LegalizeReform history
Income and Corporation Taxes Act 1988
100 versions
· 1988-02-09
2022-07-14
Income and Corporation Taxes Act 1988
2019-07-05
Income and Corporation Taxes Act 1988
2019-02-12
Income and Corporation Taxes Act 1988
2017-11-16
Income and Corporation Taxes Act 1988
2017-04-27
Income and Corporation Taxes Act 1988
2017-04-06
Income and Corporation Taxes Act 1988
2016-12-14
Income and Corporation Taxes Act 1988
2016-09-15
Income and Corporation Taxes Act 1988
2016-08-12
Income and Corporation Taxes Act 1988
2016-06-16
Income and Corporation Taxes Act 1988
2015-03-26
Income and Corporation Taxes Act 1988
2015-02-12
Income and Corporation Taxes Act 1988
2014-08-01
Income and Corporation Taxes Act 1988
2014-07-17
Income and Corporation Taxes Act 1988
2014-01-01
Income and Corporation Taxes Act 1988
2013-07-17
Income and Corporation Taxes Act 1988
2013-04-06
Income and Corporation Taxes Act 1988
2012-07-17
Income and Corporation Taxes Act 1988
2012-04-01
Income and Corporation Taxes Act 1988
2012-03-14
Income and Corporation Taxes Act 1988
2011-08-11
Income and Corporation Taxes Act 1988
2011-07-19
Income and Corporation Taxes Act 1988
2011-06-16
Income and Corporation Taxes Act 1988
2011-02-25
Income and Corporation Taxes Act 1988
2010-12-16
Income and Corporation Taxes Act 1988
2010-10-01
Income and Corporation Taxes Act 1988
2010-07-27
Income and Corporation Taxes Act 1988
2010-04-08
Income and Corporation Taxes Act 1988
2010-04-01
Income and Corporation Taxes Act 1988
2009-12-01
Income and Corporation Taxes Act 1988
2009-11-11
Income and Corporation Taxes Act 1988
2009-10-01
Income and Corporation Taxes Act 1988
2009-09-01
Income and Corporation Taxes Act 1988
2009-08-13
Income and Corporation Taxes Act 1988
2009-07-21
Income and Corporation Taxes Act 1988
2009-06-01
Income and Corporation Taxes Act 1988
2009-04-23
Income and Corporation Taxes Act 1988
2009-04-22
Income and Corporation Taxes Act 1988
2009-04-06
Income and Corporation Taxes Act 1988
2009-04-01
Income and Corporation Taxes Act 1988
2009-02-21
Income and Corporation Taxes Act 1988
2009-02-03
Income and Corporation Taxes Act 1988
2009-01-01
Income and Corporation Taxes Act 1988
2008-12-27
Income and Corporation Taxes Act 1988
2008-12-01
Income and Corporation Taxes Act 1988
2008-10-29
Income and Corporation Taxes Act 1988
2008-10-28
Income and Corporation Taxes Act 1988
2008-09-08
Income and Corporation Taxes Act 1988
2008-08-12
Income and Corporation Taxes Act 1988
2008-07-22
Income and Corporation Taxes Act 1988
2008-07-21
Income and Corporation Taxes Act 1988
2008-07-08
Income and Corporation Taxes Act 1988
2008-07-01
Income and Corporation Taxes Act 1988
2008-04-06
Income and Corporation Taxes Act 1988
2008-04-01
Income and Corporation Taxes Act 1988
2008-02-19
Income and Corporation Taxes Act 1988
2008-01-03
Income and Corporation Taxes Act 1988
2008-01-01
Income and Corporation Taxes Act 1988
2007-12-28
Income and Corporation Taxes Act 1988
2007-12-27
Income and Corporation Taxes Act 1988
2007-12-06
Income and Corporation Taxes Act 1988
2007-11-29
Income and Corporation Taxes Act 1988
2007-10-01
Income and Corporation Taxes Act 1988
2007-09-01
Income and Corporation Taxes Act 1988
2007-08-14
Income and Corporation Taxes Act 1988
2007-08-13
Income and Corporation Taxes Act 1988
2007-07-19
Income and Corporation Taxes Act 1988
2007-07-17
Income and Corporation Taxes Act 1988
2007-04-17
Income and Corporation Taxes Act 1988
2007-04-06
Income and Corporation Taxes Act 1988
Changes on 2007-04-06
@@ -8,195 +8,125 @@
##### 1
- (1) Income tax is charged in accordance with the Income Tax Acts on—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) all amounts which are charged to tax under any of the following provisions of ITEPA 2003—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limited exemption for computer equipment.
##### 2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 138.
##### 3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “adjusted net income”
##### 4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dividend or bonus granted by industrial and provident society
##### 5
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### Corporation tax
#### Spouses and civil partners.
##### 6
- (1) Corporation tax shall be charged on profits of companies, and the Corporation Tax Acts shall apply, for any financial year for which Parliament so determines, and where an Act charges corporation tax for any financial year the Corporation Tax Acts apply, without any express provision, for that year accordingly.
- (2) The provisions of the Income Tax Acts relating to the charge of income tax shall not apply to income of a company (not arising to it in a fiduciary or representative capacity) if—
- (a) the company is resident in the United Kingdom, or
- (b) the income is, in the case of a company not so resident, within the chargeable profits of the company as defined for the purposes of corporation tax by section 11(2).
- (3) A company shall not be chargeable to capital gains tax in respect of gains accruing to it so that it is chargeable in respect of them to corporation tax or would be so chargeable but for an exemption from corporation tax.
- (4) In this section, sections 7 to 12, 114, 115 (but subject to subsection (7)), . . . . . . and 248, Part VIII, Chapter IV of Part X and Part XI, except in so far as the context otherwise requires—
- (a) “*profits*” means income and chargeable gains; and
- (b) “*trade*” includes “*vocation*”, and also includes an office or employment or the occupation of woodlands in any context in which the expression is applied to that in the Income Tax Acts.
- (4A) In sections 74(1), 79(1), 79A(1), 79B(1), 83A(1), 84(1), 86(1), 86A(2)(a), 87(1), (2) and (4), 88, 89, 90(1) and (3), 94(1), 100(2)(b), 101, 102, 401(1), 491(10), 577(7)(b), 579(2), 588(3), 589A(8) and 817(2), and in paragraph 5(11) of Schedule 30, “*profession*” includes vocation.
- (5) Part VIII contains general provisions relating to the taxation of profits of companies.
#### Life or endowment business: application of the Corporation Tax Acts.
##### 7
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Subject to the provisions of the Corporation Tax Acts, where a company resident in the United Kingdom receives any payment on which it bears income tax by deduction, the income tax thereon shall be set off against any corporation tax assessable on the company . . . for the accounting period in which that payment falls to be taken into account for corporation tax (or would fall to be taken into account but for any exemption from corporation tax); and accordingly in respect of that payment the company, unless wholly exempt from corporation tax, shall not be entitled to a repayment of income tax before the assessment for that accounting period is finally determined and it appears that a repayment is due.
- (3) Subsection (2) above does not apply to a payment of relevant loan interest to which section 369 applies.
- (4) References in this section to payments received by a company apply to any received by another person on behalf of or in trust for the company, but not to any received by the company on behalf of or in trust for another person.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of pure reinsurance business.
##### 8
- (1) Subject to any exceptions provided for by the Corporation Tax Acts, a company shall be chargeable to corporation tax on all its profits wherever arising.
- (2) A company shall be chargeable to corporation tax on profits accruing for its benefit under any trust, or arising under any partnership, in any case in which it would be so chargeable if the profits accrued to it directly; and a company shall be chargeable to corporation tax on profits arising in the winding up of the company, but shall not otherwise be chargeable to corporation tax on profits accruing to it in a fiduciary or representative capacity except as respects its own beneficial interest (if any) in those profits.
- (3) Corporation tax for any financial year shall be charged on profits arising in that year; but assessments to corporation tax shall be made on a company by reference to accounting periods, and the amount chargeable (after making all proper deductions) of the profits arising in an accounting period shall, where necessary, be apportioned between the financial years in which the accounting period falls.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for expenses.
##### 9
- (1) Except as otherwise provided by the Tax Acts, the amount of any income shall for purposes of corporation tax be computed in accordance with income tax principles, all questions as to the amounts which are or are not to be taken into account as income, or in computing income, or charged to tax as a person’s income, or as to the time when any such amount is to be treated as arising, being determined in accordance with income tax law and practice as if accounting periods were years of assessment.
- (2) For the purposes of this section “*income tax law*” means, in relation to any accounting period, the law applying, for the year of assessment in which the period ends, to the charge on individuals of income tax, except that it does not include —
- (a) such of the enactments of the Income Tax Acts as make special provision for individuals in relation to matters referred to in subsection (1) above, or
- (b) ITA 2007.
- (2A) But no income shall be computed, and no assessment shall be made, for purposes of corporation tax under ITTOIA 2005.
- (2B) Instead, income shall continue to be computed, and the assessment shall continue to be made, for purposes of corporation tax under Schedules A and D and the Cases of Schedule D.
- (2C) For (but only for) the purpose of continuing to apply for purposes of corporation tax, those Schedules and Cases are treated as if they were still part of income tax law (and therefore applied in accordance with subsection (1) above for purposes of corporation tax).
- (3) Accordingly, for purposes of corporation tax, income shall be computed, and the assessment shall be made, under—
- (a) Schedules A and D and the Cases of Schedule D. . . , and
- (b) the following provisions of ITEPA 2003 (which impose charges to income tax)—
- (i) Part 2 (employment income),
- (ii) Part 9 (pension income), and
- (iii) Part 10 (social security income), . . .
- (ba) all amounts which are charged to tax under any of the following provisions of ITTOIA 2005—
- (i) Part 2 (trading income),
- (ii) Part 3 (property income),
- (iii) Part 4 (savings and investment income), and
- (iv) Part 5 (miscellaneous income), and
- (c) any other amounts which, under the Income Tax Acts, are charged to income tax.
- (2) Where any Act enacts that income tax shall be charged for any year, income tax shall be charged for that year—
- (aa) in respect of so much of an individual’s total income as does not exceed £1,500, at such rate as Parliament may determine to be the starting rate for that year;
- (a) in respect of any income which does not fall within paragraph (aa) above or paragraph (b) below, at such rate as Parliament may determine to be the basic rate for that year;
- (b) in respect of so much of an individual’s total income as exceeds £20,700 at such higher rate as Parliament may determine
but this subsection has effect subject to any provision of the Income Tax Acts providing for income tax to be charged at a different rate in certain cases.
- (2A) The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the starting rate shall be known as the starting rate limit.
- (3) The amount up to which an individual’s income is by virtue of subsection (2) above chargeable for any year at the starting rate or the basic rate shall be known as the basic rate limit,*and the parts of income in excess of the basic rate limit which are specified in paragraph (b) of that subsection shall be known respectively as the first, second, third, fourth and fifth higher rate bands*.
- (4) If the retail prices index for the month of September preceding a year of assessment is higher than it was for the previous September, then, unless Parliament otherwise determines, subsection (2) above shall apply for that year as if for each of the amounts specified in that subsection as it applied for the previous year (whether by virtue of this subsection or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index and—
- (a) if the result in the case of the amount specified in subsection (2)(aa) above is not a multiple of £10, rounding it up to the nearest amount which is such a multiple, and
- (b) if the result in the case of the amount specified in subsection (2)(b) above is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.
.
- (5A) Subsection (4) above shall not require any change to be made in the amounts deductible or repayable under PAYE regulations during the period beginning with 6th April and ending with 17th May in the year of assessment.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) The Treasury shall before each year of assessment make an order specifying the amounts which by virtue of subsection (4) above will be treated as specified for that year in subsection (2) above.
- (6A) Where income tax at the basic rate has been borne on income chargeable at the starting rate any necessary repayment of tax shall be made on the making of a claim.
- (7) Part VII contains general provisions relating to the taxation of income of individuals.
#### Limited exemption for computer equipment.
##### 2
- (1) The due proportion of income tax shall be charged for every fractional part of one pound.
- (2) Every assessment and charge to income tax shall be made for a year commencing on the 6th April and ending on the following 5th April.
#### Provisions supplementary to section 138.
##### 3
Where a person is required to be assessed and charged with income tax in respect of any property, profits or gains out of which he makes any payment in respect of—
- (a) any annuity or other annual payment (not being interest); or
- (b) any royalty or other sum in respect of the user of a patent; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
he shall, in respect of so much of the property, profits or gains as is equal to the payment and may be deducted in computing his total income, be charged at the basic rate.
#### Meaning of “adjusted net income”
##### 4
- (1) Any provision of the Income Tax Acts requiring, permitting or assuming the deduction of income tax from any amount (otherwise than under PAYE regulations) or treating income tax as having been deducted from or paid on any amount, shall, subject to any provision to the contrary, be construed as referring to deduction or payment of income tax at the basic rate in force for the relevant year of assessment.
- (1A) As respects deductions from, and tax treated as paid on, any such amounts as constitute or (but for the person whose income they are) would constitute income to which section 1A applies, subsection (1) above shall have effect with a reference to the lower rate in force for the relevant year of assessment substituted for the reference to the basic rate in force for that year.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this section, the relevant year of assessment shall be taken to be (except where otherwise provided)—
- (a) if the amount is an amount payable wholly out of profits or gains brought into charge to tax, the year in which the amount becomes due;
- (b) in any other case, the year in which the amount is paid.
#### Interpretation of sections 251A to 251C
##### 5
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### Corporation tax
#### Spouses and civil partners.
##### 6
- (1) Corporation tax shall be charged on profits of companies, and the Corporation Tax Acts shall apply, for any financial year for which Parliament so determines, and where an Act charges corporation tax for any financial year the Corporation Tax Acts apply, without any express provision, for that year accordingly.
- (2) The provisions of the Income Tax Acts relating to the charge of income tax shall not apply to income of a company (not arising to it in a fiduciary or representative capacity) if—
- (a) the company is resident in the United Kingdom, or
- (b) the income is, in the case of a company not so resident, within the chargeable profits of the company as defined for the purposes of corporation tax by section 11(2).
- (3) A company shall not be chargeable to capital gains tax in respect of gains accruing to it so that it is chargeable in respect of them to corporation tax or would be so chargeable but for an exemption from corporation tax.
- (4) In this section, sections 7 to 12, 114, 115 (but subject to subsection (7)), . . . . . . and 248, Part VIII, Chapter IV of Part X and Part XI, except in so far as the context otherwise requires—
- (a) “*profits*” means income and chargeable gains; and
- (b) “*trade*” includes “*vocation*”, and also includes an office or employment or the occupation of woodlands in any context in which the expression is applied to that in the Income Tax Acts.
- (4A) In sections 74(1), 79(1), 79A(1), 79B(1), 83A(1), 84(1), 86(1), 86A(2)(a), 87(1), (2) and (4), 88, 89, 90(1) and (3), 94(1), 100(2)(b), 101, 102, 401(1), 491(10), 577(7)(b), 579(2), 588(3), 589A(8) and 817(2), and in paragraph 5(11) of Schedule 30, “*profession*” includes vocation.
- (5) Part VIII contains general provisions relating to the taxation of profits of companies.
#### Losses of ring fence trade: set off against profits of an earlier accounting period
##### 7
- (1) No payment made by a company resident in the United Kingdom shall be treated for any purpose of the Income Tax Acts as paid out of profits or gains brought into charge to income tax; nor shall any right or obligation under the Income Tax Acts to deduct income tax from any payment be affected by the fact that the recipient is a company not chargeable to income tax in respect of the payment.
- (2) Subject to the provisions of the Corporation Tax Acts, where a company resident in the United Kingdom receives any payment on which it bears income tax by deduction, the income tax thereon shall be set off against any corporation tax assessable on the company . . . for the accounting period in which that payment falls to be taken into account for corporation tax (or would fall to be taken into account but for any exemption from corporation tax); and accordingly in respect of that payment the company, unless wholly exempt from corporation tax, shall not be entitled to a repayment of income tax before the assessment for that accounting period is finally determined and it appears that a repayment is due.
- (3) Subsection (2) above does not apply to a payment of relevant loan interest to which section 369 applies.
- (4) References in this section to payments received by a company apply to any received by another person on behalf of or in trust for the company, but not to any received by the company on behalf of or in trust for another person.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of pure reinsurance business.
##### 8
- (1) Subject to any exceptions provided for by the Corporation Tax Acts, a company shall be chargeable to corporation tax on all its profits wherever arising.
- (2) A company shall be chargeable to corporation tax on profits accruing for its benefit under any trust, or arising under any partnership, in any case in which it would be so chargeable if the profits accrued to it directly; and a company shall be chargeable to corporation tax on profits arising in the winding up of the company, but shall not otherwise be chargeable to corporation tax on profits accruing to it in a fiduciary or representative capacity except as respects its own beneficial interest (if any) in those profits.
- (3) Corporation tax for any financial year shall be charged on profits arising in that year; but assessments to corporation tax shall be made on a company by reference to accounting periods, and the amount chargeable (after making all proper deductions) of the profits arising in an accounting period shall, where necessary, be apportioned between the financial years in which the accounting period falls.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for expenses.
##### 9
- (1) Except as otherwise provided by the Tax Acts, the amount of any income shall for purposes of corporation tax be computed in accordance with income tax principles, all questions as to the amounts which are or are not to be taken into account as income, or in computing income, or charged to tax as a person’s income, or as to the time when any such amount is to be treated as arising, being determined in accordance with income tax law and practice as if accounting periods were years of assessment.
- (2) For the purposes of this section “*income tax law*” means, in relation to any accounting period, the law applying, for the year of assessment in which the period ends, to the charge on individuals of income tax, except that it does not include such of the enactments of the Income Tax Acts as make special provision for individuals in relation to matters referred to in subsection (1) above.
- (2A) But no income shall be computed, and no assessment shall be made, for purposes of corporation tax under ITTOIA 2005.
- (2B) Instead, income shall continue to be computed, and the assessment shall continue to be made, for purposes of corporation tax under Schedules A and D and the Cases of Schedule D.
- (2C) For (but only for) the purpose of continuing to apply for purposes of corporation tax, those Schedules and Cases are treated as if they were still part of income tax law (and therefore applied in accordance with subsection (1) above for purposes of corporation tax).
- (3) Accordingly, for purposes of corporation tax, income shall be computed, and the assessment shall be made, under—
- (a) Schedules A and D and the Cases of Schedule D. . . , and
- (b) the following provisions of ITEPA 2003 (which impose charges to income tax)—
- (i) Part 2 (employment income),
- (ii) Part 9 (pension income), and
- (iii) Part 10 (social security income),
and in accordance with the provisions applicable to those Schedules and Cases and those Parts, but (subject to the provisions of the Corporation Tax Acts) the amounts so computed for the several sources of income, if more than one, together with any amount to be included in respect of chargeable gains, shall be aggregated to arrive at the total profits.
- (4) Without prejudice to the generality of subsection (1) above, any provision of the Income Tax Acts (other than ITTOIA 2005) which confers an exemption from income tax, or which provides for a person to be charged to income tax on any amount (whether expressed to be income or not, and whether an actual amount or not), shall, except as otherwise provided, have the like effect for purposes of corporation tax.
- (4) Without prejudice to the generality of subsection (1) above, any provision of the Income Tax Acts (other than ITTOIA 2005 and ITA 2007) which confers an exemption from income tax, or which provides for a person to be charged to income tax on any amount (whether expressed to be income or not, and whether an actual amount or not), shall, except as otherwise provided, have the like effect for purposes of corporation tax.
- (5) Where, by virtue of this section or otherwise, any enactment applies both to income tax and to corporation tax—
@@ -204,7 +134,7 @@
- (b) for that purpose references in any such enactment to a relief from or charge to income tax, or to a specified provision of the Income Tax Acts shall, in the absence of or subject to any express adaptation, be construed as being or including a reference to any corresponding relief from or charge to corporation tax, or to any corresponding provision of the Corporation Tax Acts.
- (6) The provisions of the Income Tax Acts applied by this section do not include sections 1 to 5, . . . Part VII or sections 348 to 350 of this Act; and nothing in this section shall be taken to mean that income arising in any period is to be computed by reference to any other period (except in so far as this results from apportioning to different parts of a period income of the whole period).
- (6) . . . Nothing in this section shall be taken to mean that income arising in any period is to be computed by reference to any other period (except in so far as this results from apportioning to different parts of a period income of the whole period).
#### Approval of schemes.
@@ -1076,18254 +1006,14364 @@
##### 50
- (A1) The interest on gilt-edged securities (whenever issued and whatever the terms on which they were issued) shall be paid without deduction of income tax.
- (1) The Treasury may direct that any of the following securities in so far as they are not gilt-edged securities, that is to say—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treasury directions as respects Northern Ireland securities
##### 51
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#### Taxation of interest on converted government securities and interest which becomes subject to deduction
##### 52
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## PART IV — PROVISIONS RELATING TO THE SCHEDULE D CHARGE
### CHAPTER I — SUPPLEMENTARY CHARGING PROVISIONS
#### Farming and other commercial occupation of land (except woodlands)
##### 53
- (1) All farming and market gardening in the United Kingdom shall be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits thereof shall be charged to corporation tax under Case I of Schedule D accordingly.
- (2) All the farming carried on by any particular company or partnership shall be treated as one trade for corporation tax purposes.
- (3) Subject to subsection (4) below, the occupation of land in the United Kingdom for any purpose other than farming or market gardening shall, if the land is managed on a commercial basis and with a view to the realisation of profits, be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits thereof shall be charged to corporation tax under Case I of Schedule D accordingly.
- (4) Subsection (3) above shall not apply in relation to the occupation of land which comprises woodlands or is being prepared for use for forestry purposes.
#### Woodlands managed on a commercial basis
##### 54
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#### Mines, quarries and other concerns
##### 55
- (1) profits arising out of land in the case of any concern specified in subsection (2) below shall be charged to corporation tax under Case I of Schedule D.
- (2) The concerns are—
- (a) mines and quarries (including gravel pits, sand pits and brickfields);
- (b) ironworks, gasworks, salt springs or works, alum mines or works (not being mines falling within the preceding paragraph) and waterworks and streams of water;
- (c) canals, inland navigation, docks and drains or levels;
- (d) fishings;
- (e) rights of markets and fairs, tolls, bridges and ferries;
- (f) railways and other ways;
- (g) other concerns of the like nature as any of the concerns specified in paragraphs (b) to (e) above.
#### Transactions in deposits with and without certificates or in debts
##### 56
- (1) Subsection (2) below applies to the following rights—
- (a) the right to receive the amount, with or without interest, stated in a certificate of deposit;
- (b) the right to receive an amount payable with interest—
- (i) in a transaction in which no certificate of deposit or security is issued, and
- (ii) which is payable by a bank or similar institution or a person regularly engaging in similar transactions;
and the right to receive that interest.
- (2) Profits or gains arising to a company from the disposal of a right to which this subsection applies or, except so far as it is a right to receive interest, from the exercise of any such right (whether by the person to whom the certificate was issued or by some other person, or, as the case may be, by the person who acquired the right in the transaction referred to in subsection (1) above or by some person acquiring it directly or indirectly from that person), shall, if not falling to be taken into account as a trading receipt, be treated as annual profits or gains chargeable to corporation tax under Case VI of Schedule D.
- (3) Subsection (2) above and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do not apply in the case of the disposal or exercise of a right to receive an amount stated in a certificate of deposit or interest on such an amount—
- (a) if the company disposing of the right acquired it before 7th March 1973;
- (b) to any profits or gains arising to a fund or scheme in the case of which provision is made by section 613(4) or 614(2) or (3) or section 186 of the Finance Act 2004 for exempting the whole or part of its income from income tax;
- (c) in so far as they are applied to charitable purposes only, to any profits or gains arising to a charitable company within the meaning of section 506.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) For the purposes of this section, profits or gains shall not be treated as falling to be taken into account as a trading receipt by reason only that they are included in the computation required for the purposes of section 76(2).
- (4A) This section and section 56A shall not apply for the purposes of corporation tax except in relation to rights in existence before 1st April 1996.
- (4B) For the purposes of corporation tax, where any profits or gains arising from the disposal or exercise of a right in existence before 1st April 1996 are, or (if there were any) would be, chargeable under this section, nothing in Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall require any amount relating to that disposal, or to the exercise of that right, to be brought into account for the purposes of that Chapter.
- (5) In this section—
- “*certificate of deposit*” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable; and
- “*security*” has the same meaning as in section 132 of the 1992 Act.
#### Deep discount securities
##### 57
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#### Foreign pensions
##### 58
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#### Persons chargeable
##### 59
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, in accordance with section 12 of ITTOIA 2005, income tax is charged . . . on the profits of markets or fairs, or on tolls, fisheries or any other annual or casual profits not distrainable, the owner or occupier or receiver of the profits thereof shall be answerable for the tax so charged, and may retain and deduct the same out of any such profits.
- (4) Subsection (3) above shall not apply for the purposes of corporation tax.
### CHAPTER II — INCOME TAX: BASIS OF ASSESSMENT ETC.
### Cases I and II
#### Assessment on preceding year basis
##### 60
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#### Special basis at commencement of trade, profession or vocation
##### 61
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#### Special basis for early years following commencement
##### 62
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#### Special basis on discontinuance
##### 63
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### Cases III, IV and V
#### Case III assessments: general
##### 64
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#### Cases IV and V assessments: general
##### 65
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#### Special rules for fresh income
##### 66
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#### Special rules where source of income disposed of or yield ceases
##### 67
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#### Special rules where property etc. situated in Republic of Ireland
##### 68
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### Case VI
#### Assessment on current year basis unless otherwise directed
##### 69
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### CHAPTER III — CORPORATION TAX: BASIS OF ASSESSMENT ETC
#### Basis of assessment etc
##### 70
- (1) In accordance with sections 6 to 12 and 337 to 344, for the purposes of corporation tax for any accounting period income shall be computed under Cases I to VI of Schedule D on the full amount of the profits or gains or income arising in the period (whether or not received in or transmitted to the United Kingdom), without any other deduction than is authorised by the Corporation Tax Acts.
- (2) Where a company is chargeable to corporation tax in respect of a trade or vocation under Case V of Schedule D, the income from the trade or vocation shall be computed in accordance with the rules applicable to Case I of Schedule D.
- (3) Cases III and V of Schedule D shall for the purposes of corporation tax extend to companies not resident in the United Kingdom, so far as those companies are chargeable to tax on income of descriptions which, in the case of companies resident in the United Kingdom, fall within those Cases (but without prejudice to any provision of the Tax Acts specially exempting non-residents from tax on any particular description of income).
### CHAPTER IV — PROVISIONS SUPPLEMENTARY TO CHAPTERS II AND III
#### Computation of income tax where no profits in year of assessment
##### 71
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#### Apportionments etc. for purposes of Cases I, II and VI
##### 72
- (1) Where in the case of any profits or gains chargeable to corporation tax under Case I, II or VI of Schedule D it is necessary in order to arrive for the purposes of . . . corporation tax at the profits or gains or losses of any . . . accounting period or other period, to divide and apportion to specific periods the profits or gains or losses for any period for which the accounts have been made up, or to aggregate any such profits, gains or losses or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.
- (2) Any apportionment under this section shall be made in proportion to the number of days in the respective periods.
#### Single assessments for purposes of Cases III, IV and V
##### 73
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### CHAPTER V — COMPUTATIONAL PROVISIONS
### Deductions
#### General rules as to deductions not allowable
##### 74
- (1) Subject to the provisions of the Corporation Tax Acts, in computing the amount of the profits to be charged to corporation tax under Case I or Case II of Schedule D, no sum shall be deducted in respect of—
- (a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade or profession;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the rent of the whole or any part of any dwelling-house or domestic offices, except any such part as is used for the purposes of the trade or profession, and where any such part is so used, the sum so deducted shall not, unless in any particular case it appears that having regard to all the circumstances some greater sum ought to be deducted, exceed two-thirds of the rent bona fide paid for that dwelling-house or those offices;
- (d) any sum expended for repairs of premises occupied, or for the supply, repairs or alterations of any implements, utensils or articles employed, for the purposes of the trade or profession, beyond the sum actually expended for those purposes;
- (e) any loss not connected with or arising out of the trade or profession;
- (f) any capital withdrawn from, or any sum employed or intended to be employed as capital in, the trade or profession, but so that this paragraph shall not be treated as disallowing the deduction of any interest;
- (g) any capital employed in improvements of premises occupied for the purposes of the trade or profession;
- (h) any interest which might have been made if any such sums as aforesaid had been laid out at interest;
- (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (k) any average loss beyond the actual amount of loss after adjustment;
- (l) any sum recoverable under an insurance or contract of indemnity;
- (m) any annuity or other annual payment (other than interest) payable out of the profits;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (p) any royalty or other sum paid in respect of the user of a patent;
- (q) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses of management: investment companies
##### 75
- (1) In computing for the purposes of corporation tax the total profits for an accounting period of a company with investment business (see section 130) a deduction is to be allowed for any expenses of management of the company’s investment business (see subsection (4) below) which are referable to that accounting period in accordance with section 75A.
That is subject to the following provisions of this section.
- (2) A deduction is not to be allowed under subsection (1) above for any expenses to the extent that those expenses are deductible in computing profits apart from this section.
- (3) Expenses of a capital nature are not expenses of management for the purposes of this section except to the extent that they fall to be treated as expenses of management for those purposes by virtue of—
- (a) subsection (7) below (capital allowances), or
- (b) any provision of the Tax Acts, other than this section.
- (4) For the purposes of this section, expenses of management are “expenses of management of the company’s investment business” to the extent that—
- (a) the expenses are in respect of so much of the company’s business as consists in the making of investments, and
- (b) the investments concerned are not held by the company for an unallowable purpose during the accounting period (see subsection (5) below),
and references in this section to the company’s investment business shall be construed accordingly.
- (5) For the purposes of subsection (4)(b) above, investments are held by a company for an unallowable purpose during an accounting period to the extent that they are held during the period—
- (a) for a purpose that is not a business or other commercial purpose of the company, or
- (b) for the purpose of activities in respect of which the company is not within the charge to corporation tax.
- (6) For the purposes of subsection (1) above, there shall be deducted from the amount that would, apart from this subsection, be deductible under that subsection the amount of any income derived from a source not charged to tax—
- (a) which the company has in the course of carrying on its investment business, and
- (b) which, in a case where the company is not resident in the United Kingdom,—
- (i) the company has in the course of carrying on that business through a permanent establishment in the United Kingdom, and
- (ii) is such property or rights as are mentioned in section 11(2A)(b),
but which is not franked investment income.
- (7) For the purposes of this section, there shall be added to a company’s expenses of management referable to any accounting period the amount of any allowances falling to be made to the company for that period by virtue of section 15(1)(g) of the Capital Allowances Act (plant and machinery allowances) so far as effect cannot be given to them under section 253(2) of that Act.
- (8) Subsection (9) below applies in any case where, in an accounting period of a company with investment business, the sum of—
- (a) the expenses of management deductible under subsection (1) above, and
- (b) any charges on income paid in the accounting period, to the extent that they are paid for the purposes of so much of the company’s business as consists in the making of investments,
exceeds the amount of the profits from which those expenses and charges are deductible.
- (9) In any such case—
- (a) the excess shall be carried forward to the succeeding accounting period; and
- (b) the amount so carried forward to the succeeding accounting period shall be treated for the purposes of this section (including any further application of this subsection) as if it were expenses of management deductible for that accounting period.
- (10) Any apportionment falling to be made for the purposes of this section shall be made on a just and reasonable basis.
#### Expenses of management: insurance companies
##### 76
- (1) In computing for the purposes of corporation tax the profits for any accounting period of a company—
- (a) which carries on life assurance business, and
- (b) which is not charged to tax in respect of that business under Case I of Schedule D,
section 75 is not to apply in computing the profits of that business, but a deduction for expenses payable (the “expenses deduction”) is to be allowed in accordance with the following provisions of this section.
See also subsection (14) below for the application of this section in relation to a company which carries on capital redemption business.
- (2) The expenses deduction is to be made from so much of the income and gains of the accounting period referable to basic life assurance and general annuity business as remains after any deduction falling to be made by virtue of paragraph 4(2) of Schedule 11 to the Finance Act 1996 (non-trading deficits on loan relationships).
- (3) For the purposes of this section “*expenses payable*” means expenses brought into account in line 12, 22 or 25 of Form 40 (the revenue account) in the periodical return of the company for a period of account, but does not include any of the amounts falling within subsection (4), (5) or (6) below.
- (4) The amounts falling within this subsection are the following—
- (a) reinsurance premiums,
- (b) refunds of premiums,
- (c) profit commissions and profit participations (however described),
- (d) expenses or other amounts payable, to the extent that the company’s purpose in incurring the liability to make the payment is not a business or other commercial purpose of the company.
For the purposes of paragraph (d) above, it is not one of the business or commercial purposes of a company to incur a liability to pay an amount of commission or other expenses which exceeds the amount which it could reasonably be expected to pay if the company were charged to tax under Case I of Schedule D in respect of its life assurance business.
- (5) The amounts falling within this subsection are any amounts payable in connection with a policy or contract to—
- (a) a policy holder or annuitant under the policy or contract (except where the policy holder is an insurance company),
- (b) any other person who is entitled to receive benefits under the policy or contract,
- (c) any person acting on behalf of a person falling within paragraph (a) or (b) above,
- (d) the personal representatives of a deceased person who fell within paragraphs (a) to (c) above.
- (6) The amounts falling within this subsection are expenses of a capital nature.
But this subsection does not apply in the case of an amount which, by virtue of any provision of the Tax Acts other than this section, falls to be treated for the purposes of this section as expenses payable which fall to be brought into account at Step 1 in subsection (7) below (the reference to Step 1 being express in the provision).
- (7) The amount of the expenses deduction for an accounting period is found by taking the following steps—
- *Step 1*
- Find so much of the expenses payable as are—attributable to basic life assurance and general annuity business (see subsection (8) below), andreferable to the accounting period (see subsection (9) below).
- *Step 2*
- Reduce each of the amounts found at Step 1 by excluding so much of the amount as is—deductible in computing income for the purposes of Schedule A,deductible by virtue of section 85(2B) of the Finance Act 1989, ordeductible by virtue of section 121(3) in computing income from the letting of rights to work minerals in the United Kingdom.
- *Step 3*
- Find the amounts (so far as not included at Step 1) which fall to be treated for the purposes of this section as expenses payable for the accounting period by virtue of any of the following provisions—
- section 432AB(3) (Schedule A loss or an overseas property business loss referable to basic life assurance and general annuity business);
- section 437(1A) (relief for income element of new annuities);
- section 587B(8)(b)(i) (relief for company carrying on life assurance business in relation to gifts of shares and securities);
- paragraph 16(1) of Schedule 7 to the Finance Act 1991 (transitional relief for old annuities);
- paragraph 4(4)(b) of Schedule 11 to the Finance Act 1996 (carried forward non-trading deficit on loan relationships produced by separate computation for basic life assurance and general annuity business);
- section 256(2)(a) of the Capital Allowances Act (capital allowances on plant and machinery used in the management of life assurance business);
- paragraph 23 of Schedule 22 to the Finance Act 2001 (150% relief in respect of the remediation expenditure on contaminated land owned by a company carrying on life assurance business and acquired to be a management asset);
- paragraph 13(2) of Schedule 12 to the Finance Act 2002 (125% of relevant expenditure on R&D in the case of a life assurance company);
- paragraph 23(2) of Schedule 13 to the Finance Act 2002 (150% of relevant expenditure on research into vaccines in the case of a life assurance company);
- paragraph 36(3) of Schedule 29 to the Finance Act 2002 (relief for non-trading loss on intangible fixed assets).
- *Step 4*
- Give effect to the provisions specified in Step 3 by adding together—so much of the amounts found at Step 1 as remains after making any reductions at Step 2, andthe amounts found at Step 3,
- and then deduct the amount of any reversal (wherever brought into account) of an expense included at Step 1 in a previous period,
- to give Subtotal 1.
- *Step 5*
- If the whole or any part of a loss arising to the company in respect of its life assurance business in the accounting period is set off under section 393A or 403(1)—find the amount (“amount L”) that is equal to so much of the loss as, in the aggregate, is so set off,find the sum (“amount S”) of the amounts by which any losses for that period under section 436 or 439B fall to be reduced under section 434A(2)(b),from amount L deduct amount S, to give the adjusted loss deduction,
- then reduce Subtotal 1 by deducting from it the adjusted loss deduction,
- to give Subtotal 2.
- *Step 6*
- Give effect to subsection (6) of section 86 of the Finance Act 1989 (spreading of acquisition expenses) by—finding the amount that is equal to six-sevenths of the adjusted amount of the acquisition expenses (within the meaning of that section) for the accounting period, anddeducting that amount from Subtotal 2,
- to give Subtotal 3.
- *Step 7*
- Add together the following amounts—Subtotal 3, andany amounts carried forward to the accounting period under subsection (12) or (13) below (unrelieved excesses from earlier accounting periods),
- to give Subtotal 4.
- *Step 8*
- Give effect to subsections (8) and (9) of section 86 of the Finance Act 1989 (fraction of adjusted amount of acquisition expenses for earlier accounting periods) by adding together—Subtotal 4, andany amounts which are to be relieved under this section by virtue of those subsections,
- to give the basic deduction.
- *Step 9*
- If—amount D1 (see subsection (10) below), exceedsamount R (see subsection (11) below),
- deduct an amount equal to the excess from the basic deduction.
- *Step 10: the amount of the expenses deduction*
- The amount of the expenses deduction is so much of the basic deduction (see Step 8) as remains after making any deduction required at Step 9.
- (8) For the purposes of Step 1, the expenses that are attributable to basic life assurance and general annuity business are the expenses which are attributable to that business in accordance with proper internal accounting practice.
In this subsection “*proper internal accounting practice*” means the practice of insurance companies in allocating all the expenses of the company to particular categories of business in accordance with any applicable requirements of—
- (a) generally accepted accounting practice, . . .
- (b) the Prudential Sourcebook (Insurers), or
- (c) the Insurance Prudential Sourcebook.
- (9) The following rules have effect for determining for the purposes of Step 1 the expenses that are referable to an accounting period.
*Rule A*
Where a period of account coincides with an accounting period, the expenses brought into account for the period of account are the expenses referable to the accounting period.
*Rule B*
Where—
- (a) two or more accounting periods fall within the same period of account, and
- (b) that period of account is longer than 12 months,
section 834(4) (apportionment on time basis) is to apply.
*Rule C*
In any other case where two or more accounting periods fall within the same period of account, the expenses referable to any of those accounting periods are the expenses that would have been referable to that accounting period if—
- (a) the accounting period had coincided with a period of account, and
- (b) a separate periodical return had been made for that period of account,
and section 834(4) (apportionment on time basis) is not to apply.
*Rule D*
Rules A to C are subject to any provision of the Corporation Tax Acts which provides for an amount to be treated as expenses payable for, or referable to, a particular period.
- (10) The amount D1 in Step 9 is the amount that would be the profits of the company’s life assurance business for the accounting period if—
- (a) computed in accordance with the provisions applicable to Case I of Schedule D, and
- (b) adjusted in respect of losses.
The adjustment in respect of losses is a deduction of the amount which, disregarding sections 434A(2) and 440B, would fall to be set off under section 393 against the company’s income for that period if the company had always been charged to tax under Case I of Schedule D in respect of its life assurance business.
- (11) The amount R in Step 9 (which may be a negative amount) is found for the accounting period by—
- (a) taking the company’s relevant income, and
- (b) deducting from it the relevant aggregate.
The “*relevant income*”is the sum of—
- (a) the income and gains referable by virtue of section 432A to the company’s basic life assurance and general annuity business;
- (b) distributions received by the company from companies resident in the United Kingdom which are referable by virtue of section 432A to its basic life assurance and general annuity business;
- (c) profits chargeable under Case VI of Schedule D under section 436, 439B or 441.
The “*relevant aggregate*”is the sum of—
- (a) the basic deduction (see Step 8);
- (b) any non-trading deficit on the company’s loan relationships which is produced for the period in relation to the company’s basic life assurance and general annuity business by a separate computation under paragraph 2 of Schedule 11 to the Finance Act 1996;
- (c) any amount which in pursuance of a claim under paragraph 4(3) of that Schedule is carried back to the period and (in accordance with paragraph 4(5) of that Schedule) applied in reducing profits of the company for that period.
- (12) Where for any accounting period—
- (a) the amount of the expenses deduction (see Step 10), exceeds
- (b) the amount from which that deduction is to be made (see subsection (2) above),
the excess is to be carried forward to the next accounting period and brought into account for that period in accordance with Step 7.
- (13) Subject to paragraph 4(11) to (13) of Schedule 11 to the Finance Act 1996, where for any accounting period—
- (a) the basic deduction (see Step 8), exceeds
- (b) the expenses deduction (see Step 10),
the excess is to be carried forward to the next accounting period and brought into account for that period in accordance with Step 7.
- (14) In this section any reference to—
- (a) life assurance business, or
- (b) basic life assurance and general annuity business,
includes a reference to capital redemption business.
- (15) In this section—
- “*capital redemption business*” means any capital redemption business, within the meaning of section 458, which is business to which that section applies;
- “*expenses payable*” has the meaning given by subsection (3) above;
- and other expressions have the same meaning as in Chapter 1 of Part 12.
#### Incidental costs of obtaining loan finance
##### 77
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#### Discounted bills of exchange
##### 78
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#### Contributions to local enterprise agencies
##### 79
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to an approved local enterprise agency, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or profession for the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the agency concerned or from any other person.
- (4) In this section “*approved local enterprise agency*” means a body approved by the Secretary of State for the purposes of this section; but he shall not so approve a body unless he is satisfied that—
- (a) its sole objective is the promotion or encouragement of industrial and commercial activity or enterprise in a particular area in the United Kingdom with particular reference to encouraging the formation and development of small businesses; or
- (b) one of its principal objectives is that set out in paragraph (a) above and it maintains or is about to maintain a fund separate from its other funds which is or is to be applied solely in pursuance of that objective;
and where the Secretary of State approves a body by virtue of paragraph (b) above, the approval shall specify the fund concerned and, in relation to a body so approved, any reference in this section to a contribution is a reference to a contribution which is made wholly to or for the purposes of that fund.
- (5) A body may be approved under subsection (4) above whether or not it is a body corporate or a body of trustees or any other association or organisation and whether or not it is described as a local enterprise agency.
- (6) A body may not be approved under subsection (4) above unless it is precluded, by virtue of any enactment, contractual obligation, memorandum or otherwise, from making any direct or indirect payment or transfer to any of its members, or to any person charged with the control and direction of its affairs, of any of its income or profit by way of dividend, gift, division, bonus or otherwise howsoever by way of profit.
- (7) For the purposes of subsection (6) above, the payment—
- (a) of reasonable remuneration for goods, labour or power supplied or for services rendered, or
- (b) of reasonable interest for money lent, or
- (c) of reasonable rent for any premises,
does not constitute a payment or transfer which is required to be so precluded.
- (8) Any approval given by the Secretary of State may be made conditional upon compliance with such requirements as to accounts, provision of information and other matters as he considers appropriate; and if it appears to the Secretary of State that—
- (a) an approved local enterprise agency is not complying with any such requirement, or
- (b) one or other of the conditions for his approval contained in subsection (4) above or the precondition for his approval in subsection (6) above has ceased to be fulfilled with respect to an approved local enterprise agency,
he shall by notice withdraw his approval from the body concerned with effect from such date as he may specify in the notice (which may be a date earlier than the date on which the notice is given).
- (9) In any case where—
- (a) a contribution has been made by a company to an approved local enterprise agency in respect of which relief has been given under subsection (1) above, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (10) Section 839 applies for the purposes of subsections (3) and (9) above.
- (11) This section applies to contributions made on or after 1st April 1982 . . . .
#### Expenses connected with foreign trades etc
##### 80
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#### Travel between trades etc
##### 81
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#### Interest paid to non-residents
##### 82
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#### Patent fees etc. and expenses
##### 83
Notwithstanding anything in section 74, in computing the profits of a trade for the purposes of corporation tax there may be deducted as expenses any fees paid or expenses incurred—
- (a) in obtaining for the purposes of the trade the grant of a patent, an extension of the term of a patent, the registration of a design or trade mark, an extension of the period for which the right in a registered design subsists or the renewal of registration of a trade mark, or
- (b) in connection with a rejected or abandoned application for a patent made for the purposes of the trade.
#### Payments for technical education
##### 84
- (1) This section applies where a company carrying on a trade or profession (“*the donor*”) makes a gift for the purposes of a designated educational establishment of—
- (a) an article manufactured, or of a class or description sold, by the donor in the course of its trade which qualifies as plant or machinery in the hands of the educational establishment; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this section, an article “*qualifies as plant or machinery in the hands of an educational establishment*” if, and only if, it is an article such that—
- (a) were the activities carried on by the educational establishment regarded as a trade carried on by a body of persons, and
- (b) had that body, at the time of the gift, incurred capital expenditure wholly and exclusively on the provision of an identical article for the purposes of those activities, and
- (c) had the identical article belonged to that body in consequence of the incurring of that expenditure,
the identical article would be regarded for the purposes of Part 2 of the Capital Allowances Act as plant or machinery provided by the body for the purposes of that trade.
- (3) Where this section applies—
- (a) if the gift is of an article falling within paragraph (a) of subsection (1) above, then, for corporation tax purposes, no amount shall be required to be brought into account as a trading receipt of the donor in consequence of its disposal of that article from trading stock; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
but this subsection shall not apply unless, within the period specified in subsection (3A) below, the donor makes a claim for relief under this subsection, specifying the article given and the name of the educational establishment in question.
- (3A) The period mentioned in subsection (3) above is the period of two years beginning at the end of the accounting period in which the gift is made.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In any case where—
- (a) relief is given under subsection (3) above or section 63(2) of the Capital Allowances Act in respect of the gift of an article made by the donor, and
- (b) any benefit received in any accounting period by the donor or any person connected with the donor is in any way attributable to the making of that gift,
the donor shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the donor is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) In this section “*designated educational establishment*” means any educational establishment designated, or of a category designated,—
- (a) as respects Great Britain, in regulations made by the Secretary of State; or
- (b) as respects Northern Ireland, in regulations made by the Department of Education for Northern Ireland;
and any such regulations may make different provision for different areas.
- (6) If any question arises as to whether a particular establishment falls within a category designated in regulations under subsection (5) above, the Board shall refer the question for decision—
- (a) in the case of an establishment in Great Britain, to the Secretary of State, or
- (b) in the case of an establishment in Northern Ireland, to the Department of Education for Northern Ireland.
- (7) The power of the Secretary of State to make regulations under subsection (5) above shall be exercisable by statutory instrument; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (8) Regulations made under subsection (5) above for Northern Ireland—
- (a) shall be a statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979; and
- (b) shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
- (9) Section 839 applies for the purposes of subsection (4) above.
#### Payments to trustees of approved profit sharing schemes
##### 85
- (1) Any sum expended in making a payment to the trustees of an approved profit sharing scheme by a company which is in relation to that scheme the grantor or a participating company—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade carried on by that company; or
- (b) if that company is a company with investment business, shall be treated as expenses of management deductible under section 75, or
- (c) if that company is one in relation to which section 76 applies, shall be treated as expenses payable for the purposes of that section,
if, and only if, one of the conditions in subsection (2) below is fulfilled.
- (2) The conditions referred to in subsection (1) above are—
- (a) that before the expiry of the relevant period the sum in question is applied by the trustees in the acquisition of shares for appropriation to individuals who are eligible to participate in the scheme by virtue of their being or having been employees or directors of the company making the payment; and
- (b) that the sum is necessary to meet the reasonable expenses of the trustees in administering the scheme.
- (3) For the purposes of subsection (2)(a) above “*the relevant period*” means the period of nine months beginning on the day following the end of the period of account in which the sum in question is charged as an expense of the company incurring the expenditure or such longer period as the Board may allow by notice given to that company.
- (4) For the purposes of this section, the trustees of an approved profit sharing scheme shall be taken to apply sums paid to them in the order in which the sums are received by them.
- (5) In this section—
- “*approved profit sharing scheme*” means a profit sharing scheme approved under Schedule 9; and
- “*the grantor*” and “*participating company*” have the meaning given by paragraph 1(3) and (4) of that Schedule.
#### Employees seconded to charities and educational establishments
##### 86
- (1) If a company (“*the employer*”) carrying on a trade, profession or business for the purposes of which it employs a person (“*the employee*”) makes available to a charity, on a basis which is expressed and intended to be of a temporary nature, the services of the employee then, notwithstanding anything in section 74, 75 or 76, any expenditure incurred by the employer which is attributable to the employment of that employee shall continue to be deductible in the manner and to the like extent as if, during the time that his services are so made available to the charity, they continued to be available for the purposes of the employer’s trade, business or profession.
- (2) In subsection (1) above—
- “*charity*” has the same meaning as in section 506;
- “*deductible*” means—deductible as an expense in computing the profits of the employer to be charged to corporation tax under Case I or II of Schedule D,deductible as expenses of management for the purposes of section 75, orfalling to be brought into account in accordance with section 76 as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section,as the case may be.
- (3) With respect to expenditure attributable to the employment of a person on or after 26th November 1986 . . . , this section shall have effect as if the references to a charity included references to any of the following bodies, that is to say—
- (a) in England and Wales, any body falling within subsection (4) below;
- (b) in Scotland, any body falling within subsection (5) below;
- (c) in Northern Ireland, any body falling within subsection (6) below; and
- (d) any other educational body which is for the time being approved for the purposes of this section by the Secretary of State or, in Northern Ireland, the Department of Education for Northern Ireland.
- (4) A body falls within this subsection if it is—
- (a) a local education authority;
- (b) an educational institution maintained or otherwise supported by such an authority (including a grant-maintained school or a grant-maintained special school within the meaning of the Education Act 1996);
- (c) an independent school, within the meaning of the Education Act 1996, whose registration under section 465 of that Act is final; or
- (d) an institution within the further education sector, or the higher education sector, within the meaning of the Further and Higher Education Act 1992.
- (5) A body falls within this subsection if it is—
- (a) an education authority;
- (b) an educational establishment managed by such an authority within the meaning of the Education (Scotland) Act 1980 (“*the 1980 Act*”);
- (c) a public or grant-aided school within the meaning of the 1980 Act;
- (d) a self-governing school within the meaning of the Self-Governing Schools etc. (Scotland) Act 1989;
- (e) an independent school within the meaning of the 1980 Act;
- (f) a central institution within the meaning of the 1980 Act;
- (g) an institution within the higher education sector within the meaning of section 56(2) of the Further and Higher Education (Scotland) Act 1992; or
- (h) a college of further education within the meaning of section 36(1) of that Act.
- (6) A body falls within this subsection if it is—
- (a) an education or library board within the meaning of the Education and Libraries (Northern Ireland) Order 1986;
- (b) a college of education or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or independent school within the meaning of that Order; or
- (c) an institution of further education within the meaning of the Further Education (Northern Ireland) Order 1997.
#### Taxable premiums etc
##### 87
- (1) This section applies where in relation to any land used in connection with a trade or profession—
- (a) any amount falls to be treated as a receipt of a Schedule A business by virtue of section 34 or 35, . . .
- (b) any amount would fall to be so treated but for the operation of section 37(2) or (3);
- (c) any amount falls to be treated as a receipt of a UK property business by virtue of any of sections 277 to 282 of ITTOIA 2005 (receipts in respect of lease premiums, sums payable instead of rent, for surrender of lease and for variation or waiver of term of lease and assignments), or
- (d) any amount would fall to be so treated but for the operation of the rule in section 288 of that Act (the additional calculation rule),
and that amount is referred to below and in section 87A as “*the amount chargeable*”.
- (2) Subject to subsections (3) to (8) below, where—
- (a) during any part of the relevant period the land in relation to which the amount chargeable arose is occupied by a company which is for the time being entitled to the lease as respects which it arose, and
- (b) that occupation is for the purposes of a trade or profession carried on by the company,
the company shall be treated, in computing the profits of the trade or profession chargeable to corporation tax under Case I or II of Schedule D, as paying in respect of that land rent for the period (in addition to any actual rent), becoming due from day to day, of an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole.
- (3) As respects any period during which a part only of the land in relation to which the amount chargeable arose is occupied as mentioned in subsection (2) above, that subsection shall apply as if the whole were so occupied, but the amount chargeable shall be treated as reduced by so much thereof as, on a just apportionment, is attributable to the remainder of the land.
- (4) Where a company, although not in occupation of the land or any part of the land, deals with the company's interest in the land or that part as property employed for the purposes of a trade or profession carried on by the company, subsections (2) and (3) above shall apply as if the land or part were occupied by the company for those purposes.
- (5) Where section 37(2) and (3) has effect in relation to a lease granted out of the interest referred to in subsection (4) above, subsections (5) and (6) of that section shall apply for modifying the operation of subsections (2) and (3) above as they apply for modifying the operation of subsection (4) of that section.
- (6) In computing profits chargeable under Case I or II of Schedule D for any accounting period, rent shall not by virtue of subsection (4) above be treated as paid by a company for any period in respect of land in so far as rent treated under section 37(4) as paid by the company for that period in respect of the land has in any previous accounting period been deducted, or falls in that accounting period to be deducted under Part II.
- (7) Where, in respect of expenditure on the acquisition of the company's interest in the land in relation to which the amount chargeable arose, a company has become entitled to an allowance under Part 5 of the Capital Allowances Act in respect of expenditure falling within section 403 (mineral asset expenditure) for any accounting period, then—
- (a) if the allowance is in respect of the whole of the expenditure, no deduction shall be allowed the company under this section for that or any subsequent accounting period; or
- (b) if the allowance is in respect of part only of the expenditure (“*the allowable part*”), a deduction allowed the company under this section for that or any subsequent accounting period shall be the fraction—
$$A-BA$of the amount which apart from this subsection would fall to be deducted, where—$
A is the whole of the expenditure, and
B is the allowable part of the expenditure;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where the amount chargeable arose under section 34(2) or under section 277 of ITTOIA 2005 by virtue of section 278 of that Act (amount treated as lease premium where work required) by reason of an obligation which included the carrying out of work in respect of which any capital allowance has fallen or will fall to be made, this section shall apply as if the obligation had not included the carrying out of that work and the amount chargeable had been calculated accordingly.
- (9) In this section “*the relevant period*” means—
- (a) where the amount chargeable arose under section 34, the period treated in computing that amount as the duration of the lease;
- (b) where the amount chargeable arose under section 35, the period treated in computing that amount as the duration of the lease remaining at the date of the assignment;
- (c) where the amount chargeable arose under Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease premiums etc.), its receipt period (within the meaning of that Chapter (see section 288(6)).
- (9A) In the application of this section and section 87A to Scotland—
- (a) the reference to a lease being granted out of the interest referred to in subsection (4) above is to the grant of a sublease of land subject to that interest, and
- (b) references to the lease so granted are to be construed as references to the sublease.
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments to Export Credit Guarantee Department
##### 88
Any sums paid by a company to the Export Credits Guarantee Department under an agreement entered into under arrangements made by the Secretary of State in pursuance of section 11 of the Export Guarantees and Overseas Investment Act 1978, or with a view to entering into such an agreement, shall be included—
- (a) in the sums to be deducted in computing for the purposes of Case I or Case II of Schedule D the profits of any trade or profession carried on by that company; or
- (b) if that company is a company with investment business, in the expenses of management that are deductible under section 75 in computing the company’s profits for the purpose of corporation tax;
whether or not they would fall to be so included apart from this section.
#### Debts proving irrecoverable after event treated as discontinuance
##### 89
- (1) This section applies if—
- (a) section 337(1) applies to treat a trade as discontinued by reason of any event, or
- (b) a person permanently ceases to carry on a trade or profession,
and a company carries on the trade or profession after that event or cessation.
- (2) In computing for corporation tax purposes the profits of the trade or profession in any period after the event or cessation, there may be deducted a sum equal to any amount proved during that period to be irrecoverable in respect of any debts—
- (a) which were credited in computing for tax purposes the profits for any period before the event or cessation, and
- (b) in respect of which the benefit was assigned to the company carrying on the trade or profession after the event or cessation.
- (3) Subsection (2) applies only so far as the total amount proved to be irrecoverable in respect of the debts exceeds any relevant deduction in respect of them in a computation for any period before the event or cessation.
- (4) In this section “*debt*” includes an obligation or liability that falls to be discharged otherwise than by the payment of money.
The references to a debt being irrecoverable shall be read accordingly.
- (5) For the purposes of this section “*relevant deduction*”, in relation to a debt, means a deduction made for tax purposes in respect of an impairment loss or release.
#### Additional payments to redundant employees
##### 90
- (1) Where a payment is made by way of addition to a redundancy payment or to the corresponding amount of any other employer’s payment and the additional payment would be—
- (a) allowable as a deduction in computing for the purposes of Schedule D the profits or losses of a trade or profession,
- (b) deductible under section 75 as expenses of management of a business, or
- (c) regarded as expenses payable for the purposes of section 76,
- (1A) To the extent that the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it shall not be so regarded for the purposes of that subsection (or of subsection (1) above so far as relating to that section).
- (2) Subsection (1) above applies to an additional payment only so far as it does not exceed three times the amount of the redundancy payment or of the corresponding amount of the other employer’s payment.
- (3) In this section references to the permanent discontinuance of a trade, profession or business include references to any occasion on which it is treated as permanently discontinued by virtue of section . . . 337(1).
- (4) In this section references to a redundancy payment or to the corresponding amount of an employer’s payment shall be construed as in sections 579 and 580.
#### Cemeteries
##### 91
- (1) In computing for corporation tax purposes the profits or losses for any period of a trade which consists of or includes the carrying on of a cemetery, there shall be allowed as a deduction—
- (a) any capital expenditure incurred by the company engaged in carrying on the trade in providing any land in the cemetery sold during that period for the purpose of interments, and
- (b) the appropriate fraction of the residue at the end of that period of the relevant capital expenditure.
- (2) Subject to subsection (3) below, the relevant capital expenditure is capital expenditure incurred for the purposes of the trade in question by the company engaged in carrying it on, being—
- (a) expenditure on any building or structure other than a dwelling-house, being a building or structure in the cemetery likely to have little or no value when the cemetery is full; and
- (b) expenditure incurred in providing land taken up by any such building or structure, and any other land in the cemetery not suitable or adaptable for use for interments and likely to have little or no value when the cemetery is full.
- (3) Relevant capital expenditure—
- (a) does not include expenditure incurred on buildings or structures which have been destroyed before the beginning of the first period to which subsection (1) above applies in the case of the trade in question; and
- (b) of other expenditure incurred before that time, includes only the fraction—
$$AA+B$where—$
A is the number of grave-spaces which at that time were or could have been made available in the cemetery for sale, and
B is the number already sold.
- (4) For the purposes of this section—
- (a) the residue of any expenditure at the end of a period is the amount incurred before that time which remains after deducting—
- (i) any amount allowed in respect of that expenditure under subsection (1)(b) above , or under section 170(2)(b) of ITTOIA 2005 (relief for income tax purposes) in computing for tax purposes the profits or losses of the trade for any previous period, and
- (ii) if, after the beginning of the first period to which subsection (1) above applies in the case of a trade and before the end of the period mentioned at the beginning of this subsection, any asset representing that expenditure is sold or destroyed, the net proceeds of sale or, as the case may be, any insurance money or other compensation of any description received by the company carrying on the trade in respect of the destruction and any money received by it for the remains of the asset; and
- (b) the appropriate fraction of the residue of any expenditure at the end of any period is—
$$AA+B$where—$
A is the number of grave-spaces in the cemetery sold in the period, and
B is the number of grave-spaces which at the end of the period are or could be made available in the cemetery for sale.
- (5) Where in any chargeable period there is a change in the persons engaged in carrying on a trade which consists of or includes the carrying on of a cemetery, any allowance to be made under this section to the company carrying on the trade after the change shall, whether or not it is to be assumed for other purposes that the trade was discontinued and a new trade set up and commenced, be computed—
- (a) as if the company had at all times been engaged in carrying on the trade;
- (b) as if everything done to or by any of its predecessors in carrying on the trade had been done to or by it; and
- (c) without regard to the price paid on any sale on the occasion of any such change.
- (6) No expenditure shall be taken into account—
- (a) under both paragraphs (a) and (b) of subsection (1) above, or
- (b) under both subsection (1)(a) above and section 170(2)(b) of ITTOIA 2005 or under both subsection (1)(b) above and section 170(2)(a) of ITTOIA 2005,
whether for the same or different periods.
- (7) This section shall apply in relation to a trade which consists of or includes the carrying on of a crematorium and, in connection therewith, the maintenance of memorial garden plots, as it applies in relation to a trade which consists of or includes the carrying on of a cemetery, but subject to the modifications that—
- (a) references to the cemetery or land in the cemetery shall be taken as references to the land which is devoted wholly to memorial garden plots, and
- (b) references to grave-spaces shall be taken as references to memorial garden plots, and
- (c) references to the sale or use of land for interments shall be taken as references to its sale or use for memorial garden plots.
- (8) In this section—
- (a) references to the sale of land include references to the sale of a right of interment in land, and to the appropriation of part of a memorial garden in return for a dedication fee or similar payment;
- (b) references to capital expenditure incurred in providing land shall be taken as references to the cost of purchase and to any capital expenditure incurred in levelling or draining it or otherwise rendering it suitable for the purposes of a cemetery or a memorial garden; and
- (c) the reference in subsection (4)(a)(ii) to subsection (1) above includes a reference to section 141 of the 1970 Act and section 22 of the Finance Act 1952 (which made similar provision to that made by this section).
- (9) Section 532 of the Capital Allowances Act (general rule excluding contributions) shall apply for the purposes of this section as it applies for the purposes of that Act.
### Treatment of regional development and other grants and debts released etc.
#### Regional development grants
##### 92
- (1) A regional development grant which, apart from this subsection, would be taken into account as a receipt in computing the profits of a trade, profession or vocation which are chargeable under Case I or II of Schedule D, shall not be taken into account as a receipt in computing those profits.
- (2) A regional development grant which is made to an investment company—
- (a) shall not be taken into account as a receipt in computing its profits under Case VI of Schedule D; and
- (b) shall not be deducted, by virtue of section 75(2), from the amount treated as expenses of management.
- (3) In this section “*regional development grant*” means a payment by way of grant under Part II of the Industrial Development Act 1982.
#### Other grants under Industrial Development Act 1982 etc
##### 93
- (1) A payment to which this section applies which is made to a company carrying on a trade the profits of which are chargeable to corporation tax under Case I of Schedule D shall be taken into account as a receipt in computing those profits; and any such payment which is made to a company with investment business shall be taken into account as a receipt in computing its profits under Case VI of Schedule D.
- (2) This section applies to any payment which would not, apart from this section, be taken into account as mentioned in subsection (1) above, being a payment by way of a grant under—
- (a) section 7 or 8 of the Industrial Development Act 1982 or section 7 or 8 of the Industry Act 1972; or
- (b) section 1 of the Industries Development Act (Northern Ireland) 1966 or section 4 of the Industries Development Act (Northern Ireland) 1971; or
- (c) any of Articles 7, 9 and 30 of the Industrial Development (Northern Ireland) Order 1982;
other than a grant designated as made towards the cost of specified capital expenditure or as made by way of compensation for the loss of capital assets and other than a grant falling within subsection (3) below.
- (3) A payment by way of grant which is made—
- (a) under Article 7 of the Order referred to in subsection (2)(c) above, and
- (b) in respect of a liability for corporation tax (including a liability which has already been met),
shall not be taken into account as mentioned in subsection (1) above, whether by virtue of this section or otherwise.
#### Debts deducted and subsequently released
##### 94
- (1) Where, in computing for corporation tax purposes the profits of a trade or profession, a deduction has been allowed for any debt incurred for the purposes of the trade or profession, then, if the whole or any part of the debt is thereafter released otherwise than as part of a statutory insolvency arrangement, the amount released shall be treated as a receipt of the trade or profession arising in the period in which the release is effected.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of dealer’s receipts on purchase by company of own shares
##### 95
- (1) Where a dealer—
- (a) receives a relevant distribution, that is to say—
- (i) any distribution which is made by a company resident in the United Kingdom (“*a UK distribution*”), or
- (ii) any payment which is representative of a UK distribution, or
- (b) makes any payment which is representative of a UK distribution,
the distribution or, as the case may be, the payment shall be taken into account in computing the profits of the dealer which are chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (1A) Accordingly, where a dealer receives a relevant distribution—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any securities issued or deemed to be issued under the National Loans Act 1939 or issued under the National Loans Act 1968;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) section 208 shall not apply to that distribution; and
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) The application of subsection (1) above in relation to a payment made by a dealer is subject to paragraph 7A of Schedule 23A (manufactured payments under arrangements having an unallowable purpose).
- (2) For the purposes of this section a person is a dealer in relation to any . . . distribution if—
- (a) were there a sale by that person of the shares or stock in respect of which the distribution is made, and
- (b) the circumstances of that sale were such that the price would not fall to be treated as a . . . distribution,
the price would be taken into account in computing the profits of that person which are chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (2A) The reference in subsection (2) above to the profits of a person does not include the profits of that person in respect of insurance business or any category of insurance business.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Special provisions
#### Farming and market gardening: relief for fluctuating profits
##### 96
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of farm animals etc
##### 97
Schedule 5 shall have effect with respect to the treatment, in computing profits for the purposes of Case I of Schedule D, of animals and other living creatures kept for the purposes of farming or any other trade.
#### Tied premises
##### 98
- (1) This section applies for corporation tax purposes where a company (“*the trader*”)—
- (a) carries on a trade,
- (b) in the course of the trade supplies, or is concerned in the supply of, goods sold or used on premises occupied by a person other than the trader,
- (c) has an estate or interest in those premises, and
- (d) deals with that estate or interest as property employed for the purposes of the trade.
- (2) Where this section applies the receipts and expenses in connection with the premises that would otherwise fall to be brought into account in computing the profits of a Schedule A business carried on by the trader shall instead be brought into account in computing the profits of the trade.
- (3) Any necessary apportionment shall be made on a just and reasonable basis of receipts or expenses—
- (a) which do not relate only to the premises concerned, or
- (b) where the conditions in subsection (1) are met only in relation to part of the premises.
- (4) This section applies to premises outside the United Kingdom as if the premises were in the United Kingdom.
#### Dealers in land
##### 99
- (1) In computing for corporation tax purposes the profits of a trade of dealing in land, there shall be disregarded—
- (a) so much of the cost of woodlands in the United Kingdom purchased in the course of the trade as is attributable to trees or saleable underwood growing on the land; and
- (b) where any amount has been disregarded under paragraph (a) above and, on a subsequent sale of the woodlands in the course of the trade, all or any of the trees or underwood to which the amount disregarded was attributable are still growing on the land, so much of the price for the land as is equal to the amount so disregarded in respect of those trees or underwood.
- (2) In computing the profits of a trade of dealing in land, any trading receipt falling within subsection (1), (4) or (5) of section 34 or section 35 or 36 shall be treated as reduced by the amount on which corporation tax is chargeable by virtue of that section.
- (3) Where, on a claim being made under subsection (2)(b) of section 36, the amount on which corporation tax was chargeable by virtue of that section is treated as reduced, subsection (2) above shall be deemed to have applied to the amount as reduced, and any such adjustment of liability to corporation tax shall be made (for all relevant accounting periods) whether by means of an assessment or otherwise, as may be necessary, and may be so made at any time at which it could be made if it related only to corporation tax for the accounting period in which that claim is made.
- (4) Subsection (1) above shall not apply where the purchase mentioned in paragraph (a) of that subsection was made under a contract entered into before 1st May 1963.
### CHAPTER VI — DISCONTINUANCE . . .
### Valuation of trading stock etc.
#### Valuation of trading stock at discontinuance of trade
##### 100
- (1) In computing for any corporation tax purpose the profits of a trade which has been discontinued, any trading stock belonging to the trade at the discontinuance shall be valued as follows—
- (a) if—
- (i) the stock is sold or transferred for valuable consideration to a person who carries on, or intends to carry on, a trade in the United Kingdom, and
- (ii) the cost of the stock may be deducted by the purchaser as an expense in computing for any tax purpose the profits of that trade,
the value of the stock shall be taken to be the amount determined in accordance with subsections (1A) to (1C) below; and
- (b) if the stock does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.
- (1ZA) This section does not apply in relation to any trading stock if paragraph 1(2) of Schedule 28AA (provision not at arm’s length) has effect in relation to any provision made or imposed in relation to that stock and having effect in connection with the discontinuance of the trade.
- (1A) Subject to subsections (1B) and (1C) below and to paragraph 2 of Schedule 12 to the Finance Act 1988 (gilt-edged securities and other financial trading stock), the value of any trading stock falling to be valued under paragraph (a) of subsection (1) above shall be taken—
- (a) except where the person to whom it is sold or transferred is connected with the company which makes the sale or transfer, to be the amount (“the price actually received for it”) which is in fact realised on the sale or, as the case may be, which is in fact the value of the consideration given for the transfer; and
- (b) if that person and that company are connected with each other, to be what would have been the price actually received for it had the sale or transfer been a transaction between independent persons dealing at arm’s length.
- (1B) In a case falling within subsection (1)(a) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) stock sold in circumstances in which the amount realised on the sale would be taken to be an amount determined in accordance with paragraph 5 of Schedule 5 shall be taken to have the value so determined, instead of the value for which subsection (1A)(a) or (b) above provides.
- (1C) If—
- (a) trading stock is sold or transferred to a person in circumstances where paragraph (b) of subsection (1A) above would apply (apart from this subsection) for determining the value of the stock so sold or transferred,
- (b) the amount which would be taken in accordance with that paragraph to be the value of all of the stock sold or transferred to that person is more than the acquisition value of that stock and also more than the price actually received for it, and
- (c) both parties to the sale or transfer, by notice signed by them and sent to the inspector no later than two years after the end of the accounting period in which the trade is discontinued, elect that this subsection shall apply,
then the stock sold or transferred to that person shall be taken to have a value equal to whichever is the greater (taking all the stock so sold or transferred together) of its acquisition value and the price actually received for it or, in a case where they are the same, to either of them.
- (1D) In subsection (1C) above “*acquisition value*”, in relation to any trading stock, means the amount which, in computing for any corporation tax purposes the profits of the discontinued trade, would have been deductible as representing the acquisition value of that stock if—
- (a) the stock had, immediately before the discontinuance, been sold in the course of the trade for a price equal to whatever would be its value in accordance with subsection (1A)(b) above; and
- (b) the period for which those profits were to be computed began immediately before the sale.
- (1E) Where the value of the trading stock is determined in accordance with subsections (1A) to (1C) above, or sections 176 to 178 of ITTOIA 2005 or section 127 of that Act (by virtue of section 175(3)) (corresponding provisions for income tax purposes), the amount to be brought into account as the value of that stock in computing profits of the discontinued trade shall also be taken, for the purpose of making for corporation tax purposes any deduction in computing the profits of any trade carried on by the purchaser, to be the cost of that stock to the purchaser.
- (1F) For the purposes of this section two persons are connected with each other if—
- (a) they are connected with each other within the meaning of section 839;
- (b) one of them is a partnership and the other has a right to a share in the partnership;
- (c) one of them is a body corporate and the other has control over that body;
- (d) both of them are partnerships and some other person has a right to a share in each of them; or
- (e) both of them are bodies corporate or one of them is a partnership and the other is a body corporate and, in either case, some other person has control over both of them;
and in this subsection the references to a right to a share in a partnership are references to a right to a share of the assets or income of the partnership and “*control*” has the meaning given by section 840.
- (1G) In this section “*purchaser*”, in relation to a transfer otherwise than by sale, means the person to whom the transfer is made.
- (2) For the purposes of this section “*trading stock*”, in relation to any trade—
- (a) means property of any description, whether real or personal, being either—
- (i) property such as is sold in the ordinary course of the trade, or would be so sold if it were mature or if its manufacture, preparation or construction were complete; or
- (ii) materials such as are used in the manufacture, preparation or construction of any such property as is referred to in sub-paragraph (i) above; and
- (b) includes also any services, article or material which would, if the trade were a profession . . . , be treated, for the purposes of section 101, as work in progress of the profession . . . , and references to the sale or transfer of trading stock shall be construed accordingly.
- (3) Where trading stock falling to be valued under paragraph (a) of subsection (1) above is sold or transferred together with other assets, so much of the amount realised on the sale or, as the case may be, of the value of the consideration given for the transfer as on a just and reasonable apportionment is properly attributable to each asset shall be treated for the purposes of this section as the amount realised on the sale or, as the case may be, the value of the consideration given for the transfer, of that asset.
#### Valuation of work in progress at discontinuance of profession or vocation
##### 101
- (1) Where, in computing for any corporation tax purpose the profits of a profession . . . which has been discontinued, a valuation is taken of the work of the profession . . . in progress at the discontinuance, that work shall be valued as follows—
- (a) if—
- (i) the work is transferred for money or any other valuable consideration to a person who carries on, or intends to carry on, a profession . . . in the United Kingdom, and
- (ii) the cost of the work may be deducted by that person as an expense in computing for any tax purpose the profits of that profession . . . ,
the value of the work shall be taken to be the amount paid or other consideration given for the transfer; and
- (b) if the work does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which would have been paid for a transfer of the work on the date of the discontinuance as between parties at arm’s length.
- (2) Where a profession . . . is discontinued, and the company by which it was carried on immediately before the discontinuance so elects by notice sent to the inspector at any time within the period specified in subsection (2A) below—
- (a) the amount (if any) by which the value of the work in progress at the discontinuance (as ascertained under subsection (1) above) exceeds the actual cost of the work shall not be brought into account in computing the profits of the period immediately before the discontinuance; but
- (b) the amount by which any sums received for the transfer of the work exceed the actual cost of the work shall be included in the sums chargeable to tax by virtue of section 103 as if it were a sum to which that section applies received after the discontinuance.
- (2A) The period mentioned in subsection (2) above is—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . the period of two years beginning at the end of the accounting period in which the profession . . . is discontinued.
- (3) References in this section to work in progress at the discontinuance of a profession . . . shall be construed as references to—
- (a) any services performed in the ordinary course of the profession . . . , the performance of which was wholly or partly completed at the time of the discontinuance and for which it would be reasonable to expect that a charge would have been made on their completion if the profession . . . had not been discontinued; and
- (b) any article produced, and any such material as is used, in the performance of any such services,
and references in this section to the transfer of work in progress shall include references to the transfer of any benefits and rights which accrue, or might reasonably be expected to accrue, from the carrying out of the work.
#### Provisions supplementary to sections 100 and 101
##### 102
- (1) Any question arising under section 100(1)(a) or 101(1)(a) shall be determined as follows, for the purpose of computing for any tax purpose the profits of both the trades or, as the case may be, the professions . . . concerned—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to each of the persons whose trade or profession is one of those concerned, the question shall be determined by those Commissioners unless all parties concerned agree that it shall be determined by the Special Commissioners;
- (b) in any other case, the question shall be determined by the Special Commissioners; and
- (c) the General or Special Commissioners shall determine the question in like manner as an appeal.
- (2) Where, by virtue of section . . . 337(1), a trade or profession is treated as having been permanently discontinued for the purpose of computing corporation tax, it shall also be so treated for the purposes of sections 100 and 101. . . .
### Case VI charges on receipts
#### Receipts after discontinuance: earnings basis charge and related charge affecting conventional basis
##### 103
- (1) Where any trade, profession or vocation carried on wholly or partly in the United Kingdom the profits of which are chargeable to tax . . . has been permanently discontinued, corporation tax shall be charged under Case VI of Schedule D in respect of any sums to which this section applies which are received after the discontinuance.
- (2) Subject to subsection (3) below, this section applies to the following sums arising from the carrying on of the trade, profession or vocation during any period before the discontinuance (not being sums otherwise chargeable to tax)—
- (a) where the profits for that period were computed by reference to earnings, all such sums in so far as their value was not brought into account in computing the profits for any period before the discontinuance, and
- (b) where those profits were computed on a conventional basis (that is to say, were computed otherwise than by reference to earnings), any sums which, if those profits had been computed by reference to earnings, would not have been brought into the computation for any period before the discontinuance because the date on which they became due, or the date on which the amount due in respect thereof was ascertained, fell after the discontinuance.
- (3) This section does not apply to any of the following sums—
- (a) sums received by a company beneficially entitled thereto which is not resident in the United Kingdom, or by a person acting on its behalf, which represent income arising directly or indirectly from a country or territory outside the United Kingdom, or
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) sums realised by the transfer of trading stock belonging to a trade at the discontinuance of the trade, or by the transfer of the work of a profession or vocation in progress at its discontinuance.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where—
- (a) in computing for tax purposes the profits of a trade, profession or vocation a deduction has been allowed for any debt incurred for the purposes of the trade, profession or vocation, and
- (b) the whole or any part of that debt is thereafter released otherwise than as part of a statutory insolvency arrangement, and
- (c) the trade, profession or vocation has been permanently discontinued at or after the end of the period for which the deduction was allowed and before the release was effected,
subsections (1) to (3) above shall apply as if the amount released were a sum received after the discontinuance.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of this section the value of any sum received in payment of a debt shall be treated as not brought into account in the computation of the profits of a trade, profession or vocation to the extent that a deduction has been made for tax purposes in respect of an impairment loss or a release of liability.
#### Conventional basis: general charge on receipts after discontinuance or change of basis
##### 104
- (1) Where any trade, profession or vocation carried on wholly or partly in the United Kingdom the profits of which are chargeable to tax . . . has been permanently discontinued, and the profits for any period before the discontinuance were computed on a conventional basis, corporation tax shall be charged under Case VI of Schedule D in respect of any sums to which this subsection applies which are received on or after the discontinuance.
- (2) Subject to subsection (3) below, subsection (1) above applies to all sums arising from the carrying on of the trade, profession or vocation during any period before the discontinuance, not being sums otherwise chargeable to tax, in so far as the amount or value of the sums was not brought into account in computing the profits for any period before the discontinuance.
- (3) In subsection (2) above the reference to sums otherwise chargeable to tax includes any sums which (disregarding this section) are chargeable to corporation tax under section 103 or to which that section would have applied but for subsection (3)(a) . . . of that section.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) It is hereby declared that where work in progress at the discontinuance of a profession or vocation, or the responsibility for its completion, is transferred, the sums to which subsection (1) above applies include any sums received by way of consideration for the transfer, and any sums received by way of realisation by the transferee, on behalf of the transferor, of the work in progress transferred.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowable deductions
##### 105
- (1) In computing the charge to corporation tax in respect of sums received by any company which are chargeable to corporation tax by virtue of section 103 or 104(1) (including amounts treated as sums received by it by virtue of section 103(4)), there shall be deducted from the amount which, apart from this subsection, would be chargeable to corporation tax—
- (a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade, profession or vocation had not been discontinued, would have been deducted in computing for tax purposes the profits of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and
- (b) any capital allowance to which the person who carried on the trade, profession or vocation was entitled immediately before the discontinuance and to which effect has not been given by way of relief before the discontinuance.
- (2) No amount shall be deducted under subsection (1) above if that amount has been allowed under any other provision of the Tax Acts . . . .
- (3) No amount shall be deducted more than once under subsection (1) above; and—
- (a) any expense or debit shall be apportioned between a sum chargeable under section 103 and a sum chargeable under section 104(1) in such manner as may be just;
- (b) as between sums chargeable, whether under section 103 or 104(1), for one accounting period and sums so charged for a subsequent accounting period, any deduction in respect of a loss or capital allowance shall be made against sums chargeable for the earlier accounting period;
- (c) subject to paragraph (b) above, as between sums chargeable for any accounting period under section 103 and sums so chargeable under section 104(1), any deduction in respect of a loss or capital allowance shall be made against the last-mentioned sums rather than the first-mentioned;
but, in the case of a loss which is to be allowed after the discontinuance, not so as to authorise its deduction from any sum chargeable for a accounting period preceding that in which the loss is incurred.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of charges where rights to payments transferred
##### 106
- (1) Subject to subsection (2) below, in the case of a transfer for value of the right to receive any sum to which section 103, 104(1) or 104(4) applies, any corporation tax chargeable by virtue of either of those sections shall be charged in respect of the amount or value of the consideration (or, in the case of a transfer otherwise than at arm’s length, in respect of the value of the right transferred as between parties at arm’s length), and references in this Chapter, except section 101(2), to sums received shall be construed accordingly.
- (2) Where a trade, profession or vocation is treated as permanently discontinued by reason of a change in the persons carrying it on, and the right to receive any sum to which section 103 or 104(1) applies is or was transferred at the time of the change to the company carrying on the trade, profession or vocation after the change, corporation tax shall not be charged by virtue of either of those sections, but any sum received by that company by virtue of the transfer shall be treated for corporation tax purposes as a receipt to be brought into the computation of the profits of the trade, profession or vocation in the period in which it is received.
### Reliefs
#### Treatment of receipts as earned income
##### 107
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Election for carry-back
##### 108
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge under section 104: relief for individuals born before 6th April 1917
##### 109
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Interpretation etc
##### 110
- (1) The following provisions have effect for the purposes of sections 103 to 106.
- (1A) In the case of a trade carried on by a person other than a company or a profession or vocation within the charge to income tax carried on by any person, any reference to the permanent discontinuance of a trade, profession or vocation includes a reference to—
- (a) a person permanently ceasing to carry on a trade, profession or vocation, or
- (b) in relation to a trade or profession carried on by a person in partnership with other persons, the occurrence of an event treated under section 246(4) of ITTOIA 2005 (basic meaning of “*post-cessation receipt*”) as a person permanently ceasing to carry on a trade or profession.
- (1B) In the case of a trade carried on by a company, any reference to the permanent discontinuance of a trade includes a reference to the occurrence of an event treated under section 337(1) below as a discontinuance or treated under section 18 of ITTOIA 2005 (companies beginning or ceasing to carry on trade) as the company permanently ceasing to carry on the trade.
- (1C) In the case of a UK property business carried on by a person other than a company, any reference to the permanent discontinuance of a UK property business includes a reference to—
- (a) a person permanently ceasing to carry on a UK property business, or
- (b) in relation to a UK property business carried on by a person in partnership with other persons, the occurrence of an event treated under section 353(3) of ITTOIA 2005 (basic meaning of “post-cessation receipt”) as a person permanently ceasing to carry on a UK property business.
- (1D) In the case of a UK property business carried on by a company, any reference to the permanent discontinuance of a UK property business includes a reference to the occurrence of an event treated under section 362 of ITTOIA 2005 (companies beginning or ceasing to be within the charge to income tax) as the company permanently ceasing to carry on the business.
- (3) The profits of a trade, profession or vocation in any period shall be treated as computed by reference to earnings where all credits and liabilities accruing during that period as a consequence of its being carried on are brought into account in computing those profits for tax purposes, and not otherwise, and “earnings basis” shall be construed accordingly.
- (4) “*Conventional basis*” has the meaning given by section 103(2), so that profits are computed on a conventional basis if computed otherwise than by reference to earnings.
- (5) There is a change from a conventional basis to the earnings basis at the end of a period the profits of which were computed on a conventional basis if the profits of the next succeeding period are computed by reference to earnings; and, if the profits of two successive periods are computed on different conventional bases, a change of conventional basis occurs at the end of the earlier period.
- (6) In sections 103 and 104—
- (a) “*trading stock*” has the meaning given by section 100(2);
- (b) references to work in progress at the discontinuance of a profession or vocation, and to the transfer of work in progress, are to be construed in accordance with section 101(3); and
- (c) the reference to work in progress at the time of a change of basis is also to be construed in accordance with section 101(3), substituting therein for this purpose references to the change of basis for references to the discontinuance.
### CHAPTER VII — PARTNERSHIPS AND SUCCESSIONS
### General
#### Partnership assessments to income tax
##### 111
- (1) Where a trade or profession is carried on by persons in partnership, the partnership shall not, unless the contrary intention appears, be treated for corporation tax purposes as an entity which is separate and distinct from those persons.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partnerships controlled abroad
##### 112
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect, for income tax, of change in ownership of trade, profession or vocation
##### 113
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Partnerships involving companies
#### Special rules for computing profits and losses
##### 114
- (1) So long as a trade profession or business is carried on by persons in partnership, and any of those persons is a company, the profits and losses (including terminal losses) of the trade profession or business shall be computed for the purposes of corporation tax in like manner, and by reference to the like accounting periods, as if the partnership were a company and, subject to section 115(4), as if that company were resident in the United Kingdom, and without regard to any change in the persons carrying on the trade profession or business, except that—
- (a) references to distributions shall not apply; and
- (b) subject to section 116(5), no deduction or addition shall be made for charges on income, or for capital allowances and charges, nor in any accounting period for losses incurred in any other period nor for any expenditure to which section 401(1) applies; and
- (c) a change in the persons engaged in carrying on the trade profession or business shall be treated as the transfer of the trade profession or business to a different company if there continues to be a company so engaged after the change, but not a company that was so engaged before the change.
- (2) A company’s share in the profits or loss of any accounting period of the partnership, or in any matter excluded from the computation by subsection (1)(b) above, shall be determined according to the interests of the partners during that period, and corporation tax shall be chargeable as if that share derived from a trade profession or business carried on by the company alone in its corresponding accounting period or periods; and the company shall be assessed and charged to tax for its corresponding accounting period or periods accordingly.
- In this subsection “*corresponding accounting period or periods*” means the accounting period or periods of the company comprising or together comprising the accounting period of the partnership, and any necessary apportionment shall be made between corresponding accounting periods if more than one.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 114
##### 115
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) So long as a trade, profession or business is carried on by persons in partnership and any of those persons is a company which is not resident in the United Kingdom, section 114 shall have effect in relation to that company as if—
- (a) the reference in subsection (1) to a company resident in the United Kingdom were a reference to a company that is not so resident; and
- (b) in subsection (2), after “carried on” there were inserted “in the United Kingdom through a permanent establishment”.
- (5) Subsections (5A) and (5B) apply if—
- (a) a company resident in the United Kingdom (“*the resident partner*”) is a member of a partnership which resides outside the United Kingdom or which carries on any trade, profession or business the control and management of which is situated outside the United Kingdom, and
- (b) by virtue of any arrangements falling within section 788 (“*the arrangements*”) any of the income or capital gains of the partnership is relieved from corporation tax in the United Kingdom.
- (5A) The arrangements do not affect any liability to corporation tax in respect of the resident partner's share of any income or capital gains of the partnership (and section 114 has effect accordingly).
- (5B) If the resident partner's share of the income of the partnership consists of or includes a share in a qualifying distribution made by a company resident in the United Kingdom, the resident partner (and not the partnership) is, despite the arrangements, entitled to the share of the tax credit in respect of the distribution which corresponds to the partner's share of the distribution (and section 114 has effect accordingly).
- (5C) For the purposes of subsections (5) to (5B) the members of a partnership include any company which is entitled to a share of income or capital gains of the partnership.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) For the purposes of this section and section 114 “profits” shall not be taken as including chargeable gains.
#### Arrangements for transferring relief
##### 116
- (1) The provisions of subsection (2) below shall apply in relation to a company (“the partner company”) which is a member of a partnership carrying on a trade if arrangements are in existence (whether as part of the terms of the partnership or otherwise) whereby—
- (a) in respect of the whole or any part of the value of, or of any portion of, the partner company’s share in the profits or loss of any accounting period of the partnership, another member of the partnership or any person connected with another member of the partnership receives any payment or acquires or enjoys, directly or indirectly, any other benefit in money’s worth; or
- (b) in respect of the whole or any part of the cost of, or of any portion of, the partner company’s share in the loss of any accounting period of the partnership, the partner company or any person connected with that company receives any payment or acquires or enjoys, directly or indirectly, any other benefit in money’s worth, other than a payment in respect of group relief to the partner company by a company which is a member of the same group as the partner company for the purposes of group relief.
- (2) In any case where the provisions of this subsection apply in relation to the partner company—
- (a) the company’s share in the loss of the relevant accounting period of the partnership and its share in any charges on income, within the meaning of section 338, paid by the partnership in that accounting period shall not be available for set-off for the purposes of corporation tax except against its share in the profits of the trade carried on by the partnership; and
- (b) except in accordance with paragraph (a) above, no trading losses shall be available for set-off for the purposes of corporation tax against the company’s share in the profits of the relevant accounting period of the partnership; and
- (c) except in accordance with paragraphs (a) and (b) above, no amount which, apart from this subsection, would be available for relief against profits shall be available for set-off for the purposes of corporation tax against so much of the company’s total profits as consists of its share in the profits of the relevant accounting period of the partnership; and
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In subsection (2) above “*relevant accounting period of the partnership*” means any accounting period of the partnership in which any such arrangements as are specified in subsection (1) above are in existence or to which any such arrangements apply.
- (4) If a company is a member of a partnership and corporation tax in respect of any profits of the partnership is chargeable under Case VI of Schedule D, this section shall apply in relation to the company’s share in the profits or loss of the partnership as if—
- (a) the profits or loss to which the company’s share is attributable were the profits of, or the loss incurred in, a trade carried on by the partnership; and
- (b) any allowance to be given effect under Part 2 of the Capital Allowances Act in respect of a special leasing of plant or machinery were an allowance to be given effect in calculating the profits of that trade.
- (5) For the purposes of this section, subsection (2) of section 114 shall have effect for determining a company’s share in the profits or loss of any accounting period of a partnership as if, in subsection (1)(b) of that section, the words “ or for capital allowances and charges ” were omitted.
- (6) In this section “*arrangements*” means arrangements of any kind whether in writing or not.
- (7) Section 839 shall apply for the purposes of this section.
### Limited partners
#### Restriction on relief: individuals
##### 117
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restriction on relief: companies
##### 118
- (1) An amount which may be given . . . under section 338, 393A(1) or 403 below . . . —
- (a) in respect of a loss incurred by a company in a trade, or of charges paid by a company in connection with the carrying on of a trade, in a relevant accounting period; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
may be given . . . to that company (“the partner company”) otherwise than against profits arising from the trade, or to another company, only to the extent that the amount given . . . or (as the case may be) the aggregate amount does not exceed the relevant sum.
- (2) In this section—
- “*limited partner*” means—a company which is carrying on a trade as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907;a company which—is carrying on a trade as a general partner in a partnership;is not entitled to take part in the management of the trade; andis entitled to have its liabilities, or its liabilities beyond a certain limit, for debts or obligations incurred for the purposes of the trade discharged or reimbursed by some other person; ora company which carries on a trade jointly with others and which, under the law of any territory outside the United Kingdom—is not entitled to take part in the management of the trade; andis not liable beyond a certain limit for debts or obligations incurred for the purposes of the trade;
- “*relevant accounting period*” means an accounting period of the partner company at any time during which it carried on the trade as a limited partner . . . ;
- “*the aggregate amount*” means the aggregate of any amounts given . . . to the partner company or another company at any time under section 338, 393A(1) or 403 below . . . —in respect of a loss incurred by the partner company in the trade, or of charges paid by it in connection with carrying it on, in any relevant accounting period; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*the relevant sum*” means the amount of the partner company’s contribution . . . to the trade as at the appropriate time; and
- “*the appropriate time*” is the end of the relevant accounting period in which the loss is incurred or the charges paid or for which the allowance falls to be made (except that where the partner company ceased to carry on the trade during that accounting period it is the time when it so ceased).
- (3) A partner company's contribution to a trade at any time is the aggregate of—
- (a) the amount which the partner company has contributed to the trade as capital and has not, directly or indirectly, drawn out or received back (other than anything which it is or may be entitled so to draw out or receive back at any time when it carries on the trade as a limited partner or which it is or may be entitled to require another person to reimburse to it), and
- (b) the amount of any profits of the trade to which the partner company is entitled but which it has not received in money or money's worth.
### CHAPTER VIII — MISCELLANEOUS AND SUPPLEMENTAL
#### Rent etc. payable in connection with mines, quarries and similar concerns
##### 119
- (1) Where rent is payable in respect of any land or easement, and either—
- (a) the land or easement is used, occupied or enjoyed in connection with any of the concerns specified in section 55(2); or
- (b) the lease or other agreement under which the rent is payable provides for the recoupment of the rent by way of reduction of royalties or payments of a similar nature in the event of the land or easement being so used, occupied or enjoyed,
the rent shall, subject to section 122 and section 201 of the 1992 Act, be charged to corporation tax under Schedule D, . . . .
- (2) Where the rent is rendered in produce of the concern, it shall, . . . , be charged under Case III of Schedule D, and the value of the produce so rendered shall be taken to be the amount of the profits or income arising therefrom.
- (3) For the purposes of this section—
- “*easement*” includes any right, privilege or benefit in, over or derived from land; and
- “*rent*” includes a rent service, rentcharge, fee farm rent . . . or other rent, toll, duty, royalty or annual or periodical payment in the nature of rent, whether payable in money or money’s worth or otherwise.
#### Rent etc. payable in respect of electric line wayleaves
##### 120
- (1) Subject to subsection (1A) below, where rent is payable in respect of any easement enjoyed in the United Kingdom in connection with any electric, telegraphic or telephonic wire or cable (not being such an easement as is mentioned in section 119(1)), the rent shall be charged to corporation tax under Schedule D . . . .
- (1A) If—
- (a) the profits and gains arising to any person for any accounting period include both rent in respect of any such easement as is mentioned in subsection (1) above and amounts which are charged to corporation tax under Schedule A, and
- (b) some or all of the land to which the easement relates is included in the land by reference to which the amounts charged under Schedule A arise,
then, for that period, that rent shall be charged to corporation tax under Schedule A, instead of being charged under Schedule D.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section—
- (a) “*easement*” and “*rent*” have the same meanings as in section 119;
- (b) the reference to easements enjoyed in connection with any electric, telegraphic or telephonic wire or cable includes (without prejudice to the generality of that expression) references to easements enjoyed in connection with any pole or pylon supporting any such wire or cable, or with any apparatus (including any transformer) used in connection with any such wire or cable; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Management expenses of owner of mineral rights
##### 121
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In computing for the purposes of corporation tax the income of a company for any accounting period from the letting of rights to work minerals in the United Kingdom, there may be deducted any sums disbursed by the company wholly, exclusively and necessarily as expenses of management or supervision of those minerals in that period.
#### Relief in respect of mineral royalties
##### 122
- (1) Subject to the following provisions of this section, a company resident in the United Kingdom which in any accounting period is entitled to receive any mineral royalties under a mineral lease or agreement shall be treated—
- (a) . . . for the purposes of corporation tax on profits exclusive of chargeable gains, as if the total of the mineral royalties receivable by it under that lease or agreement in that . . . period and any management expenses available for set-off against those royalties in that . . . period were each reduced by one-half; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and this section shall have effect notwithstanding any provision of section 119(1) making the whole of certain kinds of mineral royalties chargeable to tax under Schedule D . . . .
- (2) For the purposes of subsection (1)(a) above, “*management expenses available for set-off*” against royalties means—
- (a) where section 121 applies in respect of the royalties, any sum . . . deductible from those royalties under subsection (3) of that section in computing the income of a company for the purposes of corporation tax; and
- (b) if the royalties are chargeable to tax under Schedule A, any sums deductible under Part II as payments made in respect of management of the property concerned;
and if neither paragraph (a) nor paragraph (b) above applies, the reference in subsection (1)(a) above to management expenses available for set-off shall be disregarded.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section references to mineral royalties refer only to royalties receivable on or after 6th April 1970, and the expression “*mineral royalties*” means so much of any rents, tolls, royalties and other periodical payments in the nature of rent payable under a mineral lease or agreement as relates to the winning and working of minerals; and the Board may by regulations—
- (a) provide whether, and to what extent, payments made under a mineral lease or agreement and relating both to the winning and working of minerals and to other matters are to be treated as mineral royalties; and
- (b) provide for treating the whole of such payments as mineral royalties in cases where the extent to which they relate to matters other than the winning and working of minerals is small.
- (6) In this section—
- “*minerals*” means all minerals and substances in or under land which are ordinarily worked for removal by underground or surface working but excluding water, peat, top-soil and vegetation; and
- “*mineral lease or agreement*” means—a lease, profit à prendre, licence or other agreement conferring a right to win and work minerals in the United Kingdom;a contract for the sale, or a conveyance, of minerals in or under land in the United Kingdom; anda grant of a right under section 1 of the Mines (Working Facilities and Support) Act 1966, other than an ancillary right within the meaning of that Act.
- (7) In the application of this section to Northern Ireland—
- (a) references to mineral royalties include references to periodical payments—
- (i) of compensation under section 29 or 35 of the Mineral Development Act (Northern Ireland) 1969 (“the 1969 Act”) or under section 4 of the Petroleum (Production) Act (Northern Ireland) 1964 (“the 1964 Act”); and
- (ii) made as mentioned in section 37 of the 1969 Act or under section 55(4)(b) of that Act or under section 11 of the 1964 Act (payments in respect of minerals to persons entitled to a share of royalties under section 13(3) of the Irish Land Act 1903); and
- (b) in its application to any such payments as are mentioned in paragraph (a) above, references to the mineral lease or agreement under which mineral royalties are payable shall be construed as references to the enactment under which the payments are made.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign dividends
##### 123
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on quoted Eurobonds
##### 124
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annual payments for non-taxable consideration
##### 125
- (1) Any payment to which this subsection applies . . . shall not be allowed as a deduction in computing the income of the company by which it is made . . . .
- (2) Subject to the following provisions of this section, subsection (1) above applies to any payment which—
- (a) is not interest but is—
- (i) an annuity or other annual payment charged with income tax under Part 5 of ITTOIA 2005 otherwise than as relevant foreign income; or
- (ii) an annuity or other annual payment charged with corporation tax under Case III of Schedule D; and
- (b) is made under a liability incurred for consideration in money or money's worth all or any of which—
- (i) consists of, or of the right to receive, a dividend, or
- (ii) is not required to be brought into account in computing for the purposes of . . . corporation tax the income of the person making the payment.
- (3) Subsection (1) above does not apply to—
- (a) any payment which in the hands of the recipient is income falling within section 627(1) or (2)(a) of ITTOIA 2005;
- (b) any payment made to an individual under a liability incurred in consideration of his surrendering, assigning or releasing an interest in settled property to or in favour of a person having a subsequent interest; or
- (c) any annuity granted in the ordinary course of a business of granting annuities;. . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
shall be issued, or shall be deemed to have been issued, subject to the condition that the interest thereon shall be paid without deduction of income tax; and subject to the provisions of this section the interest shall be so paid accordingly . . . .
- (2) The holder of any registered securities the interest on which is by virtue of subsection (A1) above or of directions given under subsection (1) above payable without deduction of tax may make an application to the Registrar under this subsection requesting that income tax shall be deducted from the interest on those securities before payment thereof.
- (3) Where any such application is made, income tax in respect of the interest on those securities shall, so long as they remain registered in the name of the applicant and subject to the withdrawal of the application under subsection (5) below, be deducted and charged in the same manner as if they were not securities the interest on which is to be paid without deduction of income tax.
- (4) An application under subsection (2) above shall be made in such form as the Registrar with the approval of the Treasury may prescribe, and any application made less than one month before the date on which a payment of interest falls due shall only have effect as regards any payment of interest subsequent to that payment.
- (5) An application made under subsection (2) above may at any time be withdrawn by notice to the Registrar in such form as the Registrar may with the approval of the Treasury prescribe, but an application so withdrawn shall, notwithstanding the withdrawal, continue to have effect as regards any interest payable less than one month after the date the notice is received by the Registrar.
- (6) Where any securities to which subsection (2) above applies are held on trust, the holders of the securities may make an application under that subsection in respect thereof without the consent of any other person, notwithstanding anything in the instrument creating the trust.
- (4) In the application of this section to Scotland the references in subsection (3) above to settled property shall be construed as references to property held in trust.
- (5) Subsection (1) above applies to a payment made after 5th April 1988 irrespective of when the liability to make it was incurred.
#### Treasury securities issued at a discount
##### 126
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Enterprise allowance
##### 127
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commodity and financial futures etc.: losses and gains
##### 128
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of corporation tax, any gain arising to any company in the course of dealing in financial futures or in qualifying options, which apart from this subsection would constitute profits or gains chargeable to tax under Schedule D otherwise than as the profits of a trade, shall not be chargeable to tax under Case V or VI of Schedule D.
- (3) In this section “*commodity or financial futures*” and “*qualifying options*” have the same meaning as in section 143 of the 1992 Act, and the reference to a gain arising in the course of dealing in commodity or financial futures includes any gain which is regarded as arising in the course of such dealing by virtue of subsection (3) of that section.
#### Stock lending
##### 129
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “investment company” for purposes of Part IV
##### 130
In this Part of this Act —
- “*company with investment business*” means any company whose business consists wholly or partly in the making of investments;
- “*investment company*”, means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, but includes any savings bank or other bank for savings except any which, for the purposes of the Trustee Savings Bank Act 1985, is a successor or a further successor to a trustee savings bank.
## PART V — PROVISIONS RELATING TO THE SCHEDULE E CHARGE
### CHAPTER I — SUPPLEMENTARY CHARGING PROVISIONS OF GENERAL APPLICATION
### Miscellaneous provisions
#### Chargeable emoluments
##### 131
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Place of performance, and meaning of emoluments received in the U.K
##### 132
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Voluntary pensions
##### 133
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Workers supplied by agencies
##### 134
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Shareholdings, loans etc.
#### Gains by directors and employees from share options
##### 135
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 135
##### 136
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payment of tax under section 135 by instalments
##### 137
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Share acquisitions by directors and employees
##### 138
- (1) *Subject to section* 185*and the following provisions of this section, where a person has acquired or acquires shares or an interest in shares in a body corporate in pursuance of a right conferred on him or opportunity offered to him as a director or employee of that or any other body corporate, and not in pursuance of an offer to the public*—
- (a) *if the market value of the shares at the end of the period mentioned in subsection* (9)*below exceeds their market value at the time of the acquisition, he shall be chargeable to tax under Schedule E for the year of assessment in which that period ends on an amount equal, except as provided by subsection* (8)*below, to the excess* (*or, if his interest is less than the full beneficial ownership, such part of that amount as corresponds to his interest*);
- (b) *if he receives, by virtue of his ownership of or interest in the shares, any benefit not received by the majority of persons who*—
- (i) *hold shares forming part of the ordinary share capital of the same body corporate; and*
- (ii) *have acquired the shares otherwise than as mentioned above*;
*and the benefit is not otherwise chargeable to income tax, he shall be chargeable to tax under the employment income Parts of ITEPA 2003 for the year of assessment in which he receives the benefit on an amount equal to the value of the benefit*;*and any amount chargeable under this subsection shall be treated as earned income, whether or not it would otherwise fall to be so treated.*
- (2) *Subsection* (1)*above does not apply if the acquisition*—
- (a) *was made in pursuance of arrangements under which employees of a body corporate receive as part of their emoluments shares or interests in shares in that body or in a body controlling it to an extent determined in advance by reference to the profits of either body; and*
- (b) *where the arrangements were made or modified after* 22*nd March* 1973,*was of shares or an interest in shares which satisfy the conditions set out in subsection* (4)(a)*below and the arrangements satisfy the condition set out in subsection* (4)(b)*below.*
- (3) *Subsection* (1)(a)*above does not apply if*—
- (a) *the acquisition was an acquisition of shares in a body and either of the following conditions was satisfied immediately after the acquisition, namely*—
- (i) *that the shares were not subject to such restrictions as are specified in subsection* (6)*below, and were not exchangeable for shares subject to such restrictions, and the majority of the available shares of the same class was acquired otherwise than as mentioned in subsection* (1)*above; or*
- (ii) *that the shares were not subject to such restrictions as are specified in paragraph* (a)*or* (b)*of subsection* (6)*below and were not exchangeable for shares subject to such restrictions, and the majority of the available shares of the same class was acquired by persons who were or had been employees or directors of, or of a body controlled by, that body and who were together able as holders of the shares to control that body; or*
- (b) *the acquisition was an acquisition after* 5*th**April* 1984*of an interest in shares which consists of units in an authorised unit trust and*—
- (i) *prior to the acquisition the unit trust was approved by the Board for the purposes of this section and, at the time of the acquisition, continues to be so approved, and*
- (ii) *the condition set out in subsection* (7)*below is fulfilled with respect to the body corporate* (*in that subsection referred to as “the relevant company”*)*directorship of or employment by which gave rise to the right or opportunity by virtue of which the acquisition was made; or*
- (c) *the acquisition took place before* 6*th April* 1981.
- (4) *The conditions referred to in subsection* (2)(b)*above are as follows*—
- (a) *that the shares*—
- (i) *are not subject to such restrictions as will or may result in the person acquiring the shares or an interest in the shares obtaining a benefit through an increase, subsequent to the acquisition, of the value or the value to him of the shares or interest; and*
- (ii) *cannot* (*whether by one transaction or a series of transactions*)*be exchanged for or converted into shares which are subject to such restrictions; and*
- (iii) *are either shares of a class quoted on a recognised stock exchange or are shares in a company which is not under the control of another company;*
- (b) *that the arrangements allow every full-time employee of the company concerned who*—
- (i) *has been a full-time employee of that company for a continuous period of not less than five years, and*
- (ii) *is chargeable to tax in respect of his employment under section 15 or 21 of ITEPA 2003 (earnings of employee resident and ordinarily resident in the UK), and*
- (iii) *is not less than* 25*years old,*
*to acquire shares or interests in shares of the same class on similar terms.*
- (5) *For the purposes of subsection* (3)(a)*above*—
- (a) *shares in a body are available shares if they are not held by or for the benefit of an associated company of that body; and*
- (b) *shares are exchangeable for other shares if* (*whether by one transaction or a series of transactions*)*they can be exchanged for or converted into the other shares.*
- (6) *The restrictions referred to in subsection* (3)(a)*above are*—
- (a) *restrictions not attaching to all shares of the same class; or*
- (b) *restrictions ceasing or liable to cease at some time after the acquisition; or*
- (c) *restrictions depending on the shares being or ceasing to be held by directors or employees of any body corporate* (*other than such restrictions imposed by a company’s articles of association as require shares to be disposed of on ceasing to be so held*).
- (7) *The condition referred to in subsection* (3)(b)*above is fulfilled with respect to the relevant company if, for no continuous period of one month or more, throughout which any director or employee of the relevant company either*—
- (a) *has, by virtue of his office or employment, any such right or opportunity as is referred to in subsection* (1)*above to acquire units in the unit trust, or*
- (b) *retains any beneficial interest in any units in the unit trust which he acquired in pursuance of such a right or opportunity,*
*do investments in the relevant company and in any other company in relation to which the relevant company is an associated company make up more than* 10*per cent. by value of the investments subject to the trusts of the unit trust.*
- (8) *The amount on which or on part of which the person making the acquisition is chargeable to tax under subsection* (1)(a)*above* (*“the chargeable amount”*)*shall, in the following cases, be reduced as follows, that is to say*—
- (a) *where, in accordance with the terms on which the acquisition of the shares was made, the consideration for the acquisition is subsequently increased, the chargeable amount shall be reduced by an amount equal to the increase; and*
- (b) *where, in accordance with those terms, the shares are subsequently disposed of for a consideration which is less than their market value at the time of the disposal, the chargeable amount shall be reduced so as to be equal to the excess of that consideration over the market value of the shares at the time of the acquisition*;
*and similarly where the interest acquired is less than the full beneficial ownership, and such assessments, alterations of assessments or repayments of tax shall be made as may be necessary to give effect to the reduction.*
- (9) *The period referred to in subsection* (1)(a)*above is a period ending at the earliest of the following times*—
- (a) *the expiration of seven years from the acquisition of the shares or interest in the shares*;
- (b) *the time when the person making the acquisition ceases to have any beneficial interest in the shares*;
- (c) *in relation only to a person who acquires shares, the time when by reason of their ceasing to be subject to such restrictions as are specified in subsection* (6)*above either of the conditions in subsection* (3)(a)*above would be satisfied in relation to the shares if they had been acquired at that time*;
*and for the purposes of subsection* (1)(a)*and paragraph* (b)*above a person whose beneficial interest in shares is reduced shall be treated as ceasing to have an interest in such part of the shares as is proportionate to the reduction.*
- (10) *Subsection* (11)*below applies where*—
- (a) *a person has acquired shares or an interest in shares as mentioned in subsection* (1)*above* (*and the shares which he acquires or in which he acquires an interest are in sub-paragraphs* (b)*and* (c)*and subsection* (11)*below referred to as “the original shares”*);*and*
- (b) *the circumstances of his acquisition of the original shares are such that the application of subsection* (1)(a)*above is not excluded; and*
- (c) *after* 18*th March* 1986*by virtue of his holding of the original shares or the interest in them he acquires* (*whether or not for consideration*)*additional shares or an interest in additional shares* (*and the shares which he so acquires or in which he so acquires an interest are in subsection* (11)*below referred to as “the additional shares”*).
- (11) *Where this subsection applies*—
- (a) *the additional shares or, as the case may be, the interest in them shall be treated as having been acquired as mentioned in subsection* (1)*above and in circumstances falling within subsection* (10)(b)*above and, for the purposes of subsection* (9)(a)*above, as having been acquired at the same time as the original shares or the interest in them;*
- (b) *for the purposes of subsections* (1)(a)*and* (8)*above, the additional shares and the original shares shall be treated as one holding of shares and the market value of the shares comprised in that holding at any time shall be determined accordingly (the market value of the original shares at the time of acquisition being attributed proportionately to all the shares in the holding); and*
- (c) *for the purposes of those subsections, any consideration given for the acquisition of the additional shares or the interest in them shall be taken to be an increase falling within subsection* (8)(a)*above in the consideration for the original shares or the interest in them.*
- (12) *Subsection* (1)(b)*above does not apply where the benefit is received by virtue of a person’s ownership of or of an interest in shares which were acquired before* 6*th April* 1972.
#### Provisions supplementary to section 138
##### 139
- (1) *Where*—
- (a) *a director or employee of a body corporate acquires shares in pursuance of an opportunity to acquire shares of that class offered to directors and employees of the body in their capacity as such* (*“the discount offer”*);*and*
- (b) *the discount offer is made in conjunction with an offer to the public* (*“the main offer”*)*under which shares of the same class may be acquired on the same terms, except that a discount in price is offered to directors and employees; and*
- (c) *the director or employee is chargeable to tax under Schedule E on an amount equal to the discount in the price of the shares acquired by him; and*
- (d) *at least* 75*per cent. of the aggregate number of shares of the class in question which are acquired in pursuance of the discount offer and the main offer taken together are shares acquired in pursuance of the main offer,*
*he shall be treated for the purposes of section* 138(1)*as acquiring the shares in pursuance of an offer to the public.*
- (2) *Where a director or employee acquires an interest in shares, subsection* (1)*above shall apply as if the references in that subsection to the acquisition of shares were references to the acquisition of an interest in shares.*
- (3) *For the purposes of section* 138*and this section, where a person acquires any shares or an interest in shares in a body corporate in pursuance of a right conferred on him or opportunity offered to him as a person connected with a director or employee of that or any other body corporate, the shares or interest shall be deemed to be acquired by the director or employee, and section* 32A(4)*of the* 1979*Act shall apply with the necessary modifications; and where that person receives a benefit as mentioned in section* 138(1)(b)*the benefit shall be deemed to be received by the director or employee.*
- (4) *For the purposes of section* 138,*a person who disposes of shares or an interest in shares otherwise than by a bargain at arm’s length with a person who is not connected with him shall be deemed not to cease to have a beneficial interest in the shares.*
- (5) *Where in any year of assessment a person acquires shares or an interest in shares as mentioned in section* 138(1) (*disregarding subsections* (1)*and* (2)*above*),*the body from which the shares are or the interest is acquired shall deliver to the inspector within* 30*days of the end of that year particulars in writing of the shares and the acquisition.*
- (6) *The Board may by notice require the managers or trustees of any unit trust scheme which is an authorised unit trust approved by the Board for the purposes of section* 138*to furnish to the Board within such time as they may direct* (*but not being less than* 30*days*)*such information as the Board think necessary for the purposes of enabling them to determine*—
- (a) *whether the condition in subsection* (7)*of that section is being or has at any time been fulfilled; and*
- (b) *the liability to tax of any unit holder whose rights were acquired as mentioned in subsection* (1)*of that section.*
- (7) *Subject to subsection* (9)*below, in determining for the purposes of section* 138 (*including any valuation made for those purposes*)*whether shares which, or interests in which, have been acquired or are or are to be acquired by any person are subject to any restrictions, there shall be regarded as a restriction attaching to the shares any contract, agreement, arrangement or condition by which his freedom to dispose of the shares or any interest in them or to exercise any right conferred by them is restricted or by which such a disposal or exercise may result in any disadvantages to him or a person connected with him, except where the restriction is imposed as a condition of a loan which is not a related loan as defined by subsection* (8)*below.*
- (8) *A loan made to any person is a related loan for the purposes of subsection* (7)*above if*—
- (a) *it is made, arranged, guaranteed or in any way facilitated by*—
- (i) *the body corporate of which he is a director or employee, or*
- (ii) *an associated company of that body, or*
- (iii) *if that body or an associated company of it is a close company, any person having a material interest in the close company; or*
- (b) *it is made to a person connected with another person and would have been such a loan if it had been made to that other person;*
*but a loan made by the body corporate, associated company or person mentioned in paragraph* (a)*above is not a related loan if that body, company or person carries on a business of making personal loans and the loan is made in the ordinary course of that business.*
- (9) *For the purposes of section* 138(3)(a),*shares acquired by any person shall not, by virtue of subsection* (7)*above, be regarded as subject to any restriction by reason only of any contract, agreement, arrangement or condition providing for the disposal of the shares, when that person ceases to hold the office or employment by virtue of which he acquired the shares, to a person nominated in accordance with the contract, agreement, arrangement or condition if he is required to dispose of them at a price not exceeding their market value.*
- (10) *Any reference in subsection* (7)*above to a contract, agreement, arrangement or condition does not include a reference to so much of any contract, agreement, arrangement or condition as contains provisions similar in purpose and effect to any of the provisions of the Model Rules set out in the Model Code for Securities Transactions by Directors of Listed Companies issued by the Stock Exchange in November* 1984.
- (11) *In section* 138*and this section*—
- *“associated company” has the meaning given by section* 416;
- *“control” has the meaning given by section* 840;
- *“*director*” includes a person who is to be a director*;
- *“*employee*” includes a person who is to be an employee*;
- *“*full-time*”, in relation to an employee, means required to devote substantially the whole of his time to service as an employee*;
- *“*shares*” includes stock and securities and references to an interest in any shares include references to the proceeds of sale of part of the shares; and*
- *“*units*”, in relation to an authorised unit trust, means an entitlement to a share in the investments subject to that trust.*
- (12) *For the purposes of section* 138*and this section, section* 168(11)*shall apply for determining whether a person has a material interest in a company, but with the omission of the words following* “ 417(3) ”.
- (13) *If, on a person ceasing to have a beneficial interest in any shares, he acquires, after* 18*th March* 1986,*other shares or an interest in other shares and the circumstances are such that, for the purposes of sections* 78*to* 81*of the* 1979*Act* (*reorganisations etc.*)*the shares in which he ceases to have a beneficial interest constitute original shares and the other shares constitute a new holding*—
- (a) *section* 78*of that Act* (*which equates the original shares with the new holding*)*shall apply for the purposes of this section and section* 138;
- (b) *if any such consideration is given for the new holding as is mentioned in section* 79(1)*of that Act, it shall be treated for the purposes of this section and section* 138*as an increase falling within section* 138(8)(a)*in the consideration for the shares; and*
- (c) *if any such consideration is received for the disposal of the original shares as is mentioned in section* 79(2)*of the* 1979*Act*—
- (i) *the consideration shall be apportioned among the shares comprised in the new holding, and*
- (ii) *the amount which, apart from this paragraph, would at any subsequent time be the market value of any of those shares shall be taken to be increased by the amount of the consideration apportioned to them*;
*and in paragraphs* (a)*to* (c)*above “the original shares” shall be construed in accordance with sections* 78*to* 81*of the* 1979*Act.*
- (14) *In any case where section* 138(1)*applies and the acquisition was an acquisition of units in an authorised unit trust*—
- (a) *any reference in section* 138(1)(a), (8)*or* (9)*or subsection* (4)*above or section*120(4)*of the* 1992*Act to shares shall be construed as references to units; and*
- (b) *any reference in those provisions to an interest in shares shall be omitted* .
#### Further interpretation of sections 135 to 139
##### 140
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### Vouchers etc.
#### Non-cash vouchers
##### 141
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#### Credit-tokens
##### 142
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#### Cash vouchers taxable under P.A.Y.E
##### 143
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#### Supplementary provisions
##### 144
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### Living accommodation
#### Living accommodation provided for employee
##### 145
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#### Additional charge in respect of certain living accommodation
##### 146
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#### Occupation of Chevening House
##### 147
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### Payments on retirement, sick pay etc.
#### Payments on retirement or removal from office or employment
##### 148
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#### Sick pay
##### 149
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#### Job release scheme allowances, maternity pay and statutory sick pay
##### 150
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#### Income support etc
##### 151
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#### Notification of amount taxable under section 151
##### 152
- (1) A benefit officer may by notice notify a person who is taxable in respect of any unemployment benefit , Jobseeker’s allowance or income support of the amount on which he is taxable and any such notification shall state the date on which it is issued and shall inform the person to whom it is given that he may object to the notification by notice given within 60 days after the date of issue of the notification.
- (2) Where—
- (a) no objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below); or
- (b) an objection is made but is withdrawn by the objector by notice,
that amount shall not be questioned in any appeal against any assessment in respect of income including that amount.
- (3) Where—
- (a) an objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below), and
- (b) the benefit officer and the objector come to an agreement that the amount notified should be varied in a particular manner, and
- (c) the officer confirms the agreement to vary in writing,
then, subject to subsection (4) below, that amount as so varied shall not be questioned in any appeal against any assessment in respect of income including that amount.
- (4) Subsection (3) above shall not apply if, within 60 days from the date when the agreement was come to, the objector gives notice to the benefit officer that he wishes to repudiate or resile from the agreement.
- (5) An objection to a notification may be made later than 60 days after the date of the issue of the notification if, on an application for the purpose—
- (a) a benefit officer is satisfied that there was a reasonable excuse for not objecting within that time, and
- (b) the objection was made thereafter without unreasonable delay, and
- (c) the officer gives consent in writing;
and if the officer is not so satisfied he shall refer the application for determination—
- (i) by the General Commissioners for the division in which the objector ordinarily resides or,
- (ii) in a case where an appeal has been made against an assessment in respect of income including the amount in question, the General Commissioners or the Special Commissioners having jurisdiction in that appeal.
- (6) Where a benefit officer has notified an amount to a person under subsection (1) above, he may by another notice notify the person of an alteration in the amount previously notified and, if he does so, the original notification shall be cancelled and this section shall apply to such a subsequent notification as it applies to the original notification.
- (7) In this section “*benefit officer*” means the appropriate officer, in Great Britain, of the Department for Work and Pensions, or, in Northern Ireland, of the Department of Health and Social Services.
### CHAPTER II — EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS
### Expenses
#### Payments in respect of expenses
##### 153
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### Benefits in kind
#### General charging provision
##### 154
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#### Exceptions from the general charge
##### 155
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#### Cash equivalents of benefits charged under section 154
##### 156
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#### Cars available for private use
##### 157
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#### Car fuel
##### 158
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#### Pooled cars
##### 159
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#### Beneficial loan arrangements
##### 160
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#### Exceptions from section 160
##### 161
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#### Employee shareholdings
##### 162
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#### Expenses connected with living accommodation
##### 163
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#### Director’s tax paid by employer
##### 164
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#### Scholarships
##### 165
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### General supplementary provisions
#### Notice of nil liability under this Chapter
##### 166
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#### Meaning of “director’s or higher-paid employment”
##### 167
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#### Other interpretative provisions
##### 168
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### CHAPTER III — PROFIT-RELATED PAY
### Preliminary
#### Interpretation
##### 169
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#### Taxation of profit-related pay
##### 170
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### The relief
#### Relief from tax
##### 171
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#### Exceptions from tax
##### 172
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### Registration
#### Persons who may apply for registration
##### 173
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#### Excluded employments
##### 174
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#### Applications for registration
##### 175
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#### Registration
##### 176
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#### Change of scheme employer
##### 177
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#### Cancellation of registration
##### 178
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### Administration
#### Recovery of tax from scheme employer
##### 179
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#### Annual returns etc
##### 180
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#### Other information
##### 181
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#### Appeals
##### 182
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### Supplementary
#### Partnerships
##### 183
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#### Independent accountants
##### 184
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### CHAPTER IV — OTHER EXEMPTIONS AND RELIEFS
### Share option and profit sharing schemes
#### Approved share option schemes
##### 185
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Approved profit sharing schemes
##### 186
- (1) The provisions of this section apply where, after 5th April 1979 and before 1st January 2003, the trustees of an approved profit sharing scheme appropriate shares—
- (a) which have previously been acquired by the trustees, and
- (b) as to which the conditions in Part II of Schedule 9 are fulfilled,
to an individual who participates in the scheme (“the participant”).
- (2) Notwithstanding that, by virtue of such an appropriation of shares as is mentioned in subsection (1) above, the beneficial interest in the shares passes to the participant to whom they are appropriated—
- (a) the value of the shares at the time of the appropriation shall be treated as not being income of his chargeable to tax under Schedule E; and
- (b) he shall not be chargeable to income tax under that Schedule by virtue of section 78 or 79 of the Finance Act 1988 in respect of the shares or by virtue of section 162 in any case where the shares are appropriated to him at an undervalue within the meaning of that section.
- (3) Subject to the provisions of this section and paragraph 4 of Schedule 10, if, in respect of or by reference to any of a participant’s shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money’s worth (“a capital receipt”), . . . the appropriate percentage (determined as at the time the trustees become or the participant becomes so entitled) of so much of the amount or value of the receipt as exceeds the appropriate allowance for that year, as determined under subsection (12) below counts as employment income of the participant for the year of assessment in which the entitlement arises.
- (4) If the trustees dispose of any of a participant’s shares at any time before the release date or, if it is earlier, the date of the participant’s death, then, subject to subsections (6) and (7) below, . . . the appropriate percentage of the locked-in value of the shares at the time of the disposal counts as employment income of the participant for the year of assessment in which the disposal takes place.
- (5) Subject to paragraphs 5 and 6(6) of Schedule 10, the locked-in value of a participant’s shares at any time is—
- (a) if prior to that time he has become entitled to a capital receipt (within the meaning of subsection (3) above) which is referable to those shares and—
- (i) an amount calculated by reference to that capital receipt counts as his employment income by virtue of subsection (3) above, or
- (ii) if the entitlement to the capital receipt arose before 6th April 2003, he was chargeable to income tax by virtue of that subsection (as it had effect before that date) in respect of that capital receipt,
the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and
- (b) in any other case, their initial market value.
- (6) Subject to subsection (7) below, if, on a disposal of shares falling within subsection (4) above, the proceeds of the disposal are less than the locked-in value of the shares at the time of the disposal, subsection (4) above shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal.
- (7) If, at any time prior to the disposal of any of a participant’s shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (8) below, subsections (4) and (6) above shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant’s shares held by the trustees at that time.
- (8) For the purposes of subsection (7) above—
- (a) no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and
- (b) in relation to a particular disposal the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals;
and any reference in subsection (7) or paragraph (a) above to the rights arising under a rights issue is a reference to rights conferred in respect of a participant’s shares, being rights to be allotted, on payment, other shares or securities or rights of any description in the same company.
- (9) If at any time the participant’s beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of the relevant provisions as having been disposed of at that time by the trustees for (subject to subsection (10) below) the like consideration as was obtained for the disposal of the beneficial interest; and for the purposes of this subsection there is no disposal of the participant’s beneficial interest if and at the time when—
- (a) in England and Wales or Northern Ireland, that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of law, or
- (b) in Scotland, that interest becomes vested in a judicial factor, in a trustee on the participant’s sequestrated estate or in a trustee for the benefit of the participant’s creditors.
- (10) If—
- (a) a disposal of shares falling within subsection (4) above is a transfer to which paragraph 2(2)(c) of Schedule 9 applies, or
- (b) any other disposal falling within that subsection is not at arm’s length,
- (c) a disposal of shares falling within that subsection is one which is treated as taking place by virtue of subsection (9) above and takes place within the period of retention,
then for the purposes of the relevant provisions the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal.
- (11) Where the trustees of an approved scheme acquire any shares as to which the requirements of Part II of Schedule 9 are fulfilled and, within the period of 18 months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme, section 686 shall not apply to income consisting of dividends on those shares received by the trustees; and, for the purpose of determining whether any shares are appropriated within that period, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time.
- (12) For the purposes of subsection (3) above, “*the appropriate allowance*”, in relation to any year of assessment, means a sum which, subject to a maximum of £60, is the product of multiplying £20 by 1 plus the number of years which fall within the period of three years immediately preceding the year in question and in which shares were appropriated to the participant under the scheme; and if in any year (and before the release date) the trustees become or the participant becomes entitled, in respect of or by reference to any of his shares, to more than one capital receipt, the receipts shall be set against the appropriate allowance for that year in the order in which they are received.
- (13) Schedule 10 shall have effect with respect to profit sharing schemes.
#### Interpretation of sections 185 and 186 and Schedules 9 and 10
##### 187
- (1) In sections 185 and 186, this section and Schedules 9 and 10 “*the relevant provisions*” means those sections (including this section) and Schedules.
- (2) For the purposes of the relevant provisions, except where the context otherwise requires—
- “*appropriate percentage*” shall be construed in accordance with paragraph 3 of Schedule 10;
- “*approved*”, in relation to a scheme, means approved under Schedule 9;
- “*associated company*” has the same meaning as in section 416, except that, for the purposes of paragraph 23 of Schedule 9, subsection (1) of that section shall have effect with the omission of the words “ or at any time within one year previously ”;
- “*bonus date*” has the meaning given by paragraph 17 of Schedule 9;
- “*capital receipt*” means money or money’s worth to which the trustees of or a participant in a profit sharing scheme become or becomes entitled as mentioned in section 186(3), but subject to paragraph 4 of Schedule 10;
- “*certified contractual savings scheme*” has the meaning given by section 326;
- “*control*” has the same meaning as in section 840;
- “*grantor*”, in relation to any scheme, means the company which has established the scheme;
- “*group scheme*” and, in relation to such a scheme, “*participating company*” have the meanings given by paragraph 1(3) and (4) of Schedule 9;
- “*initial market value*”, in relation to shares in a profit sharing scheme, has the meaning given by paragraph 30(4) of Schedule 9;
- “*locked-in value*”, in relation to any shares, shall be construed in accordance with section 186(5);
- “*market value*” has the same meaning as in Part VIII of the 1992 Act;
- “*new holding*” has the meaning given by section 126(1)(b) of the 1992 Act;
- “*participant*”, in relation to a profit sharing scheme, means an individual to whom the trustees of the scheme have appropriated shares;
- “*participant’s shares*”, in relation to a participant in a profit sharing scheme, means, subject to paragraph 5(4) of Schedule 10, shares which have been appropriated to the participant by the trustees;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*period of retention*” has the meaning given by paragraph 2 of Schedule 10;
- “*release date*”, in relation to any of the shares of a participant in a profit sharing scheme, means the third anniversary of the date on which they were appropriated to him;
- “*relevant amount*”, in relation to a participant in a profit sharing scheme, means an amount which is not less than £3,000 and not more than £8,000 but which, subject to that, is 10 per cent. of his salary (determined under subsection (5) below) for the year of assessment in question or the preceding year of assessment, whichever is the greater;
- “*relevant requirements*” has the meaning given by paragraph 1 of Schedule 9;
- “*savings-related share option scheme*” has the meaning given by paragraph 1 of Schedule 9;
- “*scheme*” means a savings-related share option scheme, a share option scheme which is not a savings-related share option scheme or a profit sharing scheme, as the context may require;
- “*shares*” includes stock;
- “*specified age*”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;
- “*the trustees*”, in relation to an approved profit sharing scheme or the shares of a participant in such a scheme, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 30 of Schedule 9; and
- “*just instrument*”, in relation to an approved profit sharing scheme, means the instrument referred to in paragraph 30(1)(c) of Schedule 9.
- (3) For the purposes of the application of the relevant provisions in relation to any share option scheme or profit sharing scheme, a person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—
- (a) is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the ordinary share capital of the company, or
- (b) where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the assets which would then be available for distribution among the participators.
- In this subsection “*associate*” has the meaning given by section 417(3) and (4) and “*participator*” has the meaning given by section 417(1).
- (4) Subsection (3) above shall have effect subject to the provisions of Part VI of Schedule 9.
- (5) For the purposes of subsection (2) above, a participant’s salary for a year of assessment means such of the emoluments of the office or employment by virtue of which he is entitled to participate in a profit sharing scheme as are liable to be paid in that year under deduction of tax pursuant to section 203 after deducting therefrom amounts included by virtue of Chapter II of this Part.
- (6) Section 839 shall apply for the purposes of the relevant provisions.
- (7) For the purposes of the relevant provisions a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company’s ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital.
- (8) Where the disposal referred to in section 186(4) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of the relevant provisions—
- (a) the initial market value and the locked-in value of each of those shares, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Any of the relevant provisions with respect to—
- (a) the order in which any of a participant’s shares are to be treated as disposed of for the purposes of those provisions, or
- (b) the shares in relation to which an event is to be treated as occurring for any such purpose,
shall have effect in relation to a profit sharing scheme notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.
- (10) In the relevant provisions “*workers’ cooperative*” means a registered industrial and provident society, within the meaning of section 486, which is a cooperative society and the rules of which include provisions which secure—
- (a) that the only persons who may be members of it are those who are employed by, or by a subsidiary of, the society and those who are the trustees of its profit sharing scheme; and
- (b) that, subject to any provision about qualifications for membership which is from time to time made by the members of the society by reference to age, length of service or other factors of any description, all such persons may be members of the society;
and in this subsection “*cooperative society*” has the same meaning as in section 1 of the Industrial and Provident Societies Act 1965 or, as the case may be, the Industrial and Provident Societies Act (Northern Ireland) 1969.
### Retirement benefits etc.
#### Exemptions from section 148
##### 188
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#### Lump sum benefits on retirement
##### 189
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments to Members of Parliament, Representatives to the European Parliament and others
##### 190
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job release scheme allowances not to be treated as income
##### 191
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Foreign emoluments and earnings, pensions and certain travel facilities
#### Relief from tax for foreign emoluments
##### 192
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign earnings and travel expenses
##### 193
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other foreign travel expenses
##### 194
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Travel expenses of employees not domiciled in the United Kingdom
##### 195
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign pensions
##### 196
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leave travel facilities for the armed forces
##### 197
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Other expenses, subscriptions etc.
#### Relief for necessary expenses
##### 198
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses necessarily incurred and defrayed from official emoluments
##### 199
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses of Members of Parliament
##### 200
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Fees and subscriptions to professional bodies, learned societies etc
##### 201
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Donations to charity: payroll deduction scheme
##### 202
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### CHAPTER V — ASSESSMENT, COLLECTION, RECOVERY AND APPEALS
#### Pay as you earn
##### 203
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#### P.A.Y.E repayments
##### 204
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#### Assessments unnecessary in certain circumstances
##### 205
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#### Additional provision for certain assessments
##### 206
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#### Disputes as to domicile or ordinary residence
##### 207
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## PART VI — COMPANY DISTRIBUTIONS, TAX CREDITS ETC
### CHAPTER I — TAXATION OF COMPANY DISTRIBUTIONS
#### U.K. company distributions not generally chargeable to corporation tax
##### 208
Except as otherwise provided by the Corporation Tax Acts, corporation tax shall not be chargeable on dividends and other distributions of a company resident in the United Kingdom, nor shall any such dividends or distributions be taken into account in computing income for corporation tax.
### CHAPTER II — MATTERS WHICH ARE DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS
#### Meaning of “distribution”
##### 209
- (1) The following provisions of this Chapter, together with section 418, shall, subject to any express exceptions, have effect with respect to the meaning of “distribution” and for determining the persons to whom certain distributions are to be treated as made, but references in the Corporation Tax Acts to distributions of a company shall not apply to distributions made in respect of share capital in a winding up.
- (2) In the Corporation Tax Acts “*distribution*”, in relation to any company, means—
- (a) any dividend paid by the company, including a capital dividend;
- (b) subject to subsections (5) and (6) below, any other distribution out of assets of the company (whether in cash or otherwise) in respect of shares in the company, except so much of the distribution, if any, as represents repayment of capital on the shares or is, when it is made, equal in amount or value to any new consideration received by the company for the distribution;
- (c) subject to section 230, any redeemable share capital or any security issued by the company in respect of shares in or securities of the company otherwise than wholly for new consideration, or such part of any redeemable share capital or any security so issued as is not properly referable to new consideration;
- (d) any interest or other distribution out of assets of the company in respect of securities of the company, where they are securities under which the consideration given by the company for the use of the principal thereby secured represents more than a reasonable commercial return for the use of that principal, except so much, if any, of any such distribution as represents that principal and so much as represents a reasonable commercial return for the use of that principal;
- (da) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) any interest or other distribution out of assets of the company in respect of securities of the company (except so much, if any, of any such distribution as represents the principal thereby secured and except so much of any distribution as falls within paragraph (d) . . . above), where the securities are—
- (i) securities issued as mentioned in paragraph (c) above, but excluding securities issued before 6th April 1965 in respect of shares and securities issued before 6th April 1972 in respect of securities; or
- (ii) securities convertible directly or indirectly into shares in the company or securities issued after 5th April 1972 and carrying any right to receive shares in or securities of the company, not being (in either case) securities listed on a recognised stock exchange nor issued on terms which are reasonably comparable with the terms of issue of securities so listed; or
- (iii) securities under which the consideration given by the company for the use of the principal secured is to any extent dependent on the results of the company’s business or any part of it; or
- (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (vi) securities which are connected with shares in the company, and for this purpose securities are so connected if, in consequence of the nature of the rights attaching to the securities or shares and in particular of any terms or conditions attaching to the right to transfer the shares or securities, it is necessary or advantageous for a person who has, or disposes of or acquires, any of the securities also to have, or to dispose of or to acquire, a proportionate holding of the shares or;
- (vii) equity notes issued by the company (“*the issuing company*”) and held by a company which is associated with the issuing company or is a funded company;
- (f) any such amount as is required to be treated as a distribution by subsection (4) below or section 210.
- (3) Without prejudice to section 254(11), no amount shall be regarded for the purposes of subsection (2)(d). . . and (e) above as representing the principal secured by a security issued after 5th April 1972 in so far as it exceeds any new consideration which has been received by the company for the issue of the security.
- (3A) Where any security of a company is issued at a premium representing new consideration—
- (a) the references in subsection (2)(d). . . and (e) above to so much of any distribution as represents, or is an amount representing, the principal secured by a security shall be construed, in relation to a distribution in respect of the security issued at a premium, as references to the aggregate of—
- (i) so much of the distribution as represents, or is an amount representing, that principal, and
- (ii) so much of it as represents, or is an amount representing, the premium;
- (b) the reference in subsection (2)(d) above to so much of any distribution as represents a reasonable commercial return for the use of the principal secured by a security shall be construed, in relation to a distribution in respect of the security issued at a premium, as a reference to the aggregate of—
- (i) so much of the distribution as represents a reasonable commercial return for the use of that principal, and
- (ii) so much of it as (when regard is had to the extent to which distributions represent the premium) represents a reasonable commercial return for the use of the premium.
- (3AA) If, in the case of any security issued by a company, the amount of new consideration received by the company for the issue of the security exceeds the amount of the principal secured by the security—
- (a) the amount of the principal so secured shall be treated for the purposes of paragraph (d) of subsection (2) above as increased to the amount of the new consideration so received; and
- (b) subsection (3A) above, so far as relating to that paragraph, shall not have effect in relation to the security;
but this subsection is subject to sections 209A and 209B.
- (3B) For the purposes of subsection (2)(e)(iii) above the consideration given by the company for the use of the principal secured shall not be treated as being to any extent dependent on the results of the company’s business or any part of it by reason only of the fact that the terms of the security provide—
- (a) for the consideration to be reduced in the event of the results improving, or
- (b) for the consideration to be increased in the event of the results deteriorating.
- (4) Where on a transfer of assets or liabilities by a company to its members or to a company by its members, the amount or value of the benefit received by a member (taken according to its market value) exceeds the amount or value (so taken) of any new consideration given by him, the company shall, subject to subsections (5) and (6) below, be treated as making a distribution to him of an amount equal to the difference.
- (5) Subsection (4) above shall not apply where the company and the member receiving the benefit are both resident in the United Kingdom and either the former is a subsidiary of the latter or both are subsidiaries of a third company also so resident; and any amount which would apart from this subsection be a distribution shall not constitute a distribution by virtue of subsection (2)(b) above.
- (6) No transfer of assets (other than cash) or of liabilities between one company and another shall constitute, or be treated as giving rise to, a distribution by virtue of subsection (2)(b) or (4) above if they are companies—
- (a) both of which are resident in the United Kingdom and neither of which is a 51 per cent. subsidiary of a company not so resident; and
- (b) which, neither at the time of the transfer nor as a result of it, are under common control.
- (7) The question whether one body corporate is a subsidiary of another for the purpose of subsection (5) above shall be determined as a question whether it is a 51 per cent. subsidiary of that other, except that that other shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate, if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.
- (8) For the purposes of subsection (2)(c) above—
- (a) the value of any redeemable share capital shall be taken to be the amount of the share capital together with any premium payable on redemption, or in a winding up, or in any other circumstances; and
- (b) the value of any security shall be taken to be the amount of the principal thereby secured (including any premium payable at maturity or in a winding up, or in any other circumstances);
and in determining the amount of the distribution constituted by the issue of any redeemable share capital or any security, the capital or security shall be taken at that value.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of subsection (2)(e)(vii) above a security is an equity note if as regards the whole of the principal or as regards any part of it—
- (a) the security’s terms contain no particular date by which it is to be redeemed,
- (b) under the security’s terms the date for redemption, or the latest date for redemption, falls after the expiry of the permitted period,
- (c) under the security’s terms redemption is to occur after the expiry of the permitted period if a particular event occurs and the event is one which (judged at the time of the security’s issue) is certain or likely to occur, or
- (d) the issuing company can secure that there is no particular date by which the security is to be redeemed or that the date for redemption falls after the expiry of the permitted period;
and the permitted period is the period of 50 years beginning with the date of the security’s issue.
- (10) For the purposes of subsection (2)(e)(vii) above and subsection (11) below a company is associated with the issuing company if—
- (a) the issuing company is a 75 per cent. subsidiary of the other company,
- (b) the other company is a 75 per cent. subsidiary of the issuing company, or
- (c) both are 75 per cent. subsidiaries of a third company.
- (11) For the purposes of subsection (2)(e)(vii) above a company is a funded company if there are arrangements involving the company being put in funds (directly or indirectly) by the issuing company or a company associated with the issuing company.
#### Bonus issue following repayment of share capital
##### 210
- (1) Where a company—
- (a) repays any share capital or has done so at any time after 6th April 1965, and
- (b) at or after the time of that repayment issues any share capital as paid up otherwise than by the receipt of new consideration,
the amount so paid up shall, except as provided by any provision of the Corporation Tax Acts, be treated as a distribution made in respect of the shares on which it is paid up, except in so far as that amount exceeds the amount or aggregate amount of share capital so repaid less any amounts previously so paid up and treated by virtue of this subsection as distributions.
- (2) Subsection (1) above shall not apply where the repaid share capital consists of fully paid preference shares—
- (a) if those shares existed as issued and fully paid preference shares on 6th April 1965 and throughout the period from that date until the repayment those shares continued to be fully paid preference shares, or
- (b) if those shares were issued after 6th April 1965 as fully paid preference shares wholly for new consideration not derived from ordinary shares and throughout the period from their issue until the repayment those shares continued to be fully paid preference shares.
- (3) Except in relation to a company within paragraph D of section 704, subsection (1) above shall not apply if the issue of share capital mentioned in paragraph (b) of that subsection—
- (a) is of share capital other than redeemable share capital; and
- (b) takes place after 5th April 1973 and more than ten years after the repayment of share capital mentioned in paragraph (a) of that subsection.
- (4) In this section—
- “*ordinary shares*” means shares other than preference shares;
- “*preference shares*” means shares—which do not carry any right to dividends other than dividends at a rate per cent. of the nominal value of the shares which is fixed, andwhich carry rights in respect of dividends and capital which are comparable with those general for fixed-dividend shares listed in the Official List of the Stock Exchange; and
- “*new consideration not derived from ordinary shares*” means new consideration other than consideration—consisting of the surrender, transfer or cancellation of ordinary shares of the company or any other company or consisting of the variation of rights in ordinary shares of the company or any other company, orderived from a repayment of share capital paid in respect of ordinary shares of the company or of any other company.
#### Matters to be treated or not to be treated as repayments of share capital
##### 211
- (1) Where—
- (a) a company issues any share capital as paid up otherwise than by the receipt of new consideration, or has done so after 6th April 1965; and
- (b) any amount so paid up does not fall to be treated as a qualifying distribution or, where the issue took place before 6th April 1973, did not fall to be treated as a distribution;
then, except as otherwise provided by any provision of the Corporation Tax Acts, for the purposes of sections 209 and 210, distributions afterwards made by the company in respect of shares representing that share capital shall not be treated as repayments of share capital, except to the extent to which those distributions, together with any relevant distributions previously so made, exceed the amounts so paid up (then or previously) on such shares after 6th April 1965 and not falling to be treated as qualifying distributions or, where the share capital was issued before 6th April 1973, as distributions.
- (2) Except in relation to a company within paragraph D of section 704, subsection (1) above shall not prevent a distribution being treated as a repayment of share capital if it is made—
- (a) more than ten years after the issue of share capital mentioned in paragraph (a) of that subsection; and
- (b) in respect of share capital other than redeemable share capital.
- (3) In subsection (1) above “*relevant distribution*” means so much of any distribution made in respect of shares representing the relevant share capital as apart from that subsection would be treated as a repayment of share capital, but by virtue of that subsection cannot be so treated.
- (4) For the purposes of subsection (1) above all shares of the same class shall be treated as representing the same share capital, and where shares are issued in respect of other shares, or are directly or indirectly converted into or exchanged for other shares, all such shares shall be treated as representing the same share capital.
- (5) Where share capital is issued at a premium representing new consideration, the amount of the premium is to be treated as forming part of that share capital for the purpose of determining under this Chapter whether any distribution made in respect of shares representing the share capital is to be treated as a repayment of share capital.
- (6) Subsection (5) above shall not have effect in relation to any part of the premium after that part has been applied in paying up share capital.
- (7) Subject to subsection (5) above, premiums paid on redemption of share capital are not to be treated as repayments of capital.
### CHAPTER III — MATTERS WHICH ARE NOT DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS
### Payments of interest
#### Interest etc. paid in respect of certain securities
##### 212
- (1) Any interest or other distribution—
- (a) which is paid out of the assets of a company (“the borrower”) to another company which is within the charge to corporation tax; and
- (b) which is so paid in respect of securities of the borrower which fall within . . . any of sub-paragraphs (i) to (iii) and (vi) and (vii) of paragraph (e) of section 209(2); and
- (c) which does not fall within paragraph (d) of section 209(2),
shall not be a distribution for the purposes of the Corporation Tax Acts unless the application of this subsection is excluded by subsection (2) or (3) below.
- (2) Subsection (1) above does not apply in the case of any interest or other distribution which is paid in respect of a security of the borrower falling within section 209(2)(e)(iii) if—
- (a) the principal secured does not exceed £100,000; and
- (b) the borrower is under an obligation to repay the principal and interest before the expiry of the period of five years beginning on the date on which the principal was paid to the borrower; and
- (c) that obligation either was entered into before 9th March 1982 or was entered into before 1st July 1982 pursuant to negotiations which were in progress on 9th March 1982; and
- (d) where the period for repayment of either principal or interest is extended after 8th March 1982 (but paragraph (b) above still applies), the interest or other distribution is paid within the period which was applicable immediately before that date;
and for the purposes of paragraph (c) above negotiations shall not be regarded as having been in progress on 9th March 1982 unless, before that date, the borrower had applied to the lender for a loan and had supplied the lender with any documents required by him to support the application.
- (3) . . . Subsection (1) above does not apply in a case where the company to which the interest or other distribution is paid is entitled under any enactment, other than section 208, to an exemption from tax in respect of that interest or distribution . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Demergers
#### Exempt distributions
##### 213
- (1) The provisions of this section and sections 214 to 218 have effect for facilitating certain transactions whereby trading activities carried on by a single company or group are divided so as to be carried on by two or more companies not belonging to the same group or by two or more independent groups.
- (2) References in the Corporation Tax Acts to distributions of a company shall not apply to any distribution—
- (a) which falls within subsection (3) below, and
- (b) in respect of which the conditions specified in subsections (4) to (12) below are satisfied;
and any such distribution is referred to in this section as an “exempt distribution”.
- (3) The following distributions fall within this subsection—
- (a) a distribution consisting of the transfer to all or any of its members by a company (“the distributing company”) of shares in one or more companies which are its 75 per cent. subsidiaries;
- (b) a distribution consisting of the transfer by a company (“the distributing company”) to one or more other companies (“the transferee company or companies”) of—
- (i) a trade or trades; or
- (ii) shares in one or more companies which are 75 per cent. subsidiaries of the distributing company,
and the issue of shares by the transferee company or companies to all or any of the members of the distributing company;
and in this section and sections 214 to 217 references to a relevant company are to the distributing company, to each subsidiary whose shares are transferred as mentioned in paragraph (a) or (b) (ii) above and to each transferee company mentioned in paragraph (b) above.
- (4) Each relevant company must be resident in the United Kingdom at the time of the distribution.
- (5) The distributing company must at the time of the distribution be either a trading company or a member of a trading group and each subsidiary whose shares are transferred as mentioned in subsection (3)(a) or (b)(ii) above must at that time be either a trading company or the holding company of a trading group.
- (6) In a case within subsection (3)(a) above—
- (a) the shares must not be redeemable, must constitute the whole or substantially the whole of the distributing company’s holding of the ordinary share capital of the subsidiary and must confer the whole or substantially the whole of the distributing company’s voting rights in the subsidiary; and
- (b) subject to subsections (7) and (12)(b) below, the distributing company must after the distribution be either a trading company or the holding company of a trading group.
- (7) Subsection (6)(b) above does not apply if the transfer relates to two or more 75 per cent. subsidiaries of the distributing company and that company is dissolved without there having been after the distribution any net assets of the company available for distribution in a winding up or otherwise.
- (8) In a case within subsection (3)(b) above—
- (a) if a trade is transferred the distributing company must either not retain any interest or retain only a minor interest in that trade;
- (b) if shares in a subsidiary are transferred those shares must constitute the whole or substantially the whole of the distributing company’s holding of the ordinary share capital of the subsidiary and must confer the whole or substantially the whole of the distributing company’s voting rights in the subsidiary;
- (c) the only or main activity of the transferee company or each transferee company after the distribution must be the carrying on of the trade or the holding of the shares transferred to it;
- (d) the shares issued by the transferee company or each transferee company must not be redeemable, must constitute the whole or substantially the whole of its issued ordinary share capital and must confer the whole or substantially the whole of the voting rights in that company; and
- (e) subject to subsections (9) and (12)(b) below, the distributing company must after the distribution be either a trading company or the holding company of a trading group.
- (9) Subsection (8)(e) above does not apply if there are two or more transferee companies each of which has a trade or shares in a separate 75 per cent. subsidiary of the distributing company transferred to it and the distributing company is dissolved without there having been after the distribution any net assets of the company available for distribution in a winding up or otherwise.
- (10) The distribution must be made wholly or mainly for the purpose of benefiting some or all of the trading activities which before the distribution are carried on by a single company or group and after the distribution will be carried on by two or more companies or groups.
- (11) The distribution must not form part of a scheme or arrangements the main purpose or one of the main purposes of which is—
- (a) the avoidance of tax (including stamp duty or stamp duty land tax); or
- (b) without prejudice to paragraph (a) above, the making of a chargeable payment, as defined by section 214, or what would be such a payment if any of the companies mentioned in that section were an unquoted company; or
- (c) the acquisition by any person or persons other than members of the distributing company of control of that company, of any other relevant company or of any company which belongs to the same group as any such company; or
- (d) the cessation of a trade or its sale after the distribution.
- In paragraph (c) above “*group*” means a company which has one or more 51 per cent. subsidiaries together with that or those subsidiaries.
- (12) Where the distributing company is a 75 per cent. subsidiary of another company—
- (a) the group (or, if more than one, the largest group) to which the distributing company belongs at the time of the distribution must be a trading group;
- (b) subsections (6)(b) and (8)(e) above shall not apply; and
- (c) the distribution must be followed by one or more other distributions falling within subsection (3)(a) or (b)(ii) above which satisfy the conditions of this section and result in members of the holding company of the group (or, if more than one, the largest group) to which the distributing company belonged at the time of the distribution becoming members of—
- (i) the transferee company or each transferee company to which a trade was transferred by the distributing company; or
- (ii) the subsidiary or each subsidiary whose shares were transferred by the distributing company; or
- (iii) a company (other than that holding company) of which the company or companies mentioned in sub-paragraph (i) or (ii) above are 75 per cent. subsidiaries.
#### Chargeable payments connected with exempt distributions
##### 214
- (1) If within five years after the making of an exempt distribution there is a chargeable payment—
- (a) the amount or value of the payment shall be treated as income . . . ;
- (ab) that income shall be chargeable to tax;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the payment shall be regarded as a distribution for the purposes of section 337A(1) ; and
- (d) the payment shall not (if it otherwise would) be treated as a repayment of capital for the purposes of section 210 or 211.
- (1A) Income tax chargeable by virtue of subsection (1) shall be charged on the full amount or value of the payment made in the year of assessment; and the person liable for any tax so charged is the person receiving or entitled to the payment.
- (1B) Corporation tax chargeable by virtue of subsection (1) shall be charged under Case VI of Schedule D.
- (2) In this section “*a chargeable payment*” means any payment made otherwise than for bona fide commercial reasons or forming part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax (including stamp duty or stamp duty land tax), being a payment which—
- (a) a company concerned in an exempt distribution makes directly or indirectly to a member of that company or of any other company concerned in that distribution; and
- (b) is made in connection with, or with any transaction affecting, the shares in that or any such company; and
- (c) is not a distribution or exempt distribution or made to another company which belongs to the same group as the company making the payment.
- (3) Where a company concerned in an exempt distribution is an unquoted company subsection (2)(a) above shall have effect as if any reference to the making of a payment by, or to a member of, a company concerned in the exempt distribution included a reference to the making of a payment by or to any other person in pursuance of a scheme or arrangements made with the unquoted company or, if the unquoted company is—
- (a) under the control of five or fewer persons; and
- (b) not under the control of (and only of) a company which is not itself under the control of five or fewer persons,
with any of the persons mentioned in paragraph (a) above.
- (4) References in this section to a company concerned in an exempt distribution are to any relevant company and to any other company which was connected with any such company for the whole or any part of the period beginning with the exempt distribution and ending with the making of the payment which is in question under this section.
- (5) For the purposes of subsection (4) above and this subsection a company shall be deemed to have been connected in the period referred to in that subsection with each company to which a company connected with it was connected in that period.
- (6) References in this section to a payment include references to a transfer of money’s worth including the assumption of a liability.
#### Advance clearance by Board of distributions and payments
##### 215
- (1) A distribution shall be treated as an exempt distribution in any case in which, before the distribution is made, the Board have, on the application of the distributing company, notified that company that the Board are satisfied that it will be such a distribution.
- (2) A payment shall not be treated as a chargeable payment in any case in which, before the payment is made, the Board have, on the application of the person intending to make it, notified him that they are satisfied that it will be made for bona fide commercial reasons and will not form part of any scheme or arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax (including stamp duty or stamp duty land tax).
- (3) A company which becomes or ceases to be connected with another company may make an application under subsection (2) above as respects any payments that may be made by it at any time after becoming or ceasing to be so connected (whether or not there is any present intention to make any payments); and where a notification is given by the Board on such an application no payment to which the notification relates shall be treated as a chargeable payment by reason only of the company being or having been connected with the other company.
- (4) References in subsections (2) and (3) above to a payment shall be construed as in section 214.
- (5) Any application under this section shall be in writing and shall contain particulars of the relevant transactions and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purposes of enabling the Board to make their decision; and if any such notice is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.
- (6) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of the notice being complied with.
- (7) If the Board notify the applicant that they are not satisfied as mentioned in subsection (1) or (2) above or do not notify their decision to the applicant within the time required by subsection (6) above, the applicant may within 30 days of the notification or of that time require the Board to transmit the application, together with any notice given and further particulars furnished under subsection (5) above, to the Special Commissioners; and in that event any notification by the Special Commissioners shall have effect for the purposes of this section as if it were a notification by the Board.
- (8) If any particulars furnished under this section do not fully and accurately disclose all facts and circumstances material for the decision of the Board or the Special Commissioners, any resulting notification that the Board or Commissioners are satisfied as mentioned in subsection (1) or (2) above shall be void.
#### Returns
##### 216
- (1) Where a company makes an exempt distribution it shall within 30 days after the distribution make a return to the inspector giving particulars of the distribution and of the circumstances by reason of which it is exempt.
- (2) Where within five years after the making of an exempt distribution a person makes a chargeable payment which consists of a transfer of money’s worth, he shall within 30 days after the transfer make a return to the inspector giving particulars—
- (a) of the transaction effecting the transfer;
- (b) of the name and address of the recipient or each recipient and the value of what is transferred to him or each of them; and
- (c) if the transfer is accompanied by a chargeable payment consisting of a payment of money, of that payment.
- (3) Subject to subsection (4) below, where within five years after the making of an exempt distribution a person makes a payment or a transfer of money’s worth which would be a chargeable payment but for the fact that it is made for bona fide commercial reasons and does not form part of any such scheme or arrangements as are mentioned in section 214(2), that person shall within 30 days after making the payment or transfer make a return to the inspector giving particulars—
- (a) in the case of a transfer, of the transaction by which it is effected;
- (b) of the name and address of the recipient or each recipient and the amount of the payment made, or the value of what is transferred, to him or each of them; and
- (c) of the circumstances by reason of which the payment or transfer is not a chargeable payment.
- (4) Subsection (3) above does not apply where the payment or transfer is one in relation to which a notification under section 215(3) has effect.
#### Information
##### 217
- (1) Where a distribution falling within section 213(3) has been made and the inspector has reason to believe that it may form part of any such scheme or arrangements as are mentioned in section 213(11), he may by notice require any relevant company or any person controlling any such company to furnish him within such time, not being less than 30 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which the company or that person has or can reasonably obtain, any such scheme or arrangements exist or have existed;
- (b) such other information as the inspector may reasonably require for the purposes of section 213(11) and the company or that person has or can reasonably obtain.
- (2) If the inspector has reason to believe that a person has not delivered an account or made a return which he is required to deliver or make by virtue of section 214(1)(b) or 216(2) or (3) in respect of any payment or transfer, he may by notice require that person to furnish him within such time, not being less than 30 days, as may be specified in the notice with such information relating to the payment or transfer as he may reasonably require for the purposes of section 214.
- (3) If the inspector has reason to believe that a payment or transfer has been made within five years after the making of an exempt distribution and that the payment or transfer is a chargeable payment by reason of the existence of any such scheme or arrangements as are mentioned in section 214(3), he may by notice require the person making the payment or transfer or, if that person is a company, any person controlling it to furnish him within such time, not being less than 30 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which that person has, or can reasonably obtain, any such scheme or arrangements exist or have existed;
- (b) such other information as the inspector may reasonably require for the purposes of section 214 and that person has or can reasonably obtain.
- (4) Any recipient of a chargeable payment and any person on whose behalf such a payment is received shall, if so required by the inspector, state whether the payment received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
#### Interpretation of sections 213 to 217
##### 218
- (1) In sections 213 to 217—
- “*chargeable payment*” has the meaning given by section 214(2);
- “*control*” shall be construed in accordance with section 416(2) to (6);
- “*distributing company*” has the meaning given by section 213(3);
- “*exempt distribution*” has the meaning given by section 213(2);
- “*group*”, except in section 213(11)(c), means a company which has one or more 75 per cent. subsidiaries together with that or those subsidiaries;
- “*holding company*” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
- “member”, where the reference is to a member of a company, does not, except in section 214(2)(a), include a person who is a member otherwise than by virtue of holding shares forming part of the company’s ordinary share capital;
- “*relevant company*” has the meaning given by section 213(3);
- “*shares*” includes stock;
- “*trade*”, except in subsection (3) below, does not include dealing in shares, securities, land, trades or commodity futures and “*trading activities*” shall be construed accordingly;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- “*trading group*” means a group the business of whose members, taken together, consists wholly or mainly in the carrying on of a trade or trades; and
- “*unquoted company*” means a company which does not satisfy the condition that its shares or some class thereof (disregarding debenture or loan stock, preferred shares or preferred stock) are listed in the Official List of the Stock Exchange and are dealt in on the Stock Exchange regularly or from time to time, so however that this definition does not apply to a company under the control of (and only of) one or more companies to which this definition does not apply.
- (2) In determining for the purposes of section 213(3) to (9) whether a company whose shares are transferred by the distributing company is a 75 per cent. subsidiary of the distributing company there shall be disregarded any share capital of the first-mentioned company which is owned indirectly by the distributing company.
- (3) In determining for the purposes of sections 213 to 217 whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner of—
- (a) any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) any share capital which it owns indirectly and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt.
- (4) Section 839 applies for the purposes of sections 213 to 217.
### Purchase of own shares
#### Purchase by unquoted trading company of own shares
##### 219
- (1) References in the Corporation Tax Acts to distributions of a company shall not include references to a payment made by a company on the redemption, repayment or purchase of its own shares if the company is an unquoted trading company or the unquoted holding company of a trading group and either—
- (a) the redemption, repayment or purchase is made wholly or mainly for the purpose of benefiting a trade carried on by the company or by any of its 75 per cent. subsidiaries, and does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is—
- (i) to enable the owner of the shares to participate in the profits of the company without receiving a dividend, or
- (ii) the avoidance of tax; and
the conditions specified in sections 220 to 224, so far as applicable, are satisfied in relation to the owner of the shares; or
- (b) the whole or substantially the whole of the payment (apart from any sum applied in paying capital gains tax charged on the redemption, repayment or purchase) is applied by the person to whom it is made in discharging a liability of his for inheritance tax charged on a death and is so applied within the period of two years after the death;
and in sections 220 to 224—
- “*the purchase*” means the redemption, repayment or purchase referred to in subsection (1)(a) above; and
- “*the vendor*” means the owner of the shares at the time it is made.
- (2) Where, apart from this subsection, a payment falls within subsection (1)(b) above, subsection (1) above shall not apply to the extent that the liability in question could without undue hardship have been discharged otherwise than through the redemption, repayment or purchase of shares in the company or another unquoted company which is a trading company or the holding company of a trading group.
#### Conditions as to residence and period of ownership
##### 220
- (1) The vendor must be resident and ordinarily resident in the United Kingdom in the year of assessment in which the purchase is made and if the shares are held through a nominee the nominee must also be so resident and ordinarily resident.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The residence and ordinary residence of personal representatives shall be taken for the purposes of this section to be the same as the residence and ordinary residence of the deceased immediately before his death.
- (4) The references in this section to a person’s ordinary residence shall be disregarded in the case of a company.
- (5) The shares must have been owned by the vendor throughout the period of five years ending with the date of the purchase.
- (6) If at any time during that period the shares were transferred to the vendor by a person who was then his spouse or civil partner living with him then, unless that person is alive at the date of the purchase but is no longer the vendor’s spouse or civil partner living with him, any period during which the shares were owned by that person shall be treated for the purposes of subsection (5) above as a period of ownership by the vendor.
- (7) Where the vendor became entitled to the shares under the will or on the intestacy of a previous owner or is the personal representative of a previous owner—
- (a) any period during which the shares were owned by the previous owner or his personal representatives shall be treated for the purposes of subsection (5) above as a period of ownership by the vendor, and
- (b) that subsection shall have effect as if it referred to three years instead of five.
- (8) In determining whether the condition in subsection (5) above is satisfied in a case where the vendor acquired shares of the same class at different times—
- (a) shares acquired earlier shall be taken into account before shares acquired later, and
- (b) any previous disposal by him of shares of that class shall be assumed to be a disposal of shares acquired later rather than of shares acquired earlier.
- (9) If for the purposes of capital gains tax the time when shares were acquired would be determined under any provision of Chapter II of Part IV of the 1992 Act (reorganisation of share capital, conversion of securities, etc.) then, unless the shares were allotted for payment or were comprised in share capital to which section 249 applies, it shall be determined in the same way for the purposes of this section.
#### Reduction of vendor’s interest as shareholder
##### 221
- (1) If immediately after the purchase the vendor owns shares in the company, then, subject to section 224, the vendor’s interest as a shareholder must be substantially reduced.
- (2) If immediately after the purchase any associate of the vendor owns shares in the company then, subject to section 224, the combined interests as shareholders of the vendor and his associates must be substantially reduced.
- (3) The question whether the combined interests as shareholders of the vendor and his associates are substantially reduced shall be determined in the same way as is (under the following subsections) the question whether a vendor’s interest as a shareholder is substantially reduced, except that the vendor shall be assumed to have the interests of his associates as well as his own.
- (4) Subject to subsection (5) below, the vendor’s interest as a shareholder shall be taken to be substantially reduced if and only if the total nominal value of the shares owned by him immediately after the purchase, expressed as a fraction of the issued share capital of the company at that time, does not exceed 75 per cent. of the corresponding fraction immediately before the purchase.
- (5) The vendor’s interest as a shareholder shall not be taken to be substantially reduced where—
- (a) he would, if the company distributed all its profits available for distribution immediately after the purchase, be entitled to a share of those profits, and
- (b) that share, expressed as a fraction of the total of those profits, exceeds 75 per cent. of the corresponding fraction immediately before the purchase.
- (6) In determining for the purposes of subsection (5) above the division of profits among the persons entitled to them, a person entitled to periodic distributions calculated by reference to fixed rates or amounts shall be regarded as entitled to a distribution of the amount or maximum amount to which he would be entitled for a year.
- (7) In subsection (5) above “*profits available for distribution*” has the same meaning as it has for the purposes of Part VIII of the Companies Act 1985, except that for the purposes of that subsection the amount of the profits available for distribution (whether immediately before or immediately after the purchase) shall be treated as increased—
- (a) in the case of every company, by £100, and
- (b) in the case of a company from which any person is entitled to periodic distributions of the kind mentioned in subsection (6) above, by a further amount equal to that required to make the distribution to which he is entitled in accordance with that subsection;
and where the aggregate of the sums payable by the company on the purchase and on any contemporaneous redemption, repayment or purchase of other shares of the company exceeds the amount of the profits available for distribution immediately before the purchase, that amount shall be treated as further increased by an amount equal to the excess.
- (8) References in this section to entitlement are, except in the case of trustees and personal representatives, references to beneficial entitlement.
#### Conditions applicable where purchasing company is member of group
##### 222
- (1) Subject to section 224, where the company making the purchase is immediately before the purchase a member of a group and—
- (a) immediately after the purchase the vendor owns shares in one or more other members of the group (whether or not he then owns shares in the company making the purchase), or
- (b) immediately after the purchase the vendor owns shares in the company making the purchase and immediately before the purchase he owned shares in one or more other members of the group,
the vendor’s interest as a shareholder in the group must be substantially reduced.
- (2) In subsections (5) to (7) below “*relevant company*” means the company making the purchase and any other member of the group in which the vendor owns shares immediately before or immediately after the purchase, but subject to subsection (4) below.
- (3) Subject to section 224, where the company making the purchase is immediately before the purchase a member of a group and at that time an associate of the vendor owns shares in any member of the group, the combined interests as shareholders in the group of the vendor and his associates must be substantially reduced.
- (4) The question whether the combined interests as shareholders in the group of the vendor and his associates are substantially reduced shall be determined in the same way as is (under the following subsections) the question whether a vendor’s interest as a shareholder in a group is substantially reduced, except that the vendor shall be assumed to have the interests of his associates as well as his own (and references in subsections (5) to (7) below to a relevant company shall be construed accordingly).
- (5) The vendor’s interest as a shareholder in the group shall be ascertained by—
- (a) expressing the total nominal value of the shares owned by him in each relevant company as a fraction of the issued share capital of the company,
- (b) adding together the fractions so obtained, and
- (c) dividing the result by the number of relevant companies (including any in which he owns no shares).
- (6) Subject to subsection (7) below, the vendor’s interest as a shareholder in the group shall be taken to be substantially reduced if and only if it does not exceed 75 per cent. of the corresponding interest immediately before the purchase.
- (7) The vendor’s interest as a shareholder in the group shall not be taken to be substantially reduced if—
- (a) he would, if every member of the group distributed all its profits available for distribution immediately after the purchase (including any profits received by it on a distribution by another member), be entitled to a share of the profits of one or more of them, and
- (b) that share, or the aggregate of those shares, expressed as a fraction of the aggregate of the profits available for distribution of every member of the group which is—
- (i) a relevant company, or
- (ii) a 51 per cent. subsidiary of a relevant company,
exceeds 75 per cent. of the corresponding fraction immediately before the purchase.
- (8) Subsections (6) and (7) of section 221 shall apply for the purposes of subsection (7) above as they apply for the purposes of subsection (5) of that section.
- (9) Subject to the following subsections, in this section “*group*” means a company which has one or more 51 per cent. subsidiaries, but is not itself a 51 per cent. subsidiary of any other company, together with those subsidiaries.
- (10) Where the whole or a significant part of the business carried on by an unquoted company (“the successor company”) was previously carried on by—
- (a) the company making the purchase, or
- (b) a company which is (apart from this subsection) a member of a group to which the company making the purchase belongs, the successor company and any company of which it is a 51 per cent. subsidiary shall be treated as being a member of the same group as the company making the purchase (whether or not, apart from this subsection, the company making the purchase is a member of a group).
- (11) Subsection (10) above shall not apply if the successor company first carried on the business there referred to more than three years before the time of the purchase.
- (12) For the purposes of this section a company which has ceased to be a 51 per cent. subsidiary of another company before the time of the purchase shall be treated as continuing to be such a subsidiary if at that time there exist arrangements under which it could again become such a subsidiary.
#### Other conditions
##### 223
- (1) Subject to section 224, the vendor must not immediately after the purchase be connected with the company making the purchase or with any company which is a member of the same group as that company.
- In this subsection “*group*” has the same meaning as it has for the purposes of section 222.
- (2) Subject to section 224, the purchase must not be part of a scheme or arrangement which is designed or likely to result in the vendor or any associate of his having interests in any company such that, if he had those interests immediately after the purchase, any of the conditions in sections 221 and 222 and subsection (1) above could not be satisfied.
- (3) A transaction occurring within one year after the purchase shall be deemed for the purposes of subsection (2) above to be part of a scheme or arrangement of which the purchase is also part.
#### Relaxation of conditions in certain cases
##### 224
Where—
- (a) any of the conditions in sections 221 to 223 which are applicable are not satisfied in relation to the vendor, but
- (b) he proposed or agreed to the purchase in order that the condition in section 221(2) or 222(3) could be satisfied in respect of the redemption, repayment or purchase of shares owned by a person of whom he is an associate,
then, to the extent that that result is produced by virtue of the purchase, section 219(1)(a) shall have effect as if the conditions in sections 221 to 223 were satisfied in relation to the vendor.
#### Advance clearance of payments by Board
##### 225
- (1) A payment made by a company on the redemption, repayment or purchase of its own shares shall be deemed—
- (a) to be one to which section 219 applies if, before it is made, the Board have on the application of the company notified the company that they are satisfied that the section will apply; and
- (b) to be one to which section 219 does not apply if, before it is made, the Board have on the application of the company notified the company that they are satisfied that the section will not apply.
- (2) An application under this section shall be in writing and shall contain particulars of the relevant transactions; and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purpose of enabling the Board to make their decision.
- (3) If a notice under subsection (2) above is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.
- (4) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (2) above, within 30 days of the notice being complied with.
- (5) If particulars furnished under this section do not fully and accurately disclose all facts and circumstances material for the decision of the Board, any resulting notification by the Board shall be void.
#### Returns and information
##### 226
- (1) A company which treats a payment made by it as one to which section 219 applies shall within 60 days after making the payment make a return to the inspector giving particulars of the payment and of the circumstances by reason of which that section is regarded as applying to it.
- (2) Where a company treats a payment made by it as one to which section 219(1)(a) applies, any person connected with the company who knows of any such scheme or arrangement affecting the payment as is mentioned in section 223(2) shall, within 60 days after he first knows of both the payment and the scheme or arrangement, give a notice to the inspector containing particulars of the scheme or arrangement.
- (3) Where the inspector has reason to believe that a payment treated by the company making it as one to which section 219(1)(a) applies may form part of a scheme or arrangement of the kind referred to therein or in section 223(2), he may by notice require the company or any person who is connected with the company to furnish him within such time, not being less than 60 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which the company or that person has or can reasonably obtain, any such scheme or arrangement exists or has existed, and
- (b) such other information as the inspector may reasonably require for the purposes of the provision in question and the company or that person has or can reasonably obtain.
- (4) The recipient of a payment treated by the company making it as one to which section 219 applies, and any person on whose behalf such a payment is received, shall if so required by the inspector state whether the payment received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
#### Associated persons
##### 227
- (1) Any question whether a person is an associate of another in relation to a company shall be determined for the purposes of sections 219 to 226 and 228 in accordance with the following provisions of this section.
- (2) A husband and wife living together , or civil partners of each other living together, are associates of one another, a person under the age of 18 is an associate of his parents, and his parents are his associates.
- (3) A person connected with a company is an associate of the company and of any company controlled by it, and the company and any company controlled by it are his associates.
- (4) Where a person connected with one company has control of another company, the second company is an associate of the first.
- (5) Where shares in a company are held by the trustees of a settlement then in relation to that company, but subject to subsection (8) below, the trustees are associates of—
- (a) any person who directly or indirectly provided property to the trustees or has made a reciprocal arrangement for another to do so,
- (b) any person who is, by virtue of subsection (2) above, an associate of a person within paragraph (a) above, and
- (c) any person who is or may become beneficially entitled to a significant interest in the shares;
and any such person is an associate of the trustees.
- (6) Where shares in a company are comprised in the estate of a deceased person, then in relation to that company the deceased’s personal representatives are associates of any person who is or may become beneficially entitled to a significant interest in the shares, and any such person is an associate of the personal representatives.
- (7) Where one person is accustomed to act on the directions of another in relation to the affairs of a company, then in relation to that company the two persons are associates of one another.
- (8) Subsection (5) above shall not apply to shares held on trusts which—
- (a) relate exclusively to a registered pension scheme, or
- (b) are exclusively for the benefit of the employees, or the employees and directors, of the company referred to in that subsection or of companies in a group to which that company belongs, or their dependants (and are not wholly or mainly for the benefit of directors or their relatives);
and for the purposes of this subsection “*group*” means a company which has one or more 51 per cent. subsidiaries, together with those subsidiaries.
- (9) For the purposes of subsections (5) and (6) above a person’s interest is significant if its value exceeds 5 per cent. of the value of all the the settled property or, as the case may be, comprised in the estate concerned, excluding any property in which he is not and cannot become beneficially entitled to an interest.
#### Connected persons
##### 228
- (1) Any question whether a person is connected with a company shall be determined for the purposes of sections 219 to 227 in accordance with the following provisions of this section.
- (2) A person is connected with a company if he directly or indirectly possesses or is entitled to acquire more than 30 per cent. of—
- (a) the issued ordinary share capital of the company, or
- (b) the loan capital and issued share capital of the company, or
- (c) the voting power in the company.
- (3) Where a person—
- (a) acquired or became entitled to acquire loan capital of a company in the ordinary course of a business carried on by him, being a business which includes the lending of money, and
- (b) takes no part in the management or conduct of the company,
his interest in that loan capital shall be disregarded for the purposes of subsection (2) above.
- (4) A person is connected with a company if he directly or indirectly possesses or is entitled to acquire such rights as would, in the event of the winding up of the company or in any other circumstances, entitle him to receive more than 30 per cent. of the assets of the company which would then be available for distribution to equity holders of the company; and for the purposes of this subsection—
- (a) the persons who are equity holders of the company, and
- (b) the percentage of the assets of the company to which a person would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18, taking references in paragraph 3 to the first company as references to an equity holder and references to a winding up as including references to any other circumstances in which assets of the company are available for distribution to its equity holders.
- (5) A person is connected with a company if he has control of it.
- (6) References in this section to the loan capital of a company are references to any debt incurred by the company—
- (a) for any money borrowed or capital assets acquired by the company, or
- (b) for any right to receive income created in favour of the company, or
- (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium thereon).
- (7) For the purposes of this section a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire.
- (8) For the purposes of this section a person shall be assumed to have the rights or powers of his associates as well as his own.
#### Other interpretative provisions
##### 229
- (1) In sections 219 to 228—
- “*control*” has the meaning given by section 840;
- “*holding company*” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
- “*personal representatives*” means persons responsible for administering the estate of a deceased person;
- “*quoted company*” means a company whose shares (or any class of whose shares) are listed in the official list of a stock exchange;
- “*shares*” includes stock;
- “*trade*” does not include dealing in shares, securities, land or futures and “*trading activities*” shall be construed accordingly;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- “*trading group*” means a group the business of whose members, taken together, consists wholly or mainly of the carrying on of a trade or trades, and for this purpose “*group*” means a company which has one or more 75 per cent. subsidiaries together with those subsidiaries; and
- “*unquoted company*” means a company which is neither a quoted company nor a 51 per cent. subsidiary of a quoted company.
- (2) References in sections 219 to 228 to the owner of shares are references to the beneficial owner except where the shares are settled property or are comprised in the estate of a deceased person, and in such a case are references to the trustees of the settlement or, as the case may be, to the deceased’s personal representatives.
- (3) References in sections 219 to 228 to a payment made by a company include references to anything else that is, or would but for section 219 be, a distribution.
### Stock dividends
#### Stock dividends: distributions
##### 230
Any share capital to which section 249 applies and which is issued by a company . . . in a case where section 410(2), (3) or (4) of ITTOIA 2005 applies—
- (a) shall, notwithstanding section 209(2)(c), not constitute a distribution within the meaning of section 209(2); and
- (b) for purposes of sections 210 and 211 shall not be treated as issued “as paid up otherwise than by the receipt of new consideration”.
### CHAPTER IV — TAX CREDITS
#### Tax credits for certain recipients of qualifying distributions
##### 231
- (1) Subject to sections 231AA and 231AB of this Actand section 219(4B) of the Finance Act 1994,for corporation tax purposes where a company resident in the United Kingdom makes a qualifying distribution and the person receiving the distribution is another such company . . . , the recipient of the distribution shall be entitled to a tax credit equal to such proportion of the amount or value of the distribution as corresponds to the tax credit fraction in force when the distribution is made.
- (1A) The tax credit fraction is one-ninth.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a distribution mentioned in subsection (1) above is, or falls to be treated as, or under any provision of the Tax Acts is deemed to be, the income of a person other than the recipient, that person shall be treated for the purposes of this section as receiving the distribution (and accordingly the question whether that person is entitled to a tax credit in respect of it shall be determined by reference to where that person, and not the actual recipient, is resident);*and where any such distribution is income of a United Kingdom trust the trustees shall be entitled to a tax credit in respect of it if no other person falls to be treated for the purposes of this section as receiving the distribution*.
- (5) *In subsection* (4)*above “*United Kingdom trust*” means a trust administered under the law of any part of the United Kingdom, not being a trust the general administration of which is ordinarily carried on outside the United Kingdom and the trustees, or a majority of the trustees, of which are resident or ordinarily resident outside the United Kingdom*.
#### Tax credits for non-U.K. residents
##### 232
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions
##### 233
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information relating to distributions
##### 234
- (1) Without prejudice to section 234A. . . , a company which makes a qualifying distribution shall, if the recipient so requests in writing, furnish to him a statement in writing showing the amount or value of the distribution and (whether or not the recipient is a person entitled to a tax credit in respect of the distribution) the amount of the tax credit to which a recipient who is such a person is entitled in respect of that distribution.
- (2) The duty imposed by subsection (1) above shall be enforceable at the suit or instance of the person requesting the information.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where a company makes a distribution which is not a qualifying distribution it shall make a return to the inspector—
- (a) within 14 days from the end of the accounting period in which the distribution is made; or
- (b) if the distribution is made on a date not falling in an accounting period, within 14 days from that date.
- (6) A return under subsection (5) above shall contain—
- (a) particulars of the transaction giving rise to the distribution; and
- (b) the name and address of the person, or each of the persons, receiving the distribution, and the amount or value of the distribution received by him or by each of them.
- (7) Where it is not in the circumstances apparent whether a transaction gives rise to a distribution in respect of which a return is required to be made under subsection (5) above, the company shall—
- (a) within the time within which such a return would be required to be made if the transaction did give rise to such a distribution, make a return to the inspector containing particulars of the transaction in question; and
- (b) if required by a notice served on the company by the inspector, furnish him within the time specified in the notice with such further information in relation to the transaction as he may reasonably require.
- (8) If it appears to the inspector that particulars of any transaction ought to have been and have not been included in a return under subsection (5) or (7) above, he may by a notice served on the company require the company to furnish him within the time specified in the notice with such information relating thereto as he may reasonably require.
- (9) Any power which the inspector may exercise under paragraphs 2 to 4 of Schedule 12 to the Finance Act 1989 for the purposes of the relevant provisions (as defined in paragraph 1 of that Schedule) may be exercised by him for the purposes of subsections (5) to (8) above.
#### Distributions of exempt funds etc
##### 235
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 235
##### 236
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of reliefs in respect of bonus issues
##### 237
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — ADVANCE CORPORATION TAX AND FRANKED INVESTMENT INCOME
#### Interpretation of terms and collection of ACT
##### 238
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of ACT against liability to corporation tax
##### 239
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of company’s surplus ACT against subsidiary’s liability to corporation tax
##### 240
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Calculation of ACT where company receives franked investment income
##### 241
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of losses etc. against surplus of franked investment income
##### 242
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of loss brought forward, or terminal loss
##### 243
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further provisions relating to claims under section 242 or 243
##### 244
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Calculation etc. of ACT on change of ownership of company
##### 245
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge of ACT at previous rate until new rate fixed, and changes of rate
##### 246
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER VI — MISCELLANEOUS AND SUPPLEMENTAL
### Group income
#### Dividends etc. paid by one member of a group to another
##### 247
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 247
##### 248
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Stock dividends
#### Stock dividends treated as income
##### 249
- (1) Subject to subsections (8) and (9) below, this section applies (and accordingly section 230 above and section 410 of ITTOIA 2005 apply) to any of the following share capital, that is to say—
- (a) any share capital issued by a company resident in the United Kingdom in consequence of the exercise by any person of an option conferred on him to receive in respect of shares in the company (whether the last-mentioned shares were issued before or after the coming into force of this section) either a dividend in cash or additional share capital; and
- (b) any bonus share capital issued by a company so resident in respect of any shares in the company of a relevant class (whether the last-mentioned shares were issued before or after the coming into force of this section).
- (2) For the purposes of subsection (1)(b) above a class of shares is a relevant class if—
- (a) shares of that class carry the right to receive bonus share capital in the company of the same or a different class; and
- (b) that right is conferred by the terms on which shares of that class were originally issued or by those terms as subsequently extended or otherwise varied.
- (3) Where a company issues any share capital in a case in which two or more persons are entitled thereto, the following provisions of this section*and paragraph* 12(1)*to* (3)*of Schedule* 19 shall have effect as if the company had issued to each of those persons separately a part of that share capital proportionate to his interest therein on the due date of issue.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where, in a case within section 410(2), (3) or (4) of ITTOIA 2005, the share capital in question is issued in respect of shares in the company issued before 6th April 1975 which confer on the holder a right to convert or exchange them into or for shares of a different class, this section shall not apply to so much (if any) of any bonus share capital issued by the company after 5th April 1976 in connection with an exercise of that right as would have been issued if that right had been exercised so as to effect the conversion or exchange of the shares on the earliest possible date after 5th April 1975; . . . .
- (9) Where any bonus share capital falling within subsection (1)(b) above is after 5th April 1975 converted into or exchanged for shares in the company in question of a different class, then—
- (a) this section shall not apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of that bonus share capital; but
- (b) section 230(a) and (b) shall apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of so much of that bonus share capital as caused income to be treated as arising to an individual as a result of section 410(2) of ITTOIA 2005 on the due date of issue (or would have done so if the case had been one in which an individual was beneficially entitled to that share capital).
#### Returns
##### 250
- (1) A company shall for each of its accounting periods make, in accordance with this section, returns to the inspector of all share capital to which section 249 applies (“relevant share capital”) and which was issued by it in that period.
- (2) A return shall be made for—
- (a) each complete quarter falling within the accounting period, that is to say, each of the periods of three months ending with 31st March, 30th June, 30th September or 31st December which falls within that period;
- (b) each part of the accounting period which is not a complete quarter and ends on the first (or only), or begins immediately after the last (or only), of those dates which falls within the accounting period;
- (c) if none of those dates falls within the accounting period, the whole accounting period.
- (3) A return for any period for which a return is required to be made under this section (a “return period”) shall be made within 30 days from the end of that period.
- (4) No return need be made under this section by a company for any period in which it has issued no relevant share capital.
- (5) The return made by a company for any return period shall state—
- (a) the date on which any relevant share capital issued by it in the period was issued and, if different, the date on which the company was first required to issue it;
- (b) particulars of the terms on which any such share capital so issued by it was issued; and
- (c) what is, in relation to any such share capital so issued, the cash equivalent of the share capital in accordance with section 412 of ITTOIA 2005.
- (6) If it appears to the inspector that a company ought to have, but has not, made a return for any return period, he may (notwithstanding subsection (4) above) by notice require the company to make a return for that period within such time (not being less than 30 days) as may be specified in the notice; and a return required to be made under this subsection shall, if such be the case, state that no relevant share capital was issued in the period in question.
- (7) As regards any share capital included in a return made under this section by a company, the inspector may by notice require the company to furnish him within such time (not being less than 30 days) as may be specified in the notice with such further information relating thereto as he may reasonably require for the purposes of sections 230 and 249, this section and section 251 . . . of this Act or Chapter 5 of Part 4 of ITTOIA 2005.
#### Interpretation of sections 249 and 250
##### 251
- (1) For the purposes of sections 249 and 250 —
- (a) “*bonus share capital*”, in relation to a company, means share capital issued by the company otherwise than wholly for new consideration or such part of any share capital so issued as is not properly referable to new consideration;
- (b) “*due date of issue*”, in relation to any share capital issued by a company, means the earliest date on which the company was required to issue that share capital;
- (c) an option to receive either a dividend in cash or additional share capital is conferred on a person not only where he is required to choose one or the other, but also where he is offered the one subject to a right, however expressed, to choose the other instead, and a person’s abandonment of, or failure to exercise, such a right is to be treated as an exercise of the option;
and in section 254 the definition of “*security*” (in subsection (1)) and subsections (5) and (11) shall not apply.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Rectification of excessive set-off etc. of ACT or tax credit
##### 252
- (1) If an inspector discovers that—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any set-off or payment of tax credit,
ought not to have been made, or is or has become excessive, the inspector may make any such assessments as may in his judgment be required for recovering any tax that ought to have been paid or any payment of tax credit that ought not to have been made and generally for securing that the resulting liabilities to tax (including interest on unpaid tax) of the persons concerned are what they would have been if only such set-offs or payments had been made as ought to have been made.
- (2) In any case where—
- (a) interest has been paid under section 826 on a payment of tax credit; and
- (b) interest ought not to have been paid on that payment, either at all or to any extent,
an assessment under this section may be made for recovering any interest that ought not to have been paid.
- (3) Where—
- (a) an assessment is made under this section to recover tax credit paid to a company in respect of franked investment income received by the company in an accounting period; and
- (b) more than one payment of tax credit has been made in respect of that period,
any sum recovered shall as far as possible be treated as relating to a payment of tax credit made later rather than to a payment made earlier.
- (4) Subsections (2) and (3) above shall have effect in relation to payments of tax credit claimed in respect of accounting periods ending after such day as may be appointed for the purpose of those subsections by order made by the Treasury, not being earlier than 31st March 1992.
- (5) The Management Act shall apply to any assessment under this section for recovering a payment of tax credit or interest on such a payment as if it were an assessment to income tax for the year of assessment, or in the case of a company, corporation tax for the accounting period, in respect of which the payment was claimed, and as if that payment represented a loss of tax to the Crown; and any sum charged by any such assessment shall, subject to any appeal against the assessment, be due within 14 days after the issue of the notice of assessment.
#### Power to modify or replace section 234(5) to (9) and Schedule 13
##### 253
- (1) The Board may by regulations—
- (a) modify, supplement or replace any of the provisions of subsections (5) to (9) of section 234 for the purpose of requiring companies resident in the United Kingdom to make returns and give information to the inspector in respect of distributions made by them, whether before or after the passing of this Act, which are not qualifying distributions;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and references in this Act and in any other enactment to section 234(5) to (9) . . . shall be construed as including references to any such regulations.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Regulations under this section may—
- (a) make different provision for different descriptions of companies and for different circumstances and may authorise the Board, where in their opinion there are special circumstances justifying it, to make special arrangements as respects . . . the repayment of income tax borne by a company or the payment to a company of amounts in respect of any tax credit to which it is entitled;
- (b) include such transitional and other supplemental provisions as appear to the Board to be expedient or necessary.
- (4) The Board shall not make any regulations under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.
#### Interpretation of Part VI
##### 254
- (1) In this Part, except where the context otherwise requires—
- “*new consideration*” means, subject to subsections (5) and (6) below, consideration not provided directly or indirectly out of the assets of the company, and in particular does not include amounts retained by the company by way of capitalising a distribution;
- “*security*” includes securities not creating or evidencing a charge on assets, and interest paid by a company on money advanced without the issue of a security for the advance, or other consideration given by a company for the use of money so advanced, shall be treated as if paid or given in respect of a security issued for the advance by the company;
- “*share*” includes stock, and any other interest of a member in a company;
and in this section “*a 90 per cent. group*” means a company and all of its 90 per cent. subsidiaries.
- (2) In this Part, the expressions “*in respect of shares in the company*” and “*in respect of securities of the company*”, in relation to a company which is a member of a 90 per cent. group, mean respectively in respect of shares in that company or any other company in the group and in respect of securities of that company or any other company in the group.
- (3) Without prejudice to section 209(2)(b) as extended by subsection (2) above, in relation to a company which is a member of a 90 per cent. group, “*distribution*” includes anything distributed out of assets of the company (whether in cash or otherwise) in respect of shares in or securities of another company in the group.
- (4) Nothing in subsections (2) and (3) above shall require a company to be treated as making a distribution to any other company which is in the same group and is resident in the United Kingdom.
- (5) Where share capital has been issued at a premium representing new consideration, any part of that premium afterwards applied in paying up share capital shall be treated as new consideration also for that share capital, except in so far as the premium has been taken into account under section 211(5) so as to enable a distribution to be treated as a repayment of share capital.
- (6) Subject to subsection (7) below, no consideration derived from the value of any share capital or security of a company, or from voting or other rights in a company, shall be regarded for the purposes of this Part as new consideration received by the company unless the consideration consists of—
- (a) money or value received from the company as a qualifying distribution;
- (b) money received from the company as a payment which for those purposes constitutes a repayment of that share capital or of the principal secured by the security; or
- (c) the giving up of the right to the share capital or security on its cancellation, extinguishment or acquisition by the company.
- (7) No amount shall be regarded as new consideration by virtue of subsection (6)(b) or (c) above in so far as it exceeds any new consideration received by the company for the issue of the share capital or security in question or, in the case of share capital which constituted a qualifying distribution on issue, the nominal value of that share capital.
- (8) Where two or more companies enter into arrangements to make distributions to each other’s members, all parties concerned (however many) may for the purposes of this Part be treated as if anything done by any one of those companies had been done by any of the others.
- (9) A distribution shall be treated under this Part as made, or consideration as provided, out of assets of a company if the cost falls on the company.
- (10) References in this Part to issuing share capital as paid up apply also to the paying up of any issued share capital.
- (11) Where securities are issued at a price less than the amount repayable on them, and are not listed on a recognised stock exchange, the principal secured shall not be taken for the purposes of this Part to exceed the issue price, unless the securities are issued on terms reasonably comparable with the terms of issue of securities so listed.
- (12) For the purposes of this Part a thing is to be regarded as done in respect of a share if it is done to a person as being the holder of the share, or as having at a particular time been the holder, or is done in pursuance of a right granted or offer made in respect of a share; and anything done in respect of shares by reference to share holdings at a particular time is to be regarded as done to the then holders of the shares or the personal representatives of any share holder then dead.
#### “Gross rate” and “gross amount” of distributions to include ACT
##### 255
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VII — GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
### CHAPTER I — PERSONAL RELIEFS
### The reliefs
#### General
##### 256
- (1) An individual who makes a claim in that behalf or, in the case of relief under section 266, who satisfies the conditions of that section, shall be entitled to such relief as is specified in sections 257 to 274, subject however to the provisions of section 278 and 287 and 288.
- (2) Where under any provision of this Chapter the relief to which a person is entitled for any year of assessment consists in a tax reduction calculated by reference to a specified amount, the amount of the tax reduction is equal to 10 per cent. of the specified amount.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Personal relief
##### 257
- (1) The claimant shall be entitled to a personal allowance of £3,005.
- (2) If the claimant . . . is at any time within the year of assessment of the age of 65 or upwards, he shall be entitled to a personal allowance of £3,670 (instead of the allowance provided for by subsection (1) above).
- (3) If the claimant . . . is at any time within the year of assessment of the age of 75 or upwards, he shall be entitled to a personal allowance of £3,820 (instead of the allowance provided for by subsection (1) or (2) above).
- (4) For the purposes of subsections (2) and (3) above a person who would have been of or over a specified age within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (5) In relation to a claimant whose adjusted net income for the year of assessment exceeds £12,300, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by one half of the excess (but not so as to reduce those amounts below that specified in subsection (1) above).]
- (6) An allowance under this section is given effect at Step 3 of the calculation in section 23 of ITA 2007.
#### Widower’s or widow’s housekeeper
##### 258
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Additional relief in respect of children
##### 259
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of relief under section 259
##### 260
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims under sections 258 and 259 for year of marriage
##### 261
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Widows' bereavement allowance
##### 262
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dependent relatives
##### 263
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claimant depending on services of a son or daughter
##### 264
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for blind persons
##### 265
- (1) If the claimant . . . is a registered blind person for the whole or any part of the year of assessment, he shall be entitled to a blind person's allowance of £1,280. . . .
- (1A) Section 257C (indexation) shall have effect (using the rounding up rule in subsection (1)(b) of that section) for the application of this section for the year 1998-99 and any subsequent year of assessment as it has effect for the application of sections 257 and 257A.
- (2) Where—
- (a) a person entitled to an allowance under subsection (1) above is a person whose spouse or civil partner is living with him for the whole of any part of the year of assessment, but
- (b) the amount to which the person is entitled exceeds the person's remaining relievable income,
his spouse or civil partner shall be entitled to an allowance of an amount equal to the excess.
- (2A) The person's remaining relievable income is the amount found by—
- (a) taking the amount of the individual's net income, and
- (b) subtracting any personal allowance to which the person is entitled.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Subsection (2) above shall not apply for a year of assessment unless the person entitled to an allowance under subsection (1) has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (6) A notice given under subsection (5) above in relation to a year of assessment by a spouse or civil partner shall have effect also as a notice under section 257BB(2).
- (7) In this section “*registered blind person*” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.
- (8) An allowance under this section is given effect at Step 3 of the calculation in section 23 of ITA 2007.
#### Life assurance premiums
##### 266
- (1) Subject to the provisions of this section, section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an individual who pays any such premium as is specified in subsection (2) below or makes a payment falling within subsection (7) below shall (without making any claim) be entitled to relief under this section.
- (2) The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—
- (a) the payments are made to —
- (i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or
- (ii) a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;
- (iv) in the case of a deferred annuity, the National Debt Commissioners; and
- (b) the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse or civil partner; and
- (c) the insurance or contract was made by him or his spouse or civil partner.
- (3) Subject to subsections (7), (10) and (11) below, no relief under this section shall be given—
- (a) except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;
- (b) in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;
- (c) in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 . . . ;
- (d) in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.
- (4) Subject to subsections (7) and (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.
- (5) Subject to the provisions of Schedule 14—
- (a) an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to 12.5 per cent. of the payment; and
- (b) the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Where a person makes a payment to a trade union as defined in section 28(1) of the Trade Union and Labour Relations Act 1974, and part of that payment is attributable to the provision of superannuation, life insurance or funeral benefits, he shall be entitled to relief under this section in respect of that part of the payment, but—
- (a) subsection (4) above shall not apply; and
- (b) in calculating his net income there shall be deducted an amount equal to one-half of that part of the payment.
- (8) Where the individual is not resident in the United Kingdom and is entitled to relief by virtue of section 278(2) or (2ZA), subsection (4) above shall not apply but . . . the like relief shall be given to him under paragraph 6 of Schedule 14.
- (9) Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the spouseor civil partner of such a member as if the individual were so resident.
- (10) Subsection (3)(b) above shall not apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.
- (11) Subsection (3)(a) and (d) above shall not affect premiums payable—
- (a) under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the spouse, civil partner, widow, widower , surviving civil partner or children or other dependants of any such employee or person, or
- (b) under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.
- (12) Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.
- (13) In . . . Schedule 14, “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).
- (14) In subsection (2)(a)—
- “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
- “member of the society” has the same meaning as in Lloyd’s Act 1982 .
#### Qualifying policies
##### 267
Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.
#### Early conversion or surrender of life policies
##### 268
- (1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy;
- (b) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and
- (c) the conversion of the policy into a paid-up or partly paid-up policy;
the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—
- (a) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and
- (b) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a) above.
- (3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say—
- (a) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;
- (b) if it is the conversion of the policy into a partly paid-up policy, the surrender value at the time of the conversion, of so much of the policy as is paid up; and
- (c) if it is the falling due of a sum, that sum.
- (4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—
- (a) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and
- (b) if the earlier event was such an event as is mentioned in paragraph (a) or (c) of subsection (3) above, as if the surrender value of the policy were increased by the amount which, under that paragraph, limited or might have limited the sum payable under this section in respect of the earlier event.
- (5) For the purposes of this section the appropriate percentage, in relation to any event, is the percentage equal to the following fraction of the percentage found by doubling that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happened, that is to say—
- (a) if the event happens in the first two of the four years mentioned in subsection (1) above, three-sixths;
- (b) if it happens in the third of those years, two-sixths; and
- (c) if it happens in the last of those years, one-sixth;
and the complementary percentage, in relation to any event, is 100 per cent. less the appropriate percentage.
- (6) Where the annual amount of the premiums payable under a policy of life insurance is at any time increased (whether under the policy or by any contract made after its issue) so as to exceed by more than 25 per cent.—
- (a) if the insurance was made on or before 26th March 1974, the annual amount as at that date, or
- (b) in the case of any other insurance, the first annual amount so payable,
the additional rights attributable to the excess shall be treated for the purposes of this section as conferred by a new policy issued in respect of an insurance made at that time, and the excess shall be treated as premiums payable under the new policy.
- (7) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy of life insurance issued in connection with a registered pension scheme;
and in relation to a policy of life insurance issued in respect of an insurance made before 27th March 1974 applies only in accordance with subsection (6) above.
#### Surrender etc. of policies after four years
##### 269
- (1) Where a policy of life insurance to which this section applies has been issued and, in the fifth or any later year from the making of the insurance in respect of which it was issued, either of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy; and
- (b) the falling due (otherwise than on death or maturity) of a sum payable in pursuance of a right conferred by the policy to participate in profits;
then, if either of those events has happened before, the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender, or, as the case may be, out of the sum falling due, a sum determined in accordance with the following provisions of this section.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the applicable percentage of the lower of the following—
- (a) the total of the premiums which are payable in that year under the policy; and
- (b) the sums payable by reason of the surrender or, as the case may be, the sum falling due;
and the percentage to be applied for this purpose shall be a percentage equal to that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happens.
- (3) Where, after a sum has become payable under subsection (1) above, and within the same year from the making of the insurance, another such event happens as is mentioned therein, the sums payable under that subsection in respect of both or all of the events shall not exceed the applicable percentage of the total mentioned in subsection (2)(a) above.
- (4) Where, on the happening of an event in the fifth or any later year from the making of the insurance, any sum is payable under subsection (1) of section 268 as applied by subsection (6) of that section as well as under subsection (1) above, subsection (2) above shall apply as if the sums or sum mentioned in paragraph (b) thereof were reduced by the sum payable under that section.
- (5) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy issued in the course of an industrial insurance business; or
- (c) it was issued in respect of an insurance made before 27th March 1974.
#### Provisions supplementary to sections 268 and 269
##### 270
- (1) Where on the happening of an event in relation to a policy of life insurance a sum is payable under section 268 or 269, relief under section 266 in respect of the relevant premiums paid under the policy shall be reduced by the sum so payable or, as the case may be, by so much of the sum as does not exceed the amount of that relief (or as does not exceed so much of that amount as remains after any previous reduction under this section).
- (2) For the purposes of this section the relevant premiums are—
- (a) in relation to a sum payable under section 268, the premiums payable under the policy up to the happening of the event by reason of which the sum is payable; and
- (b) in relation to a sum payable under section 269, the premiums payable in the year (from the making of the insurance) in which the event happens by reason of which the sum is payable.
- (3) Where the relevant premiums are payable in more than one year of assessment the reduction in relief under this section shall, so far as possible, reduce relief for an earlier year of assessment before reducing relief for a later one.
- (4) Any sum paid under section 268 or 269 by reason of any event shall be treated—
- (a) as between the parties, as received by the person by whom the premiums under the policy were paid; and
- (b) for the purposes of section 266, as a sum paid by that person in satisfaction of his liability resulting from the reduction of relief under this section;
and where that sum exceeds that liability he shall be entitled, on a claim made by him not later than six years after the end of the year of assessment in which the event happens, to repayment of the excess.
#### Deemed surrender in cases of certain loans
##### 271
- (1) Where—
- (a) by virtue of section 465 of ITTOIA 2005 a gain arising in connection with a policy . . . would be treated as forming part of an individual’s total income; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 . . .; and
- (c) any sum is at any time after the making of the insurance . . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy . . .;
then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy . . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).
- (2) Subsection (1) above does not apply—
- (a) in relation to a policy if—
- (i) it is a qualifying policy; and
- (ii) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection of sums payable under sections 268 and 269
##### 272
- (1) Any body by whom a policy to which section 268 or 269 applies has been issued shall, within 30 days of the end of each period of 12 months ending with 31st March in every year, make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.
- (2) Any sum which is to be included in a return made under subsection (1) above shall be due at the time by which the return is to be made and shall be paid without being demanded.
- (3) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made, it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.
- (4) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this section; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this section shall be treated as having been payable when it would have been payable had it been included in a return under subsection (1) above.
- (5) Where, on an appeal against an assessment made in pursuance of this section, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.
- (6) Where a body has paid a sum which is payable under section 268 or 269 it shall give within 30 days to the person by whom the sum is, under section 270(4), treated as received a statement specifying that sum and showing how it has been arrived at.
- (7) The Board or an inspector may, by notice served on the body by whom a policy to which section 268 or 269 applies has been issued, require the body, within such time, not being less than 30 days, as may be specified in the notice—
- (a) to furnish such particulars; or
- (b) to make available for inspection by an officer authorised by the Board such books and other documents in the possession or under the control of the body;
as the Board or officer may reasonably require for the purposes of those sections or this section.
#### Payments securing widows' and children’s annuities
##### 273
- (1) Subject to subsection (2) below, section 274 of this Act and sections 192 to 194 of the Finance Act 2004, if the claimant is, under any Act of Parliament or under any terms and conditions of employment, liable to the payment of any sum, or to the deduction from any salary or stipend of any sum, for the purpose of securing a deferred annuity to a widow or widower or surviving civil partner of the claimant or provision for the claimant’s children after the claimant dies, the claimant shall be entitled to a tax reduction equal to income tax at the basic rate on the amount of the sum which he or she has paid or which has been deducted from his or her salary or stipend.
- (2) There is no entitlement to a tax reduction under this section in respect of any contribution paid by any person under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
- (3) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
#### Limits on relief under sections 266 and 273
##### 274
- (1) The aggregate of the premiums or other sums in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.
- (2) The aggregate of the relief given under sections 266 and 273 in respect of premiums or sums payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at the appropriate rate on £100.
- (3) In subsection (2) above “*the appropriate rate*”—
- (a) in relation to premiums to which section 266 applies, means 12.5 per cent.;
- (b) in relation to other payments, means the basic rate of income tax.
- (4) War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.
### Supplemental
#### Meaning of “relative”
##### 275
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect on relief of charges on income
##### 276
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partners
##### 277
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Non-residents
##### 278
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Subject to subsection (2ZA) below, relief under this Chapter shall be given only to an individual who . . . —
- (za) is not resident in the United Kingdom,
- (zb) does not meet the condition in section 56(3) of ITA 2007, and
- (a) is a Commonwealth citizen or an EEA national;. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2ZA) Relief under section 266 above (except relief given by virtue of subsection (7) of that section) may also be given to an individual who—
- (a) is resident in the United Kingdom, or
- (b) meets the condition in section 56(3) of ITA 2007.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) *No relief under this Chapter shall be given so as to reduce the amount of the income tax payable by the individual below the amount which results from applying the fraction*—
$$AB$*to the amount which would have been payable by him by way of income tax if the tax were chargeable on his total income from all sources (including income which is not subject to income tax charged in the United Kingdom) where*—$
A*is the amount of his income subject to income tax charged in the United Kingdom; and*
B*is the amount of his total income*.
- (4) *Subsection* (3)*above shall have effect as if the amount of any relief to which an individual is entitled under section* 266(4)*were an amount by which his liability to income tax is reduced*.
- (5) *For the purposes of subsection* (3)*above as it applies to an individual whose income includes income eligible for double taxation relief*—
- (a) *in computing the amount of the income tax payable by the individual, the tax chargeable in respect of the income eligible for double taxation relief shall be disregarded;*
- (b) *in computing the amount of his income subject to income tax charged in the United Kingdom, the income eligible for double taxation relief shall be disregarded; and*
- (c) *in computing his total income from all sources, including income which is not subject to income tax charged in the United Kingdom, income eligible for double taxation relief shall be included, and the income tax which would be chargeable on that total income shall be computed without regard to the double taxation relief available in respect of the income eligible for double taxation relief;*
*and, accordingly, where this subsection applies, the amount of the tax chargeable in respect of the income eligible for double taxation relief shall not be affected by subsections* (2)*and* (3)*above*.
- (6) *Subsection* (5)*shall not operate so as to make the tax payable by an individual for a year of assessment higher than it would have been if the double taxation relief had not been available*.
- (7) *In subsection* (5)*above “*income eligible for double taxation relief*” means any dividends, interest, royalties or other profits which are chargeable to income tax but in respect of which relief (other than credit) is available under an Order in Council under section* 788*so as to limit the rate of income tax so chargeable (but not so as to confer an exemption and make it income which is not subject to income tax charged in the United Kingdom)*.
- (8) Any claim which an individual is entitled to make by virtue of subsection (2) above shall be made to the Board.
- (9) In this section “*EEA national*” means a national of any State, other than the United Kingdom, which is a Contracting Party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992, as adjusted by the Protocol signed at Brussels on 17th March 1993.
### CHAPTER II — TAXATION OF INCOME OF SPOUSES AND CIVIL PARTNERS
### General rules
#### Aggregation of wife’s income with husband's
##### 279
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of reliefs
##### 280
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax repayments to wives
##### 281
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Construction of references to married women living with their husbands
##### 282
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Separate assessments
#### Option for separate assessment
##### 283
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect of separate assessment on personal reliefs
##### 284
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection from wife of tax assessed on husband but attributable to her income
##### 285
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Right of husband to disclaim liability for tax on deceased wife’s income
##### 286
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Separate taxation
#### Separate taxation of wife’s earnings
##### 287
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Elections under section 287
##### 288
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — ENTERPRISE INVESTMENT SCHEME
#### The relief
##### 289
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Minimum and maximum subscriptions
##### 290
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Individuals qualifying for relief
##### 291
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Parallel trades
##### 292
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
##### 293
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies with interests in land
##### 294
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Valuation of interests in land for purposes of section 294(1)(b)
##### 295
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 294 disapplied where amounts raised total £50,000 or less
##### 296
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trades
##### 297
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 293 and 297
##### 298
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal of shares
##### 299
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Value received from company
##### 300
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 300
##### 301
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Replacement capital
##### 302
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Value received by persons other than claimants
##### 303
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Husband and wife
##### 304
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reorganisation of share capital
##### 305
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims
##### 306
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Withdrawal of relief
##### 307
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application to subsidiaries
##### 308
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further provisions as to subsidiaries
##### 309
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 310
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Nominees, bare trustees and approved investment funds
##### 311
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter III
##### 312
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — SPECIAL PROVISIONS
#### Taxation of consideration for certain restrictive undertakings
##### 313
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Divers and diving supervisors
##### 314
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Wounds and disability pensions
##### 315
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances, bounties and gratuities
##### 316
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Victoria Cross and other awards
##### 317
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other pensions in respect of death due to war service etc
##### 318
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Crown servants: foreign service allowance
##### 319
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commonwealth Agents-General and official agents etc
##### 320
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consuls and other official agents
##### 321
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consular officers and employees
##### 322
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Visiting forces
##### 323
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Designated international organisations
##### 324
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on deposits with National Savings Bank
##### 325
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest etc. under contractual savings schemes
##### 326
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disabled person’s vehicle maintenance grant
##### 327
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funds in court
##### 328
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on damages for personal injuries
##### 329
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Compensation for National-Socialist persecution
##### 330
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scholarship income
##### 331
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenditure and houses of ministers of religion
##### 332
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Personal equity plans
##### 333
Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans.
### CHAPTER V — RESIDENCE OF INDIVIDUALS
#### Commonwealth citizens and others temporarily abroad
##### 334
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Residence of persons working abroad
##### 335
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Temporary residents in the United Kingdom
##### 336
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VIII — TAXATION OF INCOME AND CHARGEABLE GAINS OF COMPANIES
### Taxation of income
#### Companies beginning or ceasing to carry on a trade
##### 337
- (1) Where a company begins or ceases—
- (a) to carry on a trade, or
- (b) to be within the charge to corporation tax in respect of a trade,
the company’s income shall be computed for the purposes of corporation tax as if that were the commencement or, as the case may be, the discontinuance of the trade, whether or not the trade is in fact commenced or discontinued.
- (2) Subsection (1) applies to a Schedule A business or overseas property business (within the meaning given by section 70A(4)) as it applies to a trade.
#### Allowance of charges on income and capital
##### 338
- (1) Charges on income are allowed as deductions from a company’s total profits in computing the corporation tax chargeable for an accounting period.
- (2) They are deducted from the company’s total profits for the period as reduced by any other relief from tax other than group relief.
- (3) The amount of the deduction is limited to the amount that reduces the company’s total profits for the period to nil.
- (4) Except as otherwise provided, a deduction is allowed only in respect of payments made by the company in the accounting period concerned.
- (5) The above provisions are subject to any express exceptions in the Corporation Tax Acts.
#### Charges on income: donations to charity
##### 339
- (1) A qualifying donation is a payment made by a company to a charity, other than—
- (a) a payment which, by reason of any provision of the Taxes Acts (within the meaning of the Management Act) except section 209(4), is to be regarded as a distribution (but see subsections (1A) and (1B) below); and
- (b) a payment which is deductible in computing profits or any description of profits for purposes of corporation tax.
- (1A) In determining whether a payment is to be regarded as a distribution for the purposes of subsection (1)(a) above, the words in section 209(5) from “; and any amount” to the end are to be disregarded.
- (1B) A payment (other than a dividend) made by a company which is wholly owned by a charity is not to be regarded as a distribution for the purposes of subsection (1)(a) above.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) A payment made by a company is not a qualifying donation if—
- (a) it is made subject to a condition as to repayment, or
- (b) the company or a connected person receives a benefit in consequence of making it and either the relevant value in relation to the payment exceeds the limit imposed by subsection (3DA) below or the amount to be taken into account for the purposes of this paragraph in relation to the payment exceeds £250.
- (3C) For the purposes of subsections (3B) above and (3D) below, the relevant value in relation to a payment to a charity is—
- (a) where there is one benefit received in consequence of making it which is received by the company or a connected person, the value of that benefit;
- (b) where there is more than one benefit received in consequence of making it which is received by the company or a connected person, the aggregate value of all the benefits received in consequence of making it which are received by the company or a connected person.
- (3D) The amount to be taken into account for the purposes of subsection (3B)(b) above in relation to a payment to a charity is an amount equal to the aggregate of—
- (a) the relevant value in relation to the payment, and
- (b) the relevant value in relation to each payment already made to the charity by the company in the accounting period in which the payment is made which is a qualifying donation within the meaning of this section.
- (3DA) The limit imposed by this subsection is—
- (a) where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;
- (b) where the amount of the payment exceeds £100 but does not exceed £1,000, £25;
- (c) where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.
- (3DB) Where a benefit received in consequence of making a payment—
- (a) consists of the right to receive benefits at intervals over a period of less than twelve months;
- (b) relates to a period of less than twelve months; or
- (c) is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
- (3DC) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
- (3DD) Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by—
- (a) in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;
- (b) in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above.
- (3E) A payment made by a company is not a qualifying donation if it is conditional on, or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the company or a connected person.
- (3F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3G) A payment made by a company is not a qualifying donation if the company is itself a charity.
- (4) Where a company gives a sum of money to a charity—
- (a) if the charity is a charitable company, a body mentioned in section 507 or an Association of a description specified in section 508, the gift shall in the hands of the charitable company be treated for the purposes of this Act as if it were an annual payment, and
- (b) if the charity is a trust established for charitable purposes only, see section 522 of ITA 2007 (gifts of money from companies).
- (5) *In any accounting period of a company, the maximum amount allowable under section* 338*by virtue of subsection* (2)(b)*of that section in respect of qualifying donations made by the company shall be a sum equal to* 3*per cent. of the dividends paid on the company’s ordinary share capital in that accounting period* .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7AA) Where—
- (a) a qualifying donation to a charity is made by a company which is wholly owned by a charity, and
- (b) the company makes a claim for the donation, or any part of it, to be deemed for the purposes of section 338 to be a charge on income paid in an accounting period falling wholly or partly within the period of nine months ending with the date of the making of the donation,
the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow.
- (7AB) For the purposes of this section a company is wholly owned by a charity if it is either—
- (a) a company with an ordinary share capital every part of which is owned by a charity (whether or not the same charity); or
- (b) a company limited by guarantee in whose case every person who—
- (i) is beneficially entitled to participate in the divisible profits of the company, or
- (ii) will be beneficially entitled to share in any net assets of the company available for distribution on its winding up,
is or must be a charity or a company wholly owned by a charity.
- (7AC) For the purposes of subsection (7AB) above ordinary share capital of a company shall be taken to be owned by a charity if there is a charity which—
- (a) within the meaning of section 838 directly or indirectly owns that share capital; or
- (b) would be taken so to own that share capital if references in that section to a body corporate included references to a charity which is not a body corporate.
- (7A) In subsections (3B) to (3E) above references to a connected person are to a person connected with—
- (a) the company, or
- (b) a person connected with the company;
and section 839 applies for the purposes of this subsection.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of this section “charity” includes each of the bodies mentioned in section 507, and . . . any Association of a description specified in section 508, but, subject to that, in this section “charity” has the same meaning as in section 506.
- (10) In this section “*charitable company*” has the same meaning as in section 506.
#### Charges on income: interest payable to non-residents
##### 340
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments of interest etc. between related companies
##### 341
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax on company in liquidation
##### 342
- (1) In this section references to a company’s final year are references to the financial year in which the affairs of the company are completely wound up, and references to a company’s penultimate year are references to the last financial year preceding its final year.
- (2) Subject to subsection (3) or (3A) below—
- (a) corporation tax shall be charged on the profits of the company arising in the winding-up in its final year at the rate of corporation tax fixed or proposed for the penultimate year; but
- (b) where the corporation tax charged on the company’s income included in those profits falls to be calculated or reduced in accordance with section 13, it shall be so calculated or reduced in accordance with such rate or fraction fixed or proposed for the penultimate year as is applicable under that section.
- (3) If, before the affairs of the company are completely wound up, any of the rates or fractions mentioned in subsection (2) above has been fixed or proposed for the final year, that subsection shall have effect in relation to that rate or fraction as if for the references to the penultimate year there were substituted references to the final year.
- (3A) If, in the case of the company’s final accounting period, the income (if any) which consists of interest received or receivable by the company under section 826 does not exceed £2,000, that income shall not be subject to corporation tax.
In this subsection “*the company’s final accounting period*” means the accounting period of the company which, in accordance with section 12(7), ends by reason of the completion of the winding up.
- (4) An assessment on the company’s profits for an accounting period which falls after the commencement of the winding-up shall not be invalid because made before the end of the accounting period.
- (5) In making an assessment after the commencement of the winding-up of the company but before the date when its affairs are completely wound up, the liquidator may act on an assumption as to when that date will fall, so far as it governs section 12(7).
- (6) The assumption of the wrong date shall not alter the company’s final and penultimate year, and, if the right date is later, an accounting period shall end on the date assumed, and a new accounting period shall begin and section 12(7) shall thereafter apply as if the winding-up had commenced with the beginning of that new accounting period.
- (7) References in this section to a rate or fraction fixed or proposed are references to a rate or fraction fixed by an Act passed before the completion of the winding-up or, if not so fixed, proposed by a Budget resolution (and without regard to any subsequent Act); except that if a rate or fraction so fixed is proposed to be altered by a Budget resolution any such reference to it is a reference to it as proposed to be so altered.
- In this subsection “*Budget resolution*” means a resolution of the House of Commons for fixing any such rate or fraction as is mentioned in this section.
- (8) Where the winding-up commenced before the company’s final year, paragraphs (a) and (b) of subsection (2) (but not subsection (3)) above shall apply in relation to the company’s profits arising at any time in its penultimate year.
- (9) Any assessment made by virtue of section 8(4) shall be subject to any such adjustment by discharge or repayment of tax or by a further assessment as may be required to give effect to this section.
#### Company reconstructions without a change of ownership
##### 343
- (1) Where, on a company (“*the predecessor*”) ceasing to carry on a trade, another company (“*the successor*”) begins to carry it on, and—
- (a) on or at any time within two years after that event the trade or an interest amounting to not less than a three-fourths share in it belongs to the same persons as the trade or such an interest belonged to at some time within a year before that event; and
- (b) the trade is not, within the period taken for the comparison under paragraph (a) above, carried on otherwise than by a company which is within the charge to tax in respect of it;
then the Corporation Tax Acts shall have effect subject to subsections (2) to (6) below.
- (2) The trade shall not be treated as permanently discontinued nor a new trade as set up and commenced for the purpose of the allowances and charges provided for by the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act); but—
- (a) there shall be made to or on the successor in accordance with those Acts all such allowances and charges as would, if the predecessor had continued to carry on the trade, have fallen to be made to or on it; and
- (b) the amount of any such allowance or charge shall be computed as if—
- (i) the successor had been carrying on the trade since the predecessor began to do so, and
- (ii) everything done to or by the predecessor had been done to or by the successor (but so that no sale or transfer which on the transfer of the trade is made to the successor by the predecessor of any assets in use for the purpose of the trade shall be treated as giving rise to any such allowance or charge).
- (3) . . ., subject to subsection (4) below and to any claim made by the predecessor under section 393A(1), the successor shall be entitled to relief under section 393(1), as for a loss sustained by the successor in carrying on the trade, for any amount for which the predecessor would have been entitled to . . . relief if it had continued to carry on the trade.
- (4) Where the amount of relevant liabilities exceeds the value of relevant assets, the successor shall be entitled to relief by virtue of subsection (3) above only if, and only to the extent that, the amount of that excess is less than the amount mentioned in that subsection.
- (4A) Subsection (2A) of section 393A shall not apply to any loss which (but for this subsection) would fall within subsection (2B) of that section by virtue of the predecessor’s ceasing to carry on the trade, and subsection (7) of that section shall not apply for the computation of any such loss.
- (5) Any securities, within the meaning of section 731, which at the time when the predecessor ceases to carry on the trade form part of the trading stock belonging to the trade shall be treated for the purposes of that section as having been sold at that time in the open market by the predecessor and as having been purchased at that time in the open market by the successor.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Where the successor ceases to carry on the trade within the period taken for the comparison under subsection (1)(a) above and on its doing so a third company begins to carry on the trade, . . ., subsections (2) to (5) above shall apply both in relation to that event (together with the new predecessor and successor) and to the earlier event (together with the original predecessor and successor), but so that—
- (a) in relation to the earlier event “successor” shall include the successor at either event; and
- (b) in relation to the later event “predecessor” shall include the predecessor at either event;
and if the conditions of this subsection are thereafter again satisfied, it shall apply again in like manner.
- (8) Where, on a company ceasing to carry on a trade, another company begins to carry on the activities of the trade as part of its trade, then that part of the trade carried on by the successor shall be treated for the purposes of this section as a separate trade, if the effect of so treating it is that subsection (1) or (7) above has effect on that event in relation to that separate trade; and where, on a company ceasing to carry on part of a trade, another company begins to carry on the activities of that part as its trade or part of its trade, the predecessor shall for purposes of this section be treated as having carried on that part of its trade as a separate trade if the effect of so treating it is that subsection (1) or (7) above has effect on that event in relation to that separate trade.
- (9) Where under subsection (8) above any activities of a company’s trade fall, on the company ceasing or beginning to carry them on, to be treated as a separate trade, such apportionments of receipts, expenses, assets or liabilities shall be made as may be just.
- (10) Where, by virtue of subsection (9) above, any item falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever period) of two or more companies, any question which arises as to the manner in which the item is to be apportioned shall be determined, for the purposes of the tax of all those companies—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to all those companies, by those Commissioners, unless all the companies agree that it shall be determined by the Special Commissioners;
- (b) in a case where different bodies of Commissioners have jurisdiction with respect to those companies, by such of those bodies as the Board may direct, unless all the companies agree that it shall be determined by the Special Commissioners; and
- (c) in any other case, by the Special Commissioners,
and any such Commissioners shall determine the question in like manner as if it were an appeal except that all those companies shall be entitled to appear and be heard by the Commissioners who are to make the determination or to make representations to them in writing.
- (11) Any relief obtainable under this section by way of discharge or repayment of tax shall be given on the making of a claim.
- (12) In the application of this section to any case in relation to which subsection (4) above does not apply—
- (a) subsection (9) above shall have effect with the substitution for the words following “separate trade” of the words “ any necessary apportionment shall be made of receipts or expenses ”; and
- (b) subsection (10) above shall have effect with the substitution for “item” of “ sum ”.
#### Company reconstructions: supplemental
##### 344
- (1) For the purposes of section 343—
- (a) a trade carried on by two or more persons shall be treated as belonging to them in the shares in which they are entitled to the profits of the trade;
- (b) a trade or interest in a trade belonging to any person as trustee (otherwise than for charitable or public purposes) shall be treated as belonging to the persons for the time being entitled to the income under the trust; and
- (c) a trade or interest in a trade belonging to a company shall, where the result of so doing is that subsection (1) or (7) of section 343 has effect in relation to an event, be treated in any of the ways permitted by subsection (2) below.
- (2) For the purposes of section 343, a trade or interest in a trade which belongs to a company engaged in carrying it on may be regarded—
- (a) as belonging to the persons owning the ordinary share capital of the company and as belonging to them in proportion to the amount of their holdings of that capital, or
- (b) in the case of a company which is a subsidiary company, as belonging to a company which is its parent company, or as belonging to the persons owning the ordinary share capital of that parent company, and as belonging to them in proportion to the amount of their holdings of that capital,
and any ordinary share capital owned by a company may, if any person or body of persons has the power to secure by means of the holding of shares or the possession of voting power in or in relation to any company, or by virtue of any power conferred by the articles of association or other document regulating any company, that the affairs of the company owning the share capital are conducted in accordance with his or their wishes, be regarded as owned by the person or body of persons having that power.
- (3) For the purposes of subsection (2) above—
- (a) references to ownership shall be construed as references to beneficial ownership;
- (b) a company shall be deemed to be a subsidiary of another company if and so long as not less than three-quarters of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies;
- (c) the amount of ordinary share capital of one company owned by a second company through another company or other companies, or partly directly and partly through another company or other companies, shall be determined in accordance with section 838(5) to (10); and
- (d) where any company is a subsidiary of another company, that other company shall be considered as its parent company unless both are subsidiaries of a third company.
- (4) In determining, for the purposes of section 343, whether or to what extent a trade belongs at different times to the same persons, persons who are relatives of one another and the persons from time to time entitled to the income under any trust shall respectively be treated as a single person, and for this purpose “*relative*” means husband, wife, civil partner, ancestor, lineal descendant, brother or sister.
- (5) For the purposes of section 343(4), relevant assets are—
- (a) assets which were vested in the predecessor immediately before it ceased to carry on the trade, which were not transferred to the successor and which, in a case where the predecessor was the predecessor on a previous application of section 343, were not by virtue of subsection (9) of that section apportioned to a trade carried on by the company which was the successor on that application; and
- (b) consideration given to the predecessor by the successor in respect of the change of company carrying on the trade;
and for the purposes of paragraph (b) above the assumption by the successor of any liabilities of the predecessor shall not be treated as the giving of consideration to the predecessor by the successor.
- (6) For the purposes of section 343(4), relevant liabilities are liabilities which were outstanding and vested in the predecessor immediately before it ceased to carry on the trade, which were not transferred to the successor and which, in a case where the predecessor was the predecessor on a previous application of section 343, were not by virtue of subsection (9) of that section apportioned to a trade carried on by the company which was the successor on that application; but a liability representing the predecessor’s share capital, share premium account, reserves or relevant loan stock is not a relevant liability.
- (7) For the purposes of section 343(4)—
- (a) the value of assets (other than money) shall be taken to be the price which they might reasonably be expected to have fetched on a sale in the open market immediately before the predecessor ceased to carry on the trade; and
- (b) the amount of liabilities shall be taken to be their amount at that time.
- (8) Where the predecessor transferred a liability to the successor but the creditor concerned agreed to accept settlement of part of the liability as settlement of the whole, the liability shall be treated for the purposes of subsection (6) above as not having been transferred to the successor except as to that part.
- (9) A liability representing the predecessor’s share capital, share premium account, reserves or relevant loan stock shall, for the purposes of subsection (6) above, be treated as not doing so if, in the period of one year ending with the day on which the predecessor ceased to carry on the trade, the liability arose on a conversion of a liability not representing its share capital, share premium account, reserves or relevant loan stock.
- (10) Where a liability of the predecessor representing its relevant loan stock is not a relevant liability for the purposes of section 343(4) but is secured on an asset of the predecessor not transferred to the successor, the value of the asset shall, for the purposes of section 343(4), be reduced by an amount equal to the amount of the liability.
- (11) In this section “*relevant loan stock*” means any loan stock or similar security (whether secured or unsecured) except any in the case of which subsection (12) below applies.
- (12) This subsection applies where, at the time the liability giving rise to the loan stock or other security was incurred, the person who was the creditor was carrying on a trade of lending money.
### Chargeable gains
#### Computation of chargeable gains
##### 345
#### Capital distribution of chargeable gains: recovery of tax from shareholder
##### 346
#### Tax on one member of group recoverable from another member
##### 347
## PART IX — ANNUAL PAYMENTS AND INTEREST
### Annual payments
#### Payments out of profits or gains brought into charge to income tax: deduction of tax
##### 348
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments not out of profits or gains brought into charge to income tax, and annual interest
##### 349
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax where payments made under section 349
##### 350
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Small maintenance payments
##### 351
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certificates of deduction of tax
##### 352
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Relief for payments of interest (excluding MIRAS)
#### General provision
##### 353
- (1) Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to . . . section 52 of ITTOIA 2005) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of section 365.
- (1A) Where a person is entitled for a year of assessment to relief under this section in respect of an amount of interest which is eligible for relief by virtue of section 365, the relief is given as a tax reduction for that tax year.
- (1AA) The amount of the tax reduction is 23% of the amount of the interest.
- (1AB) The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1E) Where any person is entitled for any year of assessment to relief . . . in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in section 383 of ITA 2007 (relief for interest payments), that amount of interest shall be apportioned between the cases to which each of those provisions applies without regard to what parts of the total amount borrowed remain outstanding but according to . . . —
- (a) the proportions of the total amount borrowed which were applied for different purposes; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and subsection (1A) above or section 383 of ITA 2007 shall apply accordingly to the case in which that subsection or section applies.
- (1F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) This section does not apply to a payment of relevant loan interest to which section 369 applies.
- (3) Relief under this section shall not be given in respect of—
- (a) interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or
- (b) where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans to buy land etc
##### 354
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Matters excluded from section 354
##### 355
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job-related accommodation
##### 356
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limit on amount of loan eligible for relief by virtue of section 354
##### 357
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where borrower deceased
##### 358
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy machinery or plant
##### 359
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in close company
##### 360
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in co-operative or employee-controlled company
##### 361
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy into partnership
##### 362
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 360 to 362
##### 363
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to pay inheritance tax
##### 364
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy life annuity
##### 365
- (1) Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied—
- (aa) that the loan was made before 9th March 1999;
- (a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“*the annuitants*”) who include the person to whom the loan was made;
- (b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years;
- (c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
- (d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants used the land on which it was secured as his only or main residence immediately before 9th March 1999 .
- (1AA) Where—
- (a) a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and
- (b) the offer was either in writing or evidenced by a note or memorandum made by the lender before that date,
the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date.
- (1AB) Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“*the new loan*”) if—
- (a) the new loan was made on or after the day on which the Finance Act 1999 was passed;
- (b) the new loan was made as part of a scheme (“*the scheme*”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“*the old loan*”); and
- (c) the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.
- (1AC) If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.
- (1AD) In subsection (1AC) above “*the remaining part*” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan.
- (1A) The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if—
- (a) the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and
- (b) the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest.
- (1B) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case.
- (2) Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants.
- (3) If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the sum of £30,000; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to that sum the same proportion as the interest payable by him bears to the interest payable by both or all of them.
#### Information
##### 366
- (1) A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing—
- (a) the date when the debt was incurred;
- (b) the amount of the debt when incurred;
- (c) the interest paid in the year of assessment for which the claim is made . . . ; and
- (d) the name and address of the debtor.
- (2) Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request.
- (3) Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority.
#### Provisions supplementary to sections 354 to 366
##### 367
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In section 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year.
#### Exclusion of double relief etc
##### 368
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mortgage interest relief at source
#### Mortgage interest payable under deduction of tax
##### 369
- (1) If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to the applicable percentage thereof.
- (1A) In subsection (1) above “*the applicable percentage*” means 23 per cent..
- (2) Where a sum is deducted under subsection (1) above from a payment of relevant loan interest—
- (a) the person to whom the payment is made shall allow the deduction on receipt of the residue;
- (b) the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and
- (c) the sum deducted shall be treated as income tax paid by the person to whom the payment is made.
- (3) The following payments, that is to say—
- (a) payments of relevant loan interest to which this section applies, and
- (b) payments which would be such payments but for section 373(5),
shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection.
- (6) Any person by whom a payment of relevant loan interest to which this section applies is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates.
- (7) The following provisions of the Management Act, namely—
- (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act;
- (b) section 30 (tax repaid in error etc.) apart from subsection (1B) ,
- (c) section 86 (interest), and
- (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.
- (8) In the application of section 86 of the Management Act by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment (“the relevant year of assessment”) under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—
- (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (6) above has made a relevant interim claim; and
- (b) in any other case, is the later of the following dates, that is to say—
- (i) 1st January in the relevant year of assessment; or
- (ii) the date of the making of the payment by the Board which gives rise to the assessment.
- (9) In this section—
- “*financial year*”, in relation to any person, means a financial year of that person for the purposes of the relevant regulations;
- “*interim claim*” means an interim claim within the meaning of the relevant regulations;
- “*relevant interim claim*” means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person’s financial year, an interim claim made for a period falling wholly or partly within that financial year; and
- “*the relevant regulations*” means regulations made under section 378(3) for the purposes of subsection (6) above.
#### Relevant loan interest
##### 370
- (1) Subject to this section and sections 373 to 376, in this Part “*relevant loan interest*” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) . . . below applies.
- (2) Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2) and any other provision applying to interest falling to be treated as relevant loan interest—
- (a) it is interest falling within section . . . 365; and
- (b) apart (where applicable) from section . . . 365(3), the whole of the interest would be eligible for relief under section 353;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In determining whether subsection (2) above applies to any interest, section 365 shall have effect as if the words “or the Republic of Ireland” were omitted.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Second loans
##### 371
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Home improvement loans
##### 372
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans in excess of the qualifying maximum, and joint borrowers
##### 373
- (1) The provisions of this section have effect in relation to a loan where, by virtue of . . . section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “*limited loan*”.
- (2) None of the interest on a limited loan is relevant loan interest unless—
- (a) the loan is made on or after 6th April 1987; or
- (b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled . . . only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest.
- (6) Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless—
- (a) each of the persons to whom the loan was made is a qualifying borrower; and
- (b) in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with section 370 and this section.
- (7) In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
#### Conditions for application of section 369
##### 374
- (1) Section 369 does not apply to any relevant loan interest unless—
- (a) in the case of a loan of a description specified by regulations for the purposes of this paragraph, the borrower or, in the case of joint borrowers, each of them has given notice to the lender in the prescribed form certifying—
- (i) that he is a qualifying borrower; and
- (ii) that the interest is relevant loan interest; and
- (iii) such other matters as may be prescribed; or
- (b) the Board have given notice to the lender and the borrower that the interest may be paid under deduction of tax; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) the loan to which the interest relates is of a description specified by regulations for the purposes of this paragraph and was made—
- (i) if sub-paragraph (2) of paragraph 2 of Schedule 7 to the Finance Act 1982 applied to interest on the loan which became due on or after a date earlier than 6th April 1983, being a date specified by the Board in pursuance of sub-paragraph (5) of that paragraph, before that earlier date; or
- (ii) if the qualifying lender is a building society or a local authority, before 1st April 1983; or
- (iii) if sub-paragraphs (i) and (ii) above do not apply and the interest falls within section 370(2), before 6th April 1983.
- (2) Where notice has been given as mentioned in paragraph (a) or (b) of subsection (1) above, section 369 applies to any relevant loan interest to which the notice relates and which becomes due on or after the relevant date, as defined by subsection (3) below; and in a case falling within paragraph . . . (d) of subsection (1) above, section 369 applies to the relevant loan interest referred to in that paragraph.
- (3) In subsection (2) above “*the relevant date*” means—
- (a) in the case of a notice under subsection (1)(a) above, the date the notice is given, and
- (b) in the case of a notice under subsection (1)(b) above, a date specified in the notice as being the relevant date (which may be earlier than the date so specified as the date from which the interest may be paid under deduction of tax).
#### Interest ceasing to be relevant loan interest, etc
##### 375
- (1) If at any time—
- (a) the interest on a loan ceases to be relevant loan interest; or
- (b) a person making payments of relevant loan interest ceases to be a qualifying borrower;
the borrower shall give notice of the fact to the lender.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and
- (aa) as respects which any of the conditions mentioned in section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made.
- (4A) If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.
- (5) If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters.
- (6) Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower.
- (7) Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower.
- (8) In any case where—
- (a) section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and
- (b) the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and
- (c) a payment of that interest was made on or after the relevant date but not under deduction of tax,
regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date.
- (8A) In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—
- (a) provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and
- (b) make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.
- (8B) Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying borrowers and qualifying lenders
##### 376
- (1) Subject to subsection (2) below, an individual is a qualifying borrower with respect to the interest on any loan.
- (2) In relation to interest paid at a time when the borrower or the borrower’s husband or wife holds an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act), the borrower is not a qualifying borrower.
- (3) In subsection (2) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
- (4) The following bodies are qualifying lenders:—
- (a) a building society;
- (b) a local authority;
- (c) the Bank of England;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance;
- (f) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) a development corporation within the meaning of the New Towns Act 1981 or the New Towns (Scotland) Act 1968;
- (j) the Commission for the New Towns;
- (k) the Housing Corporation;
- (ka) the Secretary of State if the loan is made by him under section 79 of the Housing Associations Act 1985;
- (l) the Northern Ireland Housing Executive;
- (m) the Scottish Special Housing Association;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) the Church of England Pensions Board;
- (p) any body which is for the time being registered under section 376A.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variation of terms of repayment of certain loans
##### 377
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary regulations
##### 378
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The Board may by regulations make provision—
- (a) for the purposes of any provision of sections 369 to 376A which relates to any matter or thing to be specified by or done in accordance with regulations;
- (b) for the application of those sections in relation to loan interest paid by personal representatives and trustees;
- (c) with respect to the furnishing of information by borrowers or lenders, including, in the case of lenders, the inspection of books, documents and other records on behalf of the Board;
- (d) for, and with respect to, appeals to the General Commissioners or the Special Commissioners against the refusal of the Board to issue a notice under section 374(1)(b) or the issue of a notice under section 375(6) or (7); and
- (e) generally for giving effect to sections 369 to 376A.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 369 to 378
##### 379
In sections 369 to 378—
- “contracts of general insurance” means contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contracts of long-term insurance” means contracts which fall within Part II of that Schedule;
- “*prescribed*” . . . means prescribed by the Board;
- “*qualifying borrower*” has the meaning given by section 376(1) to (3);
- “*qualifying lender*” has the meaning given by section 376(4) . . . ;
- “*regulations*” . . . means regulations made by the Board under section 378;
- “*relevant loan interest*” has the meaning given by section 370(1);
- “*separated*” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent.
## PART X — LOSS RELIEF AND GROUP RELIEF
### CHAPTER I — LOSS RELIEF: INCOME TAX
### Trade etc. losses
#### Set-off against general income
##### 380
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further relief for individuals for losses in early years of trade
##### 381
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 380 and 381
##### 382
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Extension of right of set-off to capital allowances
##### 383
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restrictions on right of set-off
##### 384
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward against subsequent profits
##### 385
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward where business transferred to a company
##### 386
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward as losses of amounts taxed under section 350
##### 387
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of terminal losses
##### 388
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions relating to carry-back of terminal losses
##### 389
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of interest as a loss for purposes of carry-forward and carry-back
##### 390
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from trade etc. carried on abroad
##### 391
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI losses
#### Case VI losses
##### 392
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — LOSS RELIEF: CORPORATION TAX
### Trade etc. losses
#### Losses other than terminal losses
##### 393
- (1) Where in any accounting period a company carrying on a trade incurs a loss in the trade, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against any trading income from the trade in succeeding accounting periods; and (so long as the company continues to carry on the trade) its trading income from the trade in any succeeding accounting period shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot, on that claim or on a claim (if made) under section 393A(1), be relieved against income or profits of an earlier accounting period.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The amount of a loss incurred in a trade in an accounting period shall be computed for the purposes of this section in the same way as trading income from the trade in that period would have been computed.
- (8) For the purposes of this section “*trading income*” means, in relation to any trade, the income which falls or would fall to be included in respect of the trade in the total profits of the company; but where—
- (a) in an accounting period a company incurs a loss in a trade in respect of which it is within the charge to corporation tax under Case I or V of Schedule D, and
- (b) in any later accounting period to which the loss or any part of it is carried forward under subsection (1) above relief in respect thereof cannot be given, or cannot wholly be given, because the amount of the trading income of the trade is insufficient,
any interest or dividends on investments which would fall to be taken into account as trading receipts in computing that trading income but for the fact that they have been subjected to tax under other provisions shall be treated for the purposes of subsection (1) above as if they were trading income of the trade.
- (9) Where in an accounting period the charges on income paid by a company—
- (a) exceed the amount of the profits against which they are deductible, and
- (b) include payments made wholly and exclusively for the purposes of a trade carried on by the company,
then, up to the amount of that excess or of those payments, whichever is the less, the charges on income so paid shall in computing a loss for the purposes of subsection (1) above be deductible as if they were trading expenses of the trade.
- (10) In this section references to a company carrying on a trade refer to the company carrying it on so as to be within the charge to corporation tax in respect of it.
- (11) A claim under subsection (1) above must be made within six years after the end of the accounting period in which the loss is incurred, and must be so made notwithstanding that relief cannot be given in respect of the loss until after the end of that period of six years; . . ..
#### Terminal losses
##### 394
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leasing contracts and company reconstructions
##### 395
- (1) Subject to the provisions of this section, if—
- (a) under a contract entered into on or after 6th March 1973 a company (“*the first company*”) incurs capital expenditure on the provision of plant or machinery which the first company lets to another person by another contract (a “*leasing contract*”); and
- (b) apart from this subsection, the first company would be entitled under section 393(1) or in pursuance of a claim under section 393A(1) to relief in respect of losses incurred on the leasing contract; and
- (c) in the accounting period for which a first-year allowance, within the meaning of Part 2 of the Capital Allowances Act, in respect of the expenditure referred to in paragraph (a) above is made to the first company, arrangements are in existence by virtue of which, at some time during or after the expiry of that accounting period, a successor company will be able to carry on any part of the first company’s trade which consists of or includes the performance of all or any of the obligations which, apart from the arrangements, would be the first company’s obligations under the leasing contract,
then, in the accounting period specified in paragraph (c) above and in any subsequent accounting period, the first company shall not be entitled . . . as mentioned in paragraph (b) above except in computing its profits (if any) arising under the leasing contract.
- (2) For the purposes of this section a company is a successor of the first company if the circumstances are such that—
- (a) section 343 applies in relation to the first company and the other company as the predecessor and the successor within the meaning of that section; or
- (b) the two companies are connected with each other within the terms of section 839.
- (3) For the purposes of this section losses incurred on a leasing contract and profits arising under such a contract shall be computed as if the performance of the leasing contract were a trade begun to be carried on by the first company, separately from any other trade which it may carry on, at the commencement of the letting under the leasing contract.
- (4) In determining whether the first company would be entitled . . . as mentioned in subsection (1)(b) above, any losses incurred on the leasing contract shall be treated as incurred in a trade carried on by that company separately from any other trade which it may carry on.
- (5) In this section “*arrangements*” means arrangements of any kind whether in writing or not.
### Case VI losses
#### Case VI losses
##### 396
- (1) Subject to subsection (2) below, where in any accounting period a company incurs a loss in a transaction in respect of which the company is within the charge to corporation tax under Case VI of Schedule D, the company may make a claim requiring that the loss be set off against the amount of any income arising from transactions in respect of which the company is assessed to corporation tax under that Case for the same or any subsequent accounting period; and the company’s income in any accounting period from such transactions shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this section against income of an earlier accounting period.
- (2) This section shall not apply to a loss incurred in a transaction falling within section 34, 35 or 36.
- (3) A claim under this section must be made within six years after the end of the accounting period in which the loss is incurred and must be so made notwithstanding that relief cannot be given in respect of the loss until after the end of that period of six years .
### CHAPTER III — LOSS RELIEF: MISCELLANEOUS PROVISIONS
#### Restriction of relief in case of farming and market gardening
##### 397
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Any loss incurred in any accounting period by a company in carrying on a trade of farming or market gardening shall be excluded from section 393(2) if a loss, computed without regard to capital allowances, was incurred in carrying on that trade in that accounting period, and in each of the chargeable periods wholly or partly comprised in the prior five years.
- (3) This section shall not restrict relief for any loss or for any capital allowance in any case—
- (a) where the whole of the farming or market gardening activities in the year next following the prior five years are of such a nature, and carried on in such a way, as would have justified a reasonable expectation of the realisation of profits in the future if they had been undertaken by a competent farmer or market gardener, but
- (b) where, if that farmer or market gardener had undertaken those activities at the beginning of the prior period of loss, that farmer or market gardener could not reasonably have expected the activities to become profitable until after the end of the year next following the prior period of loss.
- (4) This section shall not restrict relief where the carrying on of the trade forms part of, and is ancillary to, a larger trading undertaking.
- (5) In this section—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*prior five years*” means, in relation to a loss incurred in a company's accounting period, the last five years before the beginning of that period;
- “*prior period of loss*” means the prior five years, except that, if losses were incurred in the trade in successive . . . chargeable periods amounting in all to a period longer than five years (and ending when the prior five years end), it means that longer period, and for this purpose“*losses*” means losses computed without regard to capital allowances; and
- “*farming*” and “*market gardening*” shall be construed in accordance with the definitions in section 832, but as if those definitions were not restricted to activities in the United Kingdom.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In ascertaining for the purposes of this section whether a loss was incurred in any part of the prior five years or earlier, the rules applicable to . . . Case I of Schedule D (or to the calculation of the profits of a trade in Part 2 of ITTOIA 2005) shall be applied; and in this section “*loss computed without regard to capital allowances*” means . . . a loss so ascertained, but disregarding—
- (a) any allowance or charge under the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act); and
- (b) any provision of that Act requiring allowances and charges to be treated as expenses and receipts of the trade.
- (8) This section shall not restrict relief for any loss or capital allowance if the trade was set up and commenced within the prior five years, and, for the purposes of this subsection
- (a) a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Corporation Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade; and
- (b) without prejudice to paragraph (a), a trade shall be treated as discontinued, and a new trade set up, at any time when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on.
- (9) For the purposes of subsection (8) above a trade shall not be treated as discontinued if, under section 343(2), it is not to be treated as discontinued for the purpose of capital allowances and charges.
- (10) Where at any time there has been a change in the persons carrying on a trade, this section shall, notwithstanding subsection (8) above, apply as if—
- (a) a husband and his wife were the same person, . . .
- (ab) two civil partners of each other were the same person,
- (b) a husband or his wife were the same person as any company of which either the husband or the wife has control, or of which the two of them have control; and
- (c) a civil partner of another were the same person as any company of which either of the civil partners has control, or of which the two of them have control;
and accordingly relief . . . may be restricted under this section by reference to losses (computed without regard to capital allowances) some of which are incurred in an accounting period wholly or partly comprised in the prior five years and some of which are incurred in a year of assessment wholly or partly comprised in the prior five years.
#### Transactions in deposits with and without certificates or in debts
##### 398
Where a company sustains a loss on the exercise or disposal of a right to receive any amount, being a right to which section 56(2) . . . applies, in a case where—
- (a) if a profit had arisen from that exercise or disposal, that profit would have been chargeable to corporation tax by virtue of section 56(2) . . . , and
- (b) the company is chargeable to corporation tax under Schedule D in respect of interest payable on that amount,
then the amount of that interest shall be included in the amounts against which the amount of its loss may be set off under section 396.
#### Dealings in commodity futures etc: withdrawal of loss relief
##### 399
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) If, apart from section 143(1) of the 1992 Act or section 128(2) above, gains arising in the course of dealing in financial futures or in qualifying options would constitute, for the purposes of the Corporation Tax Acts, profits and gains chargeable to tax under Case V or VI of Schedule D, then any loss arising in the course of that dealing shall not be allowable against profits and gains which are chargeable to tax under Case V or VI of Schedule D.
- (2) Relief shall not be given to any company under section393A(1) in respect of a loss sustained in a trade of dealing in commodity futures if—
- (a) the loss was sustained in a trade carried on in partnership . . . ; and
- (b) a scheme has been effected or arrangements have been made (whether by the partnership agreement or otherwise) such that the sole or main benefit that might be expected to accrue to that company from its interest in the partnership was the obtaining of a reduction in corporation tax liability by means of any such relief.
- (3) Where relief has been given in a case to which subsection (2) above applies it shall be withdrawn by the making of an assessment to corporation tax under Case VI of Schedule D.
- (4) Subsection (2) above does not apply where the scheme was effected or the arrangements were made wholly before 6th April 1976.
- (5) In this section “*commodity futures*”, “*financial futures*” and “*qualifying options*” have the same meanings as in section 143 of the 1992 Act. . . .
#### Write-off of government investment
##### 400
- (1) Where any amount of government investment in a body corporate is written-off on or after 6th April 1988, an amount equal to the amount written-off shall be set off against the body’s tax losses as at the end of the accounting period ending last before the write-off date and, to the extent to which that amount exceeds those losses, against the body’s tax losses as at the end of the next accounting period and so on.
- (2) For the purposes of subsection (1) above a body’s tax losses as at the end of an accounting period are—
- (a) any losses which under section 393(1) are . . . available for relief against its trading income for the next accounting period;
- (b) in the case of a company with investment business, within the meaning of Part 4, any such excess as is mentioned in subsection (8) of section 75 which falls to be treated in accordance with subsection (9) of that section;
- (bb) any losses which—
- (i) under section 392A(2) or 392B are carried forward to the next accounting period, or
- (ii) under section 392A(3) are to be carried forward to the next accounting period and treated for the purposes of section 75 as if they were expenses of management deductible for that period;
- (c) any allowances which under section 260(2) of the Capital Allowances Act are available for carry forward to the next accounting period;
- (d) any amount paid by way of charges on income so far as it exceeds the company’s profit for the period and is not taken into account under 75(3) or 393(9); and
- (e) any allowable losses available under 8 of the 1992 Act so far as not allowed in that or a previous accounting period.
- (3) The set off to be made under subsection (1) above for any accounting period shall be made first against the amounts in paragraphs (a) to (d) of subsection (2) above and, so far as it cannot be so made, against the amount in paragraph (e) of that subsection.
- (4) For the purposes of subsection (1) above there shall be excluded from a body’s tax losses as at the end of the accounting period ending last before the write-off date any amounts in respect of which a claim has been made before the write-off date under section 393A(1) or 402 of this Act or section 260(3) of the Capital Allowances Act but the body’s tax losses as at the end of any subsequent accounting period shall be determined as if no such claim had been made on or after that date.
- (5) Any amount that could be set off under subsection (1) above against a body’s tax losses as at the end of an accounting period (or could be so set off if that body then had any such losses) may be set off against the tax losses of any other body corporate which at the end of that period is a member of the same group as the first-mentioned body, or partly against the tax losses of one member of that group and partly against those of the other or any of the others, as may be just and reasonable.
- (6) Expenditure shall not be treated for the purposes of section 532 or 536 of the Capital Allowances Act or section 50 of the 1992 Act as met by the Crown by reason only of the writing-off of any government investment in the body in question and a sum shall not by reason only of any such writing-off be treated as not having been deductible in computing the profits of that body for the purposes of Case I or II of Schedule D.
- (7) For the purposes of this section an amount of government investment in a body corporate is written-off—
- (a) if its liability to repay any money lent to it out of public funds by a Minister of the Crown or the Scottish Ministers is extinguished;
- (b) if any of its shares for which a Minister of the Crown has , or the Scottish Ministers have, subscribed out of public funds are cancelled; or
- (c) if its commencing capital debt is reduced otherwise than by being paid off or its public dividend capital is reduced otherwise than by being repaid (including, in either case, a reduction to nil);
and the amount written-off and the write-off date are the amount in respect of which the liability is extinguished and the date on which it is extinguished, the amount subscribed for the shares that are cancelled and the date of cancellation or the amount of reduction in the commencing capital debt or public dividend capital and the date of the reduction, as the case may be.
- (8) In subsection (7) above “*commencing capital debt*” means any debt to a Minister of the Crown or the Scottish Ministers assumed as such under an enactment and “*public dividend capital*” means any amount paid by a Minister of the Crown or the Scottish Ministers under an enactment in which that amount is so described or under an enactment corresponding to an enactment in which a payment made on similar terms to another body is so described.
- (9) This section shall not have effect in relation to any amount written-off if and to the extent to which it is replaced by money lent, or a payment made, out of public funds or by shares subscribed for, whether for money or money’s worth, by a Minister of the Crown or the Scottish Ministers.
- (9A) Nothing in section 80(5) of the Finance Act 1996 (matters to be brought into account in the case of loan relationships only under Chapter II of Part IV of that Act) shall be construed as preventing this section from applying where a government investment in a body corporate is written off by the extinguishment, in whole or in part, of any liability under a loan relationship.
- (10) In this section—
- “*body corporate*” means any body corporate which is a company for the purposes of corporation tax;
- “*group*” means a company having one or more 51 per cent. subsidiaries and that or those subsidiaries; and
- “*Minister of the Crown*” includes a Northern Ireland department.
#### Relief for pre-trading expenditure
##### 401
- (1) Where a company incurs expenditure for the purposes of a trade or profession before the time when the company begins to carry it on and the expenditure—
- (a) is incurred not more than seven years before that time; and
- (b) is not allowable as a deduction in computing the company'sprofits from the trade or profession for the purposes of Case I or II of Schedule D but would have been so allowable if incurred after that time,
the expenditure shall be treated as incurred on the day on which the trade or profession is first carried on by the company.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1AA) Subsection (1) above shall not apply to any expenditure in relation to which any debit falls, or (but for subsection (1AB) below) would fall, to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (1AB) Where, in the case of any company—
- (a) a non-trading debit is given for any accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships), and
- (b) an election for the purposes of this section is made by that company with respect to that debit within the period of 2 years beginning with the end of that accounting period,
that debit shall not be brought into account for the purposes of that Chapter as a non-trading debit for that period, but subsection (1AC) below shall apply instead.
- (1AC) If a company—
- (a) begins to carry on a trade within the period of seven years after the end of the accounting period for which a non-trading debit is given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships),
- (b) that debit is such that, if it had been given for the accounting period in which the company begins to carry on that trade, it would have been brought into account by reference to that trade in accordance with section 82(2) of that Act (trading debits and credits), and
- (c) an election is or has been made with respect to that debit under subsection (1AB) above,
that debit shall be treated for the purposes of that Chapter as if it were a debit for the accounting period in which the company begins to carry on the trade and shall be brought into account for that period in accordance with section 82(2) of that Act.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — GROUP RELIEF
#### Surrender of relief between members of groups and consortia
##### 402
- (1) Subject to and in accordance with this Chapter and section 492(8)—
- (a) relief for trading losses and other amounts eligible for relief from corporation tax, or
- (b) losses and other amounts not eligible for relief from corporation tax,
may, in the cases set out in subsections (2) and (3) below, be surrendered by a company (“*the surrendering company*”) and, on the making of a claim by another company (“*the claimant company*”) may be allowed to the claimant company by way of a relief from corporation tax called “*group relief*”.
- (2) In respect of amounts falling within subsection (1)(a) above, group relief shall be available in a case where—
- (a) the surrendering company and the claimant company are both members of the same group,
- (b) the surrendering company is resident in the United Kingdom or is not so resident but carries on a trade there through a permanent establishment, and
- (c) the claimant company is resident in the United Kingdom or is not so resident but carries on a trade there through a permanent establishment,
and, in respect of amounts falling within subsection (1)(b) above, group relief shall be available in a case where the condition in subsection (2A) below is satisfied.
A claim made by virtue of this subsection is referred to as a “*group claim*”.
- (2A) The condition in this subsection is satisfied if the surrendering company is within the charge to tax under the law of any EEA territory and—
- (a) the surrendering company is a 75 per cent. subsidiary of the claimant company and the claimant company is resident in the United Kingdom, or
- (b) both the surrendering company and the claimant company are 75 per cent. subsidiaries of a third company that is resident in the United Kingdom.
- (2B) For the purposes of subsection (2A) above, the surrendering company is within the charge to tax under the law of any EEA territory if—
- (a) it is a non-resident company which is resident in any EEA territory, or
- (b) it is a non-resident company which is not resident in any EEA territory but which carries on a trade in any EEA territory through a permanent establishment.
- (3A) A consortium claim shall not be made unless the following condition is satisfied in the case of both the surrendering company and the claimant company.
- (3B) The condition is that the company is resident in the United Kingdom or is a non-resident company carrying on a trade in the United Kingdom through a permanent establishment.
- (4) A consortium claim shall not be made . . . if a profit on a sale of the share capital of the other company or its holding company which the member owns would be treated as a trading receipt of that member.
- (5) Subject to the provisions of this Chapter, two or more claimant companies may make claims relating to the same surrendering company, and to the same accounting period of that surrendering company.
- (6) A payment for group relief—
- (a) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and
- (b) shall not for any of the purposes of the Corporation Tax Acts be regarded as a distribution . . . ;
and in this subsection “*a payment for group relief*” means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered by way of group relief, being a payment not exceeding that amount.
#### Losses etc. which may be surrendered by way of group relief
##### 403
- (1) If in an accounting period (the “surrender period") the surrendering company has—
- (a) trading losses, excess capital allowances or a non-trading deficit on its loan relationships, or
- (b) charges on income, Schedule A losses , management expenses or a non-trading loss on intangible fixed assets available for group relief,
the amount may, subject to the provisions of this Chapter, be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period.
- (2) Trading losses, excess capital allowances and a non-trading deficit on the company’s loan relationships are eligible for surrender as group relief even if the surrendering company has other profits of the surrender period against which they could be set.
Further provision about relief in respect of amounts eligible for surrender under this subsection is contained in sections 403ZA to 403ZC.
- (3) Charges on income, Schedule A losses management expenses and a non-trading loss on intangible fixed assets are available for surrender as group relief only to the extent that in aggregate they exceed the surrendering company’s gross profits for the surrender period.
Any excess surrendered shall be taken to consist first of charges on income, then Schedule A losses , management expenses and finally a non-trading loss on intangible fixed assets.
Further provision about relief in respect of amounts available for surrender under this subsection is contained in section 403ZD.
- (4) This section has effect subject to—
- section 404 (limitation of group relief in relation to certain dual resident companies), and
- sections 492(8) and 494A (oil extraction activities: availability of group relief against ring fence profits), and
- section 785ZA (restrictions on use of losses: leasing partnerships), and
- paragraph 38 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc: anti-avoidance).
#### Limitation of group relief in relation to certain dual resident companies
##### 404
- (1) Notwithstanding any other provision of this Chapter, no loss or other amount shall be available for set off by way of group relief in accordance with section 403 if, in the material accounting period of the company which would otherwise be the surrendering company, that company is for the purposes of this section a dual resident investing company.
- (2) In this section “*the material accounting period*” means, according to the kind of group relief which would be appropriate, the accounting period—
- (a) in which the trading loss or Schedule A loss is incurred; or
- (aa) in which the non-trading deficit on the company’s loan relationships arises; or
- (b) for which the capital allowances fall to be made; or
- (c) for which the expenses of management are deductible; or
- (d) for which the amount is paid by way of charges on income;
but subsection (1) above does not have effect unless the material accounting period begins on or after 1st April 1987.
- (3) In Schedule 17—
- (a) Part I has effect where an accounting period of a company in which it is a dual resident investing company begins before and ends on or after 1st April 1987 and references in subsections (1) and (2) above to the material accounting period shall be construed accordingly; and
- (b) Part II has effect with respect to the time at which certain interest and other payments are to be treated as paid.
- (4) A company is for the purposes of this section a dual resident company in any accounting period in which—
- (a) it is resident in the United Kingdom; and
- (b) it is also within a charge to tax under the laws of a territory outside the United Kingdom—
- (i) because it derives its status as a company from those laws; or
- (ii) because its place of management is in that territory; or
- (iii) because under those laws it is for any other reason regarded as resident in that territory for the purposes of that charge.
- (5) In any accounting period throughout which it is not a trading company, a dual resident company is for the purposes of this section an investing company.
- (6) In any accounting period of a dual resident company in which it is a trading company, the company is nevertheless for the purposes of this section an investing company if—
- (a) in that period it carries on a trade of such a description that its main function or one of its main functions consists of all or any of the following, namely—
- (i) acquiring and holding, directly or indirectly, shares, securities or investments of any other description, including interests in companies (resident outside, as well as in, the United Kingdom) with which the dual resident company is connected, within the terms of section 839;
- (ia) making payments in relation to which, being payments under loan relationships, any debits fall to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996;
- (ii) making payments which, by virtue of any enactment, are charges on income for the purposes of corporation tax;
- (iii) making payments (of interest or other sums) which are similar to those referred to in sub-paragraph (ii) above but which are deductible in computing the profits of the company for the purposes of corporation tax;
- (iv) obtaining funds (by borrowing or in any other manner whatsoever) for the purpose of, or otherwise in connection with, any of the activities referred to in sub-paragraphs (i) to (iii) above; or
- (b) it does not fall within paragraph (a) above, but in that accounting period it carries on all or any of the activities referred to in sub-paragraphs (i) to (iv) of that paragraph and does so—
- (i) to an extent which does not appear to be justified by any trade which it does carry on; or
- (ii) for a purpose which does not appear to be appropriate to any such trade; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In this section “*debtor relationship*” has the same meaning as in Chapter II of Part IV of the Finance Act 1996.
#### Claims relating to losses etc. of members of both group and consortium
##### 405
- (1) For the purposes of a consortium claim in respect of the loss or other amount of any relevant accounting period of a group/consortium company, that loss or other amount shall be treated as reduced (or, as the case may be, extinguished) by first deducting therefrom the potential relief attributable to group claims.
- (2) Subject to subsection (3) below, in relation to the loss or other amount of a relevant accounting period of a group/consortium company, the potential relief attributable to group claims is the aggregate amount of group relief that would be claimed if every company which, as a member of the same group of companies as the group/consortium company, could make a group claim in respect of that loss or other amount made such a claim for an amount which, when set against the claimant company’s total profits for its corresponding accounting period, would equal those profits.
- (3) Where for any accounting period another member of the group of companies of which the group/consortium company is a member has a loss or other amount available for relief and one or more group claims is or are in fact made in respect of that loss or other amount, account shall be taken of the relief so claimed before determining (in relation to the loss or other amount of the group/consortium company) the potential relief attributable to group claims under subsection (2) above.
- (4) In any case where—
- (a) a consortium claim is made by a group/consortium company in respect of a loss or other amount of an accounting period of a member of the consortium, and
- (b) the corresponding accounting period of the group/consortium company is a relevant accounting period,
the total profits of the corresponding accounting period of the group/consortium company against which an amount may by virtue of that claim be set off by way of group relief shall be treated as reduced (or as the case may be extinguished) by deducting therefrom the potential relief available to the group/consortium company by way of group claims.
- (5) Subject to subsection (6) below, in relation to a relevant accounting period of a group/consortium company, the potential relief available to the company by way of group claims is the maximum amount of group relief that could be claimed by the company for that accounting period on group claims relating to the losses or other amounts available for relief of other members of the group of companies of which the group/consortium company is a member.
- (6) Where another member of the group of companies of which the group/consortium company is a member in fact makes one or more group claims in respect of losses or other amounts of other members of the group, account shall be taken of the relief already claimed by that company in determining the potential relief available to the group/consortium company by way of group claims under subsection (5) above.
#### Claims relating to losses etc. of consortium company or group member
##### 406
- (1) In this section—
- (a) “*link company*” means a company which is a member of a consortium and is also a member of a group of companies; and
- (b) “*consortium company*”, in relation to a link company, means a company owned by the consortium of which the link company is a member; and
- (c) “*group member*”, in relation to a link company, means a company which is a member of the group of which the link company is also a member but is not itself a member of the consortium of which the link company is a member.
- (2) Subject to subsections (3) and (4) below, where the link company could (disregarding any deficiency of profits) make a consortium claim in respect of the loss or other amount eligible for relief of a relevant accounting period of a consortium company, a group member may make any consortium claim which could be made by the link company; and the fraction which is the relevant fraction for the purposes of section 403C where a group member is the claimant company shall be the same as it would be if the link company were the claimant company.
- (3) Sections 403A to 403C shall have effect in relation to a consortium claim made by a group member by virtue of subsection (2) above as if any time when the claimant company was not a member of the group—
- (a) were not comprised in the period which is the overlapping period in the case of that claim; and
- (b) were to be treated instead as if it constituted a part of the claim period which did not coincide with any part of the accounting period of the surrendering company to which the claim relates.
- (4) The maximum amount of relief which, in the aggregate, may be claimed by group members and the link company by consortium claims relating to the loss or other amount of a relevant accounting period of a consortium company shall not exceed the relief which could have been claimed by the link company (disregarding any deficiency of profits) if subsections (2) and (3) above had not been enacted.
- (5) Subject to subsections (6) to (8) below, where a group member has for a relevant accounting period a loss or other amount available for relief, a consortium company may make any claim in respect of that loss or other amount which it could make if the group member were a member of the consortium at all times when the link company was such a member, but not at any other time.
- (6) The fraction which is the relevant fraction for the purposes of section 403C in relation to a consortium claim made by virtue of subsection (5) above shall be the same as it would be if the link company were the surrendering company, except that the overlapping period in respect of which the relevant fraction is to be ascertained shall be that of the group member which is in fact the surrendering company.
- (7) Sections 403A to 403C shall have effect in relation to a consortium claim made by a consortium company by virtue of subsection (5) above as if any time when the surrendering company was not a member of the group—
- (a) were not comprised in the period which is the overlapping period in the case of that claim; and
- (b) were to be treated instead as if it constituted a part of the claim period that did not coincide with any part of the accounting period of the surrendering company to which the claim relates.
- (8) For any accounting period of a consortium company (“*the claimant company’s accounting period*”) the maximum amount of relief which, in the aggregate, may be claimed by that company by consortium claims relating to the losses or other amounts of accounting periods of the link company and group members shall not exceed the maximum amount of relief available to the claimant company on a consortium claim in respect of which—
- (a) the link company was the surrendering company; and
- (b) the link company’s accounting period was the same as the claimant company’s accounting period.
#### Relationship between group relief and other relief
##### 407
- (1) Group relief for an accounting period shall be allowed as a deduction against the claimant company’s total profits for the period—
- (a) before reduction by any relief derived from a subsequent accounting period, but
- (b) as reduced by any other relief from tax (including relief in respect of charges on income under section 338(1) of this Act or by virtue of section 83 of, or paragraph 4 of Schedule 11 to, the Finance Act 1996 (non-trading deficits)) determined on the assumption that the company makes all relevant claims under section 393A(1) of this Act and section 260(3) of the Capital Allowances Act(set-off of capital allowances against total profits).
- (2) For the purposes of this section “*relief derived from a subsequent accounting period*” means—
- (a) relief under section 393A(1)(b) in respect of a loss incurred in an accounting period after the accounting period the profits of which are being computed; and
- (b) relief under section 260(3) of the Capital Allowances Act in respect of capital allowances falling to be made for an accounting period after the accounting period the profits of which are being computed; and
- (c) relief in pursuance of a claim under section 83(2) of, or paragraph 4 of Schedule 11 to, the Finance Act 1996 (non-trading deficits) in respect of any deficit for a deficit period after the accounting period the profits of which are being computed.
- (3) The reductions to be made in total profits of an accounting period against which any relief derived from a subsequent accounting period is to be set off shall include any group relief for that first-mentioned accounting period.
#### Corresponding accounting periods
##### 408
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies joining or leaving group or consortium
##### 409
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements for transfer of company to another group or consortium
##### 410
- (1) If, apart from this section, two companies (“*the first company*” and “*the second company*”) would be treated as members of the same group of companies and—
- (a) in an accounting period one of the two companies has trading losses or other amounts eligible for relief from corporation tax which it would, apart from this section, be entitled to surrender by way of group relief; and
- (b) arrangements are in existence by virtue of which, at some time during or after the expiry of that accounting period—
- (i) the first company or any successor of it could cease to be a member of the same group of companies as the second company and could become a member of the same group of companies as a third company; or
- (ii) any person has or could obtain, or any persons together have or could obtain, control of the first company but not of the second; or
- (iii) a third company could begin to carry on the whole or any part of a trade which, at any time in that accounting period, is carried on by the first company and could do so either as a successor of the first company or as a successor of another company which is not a third company but which, at some time during or after the expiry of that accounting period, has begun to carry on the whole or any part of that trade;
then, for the purposes of this Chapter, the first company shall be treated as not being a member of the same group of companies as the second company.
- (2) If a trading company is owned by a consortium or is a 90 per cent. subsidiary of a holding company which is owned by a consortium and—
- (a) in any accounting period the trading company or a member of the consortium has trading losses or other amounts eligible for relief from corporation tax which it would, apart from this section, be entitled to surrender by way of group relief; and
- (b) arrangements are in existence by virtue of which—
- (i) the trading company or any successor of it could, at some time during or after the expiry of that accounting period, become a 75 per cent. subsidiary of a third company; or
- (ii) any person who owns, or any persons who together own, less than 50 per cent. of the ordinary share capital of the trading company has or together have, or could at some time during or after the expiry of that accounting period obtain, control of the trading company; or
- (iii) any person, other than a holding company of which the trading company is a 90 per cent. subsidiary, either alone or together with connected persons, holds or could obtain, or controls or could control the exercise of not less than 75 per cent. of the votes which may be cast on a poll taken at a general meeting of that trading company in that accounting period or in any subsequent accounting period; or
- (iv) a third company could begin to carry on, at some time during or after the expiry of that accounting period, the whole or any part of a trade which, at any time in that accounting period, is carried on by the trading company and could do so either as a successor of the trading company or as a successor of another company which is not a third company but which, at some time during or after the expiry of that accounting period, has begun to carry on the whole or any part of that trade;
then, for the purposes of this Chapter, the trading company shall be treated as though it did not (as the surrendering company or the claimant company) fall within section 402(3).
- (3) In any case where a trading company is a 90 per cent. subsidiary of a holding company which is owned by a consortium, any reference in subsection (2) above to the trading company, other than a reference in paragraph (b)(iv), shall be construed as including a reference to the holding company.
- (4) In this section “*third company*” means a company which, apart from any provision made by or under any such arrangements as are specified in paragraph (b) of either subsection (1) or subsection (2) above, is not a member of the same group of companies as the first company or, as the case may be, the trading company or the holding company to which subsection (2) above applies.
- (5) In subsections (1) and (2) above—
- “*arrangements*” means arrangements of any kind whether in writing or not;
- “*connected persons*” shall be construed in accordance with section 839 but as if subsection (7) of that section (persons acting together to control a company are connected) were omitted; and
- “*control*” has the meaning assigned by section 840.
- (6) For the purposes of subsections (1) and (2) above a company is the successor of another if it carries on a trade which, in whole or in part, the other company has ceased to carry on and the circumstances are such that—
- (a) section 343 applies in relation to the two companies as the predecessor and the successor within the meaning of that section; or
- (b) the two companies are connected with each other within the meaning of section 839.
- (7) Where by virtue of any enactment a Minister of the Crown or Northern Ireland department has power to give directions to a statutory body as to the disposal of assets belonging to, or to a subsidiary of, that body, the existence of that power shall not be regarded as constituting or as having at any time constituted an arrangement within the meaning of this section.
#### Exclusion of double allowances
##### 411
- (1) Relief shall not be given more than once in respect of the same amount, whether by giving group relief and by giving some other relief (in any accounting period) to the surrendering company, or by giving group relief more than once.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . Any reference in the Capital Allowances Act, except Parts 6 and 10, to an allowance made includes a reference to an allowance which would be made but for the granting of group relief, or but for that and but for an insufficiency of profits or other income against which to make it.
#### Claims and adjustments
##### 412
- (1) Claims for group relief are dealt with in Part VIII of Schedule 18 to the Finance Act 1998.
- (2) Paragraph 76 of that Schedule provides for assessments or other adjustments where group relief has been given which is or has become excessive.
#### Interpretation of Chapter IV
##### 413
- (1) The following provisions of this section have effect for the interpretation of this Chapter.
- (2) In this Chapter—
- “*claimant company*” has the meaning given by section 402(1);
- “*company*” means any body corporate;
- “*consortium claim*” means a claim for group relief made by virtue of section 402(3);
- “*EEA territory*”, in relation to any time, means a territory outside the United Kingdom which is within the European Economic Area at that time;
- “*group claim*” means a claim for group relief made by virtue of section 402(2);
- “*group/consortium company*” means a company which is both a member of a group of companies and a company owned by a consortium;
- “*group relief*” has the meaning given by section 402(1);
- “*non-resident company*” means a company that is not resident in the United Kingdom;
- “*relevant accounting period*” means an accounting period beginning after 31st July 1985; and
- “*surrendering company*” has the meaning given by section 402(1).
- (2A) For the purposes of group relief an accounting period of the claimant company which falls wholly or partly within an accounting period of the surrendering company shall be taken to correspond to that accounting period of the surrendering company.
- (3) For the purposes of this Chapter—
- (a) two companies shall be deemed to be members of a group of companies if one is the 75 per cent. subsidiary of the other or both are 75 per cent. subsidiaries of a third company;
- (b) “*holding company*” means a company the business of which consists wholly or mainly in the holding of shares or securities of companies which are its 90 per cent. subsidiaries and which are trading companies; and
- (c) “*trading company*” means a company the business of which consists wholly or mainly in the carrying on of a trade or trades.
- (4) In applying for the purposes of this Chapter the definition of “*75 per cent. subsidiary*” in section 838, any share capital of a registered industrial and provident society shall be treated as ordinary share capital.
- (5) . . . In determining for the purposes of this Chapter whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on a sale of the shares would be a trading receipt;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) References to a company being owned by a consortium shall be construed in accordance with paragraph (a) below except for the purposes of the definition of “*group consortium company*” in subsection (2) above and of sections 403ZA(3), 406(1)(b) and 409(5), (6) and (7), and for those purposes shall be construed in accordance with paragraph (b) below—
- (a) a company is owned by a consortium if three-quarters or more of the ordinary share capital of the company is beneficially owned between them by companies of which none beneficially owns less than one-twentieth of that capital;
- (b) a company is owned by a consortium if—
- (i) it is either such a trading company as is referred to in paragraph (a) or (b) of subsection (3) of section 402 or such a holding company as is referred to in paragraph (c) of that subsection, and
- (ii) three-quarters or more of the ordinary share capital of the company or, in the case of a company within section 402(3)(b), of its holding company is beneficially owned between them by companies of which none beneficially owns less than one-twentieth of that capital;
and the companies which so own three-quarters or more of that ordinary share capital are in this Chapter called the members of the consortium.
- (7) Notwithstanding that at any time a company (“*the subsidiary company*”) is a 75 per cent. subsidiary or a 90 per cent. subsidiary of another company (“*the parent company*”) it shall not be treated at that time as such a subsidiary for the purposes of this Chapter unless, additionally at that time—
- (a) the parent company is beneficially entitled to not less than 75 per cent. or, as the case may be, 90 per cent. of any profits available for distribution to equity holders of the subsidiary company; and
- (b) the parent company would be beneficially entitled to not less than 75 per cent. or, as the case may be, 90 per cent. of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) Schedule 18 shall have effect for supplementing this section.
## PART XI — CLOSE COMPANIES
### CHAPTER I — INTERPRETATIVE PROVISIONS
#### Close companies
##### 414
- (1) For the purposes of the Corporation Tax Acts, a “*close company*” is one which is under the control of five or fewer participators, or of participators who are directors, except that the expression does not apply—
- (a) to a company not resident in the United Kingdom;
- (b) to a registered industrial and provident society within the meaning of section 486(12) or to a building society;
- (c) to a company controlled by or on behalf of the Crown, and not otherwise a close company; or
- (d) to a company falling within section 415 or subsection (5) below.
- (2) Subject to section 415 and subsection (5) below, a company resident in the United Kingdom (but not falling within subsection (1)(b) above) is also a close company if five or fewer participators, or participators who are directors, together possess or are entitled to acquire—
- (a) such rights as would, in the event of the winding-up of the company (“*the relevant company*”) on the basis set out in subsection (2A) below, entitle them to receive the greater part of the assets of the relevant company which would then be available for distribution among the participators, or
- (b) such rights as would in that event so entitle them if any rights which any of them or any other person has as a loan creditor (in relation to the relevant company or any other company) were disregarded.
- (2A) In the notional winding-up of the relevant company, the part of the assets available for distribution among the participators which any person is entitled to receive is the aggregate of—
- (a) any part of those assets which he would be entitled to receive in the event of the winding-up of the company, and
- (b) any part of those assets which he would be entitled to receive if—
- (i) any other company which is a participator in the relevant company and is entitled to receive any assets in the notional winding-up were also wound up on the basis set out in this subsection, and
- (ii) the part of the assets of the relevant company to which the other company is entitled were distributed among the participators in the other company in proportion to their respective entitlement to the assets of the other company available for distribution among the participators.
- (2B) In the application of subsection (2A) above to the notional winding-up of the other company and to any further notional winding-up required by paragraph (b) of that subsection (or by any further application of that paragraph), references to “*the relevant company*” shall have effect as references to the company concerned.
- (2C) In ascertaining under subsection (2) above whether five or fewer participators, or participators who are directors, together possess or are entitled to acquire rights such as are mentioned in paragraph (a) or (b) of that subsection—
- (a) a person shall be treated as a participator in or director of the relevant company if he is a participator in or director of any other company which would be entitled to receive assets in the notional winding-up of the relevant company on the basis set out in subsection (2A) above, and
- (b) except in the application of subsection (2A) above, no account shall be taken of a participator which is a company unless the company possesses or is entitled to acquire the rights in a fiduciary or representative capacity.
- (2D) Subsections (4) to (6) of section 416 apply for the purposes of subsections (2) and (2A) above as they apply for the purposes of subsection (2) of that sections.
- (3) *In ascertaining under subsection* (2)*above whether any amount could be apportioned among five or fewer participators or among participators who are directors, account shall, in cases where an original apportionment and any sub-apportionment are involved, be taken only of persons among whom that amount could finally be apportioned as the result of the whole process of original apportionment and sub-apportionment and those persons shall be treated as participators or directors if they are participators or directors of any company in the case of which either an original apportionment or any sub-apportionment could be made*.
- (4) For the purposes of this section—
- (a) a company is to be treated as controlled by or on behalf of the Crown if, but only if, it is under the control of the Crown or of persons acting on behalf of the Crown, independently of any other person, and
- (b) where a company is so controlled, it shall not be treated as being otherwise a close company unless it can be treated as a close company as being under the control of persons acting independently of the Crown.
- (5) A company is not to be treated as a close company—
- (a) if—
- (i) it is controlled by a company which is not a close company, or by two or more companies none of which is a close company; and
- (ii) it cannot be treated as a close company except by taking as one of the five or fewer participators requisite for its being so treated a company which is not a close company;
- (b) if it cannot be treated as a close company except by virtue of paragraph (a) of subsection (2) above or paragraph (c) of section 416(2) and it would not be a close company if the references in those paragraphs to participators did not include loan creditors who are companies other than close companies.
- (6) References in subsection (5) above to a close company shall be treated as applying to any company which, if resident in the United Kingdom, would be a close company.
- (7) If shares in any company (“*the first company*”) are held on trust for a registered pension scheme, then, unless the scheme is established wholly or mainly for the benefit of persons who are, or are dependants of, directors or employees or past directors or employees of—
- (a) the first company; or
- (b) an associated company of the first company; or
- (c) a company which is under the control of any director or associate of a director of the first company or of two or more persons each of whom is such a director or associate; or
- (d) a close company;
the persons holding the shares shall, for the purposes of subsection (5) above, be deemed to be the beneficial owners of the shares and, in that capacity, to be a company which is not a close company.
#### Certain quoted companies not to be close companies
##### 415
- (1) Subject to the following provisions of this section, a company is not to be treated as being at any time a close company if—
- (a) shares in the company carrying not less than 35 per cent. of the voting power in the company (and not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) have been allotted unconditionally to, or acquired unconditionally by, and are at that time beneficially held by, the public, and
- (b) any such shares have within the preceding 12 months been the subject of dealings on a recognised stock exchange, and the shares have within those 12 months been listed in the official list of a recognised stock exchange.
- (2) Subsection (1) above shall not apply to a company at any time when the total percentage of the voting power in the company possessed by all of the company’s principal members exceeds 85 per cent.
- (3) For the purposes of subsection (1) above shares in a company shall be deemed to be beneficially held by the public if, and only if, they—
- (a) fall within subsection (4) below, and
- (b) are not within the exceptions in subsection (5) below,
and a corresponding construction shall be given to the reference to shares which have been allotted unconditionally to, or acquired unconditionally by, the public.
- (4) Shares shall fall within this subsection (as being beneficially held by the public)—
- (a) if beneficially held by a company resident in the United Kingdom which is not a close company, or by a company not so resident which would not be a close company if it were so resident, or
- (b) if held on trust for a registered pension scheme, or
- (c) If they are not comprised in a principal member’s holding.
- (5) Shares shall not be deemed to be held by the public if they are held—
- (a) by any director or associate of a director of the company, or
- (b) by any company which is under the control of any such director or associate, or of two or more persons each of whom is such a director or associate, or
- (c) by any associated company of the company, or
- (d) as part of any fund the capital or income of which is applicable or applied wholly or mainly for the benefit of, or of the dependants of, the employees or directors, or past employees or directors, of the company, or of any company within paragraph (b) or (c) above.
- (6) For the purposes of this section—
- (a) a person is a principal member of a company if he possesses a percentage of the voting power in the company of more than 5 per cent. and, where there are more than five such persons, if he is one of the five persons who possess the greatest percentages or if, because two or more persons possess equal percentages of the voting power in the company, there are no such five persons, he is one of the six or more persons (so as to include those two or more who possess equal percentages) who possess the greatest percentages, and
- (b) a principal member’s holding consists of the shares which carry the voting power possessed by him.
- (7) In arriving at the voting power which a person possesses, there shall be attributed to him any voting power which, for the purposes of section 416, would be attributed to him under subsection (5) or (6) of that section.
- (8) In this section “*shares*” include stock.
#### Meaning of “associated company” and “control”
##### 416
- (1) For the purposes of this Part,*except paragraphs* 2*and* 9(1)(a), (2)(a)*and* (3)(a)*of Schedule* 19 , a company is to be treated as another’s “*associated company*” at a given time if, at that time or at any other time within one year previously, one of the two has control of the other, or both are under the control of the same person or persons.
- (2) For the purposes of this Part, a person shall be taken to have control of a company if he exercises, or is able to exercise or is entitled to acquire, direct or indirect control over the company’s affairs, and in particular, but without prejudice to the generality of the preceding words, if he possesses or is entitled to acquire—
- (a) the greater part of the share capital or issued share capital of the company or of the voting power in the company; or
- (b) such part of the issued share capital of the company as would, if the whole of the income of the company were in fact distributed among the participators (without regard to any rights which he or any other person has as a loan creditor), entitle him to receive the greater part of the amount so distributed; or
- (c) such rights as would, in the event of the winding-up of the company or in any other circumstances, entitle him to receive the greater part of the assets of the company which would then be available for distribution among the participators.
- (3) Where two or more persons together satisfy any of the conditions of subsection (2) above, they shall be taken to have control of the company.
- (4) For the purposes of subsection (2) above a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date, or will at a future date be entitled to acquire.
- (5) For the purposes of subsections (2) and (3) above, there shall be attributed to any person any rights or powers of a nominee for him, that is to say, any rights or powers which another person possesses on his behalf or may be required to exercise on his direction or behalf.
- (6) For the purposes of subsections (2) and (3) above, there may also be attributed to any person all the rights and powers of any company of which he has, or he and associates of his have, control or any two or more such companies, or of any associate of his or of any two or more associates of his, including those attributed to a company or associate under subsection (5) above, but not those attributed to an associate under this subsection; and such attributions shall be made under this subsection as will result in the company being treated as under the control of five or fewer participators if it can be so treated.
#### Meaning of “participator”, “associate”, “director” and “loan creditor”
##### 417
- (1) For the purposes of this Part, a “*participator*” is, in relation to any company, a person having a share or interest in the capital or income of the company, and, without prejudice to the generality of the preceding words, includes—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any loan creditor of the company;
- (c) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company (construing “distributions” without regard to section 418) or any amounts payable by the company (in cash or in kind) to loan creditors by way of premium on redemption; and
- (d) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit.
- (2) The provisions of subsection (1) above are without prejudice to any particular provision of this Part requiring a participator in one company to be treated as being also a participator in another company.
- (3) “*associate*” means, in relation to a participator—
- (a) any relative or partner of the participator;
- (b) the . . . trustees of any settlement in relation to which the participator is, or any relative of his (living or dead) is or was, a settlor . . . ; and
- (c) where the participator is interested in any shares or obligations of the company which are subject to any trust, or are part of the estate of a deceased person—
- (i) the . . . trustees of the settlement concerned or, as the case may be, the personal representatives of the deceased; and
- (ii) if the participator is a company, any other company interested in those shares or obligations;
and has a corresponding meaning in relation to a person other than a participator.
- (4) In subsection (3) above “*relative*” means spouse or civil partner, parent or remoter forebear, child or remoter issue, or brother or sister.
- (5) For the purposes of this Part “*director*” includes any person occupying the position of director by whatever name called, any person in accordance with whose directions or instructions the directors are accustomed to act, and any person who—
- (a) is a manager of the company or otherwise concerned in the management of the company’s trade or business, and
- (b) is, either on his own or with one or more associates, the beneficial owner of, or able, directly or through the medium of other companies or by any other indirect means, to control 20 per cent. or over of the ordinary share capital of the company.
- (6) In subsection (5)(b) above the expression “*either on his own or with one or more associates*” requires a person to be treated as owning or, as the case may be, controlling what any associate owns or controls, even if he does not own or control share capital on his own.
- (7) Subject to subsection (9) below, for the purposes of this Part “*loan creditor*”, in relation to a company, means a creditor in respect of any debt incurred by the company—
- (a) for any money borrowed or capital assets acquired by the company; or
- (b) for any right to receive income created in favour of the company; or
- (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium thereon);
or in respect of any redeemable loan capital issued by the company.
- (8) Subject to subsection (9) below, a person who is not the creditor in respect of any debt or loan capital to which subsection (7) above applies but nevertheless has a beneficial interest therein shall, to the extent of that interest, be treated for the purposes of this Part as a loan creditor in respect of that debt or loan capital.
- (9) A person carrying on a business of banking shall not be deemed to be a loan creditor in respect of any loan capital or debt issued or incurred by the company for money lent by him to the company in the ordinary course of that business.
### Additional matters to be treated as distributions
#### “Distribution” to include certain expenses of close companies
##### 418
- (1) Subject to such exceptions as are mentioned in section 209(1), in the Corporation Tax Acts “*distribution*”, in relation to a close company, includes, unless otherwise stated, any such amount as is required to be treated as a distribution by subsection (2) below.
- (2) Subject to subsection (3) below, where a close company incurs expense in or in connection with the provision for any participator of living or other accommodation, of entertainment, of domestic or other services, or of other benefits or facilities of whatever nature, the company shall be treated as making a distribution to him of an amount equal to so much of that expense as is not made good to the company by the participator.
- (3) Subsection (2) above shall not apply to expense incurred in or in connection with the provision—
- (a) for a person employed in employment to which Part 3 of ITEPA 2003 applies (earnings and benefits etc. treated as employment income) without the exclusion in section 216 of that Act (provisions not applicable to lower-paid employment) of such benefits as are mentioned in any of Chapters 6 to 10 of Part 3 and section 223 of that Act (cars and vans, loans, shares, other benefits, and payments on account of director’s tax); or
- (b) of living accommodation for any person if the accommodation is (within the meaning of Chapter 5 of Part 3 of ITEPA 2003) provided by reason of his employment; or
- (c) for the spouse or civil partner, children or dependants of a person employed by the company of any pension, annuity, lump sum, gratuity or other like benefit to be given on that person’s death or retirement.
- (4) The amount of the expense to be taken into account under subsection (2) above as a distribution shall be the same as would under Chapters 6 to 10 of Part 3 of ITEPA 2003 be the cash equivalent of the resultant benefit to the participator.
- (5) Subsection (2) above shall not apply if the company and the participator are both resident in the United Kingdom and—
- (a) one is a subsidiary of the other or both are subsidiaries of a third company also so resident, and
- (b) the benefit to the participator arises on or in connection with a transfer of assets or liabilities by the company to him, or to the company by him.
- (6) The question whether one body corporate is a subsidiary of another for the purposes of subsection (5) above shall be determined as a question whether it is a 51 per cent. subsidiary of that other, except that that other shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on a sale of the shares would be a trading receipt; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.
- (7) Where each of two or more close companies makes a payment to a person who is not a participator in that company, but is a participator in another of those companies, and the companies are acting in concert or under arrangements made by any person, then each of those companies and any participator in it shall be treated as if the payment made to him had been made by that company.
- (8) For the purposes of this section any reference to a participator includes an associate of a participator, and any participator in a company which controls another company shall be treated as being also a participator in that other company.
### CHAPTER II — CHARGES TO TAX IN CONNECTION WITH LOANS
#### Loans to participators etc
##### 419
- (1) Subject to the following provisions of this section and section 420, where a close company, otherwise than in the ordinary course of a business carried on by it which includes the lending of money, makes any loan or advances any money to an individual who is a participator in the company or an associate of a participator, there shall be assessed on and recoverable from the company, as if it were an amount of corporation tax chargeable on the company for the accounting period in which the loan or advance is made, an amount equal to 25 per cent. of the amount of the loan or advance.
- (2) For the purposes of this section the cases in which a close company is to be regarded as making a loan to any person include a case where—
- (a) that person incurs a debt to the close company; or
- (b) a debt due from that person to a third party is assigned to the close company;
and then the close company shall be regarded as making a loan of an amount equal to the debt.
- (3) Tax due by virtue of this section in relation to any loan or advance shall be due and payable in accordance with section 59D of the Management Act on the day following the expiry of nine months from the end of the accounting period in which the loan or advance was made.
- (4) Where a close company has made a loan or advance which gave rise to a charge to tax on the company under subsection (1) above and
- (a) the loan or advance or any part of it is repaid to the company,or
- (b) the whole or part of the debt in respect of the loan or advance is released or written off,
relief shall be given from that tax, or a proportionate part of it . . . .
- (4A) Where
- (a) the repayment of the whole or any part of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance, or
- (b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,
relief in respect of the repayment , release or writing off shall not be given under subsection (4) above at any time before the expiry of nine months from the end of the accounting period in which the repayment , release or writing off occurred.
- (4B) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in return) applies to a claim for relief under subsection (4) above unless—
- (a) the claim is included (by amendment or otherwise) in the return for the period in which the loan or advance was made, and
- (b) the relief may be given at the time the claim is made.
- (5) Where, under arrangements made by any person otherwise than in the ordinary course of a business carried on by him—
- (a) a close company makes a loan or advance which, apart from this subsection, does not give rise to any charge on the company under subsection (1) above, and
- (b) some person other than the close company makes a payment or transfers property to, or releases or satisfies (in whole or in part) a liability of, an individual who is a participator in the company or an associate of a participator,
then, unless in respect of the matter referred to in paragraph (b) above there falls to be included in the total income of the participator or associate an amount not less than the loan or advance, this section shall apply as if the loan or advance had been made to him.
- (6) In subsections (1) and (5)(b) above the references to an individual shall apply also to a company receiving the loan or advance in a fiduciary or representative capacity . . . .
- (7) For the purposes of this section any participator in a company which controls another company shall be treated as being also a participator in that other company.
#### Exceptions from section 419
##### 420
- (1) Section 419(2)(a) shall not apply to a debt incurred for the supply by the close company of goods or services in the ordinary course of its trade or business unless the credit given exceeds six months or is longer than that normally given to the company’s customers.
- (2) Section 419(1) shall not apply to a loan made to a director or employee of a close company, or of an associated company of the close company, if—
- (a) neither the amount of the loan, nor that amount when taken together with any other outstanding loans which—
- (i) were made by the close company or any of its associated companies to the borrower*or the wife or husband of the borrower* ; and
- (ii) if made before 31st March 1971, were made for the purpose of purchasing a dwelling which was or was to be the borrower’s only or main residence;
exceeds £15,000 and the outstanding loans falling within sub-paragraph (ii) above do not together exceed £10,000; and
- (b) the borrower works full-time for the close company or any of its associated companies; and
- (c) the borrower does not have a material interest in the close company or in any associated company of the close company;
but if the borrower acquires such a material interest at a time when the whole or part of any such loan made after 30th March 1971 remains outstanding the close company shall be regarded as making to him at that time a loan of an amount equal to the sum outstanding.
#### Taxation of borrower when loan under section 419 released etc
##### 421
- (1) Subject to the following provisions of this section, where a company is assessed or liable to be assessed under section 419 in respect of a loan or advance made to the trustees of a settlement and after the settlement has ended releases or writes off the whole or part of the debt in respect of it, then—
- (a) for the purpose of computing the income of the person from whom the debt was due (“*the debtor*”) for corporation tax purposes, a sum equal to the amount so released or written off shall be treated as income received by the debtor after deduction of income tax at the dividend ordinary rate from a corresponding gross amount;
- (b) no repayment of income tax shall be made in respect of that income and the debtor shall not be liable to pay corporation tax at the dividend ordinary rate on that income;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This section shall be construed as one with section 419.
#### Extension of section 419 to loans by companies controlled by close companies
##### 422
- (1) Subject to subsection (4) below, where a company which is controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 419, that section and section 420 shall apply as if the loan had been made by the close company.
- (2) Subject to subsection (4) below, where a company which is not controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 419 and a close company subsequently acquires control of it, that section and section 420 shall apply as if the loan had been made by the close company immediately after the time when it acquired control.
- (3) Where two or more close companies together control the company that makes or has made the loan, subsections (1) and (2) above shall have effect—
- (a) as if each of them controlled that company; and
- (b) as if the loan had been made by each of those close companies,
but the loan shall be apportioned between those close companies in such proportion as may be appropriate having regard to the nature and amount of their respective interests in the company that makes or has made the loan.
- (4) Subsections (1) and (2) above do not apply if it is shown that no person has made any arrangements (otherwise than in the ordinary course of a business carried on by him) as a result of which there is a connection—
- (a) between the making of the loan and the acquisition of control; or
- (b) between the making of the loan and the provision by the close company of funds for the company making the loan;
and the close company shall be regarded as providing funds for the company making the loan if it directly or indirectly makes any payment or transfers any property to, or releases or satisfies (in whole or in part) a liability of, the company making the loan.
- (5) Where, by virtue of this section, sections 419 and 420 have effect as if a loan made by one company had been made by another, any question under those sections or section 421 whether—
- (a) the company making the loan did so otherwise than in the ordinary course of a business carried on by it which includes the lending of money;
- (b) the loan or any part of it has been repaid to the company;
- (c) the company has released or written off the whole or part of the debt in respect of the loan,
shall be determined by reference to the company that makes the loan.
- (6) This section shall be construed as one with section 419 and section 420 and in this section—
- (a) “*loan*” includes advance; and
- (b) references to a company making a loan include references to cases in which the company is, or if it were a close company would be, regarded as making a loan by virtue of section 419(2).
### CHAPTER III — APPORTIONMENT OF UNDISTRIBUTED INCOME ETC.
#### Apportionment of certain income, deductions and interest
##### 423
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusions from section 423
##### 424
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manner of apportionment
##### 425
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to income tax where apportionment is to an individual
##### 426
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of charge under section 426 in certain cases
##### 427
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Increase of apportioned sum etc. by reference to ACT
##### 428
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payment and collection of income tax
##### 429
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consequences of apportionment: ACT
##### 430
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XII — SPECIAL CLASSES OF COMPANIES AND BUSINESSES
### CHAPTER I — INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS
### Insurance companies: general
#### Interpretative provisions relating to insurance companies
##### 431
- (1) This section has effect for the interpretation of this Chapter.
- (2) Unless the context otherwise requires—
- “*annuity business*” means the business of granting annuities on human life , other than the business of granting immediate needs annuities (within the meaning of section 725 of ITTOIA 2005 (immediate needs annuities));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*basic life assurance and general annuity business*” has the meaning given by section 431F;
- “*brought into account*” has the meaning given by section 83A of the Finance Act 1989;
- “*closing*” and “*opening*”, in relation to a period of account, refer respectively to the position at the end and at the beginning of the period and, in relation to an accounting period, refer respectively to the position at the end and at the beginning of the period of account in which the accounting period falls;
- “*closing liabilities*” includes liabilities assumed at the end of the period of account concerned in consequence of the declaration of reversionary bonuses or a reduction in premiums;
- “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contract of long-term insurance” means any contract which falls within Part II of Schedule 1 to that Order;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*free assets amount*”, in relation to an insurance company, means the excess of the value of the assets of the company's long-term business over the aggregate of —the value of the liabilities of that business,any money debts (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996) of the company not within paragraph (a) above which are owed in respect of that business, andthe amount of the shareholders' excess assets within the meaning given by section 432A(8)(b));
- “*General Prudential Sourcebook*” means the General Prudential Sourcebook made by the Financial Services Authority under the Financial Services and Markets Act 2000 ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “insurance business transfer scheme” means a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 or 4 of subsection (3) of that section;
- “insurance company” means—a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, oran EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which—carries on business which consists of the effecting or carrying out of contracts of insurance, andcarries on that business through a branch or agency in the United Kingdom,but does not include an insurance special purpose vehicle;
- “*the Insurance Prudential Sourcebook*” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*insurance special purpose vehicle*” means any undertaking which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issue or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of the undertaking;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*liabilities*”, in relation to an insurance company, means—the mathematical reserves of the company as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook, andliabilities of the company (whose value falls to be determined in accordance with section 1.3 of the General Prudential Sourcebook) which arise from deposit back arrangements;and for this purpose “*deposit back arrangements*” has the same meaning as in that Sourcebook;
- “*life assurance business*” includes annuity business;
- “*life reinsurance business*” has the meaning given by section 431C;
- “*linked assets*”, and related expressions, shall be construed in accordance with section 432ZA;
- “long-term business” means business which consists of the effecting or carrying out of contracts of long-term insurance;
- “*long-term insurance fund*” means the fund maintained by an insurance company in respect of its long-term business . . . ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*overseas life assurance business*” has the meaning given by section 431D;
- “*overseas life assurance fund*” shall be construed in accordance with Schedule 19AA;
- “*overseas life insurance company*” means an insurance company not resident in the United Kingdom but carrying on life assurance business through a branch or agency in the United Kingdom; . . .
- “*pension business*” has the meaning given by section 431B;
- “*periodical return*”, in relation to an insurance company, means a return deposited with the Financial Services Authority under section 9.6 of the Prudential Sourcebook (Insurers).
- “*period of account*” means the period covered by a periodical return;
- “the Prudential Sourcebook (Insurers)” means the Interim Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*reinsurance business*” includes retrocession business;
- “*shareholders' excess assets*” has the meaning given by section 432A(8)(b));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*value*”, in relation to an asset of an insurance company, means the value of the asset as determined in accordance with section 1.3 of the General Prudential Sourcebook, as read with section 2.1 of the Insurance Prudential Sourcebook;
- “*with-profits liabilities*” means liabilities in respect of policies or contracts under which the policy holders or annuitants are eligible to participate in surplus;
- (2ZA) Subsections (2ZB) and (2ZC) below apply where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2ZB) If the transfer takes place otherwise than on the last day of a period of account of the transferor, references to—
- (a) opening liabilities of the transferor,
- (b) opening values or net values of assets of the transferor, . . .
- (c) the opening amount of the free assets amount of the transferor, or
- (d) the opening amount of the shareholders' excess assets of the transferor,
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion A/C.
- (2ZC) If the transfer takes place otherwise than on the first day of a period of account of the transferee, references to—
- (a) closing liabilities of the transferee,
- (b) closing values or net values of assets of the transferee, . . .
- (c) the closing amount of the free assets amount of the transferee, or
- (d) the closing amount of the shareholders' excess assets of the transferee,
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion B/C.
- (2ZD) For the purposes of subsection (2ZC) above—
- (a) closing liabilities of the transferee are to be taken not to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferor with the transferee, but
- (b) closing liabilities of the transferee are to be taken to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferee with the transferor if the business transferred consists of or includes that reinsurance business.
- (2ZE) In subsections (2ZB) and (2ZC) above—
- A is the number of days in the period beginning with the period of account and ending with the day of the transfer,
- B is the number of days in the period beginning with the day of the transfer and ending with the period of account, and
- C is one-half of the number of days in the period of account.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Separation of different classes of business
##### 432
- (1) Where an insurance company carries on life assurance business in conjunction with insurance business of any other category, the life assurance business shall, for the purposes of the Corporation Tax Acts, be treated as a separate business from any other category of business carried on by the company.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Profits reserved for policy holders and annuitants
##### 433
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Franked investment income etc
##### 434
- (1) Section 208 shall not apply in relation to—
- (a) the charge to corporation tax on the life assurance profits of an insurance company computed in accordance with the provisions of this Act applicable to Case I of Schedule D; or
- (b) any computation of such profits in accordance with those provisions.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) The reference in subsection (1) above to the life assurance profits of an insurance company is a reference to the profits of the company—
- (a) in respect of its life assurance business; or
- (b) in respect of any category of life assurance business which it carries on.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) So much of the policy holders' share of the franked investment income from investments of a company’s long-term insurance fund as is referable to its life assurance business shall be left out of account in determining, under subsection (7) of section 13, the franked investment income forming part of the company’s profits for the purposes of that section.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) *Subject to subsection* (5)*below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case* I*of Schedule D* (*whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods*),*would be connoted by the words in section* 433 “*such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants*”.
- (5) *If the income exceeds the profits as computed in accordance with the provisions applicable to Case* I*of Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess*.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) For the purposes of this section—
- (a) “*the policy holders’ share*” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, . . .
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) “*the policy holders’ share of the relevant profits*” has the same meaning as in section 89 of that Act.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of gains reserved for policy holders and annuitants
##### 435
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity business and pension business: separate charge on profits
##### 436
- (1) Subject to the provisions of this section, profits arising to an insurance company from . . . pension business shall be treated as income within Schedule D, and be chargeable under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, and to subsection (3) below, the profits therefrom shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (2) Subsection (1) above shall not apply to an insurance company charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its ordinary life assurance business.
- (3) In making the computation referred to in subsection (1) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . ;
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) *no deduction shall be allowed in respect of any expenses of management deductible under section* 76;
- (c) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from pension business . . .in any previous accounting period or year of assessment;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Section 396 shall not be taken to apply to a loss incurred by a company on its . . . pension business.
- (5) Nothing in section 128 or 399(1) shall affect the operation of this section.
#### General annuity business
##### 437
- (1A) In the computation, otherwise than in accordance with the provisions applicable to Case I of Schedule D, of the relevant profits (within the meaning of section 88(1) of the Finance Act 1989) of an insurance company for any accounting period, new annuities paid by the company in that period shall be brought into account by treating an amount equal to the income limit for that period as expenses payable which fall to be brought into account for that period at Step 3 in section 76(7).
- (1C) For the purposes of this section (but subject to subsections (1CA) to (1CD) below)—
- (a) “*new annuity*” means any annuity, so far as paid under a contract made by an insurance company in an accounting period beginning on or after 1st January 1992 and so far as referable to the company’s basic life assurance and general annuity business;
- (b) “*the income limit*” for an accounting period of an insurance company is the difference between—
- (i) the total amount of the new annuities paid by the company in that accounting period; and
- (ii) the total of the capital elements and amounts exempt under section 717 of ITTOIA 2005 contained in the new annuities so paid; . . .
- (c) the capital element contained in an annuity shall be determined in accordance with Chapter V of Part XIV, but for this purpose—
- (i) it is immaterial whether or not an annuitant claims any relief to which he is entitled under that Chapter; and
- (ii) where, by virtue of subsection (2) of section 657, section 656 does not apply to an annuity, the annuity shall be treated as containing the capital element that it would have contained apart from that subsection; and
- (d) the amounts exempt under section 717 of ITTOIA 2005 shall be determined in accordance with Chapter 7 of Part 6 of that Act, but for this purpose—
- (i) it is immaterial whether or not an annuitant claims any relief to which the annuitant is entitled under that section; and
- (ii) where, by virtue of section 718 of that Act, section 717 does not apply to an annuity, the annuity shall be treated as being exempt to the same extent that it would have been apart from that section.
- (1CA) Where a new annuity (“*the actual annuity*”) is a steep-reduction annuity, the income limit for an accounting period of the company paying the annuity shall be computed for the purposes of this section as if—
- (a) the contract providing for the actual annuity provided instead for the annuities identified by subsections (1CB) and (1CC) below; and
- (b) the consideration for each of those annuities were to be determined by the making of a just and reasonable apportionment of the consideration for the actual annuity.
- (1CB) The annuities mentioned in subsection (1CA)(a) above are—
- (a) an annuity the payments in respect of which are confined to the payments in respect of the actual annuity that fall to be made before the earliest time for the making in respect of the actual annuity of a reduced payment such as is mentioned in section 437A(1)(c); and
- (b) subject to subsection (1CC) below, an annuity the payments in respect of which are all the payments in respect of the actual annuity other than those mentioned in paragraph (a) above.
- (1CC) Where an annuity identified by paragraph (b) of subsection (1CB) above (“*the later annuity*”) would itself be a steep-reduction annuity, the annuities mentioned in subsection (1CA)(a) above—
- (a) shall not include the later annuity; but
- (b) shall include, instead, the annuities which would be identified by subsection (1CB) above (with as many further applications of this subsection as may be necessary for securing that none of the annuities mentioned in subsection (1CA)(a) above is a steep-reduction annuity) if references in that subsection to the actual annuity were references to the later annuity.
- (1CD) Subsections (1CA) to (1CC) above shall be construed in accordance with section 437A.
- (1D) In any case where—
- (a) a payment in respect of an annuity is made by an insurance company under a group annuity contract made in an accounting period beginning before 1st January 1992,
- (b) the company’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the company’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall be treated for the purposes of this section, other than this subsection, as if the group annuity contract had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1E) In any case where—
- (a) a payment in respect of an annuity is made by a reinsurer under a reinsurance treaty made in an accounting period beginning before 1st January 1992,
- (b) the reinsurer’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the reinsurer’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall, as respects the reinsurer, be treated for the purposes of this section, other than this subsection, as if the reinsurance treaty had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1F) In this section—
- “*group annuity contract*” means a contract between an insurance company and some other person under which the company undertakes to become liable to pay annuities to or in respect of such persons as may subsequently be specified or otherwise ascertained under or in accordance with the contract (whether or not annuities under the contract are also payable to or in respect of persons who are specified or ascertained at the time the contract is made);
- “*reinsurance treaty*” means a contract under which one insurance company is obliged to cede, and another (in this section referred to as a “*reinsurer*”) to accept, the whole or part of a risk of a class or description to which the contract relates.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pension business: exemption from tax
##### 438
- (1) Exemption from corporation tax shall be allowed in respect of income from, and chargeable gains in respect of, investments and deposits of so much of an insurance company’s long-term insurance fund as is referable (in accordance with section 432A) to pension business.
- (2) The exemption from tax conferred by subsection (1) above shall not exclude any sums from being taken into account as receipts in computing profits or losses for any purpose of the Corporation Tax Acts.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This section shall be disregarded in determining, in relation to an insurance company which is entitled to a tax credit in respect of a distribution, whether the condition in paragraph (a) or (b) of section 231(2) is satisfied.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restricted government securities
##### 439
- (1) For the purposes of this Chapter restricted government securities shall be treated as linked solely to pension business.
- (2) In this section“*restricted government securities*” means, subject to the following provisions of this section, government securities issued on the condition that, except in such circumstances as may be specified in the conditions of issue, they are to be held by insurance companies against and applied solely towards meeting pension business liabilities.
- (6) Subject to subsection (7) below, the following Treasury Stock, namely—
- (a) 2 per cent. Index-linked Treasury Stock 1996;
- (b) 2 per cent. Index-linked Treasury Stock 2006;
- (c) 2 per cent. Index-linked Treasury Stock 2011;
are not restricted government securities for the purposes of this section.
- (7) If any of the index-linked stock referred to in subsection (6) above was on 27th March 1982 held by an insurance company against and applied solely towards meeting the liabilities of the company’s pension business, then—
- (a) if and so long as the stock continues to be so held by that company, it shall continue to be treated as restricted government securities for the purposes of this section; and
- (b) if the stock ceases to be restricted government securities otherwise than by virtue of being actually disposed of or redeemed, on the day on which it so ceases the stock shall be deemed for the purposes of corporation tax, including (*subject to subsection* (8)*below*) corporation tax on chargeable gains, to have been disposed of and immediately re-acquired at its market value on that date.
- (8) *For the purposes of sections* 67*and* 68*of the* 1979*Act* (*gilt-edged securities*)—
- (a) *in ascertaining the date on which securities were acquired, no account shall be taken of any deemed disposal and reacquisition resulting from subsection* (7)(b)*above; and*
- (b) *so long as any index-linked stock continues, by virtue of subsection* (7)(a)*above, to be treated as restricted government securities for the purposes of this section, it shall be regarded as being stock of a different kind from the index-linked stock referred to in subsection* (6)*above which is not so treated*.
#### Identification or exchange of long term assets
##### 440
- (1) If at any time an asset (or a part of an asset) held by an insurance company ceases to be within one of the categories set out in subsection (4) below and comes within another of those categories, the company shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) for a consideration equal to its market value at that time.
- (2) Where—
- (a) an asset is acquired by a company as a result of an insurance business transfer scheme which has effect to transfer long-term business from any person (“the transferor”) to the company, and
- (b) the asset (or part of it) is within one of the categories set out in subsection (4) below immediately before the acquisition and is within another of those categories immediately afterwards,
the transferor shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) immediately before the acquisition for a consideration equal to its market value at that time.
- (2A) Where under subsection (1) or (2) above there is a deemed disposal and re-acquisition of any asset representing a loan relationship of a company, Chapter 2 of Part 4 of the Finance Act 1996 applies as respects that asset as if the asset that is deemed to be disposed of and the asset that is deemed to be re-acquired were different assets.
- (2B) Where under subsection (1) or (2) above there is a deemed disposal and re-acquisition of any derivative contract of a company, Schedule 26 to the Finance Act 2002 applies as respects that contract as if the contract that is deemed to be disposed of and the contract that is deemed to be re-acquired were different assets.
- (3) Where, apart from this subsection, section 171 or 173 the 1992 Act (transfers within a group) would apply to a disposal or acquisition by an insurance company of an asset (or part of an asset) which, immediately before the disposal or (as the case may be) immediately after the acquisition, is within one of the categories set out in paragraphs (a) to (e) of subsection (4) below, that section shall not apply to the disposal or acquisition.
- (4) The categories referred to in subsections (1) to (3) above are—
- (a) assets linked solely to pension business;
- (b) assets linked solely to life reinsurance business;
- (c) assets of the overseas life assurance fund;
- (d) assets linked solely to basic life assurance and general annuity business;
- (e) assets of the long-term insurance fund not within any of the preceding paragraphs;
- (f) other assets.
- (5) In this section “*market value*” has the same meaning as in the 1992 Act.
- (6) In a case where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D this section has effect with the modification specified in section 440B(3).
#### Foreign life assurance funds
##### 441
- (1) This section . . . shall apply for an accounting period of an insurance company . . . if during the period the company carries on overseas life assurance business.
- (2) Subject to the provisions of this section . . . , profits arising to the company from the overseas life assurance business shall be treated as income within Schedule D, and the chargeable under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, the profits from it shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (2) above shall not apply if the company is charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business.
- (4) In making the computation referred to in subsection (2) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . , and
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from overseas life assurance business in any previous accounting period beginning on or after 1st January 1990.
- (5) Section 396 shall not be taken to apply to a loss incurred by a company on overseas life assurance business.
- (6) Nothing in section 128 or 399(1) shall affect the operation of this section.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Gains accruing on the disposal by a company of assets of its overseas life assurance fund shall not be chargeable gains. ]
#### Overseas business of U.K. companies
##### 442
- (1) Subsections (2) and (3) below apply where a company resident in the United Kingdom carries on insurance business outside the United Kingdom through a permanent establishment and—
- (a) that business, or part of it, together with the whole assets of the company used for the purposes of that business or part (or together with the whole of those assets other than cash), is transferred to a company not resident in the United Kingdom;
- (b) the business or part is so transferred wholly or partly in exchange for shares, or for shares and loan stock, issued by the transferee company to the transferor company; and
- (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company.
- (2) In making any computation in accordance with the provisions of this Act applicable to Case I of Schedule D of the profits or losses of the transferor company for the accounting period in which the transfer occurs, there shall be disregarded any profit or loss in respect of any asset transferred which, apart from this subsection, would fall to be taken into account in making that computation.
- (3) Where by virtue of subsection (2) above any profit or loss is disregarded in making any computation . . . the profit or loss shall be treated for the purposes of the 1992 Act as a chargeable gain or allowable loss accruing to the transferor company on the transfer.
- (4) Where at any time a company resident in the United Kingdom—
- (a) which carries on insurance business wholly outside the United Kingdom, and
- (b) the whole or part of whose ordinary share capital is beneficially owned by one or more companies resident in the United Kingdom,
ceases to be resident in the United Kingdom, the profits or losses of the company in respect of that business for the accounting period ending at that time shall be computed for tax purposes without regard to the whole, or, as the case may be, a corresponding part of any profit or loss in respect of any asset which, apart from this subsection, would fall to be calculated in accordance with section 100(1)(b) and taken into account in making that computation.
#### Life policies carrying rights not in money
##### 443
Where any investments or other assets are or have been, in accordance with a policy issued in the course of life assurance business carried on by an insurance company, transferred to the policy holder on or after 6th April 1967, the policy holder’s acquisition of the assets, and the disposal of them to him, shall be deemed to be for a consideration equal to the market value of the assets for the purposes of computing income in accordance with Case I or VI of Schedule D.
#### Life policies issued before 5th August 1965
##### 444
- (1) This section applies in relation to policies of life assurance issued before 5th August 1965 by a company carrying on life assurance business, being policies which—
- (a) provide for benefits consisting to any extent of investments of a specified description or of a sum of money to be determined by reference to the value of such investments, but
- (b) do not provide for the deduction from those benefits of any amount by reference to tax chargeable in respect of chargeable gains.
- (2) Where—
- (a) the investments of the company’s life assurance fund, so far as referable to those policies, consist wholly or mainly of investments of the description so specified, and
- (b) on the company becoming liable under any of those policies for any such benefits (including benefits to be provided on the surrender of a policy), a chargeable gain accrues to the company from the disposal, in meeting or for the purpose of meeting that liability, of investments of that description forming part of its life assurance fund, or would so accrue if the liability were met by or from the proceeds of such a disposal,
then the company shall be entitled as against the person receiving the benefits to retain out of those benefits a part not exceeding in amount or value corporation tax, at the rate specified in subsection (3) below, in respect of the chargeable gain referred to in paragraph (b) above, computed without regard to any amount retained under this subsection.
- (3) The amount to be retained under subsection (2) above shall, subject to subsection (4) below, be computed by reference to the rate of corporation tax for the time being in force or, if no rate of corporation tax has yet been fixed for the financial year, the rate last in force.
- (4) In so far as the chargeable gain represents or would represent a gain belonging or allocated to, or reserved for, policy holders, the amount to be retained shall be computed by reference to a rate of tax not exceeding 37.5 per cent.
### Provisions applying only to overseas life insurance companies
#### Charge to tax on investment income
##### 445
#### Annuity business
##### 446
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of income tax and tax credits against corporation tax
##### 447
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying distributions and tax credits
##### 448
#### Double taxation agreements
##### 449
### Underwriters
#### Assessment, set-off of losses and reinsurance
##### 450
#### Regulations
##### 451
#### Special reserve funds
##### 452
#### Payments into premiums trust fund on account of losses
##### 453
#### Income tax consequences on payments into and out of special reserve fund
##### 454
#### Income tax consequences on death of underwriter
##### 455
#### Unearned income, variation of arrangements and cancellation of approval etc
##### 456
#### Interpretation of sections 450 to 456
##### 457
### Capital redemption business
#### Capital redemption business
##### 458
- (1) Where any person carries on capital redemption business in conjunction with business of any other class, the capital redemption business shall, for the purposes of the Corporation Tax Acts (including the provisions about corporation tax on chargeable gains) . . . , be treated as a separate business from any other class of business carried on by that person and where section 76 applies by virtue of subsection (5A) of that section, it shall apply separately to capital redemption business.
- (2) In ascertaining whether and to what extent any person has incurred a loss on his capital redemption business for the purposes of . . . sections 393 and 393A(1)—
- (a) any profits derived from investments held in connection with the capital redemption business (including franked investment income of . . . a company resident in the United Kingdom) shall be treated as part of the profits of that business, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In this section “*capital redemption business*” means any business in so far as it—
- (a) consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts of insurance under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period; and
- (b) is not life assurance business.
- (4) This section shall not apply to any capital redemption business in so far as it consists of carrying out contracts of insurance effected before 1st January 1938.
### CHAPTER II — FRIENDLY SOCIETIES, TRADE UNIONS AND EMPLOYERS’ ASSOCIATIONS
### Unregistered friendly societies
#### Exemption from tax
##### 459
An unregistered friendly society (that is, a friendly society which is neither an incorporated friendly society nor a registered friendly society) whose income does not exceed £160 a year shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains).
### Registered friendly societies
#### Exemption from tax in respect of life or endowment business
##### 460
- (1) Subject to subsection (2) below, a friendly society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits arising from life or endowment business.
- (2) Subsection (1) above—
- (a) shall not, subject to section 462, exempt a registered friendly society registered after 31st December 1957 which at any time in the period of three months ending 3rd May 1966 entered into any transaction in return for a single premium, being a transaction forming part of its life or endowment business;
- (aa) shall not, subject to section 462, exempt an incorporated friendly society which, before its incorporation, was a registered friendly society such as is mentioned in paragraph (a) above;
- (b) shall not apply to profits arising from pension business;
- (c) shall not apply to profits arising from life or endowment business consisting—
- (zai) where the profits relate to contracts made on or after the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £270 or of the granting of annuities of annual amounts exceeding £156;
- (ai) where the profits relate to contracts made on or after the day on which the Finance Act 1991 was passed but before the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £200 or of the granting of annuities of annual amounts exceeding £156;
- (i) where the profits relate to contracts made after 31st August 1990 but before the day on which the Finance Act 1991 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £150 or of the granting of annuities of annual amounts exceeding £156;
- (ia) where the profits relate to contracts made after 31st August 1987 but before 1st September 1990, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100 or of the granting of annuities of annual amounts exceeding £156.
- (ii) where the profits relate to contracts made after 13th March 1984 but before 1st September 1987, of the assurance of gross sums exceeding £750 or of the granting of annuities of annual amounts exceeding £156;
- (iii) where the profits relate to contracts made before 14th March 1984, of the assurance of gross sums exceeding £500 or of the granting of annuities of annual amounts exceeding £104;
- (ca) shall not apply to so much of the profits arising from life or endowment business as is attributable to contracts for the assurance of gross sums made on or after 20th March 1991 and expressed at the outset not to be made in the course of tax exempt life or endowment business;
- (cb) shall not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP;and
- (d) as respects other life or endowment business (“tax exempt life or endowment business”), has effect subject to the following provisions of this Chapter.
- (3) In determining for the purposes of subsection (2)(c)(zai), (ai), (i) or (ia) above the total premiums payable in any period of 12 months—
- (a) where those premiums are payable more frequently than annually, there shall be disregarded an amount equal to 10 per cent. of those premiums; and
- (b) so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved shall be disregarded;
and in applying the limit of £156 in subsection (2)(c)(zai), (ai), (i) or (ia) above, any bonus or addition declared upon an annuity shall be disregarded.
- (4) In applying the limits referred to in subsection (2)(c)(ii) and (iii) above, any bonus or addition which either is declared upon an assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments shall be disregarded.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (2)(c) above, be treated, in relation to any profits relating to it as varied, as made at the time of the variation.
- (5) A friendly society is within this subsection if its rules make no provision for it to carry on life or endowment business consisting of the assurance of gross sums exceeding £2,000 or of the granting of annuities of annual amounts exceeding £416.
- (6) In the case of a friendly society within subsection (5) above—
- (a) subsection (2)(c)(iii) above shall have effect with the substitution of references to £2,000 and £416 respectively for the references to £500 and £104; and
- (b) references in this Chapter to tax exempt life or endowment business shall be construed accordingly.
- (7) Where at any time a friendly society within subsection (5) above amends its rules so as to cease to be within that subsection, any part of its life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (8) Where at any time a friendly society not within subsection (5) above amends its rules so as to bring itself within that subsection, any part of its life or endowment business consisting of business which—
- (a) related to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (9) Where at any time a friendly society not within subsection (5) above acquires by way of transfer of engagements or amalgamation from another friendly society any life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
that business shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (10) Where at any time a friendly society within subsection (5) above acquires by way of transfer of engagements or amalgamation from another friendly society any life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
that business shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (10A) Where at any time an insurance business transfer scheme has effect to transfer to a friendly society long-term business, any life or endowment business which relates to contracts included in the transfer , other than any to which subsection (11) or (12) below applied immediately before the transfer had effect, shall not thereafter be tax exempt life or endowment business for the purposes of this Chapter.
- (10B) In subsection (10A) “insurance business transfer scheme” means a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 or 4 of subsection (3) of that section.
- (11) Where at any time a friendly society ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, any part of its life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
shall continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
- (12) For the purposes of the Corporation Tax Acts any part of a company’s business which continues to be tax exempt life or endowment business by virtue of subsection (11) above shall be treated as a separate business from any other business carried on by the company.
#### Taxation in respect of other business
##### 461
- (1) Subject to the following provisions of this section, a registered friendly society other than a society to which subsection (2) below applies shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) This subsection applies to any society registered after 31st May 1973 unless—
- (a) its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board; or
- (b) it was registered before 27th March 1974 and its rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as the Board may authorise for the purposes of this section;
and also applies to any society registered before 1st June 1973 with respect to which a direction under subsection (7) below is in force.
- (3) If a society to which subsection (2) above applies, after 26th March 1974 or such later date as may be specified in a direction under this section, makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society after that date, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (3A) The exemption conferred by subsection (1) above does not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP.
- (4) Where a registered friendly society—
- (a) at any time ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act; and
- (b) immediately before that time was exempt from . . . corporation tax on profits arising from any business carried on by it other than life or endowment business,
the company into which the society is converted shall be so exempt on its profits arising from any part of that business which relates to contracts made before that time so long as there is no increase in the scale of benefits which it undertakes to provide in the course of carrying on that part of its business.
- (5) For the purposes of the Corporation Tax Acts any part of a company’s business in respect of the profits from which the company is exempt by virtue of subsection (4) above shall be treated as a separate business from any other business carried on by the company.
- (6) If—
- (a) a friendly society registered before 1st June 1973 begins after 26th March 1974 to carry on business other than life or endowment business or, in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character; and
- (b) it appears to the Board, having regard to the restrictions imposed by this section on friendly societies registered later, that for the protection of the revenue it is expedient to do so;
the Board may give a direction to the society under subsection (7) below.
- (7) A direction under this subsection is that (and has the effect that) the society to which it is given is to be treated for the purposes of this Act as a society registered after 31st May 1973 with respect to business carried on after the date of the direction.
- (8) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (6)(a) above; or
- (b) the direction is not necessary for the protection of the revenue.
- (9) If a registered friendly society in respect of which a direction is in force under subsection (7) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a society registered after 31st May 1973.
- (10) For the purposes of this section a registered friendly society formed on the amalgamation of two or more friendly societies shall be treated as registered before 1st June 1973 if at the time of the amalgamation subsection (2) above did not apply to any of the societies amalgamated, but otherwise shall be treated as registered at that time.
- (11) For the purposes of this section and section 461C—
- (a) any group of persons which was approved for the purposes of this section (as mentioned in subsection (2)(a) above) immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date;
- (b) any greater amount which was authorised for the purposes of this section (as mentioned in subsection (2)(b) above) immediately before 1st December 2001 shall be treated as having been authorised for the purposes of this section by the Board on that date; and
- (c) where a direction that subsection (2) above applies to a society was in force immediately before 1st December 2001, a direction in relation to that society shall be treated as having been made under subsection (7) above by the Board on that date.
#### Conditions for tax exempt business
##### 462
- (1) Subject to subsections (2) to (4) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—
- (a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and
- (b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.
- (1A) For the purposes of subsection (1) above a policy is an excluded policy if—
- (a) it is a policy held otherwise than with the friendly society or insurance company, or
- (b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money's worth.
- (2) Section 460(2)(a) or (aa) and subsection (1) above shall not withdraw exemption in relation to profits arising from any part of a business relating to contracts made not later than 3rd May 1966.
- (3) If, with respect to a policy issued in respect of an insurance made on or after 1st June 1984 and before 19th March 1985 for the assurance of a gross sum, there is or has been an infringement of any of the conditions in paragraph 3(2) to (11) of Schedule 15, section 460 does not afford any exemption from corporation tax in relation to so much as is attributable to that policy of the profits of the friendly society or insurance company concerned.
- (4) Nothing in subsection (3) above shall be taken to affect the status of a policy as a qualifying policy.
#### Life or endowment business: application of the Corporation Tax Acts
##### 463
- (1) Subject to section 460(1), the Corporation Tax Acts shall apply to the life or endowment business carried on by friendly societies in the same way as they apply to mutual life assurance business (or other long-term business) carried on by insurance companies, so however that the Treasury may by regulations provide that those Acts as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations, and those regulations may in particular require any part of any business to be treated as a separate business.
- (2) The provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company shall apply in the same way—
- (a) on the transfer of the whole or part of the business of a friendly society to another friendly society (and on the amalgamation of friendly societies), and
- (b) on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society (and on the conversion of a friendly society into such a company),
so however that the Treasury may by regulations provide that those provisions as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations.
- (3) The Treasury may by regulations provide that the provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company to another company shall have effect where the transferee is a friendly society subject to such modifications and exceptions as may be prescribed by the regulations.
- (4) Regulations under this section may make different provision for different cases and may include provision having retrospective effect.
#### Maximum benefits payable to members
##### 464
- (1) Subject to subsections (2) and (3) below, a member of a friendly society or registered branch shall not be entitled to have at any time outstanding contracts with any one or more such societies or branches (taking together all such societies or branches throughout the United Kingdom) for the assurance of—
- (a) more than £750 by way of gross sum under tax exempt life or endowment business;
- (b) more than £156 by way of annuity under tax exempt life or endowment business.
- (2) Subsection (1)(a) above shall not apply as respects sums assured under contracts made after 31st August 1987.
- (3) With respect to contracts for the assurance of gross sums under tax exempt life or endowment business, a member of a friendly society or registered branch shall not be entitled to have outstanding with any one or more such societies or branches (taking together all such societies or branches throughout the United Kingdom)—
- (zza) contracts under which the total premiums payable in any period of 12 months exceed £270; or
- (za) contracts made before the day on which the Finance Act 1995 was passed and under which the total premiums payable in any period of 12 months exceed £200; or
- (a) contracts made before the day on which the Finance Act 1991 was passed and under which the total premiums payable in any period of 12 months exceed £150; or
- (b) contracts made before 1st September 1990 under which the total premiums payable in any period of 12 months exceed £100,
unless all those contracts were made before 1st September 1987.
- (4) In applying the limits in subsection (3) above, the premiums under any contract for an annuity which was made before 1st June 1984 by a new society shall be brought into account as if the contract were for the assurance of a gross sum.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (3) above, be treated, in relation to times when the contract has effect as varied, as made at the time of the variation.
- (5) In applying the limits in this section there shall be disregarded—
- (a) any bonus or addition which either is declared upon assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments;
- (b) any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) are secured or any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than such an occupational pension scheme;
- (c) any increase in a benefit under a friendly society contract, as defined in section 6 of the Decimal Currency Act 1969, resulting from the adoption of a scheme prescribed or approved in pursuance of subsection (3) of that section; and
- (d) so far as concerns the total premiums payable in any period of 12 months—
- (i) 10 per cent. of the premiums payable under any contract under which the premiums are payable more frequently than annually; and
- (ii) £10 of the premiums payable under any contract made before 1st September 1987 by a friendly society other than a new society; and
- (iii) so much of any premium as is charged on the ground that an exceptional risk of death is involved.
- (6) In applying the limits in this section in any case where a member has outstanding with one or more society or branch one or more contracts made after 13th March 1984 and one or more contracts made on or before that date, any contract for an annuity which was made before 1st June 1984 by a new society shall be regarded not only as a contract for the annual amount concerned but also as a contract for the assurance of a gross sum equal to 75 per cent. of the total premiums which would be payable under the contract if it were to run for its full term or, as the case may be, if the member concerned were to die at the age of 75 years.
- (7) A friendly society or registered branch may require a member to make and sign a statutory declaration that the total amount assured under outstanding contracts entered into by that member with any one or more friendly societies or registered branches (taking together all such societies or branches throughout the United Kingdom) does not exceed the limits applicable by virtue of this section and that the total premiums under those contracts do not exceed those limits.
#### Old societies
##### 465
- (1) In this section “*old society*” means a friendly society which is not a new society.
- (2) This section applies if, on or after 19th March 1985, an old society—
- (a) begins to carry on tax exempt life or endowment business; or
- (b) in the opinion of the Board begins to carry on such business on an enlarged scale or of a new character.
- (3) If it appears to the Board, having regard to the restrictions placed on qualifying policies issued by new societies by paragraphs 3(1)(b) . . . and 4(3)(b) of Schedule 15, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the old society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the old society to which it is given is to be treated for the purposes of this Act as a new society with respect to business carried on after the date of the direction.
- (5) An old society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (2) above; or
- (b) that the direction is not necessary for the protection of the revenue.
- (6) If a registered friendly society in respect of which a direction is in force under subsection (4) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a new society.
#### Interpretation of Chapter II
##### 466
- (1) In this Chapter “*life or endowment business*” means, subject to subsections (1A) and (1B) below,—
- (a) any business of effecting or carrying out contracts of insurance which fall within paragraphs I, II or III of Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- (b) pension business;
- (c) any other life assurance business;
- (d) any business within paragraph IV of Part II of that Schedule, if—
- (i) the contract is one made before 1st September 1996; or
- (ii) the contract is one made on or after 1st September 1996 and the effecting and carrying out of the contract also constitutes business within paragraphs I, II or III of Part II of that Schedule.
- (1A) Life or endowment business does not include the issue, in respect of a contract made before 1st September 1996, of a policy affording provision for sickness or other infirmity (whether bodily or mental), unless—
- (a) the policy also affords assurance for a gross sum independent of sickness or other infirmity;
- (b) not less than 60 per cent. of the amount of the premiums is attributable to the provision afforded during sickness or other infirmity; and
- (c) there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
- (1B) Life or endowment business does not include the assurance of any annuity the consideration for which consists of sums obtainable on the maturity, or on the surrender, of any other policy of assurance issued by the friendly society, being a policy of assurance forming part of the tax exempt life or endowment business of the friendly society.
- (2) In this Chapter—
- “*friendly society*”, without qualification, means (except in section 459) an incorporated friendly society or a registered friendly society;
- “*incorporated friendly society*” means a society incorporated under the Friendly Societies Act 1992;
- “*insurance company*” shall be construed in accordance with section 431;
- “*life assurance business*” means the issue of, or the undertaking of liability under, policies of assurance upon human life, or the granting of annuities upon human life, not being industrial assurance business;
- “*long-term business*” shall be construed in accordance with section 431;
- “*new society*” means—a registered friendly society which was registered after 3rd May 1966 or which was registered in the period of three months ending on that date but which at no time earlier than that date carried on any life or endowment business, oran incorporated friendly society other than one which, before its incorporation, was a registered friendly society not within paragraph (a) above;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*policy*”, in relation to life or endowment business, includes an instrument evidencing a contract to pay an annuity upon human life;
- “*registered branch*” means the same as in the Friendly Societies Act 1992 (and includes any branch that by virtue of section 96(3) of that Act is to be treated as a registered branch);
- “*registered friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society);
- . . .
- “*tax exempt life or endowment business*” has, subject to subsections (7) to (10A) of section 460, the meaning given by subsection (2)(d) of that section, that is to say, it means (subject to those subsections) life or endowment business other than business profits arising from which are excluded from subsection (1) of that section by subsection (2)(b) or (c) of that section (read, where appropriate, with subsection (6) of that section);
and references in sections 460 to 465 and this subsection to a friendly society include, in the case of a registered friendly society, references to any branch of that society.
- (2ZA) In subsection (2) “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
- (2A) In this Chapter “*pension business*” means so much of a friendly society’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme.
- (2B) But where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the friendly society’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the friendly society in which the pension scheme so ceases to be a registered pension scheme.
- (3) It is hereby declared that for the purposes of this Chapter (except where provision to the contrary is made) a friendly society formed on the amalgamation of two or more friendly societies is to be treated as different from the amalgamated societies.
- (4) A registered friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society;
or, if the amalgamation took place before 19th March 1985, the society was treated as registered not later than 3rd May 1966 by virtue of the proviso to section 337(4) of the 1970 Act.
- (5) An incorporated friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as a society which, before its incorporation, was a registered friendly society registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society.
### Trade unions and employers’ associations
#### Exemption for trade unions and employers' associations
##### 467
- (1) A trade union which is precluded by Act of Parliament or by its rules from assuring to any person a sum exceeding £4,000 by way of gross sum or £825 by way of annuity shall on making a claim be entitled to exemption from corporation tax—
- (a) . . . in respect of its income which is not trading income and which is applicable and applied for the purpose of provident benefits;
- (b) . . . in respect of chargeable gains which are applicable and applied for the purpose of provident benefits.
- (2) In this section “*provident benefits*” includes any payment, expressly authorised by the rules of the trade union, which is made to a member during sickness or incapacity from personal injury or while out of work, or to an aged member by way of superannuation, or to a member who has met with an accident, or has lost his tools by fire or theft, and includes a payment in discharge or aid of funeral expenses on the death of a member or the spouseor civil partner of a member or as provision for the children of a deceased member.
- (3) In determining for the purposes of this section whether a trade union is by Act of Parliament or its rules precluded from assuring to any person a sum exceeding £825 by way of annuity, there shall be disregarded any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004).
- (3A) The Treasury may by order substitute for any figure for the time being specified in this section such greater figure as may be specified in the order; and any amendment made in exercise of the power conferred by this subsection shall have effect in relation to such income or gains as may be specified in the order.
- (4) In this section “*trade union*” means—
- (a) any trade union the name of which is entered in the list of trade unions maintained by the Certification Officer under section 2 of the Trade Union and Labour Relations (Consolidation) Act 1992;
- (b) any employers’ association the name of which is entered in the list of employers’ associations maintained by the Certification Officer under section 123 of the Trade Union and Labour Relations (Consolidation) Act 1992 and which on 30th September 1971 was a registered trade union for the purposes of section 338 of the 1970 Act;
- (ba) any trade union the name of which is entered in the list of trade unions maintained by the Certification Officer for Northern Ireland under Article 5 of the Industrial Relations (Northern Ireland) Order 1992;
- (bb) any employers’ association the name of which is entered in the list of employers’ associations maintained by the Certification Officer for Northern Ireland under Article 5 of the Industrial Relations (Northern Ireland) Order 1992 and which immediately before the coming into operation of that Article was a trade union for the purposes of this section; and
- (c) the Police Federation for England and Wales, the Police Federation for Scotland, the Police Federation for Northern Ireland and any other organisation of persons in police service which has similar functions.
### CHAPTER III — UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.
### Unit trust schemes
#### Authorised unit trusts
##### 468
- (1) In respect of income arising to the trustees of an authorised unit trust, and for the purposes of the provisions relating to relief for capital expenditure, the Tax Acts shall have effect as if—
- (a) the trustees were a company resident in the United Kingdom; and
- (b) the rights of the unit holders were shares in the company;
but paragraph (b) above is without prejudice to the making of distributions which are interest distributions (within the meaning of regulations made under section 17(3) of the Finance (No. 2) Act 2005 (as at 1st April 2006, see regulation 18(3) of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964))) to unit holders.
- (1A) In relation to any authorised unit trust the rate of corporation tax for the financial year 1996 and subsequent financial years shall be deemed to be the rate at which income tax at the savings rate is charged for the year of assessment which begins on 6th April in the financial year concerned and section 13 shall not apply.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) References in the Corporation Tax Acts to a body corporate shall be construed in accordance with subsection (1) above, and section 234A shall apply with any necessary modifications.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Subject to subsections (7) to (9) below in this section—
- “*authorised unit trust*” means, as respects an accounting period, a unit trust scheme in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force during the whole or part of that accounting period;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*unit holder*” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme; . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Each of the parts of an umbrella scheme shall be regarded for the purposes of this Chapter as an authorised unit trust and the scheme as a whole shall not be so regarded.
- (8) In this section, “*umbrella scheme*” means a unit trust scheme—
- (a) which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are to be made to them;
- (b) under which the participants are entitled to exchange rights in one pool for rights in another; and
- (c) in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force;
and any reference to a part of an umbrella scheme is a reference to such of the arrangements as relate to a separate pool.
- (9) In relation to a part of an umbrella scheme, any reference—
- (a) to investments subject to the trusts of an authorised unit trust, shall have effect as a reference to such of the investments as under the arrangements form part of the separate pool to which the part of the umbrella scheme relates; and
- (b) to a unit holder, shall have effect as a reference to a person for the time being having rights in that separate pool.
#### Other unit trusts
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Corporation Tax Acts as income of the trustees (and not as income of the unit holders) . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) For the purposes of the Corporation Tax Acts, the trustees are treated as making an annual payment (under deduction of income tax) to each unit holder if an amount is shown in the scheme's accounts as income available for payment to unit holders or for investment.
- (4B) The amount of an annual payment to a unit holder for a distribution period before the deduction of income tax is its gross amount.
- (4C) Section 548(2) of ITTOIA 2005 applies for the purpose of calculating the gross amount of an annual payment for a distribution period as it applies for the purpose of calculating the gross amount of income treated as received for a distribution period under Chapter 10 of Part 4 of that Act.
- (4D) Section 941 of ITA 2007 deals with the deduction of income tax from the gross amount so calculated.
- (5) The date on which the annual payment is treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payment is treated as made shall be the last day of the period.
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Transitional provisions relating to unit trusts
##### 470
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dealers in securities, banks and insurance businesses
#### Exchange of securities in connection with conversion operations, nationalisation etc
##### 471
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of securities issued in connection with nationalisation etc
##### 472
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conversion etc. of securities held as circulating capital
##### 473
- (1) Subsections (3) and (4) below shall have effect where a transaction to which this section applies occurs in relation to any securities (“*the original holding*”)—
- (a) to which a company carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities is beneficially entitled; and
- (b) which are such that a profit on their sale would form part of the trading profits of that business.
- (2) This section applies to any transaction which . . . —
- (a) results in the original holding being equated with a new holding by virtue of sections 126 to 136 of the 1992 Act (capital gains tax roll-over relief in cases of conversion etc.); or
- (b) is treated by virtue of section 134 of that Act (compensation stock) as an exchange for a new holding which does not involve a disposal of the original holding;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) This section does not apply to securities in respect of which unrealised profits or losses, calculated by reference to the fair value of the securities at the end of a period of account, are taken into account in the period of account in which the transaction mentioned in subsection (2) above occurs.
- (2B) Subsection (2A) above shall be disregarded in determining for the purposes of section 66 of the Finance Act 2002 (election to continue postponement of mark to market) whether an asset was held by a person on 1st January 2002.
- (3) Subject to subsection (4) below, in making any computation in accordance with the provisions of this Act applicable to Case I of Schedule D of the profits or losses of the business—
- (a) the transaction shall be treated as not involving any disposal of the original holding, and
- (b) the new holding shall be treated as the same asset as the original holding.
- (4) Where under the transaction the company concerned receives or becomes entitled to receive any consideration in addition to the new holding, subsection (3) above shall have effect as if references to the original holding were references to the proportion of it which the market value of the new holding at the time of the transaction bears to the aggregate of that value and the market value at that time (or, if it is cash, the amount) of the consideration.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In this section “*securities*” includes shares, any security within the meaning of section 132 of the 1992 Act and any rights, interests or options which by virtue of section 135(5), 136(5), 147 or 99 of that Act are treated as shares for the purposes of sections 126 to 136 of that Act.
- (7) In determining for the purposes of subsection (2)(a) above whether a transaction results in the original holding being equated with a new holding by virtue of section 135 or 136 of the 1992 Act the reference in section 137(1) of that Act to capital gains tax shall be construed as a reference to income tax.
#### Treatment of tax-free income
##### 474
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax-free Treasury securities: exclusion of interest on borrowed money
##### 475
- (1) This section has effect where a banking business, an insurance business or a business consisting wholly or partly in dealing in securities—
- (a) is carried on in the United Kingdom by a person not ordinarily resident there; and
- (b) in computing for any of the purposes of the Tax Acts the profits arising from, or loss sustained, in the business, any amount which would otherwise be brought into account is disregarded by virtue of a condition subject to which any 3½% War Loan 1952 or after was issued;
and for this purpose insurance business includes insurance business of any category.
- (2) Up to the amount determined under this section (“*the amount ineligible for relief*”), interest on money borrowed for the purposes of the business—
- (a) shall be excluded in any computation under the Tax Acts of the profits (or losses) arising from the business . . . , and
- (b) shall not be brought into account by way of any debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (3) Subject to subsection (4) below, in determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting or basis period, up to the total cost of the 3½% War Loan 1952 or after held for the purpose of the business in that period.
- (4) Where the person carrying on the business is a company, account shall not be taken of any borrowed money carrying interest which, apart from subsection (2) above, does not fall to be included in the computations under paragraph (a) of that subsection or to be brought into account by way of a debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (5) . . . The amount ineligible for relief shall be equal to a year’s interest on the amount of money borrowed which is to be taken into account under subsection (3) above at a rate equal to the average rate of interest in the accounting or basis period on money borrowed for the purposes of the business, except that in the case of a period of less than 12 months interest shall be taken for that shorter period instead of for a year.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this section the cost of a holding of 3½% War Loan 1952 or after which has fluctuated in the accounting or basis period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting or basis period, applied to the average amount of the holding in the accounting or basis period, . . . .
- (9) In this section “*accounting or basis period*” means the company’s accounting period or the period by reference to which the profits or gains arising in the year of assessment are to be computed.
### CHAPTER IV — BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS
#### Building societies: regulations for payment of tax
##### 476
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Investments becoming or ceasing to be relevant building society investments
##### 477
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Building societies: time for payment of tax
##### 478
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid on deposits with banks etc
##### 479
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deposits becoming or ceasing to be composite rate deposits
##### 480
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Deposit-taker”, “deposit” and “relevant deposit”
##### 481
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions
##### 482
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Determination of reduced rate for building societies and composite rate for banks etc
##### 483
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Savings banks: exemption from tax
##### 484
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Savings banks: supplemental
##### 485
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Industrial and provident societies and co-operative associations
##### 486
- (1) Notwithstanding anything in the Tax Acts, share interest or loan interest paid by a registered industrial and provident society shall not be treated as a distribution for the purposes of corporation tax; but interest payable by such a society (whether as share interest or loan interest) shall be treated for those purposes as interest under a loan relationship of the society.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Any share interest or loan interest paid by a registered industrial and provident society shall be chargeable under Case III of Schedule D for the purposes of corporation tax.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) If for any accounting period a return under section 887(2) of ITA 2007 above is not duly made by a registered industrial and provident society, share and loan interest paid by the society in that period shall not be brought into account in that period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (8) If in the course of, or as part of, a union or amalgamation of two or more registered industrial and provident societies, or a transfer of engagements from one registered industrial and provident society to another, there is a disposal of an asset by one society to another, both shall be treated for the purposes of corporation tax in respect of chargeable gains as if the asset were acquired from the society making the disposal for a consideration of such amount as would secure that neither a gain nor a loss would accrue to that society on the disposal.
- (9) Subsections (1) and (8) above shall have effect as if references to a registered industrial and provident society included any co-operative association established and resident in the United Kingdom, and having as its object or primary object to assist its members in the carrying on of agricultural or horticultural businesses on land occupied by them in the United Kingdom or in the carrying on of businesses consisting in the catching or taking of fish or shellfish.
- (10) It is hereby declared that, in computing, for the purposes of any provision of the Tax Acts relating to profits chargeable under Case I of Schedule D (“the tax computation”), any profits of—
- (a) any registered industrial and provident society which does not sell to persons not members thereof; or
- (b) any registered industrial and provident society the number of the shares in which is not limited by its rules or practice;
there are to be deducted as expenses any sums which—
- (i) represent a discount, rebate, dividend or bonus granted by the company to members or other persons in respect of amounts paid or payable by or to them on account of their transactions with the company, being transactions which are taken into account in the tax computation; and
- (ii) are calculated by reference to those amounts or to the magnitude of those transactions and not by reference to the amount of any share or interest in the capital of the company.
- (11) No dividends or bonus deductible in computing income as mentioned in subsection (10) above shall be regarded as a distribution.
- (12) In this section—
- “*co-operative association*” means a body of persons having a written constitution from which the Minister is satisfied, having regard to the provision made as to the manner in which the income of the body is to be applied for the benefit of its members and all other relevant provisions, that the body is in substance a co-operative association;
- “*the Minister*” means—
- the Secretary of State, as regards England and Wales;
- the Secretary of State, as regards Scotland; and
- the Department of Agriculture for Northern Ireland, as regards Northern Ireland;
- “*registered industrial and provident society*” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or under the Industrial and Provident Societies Act (Northern Ireland) 1969;
- “*share interest*” means any interest, dividend, bonus or other sum payable to a shareholder of the society by reference to the amount of his holding in the share capital of the society;
- “*loan interest*” means any interest payable by the society in respect of any mortgage, loan, loan stock or deposit;
and references to the payment of share interest or loan interest include references to the crediting of such interest.
#### Credit unions
##### 487
- (1) Subject to subsection (2) below, in computing for the purposes of corporation tax the income of a credit union for any accounting period—
- (a) neither the activity of the credit union in making loans to its members nor in placing on deposit or otherwise investing from time to time its surplus funds shall be regarded as the carrying on of a trade or part of a trade; and
- (b) no credits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a debtor as respects the debt in question.
- (2) Paragraph (b) of subsection (1) above shall not apply to an accounting period of a credit union for which the credit union is obliged to make a return under section 887(2) of ITA 2007 and has not done so within three months after the end of that accounting period or such longer period as the inspector shall allow.
- (3) An annuity or other annual payment (not being a payment of share interest or loan interest) which is paid or payable by a credit union in any accounting period shall not be deductible in computing for the purposes of corporation tax the income of the credit union for that period from any trade carried on by it . . . .
- (3A) No debits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a creditor as respects the debt in question.
- (4) A credit union shall not be regarded as a company with investment business for the purposes of section 75 above or Part 2 of the Capital Allowances Act (plant and machinery allowances).
- (5) In this section—
- “*credit union*” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;
- “*share interest*” and “*loan interest*” have the same meaning as in section 486;
- “*surplus funds*”, in relation to a credit union, means funds not immediately required for its purposes;
and references to the payment of share interest or loan interest include references to the crediting of such interest.
#### Co-operative housing associations
##### 488
- (1) Where a housing association makes a claim in that behalf for any year or part of a year of assessment during which the association was approved for the purposes of this section—
- (a) rent to which the association was entitled from its members for the year or part shall be disregarded for tax purposes; and
- (b) any yearly interest payable by the association for the year or part shall be treated for tax purposes in relation to the association as if there were no interest so payable.
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where the property, or any of the properties, to which any such interest as is mentioned in paragraph (b) of subsection (1) above relates is for any period not subject to a tenancy—
- (a) that paragraph shall not apply in relation to so much of the interest as is attributable to the property not subject to a tenancy;. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a claim under subsection (1) above has effect, any adjustment of the liability to tax of . . . the association which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (5) Where a housing association makes a claim in that behalf for an accounting period or part of an accounting period during which it was approved for the purposes of this section, the housing association shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part on the disposal by way of sale of any property which has been or is being occupied by a tenant of the housing association.
- (6) References in this section to the approval of an association shall be construed as references to approval—
- (a) by the Secretary of State in the case of a housing association in Great Britain;
- (b) by the Head of the Department of the Environment for Northern Ireland in the case of a housing association in Northern Ireland;
and an association shall not be approved unless the approving authority is satisfied—
- (i) that the association is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969, and is a housing association within the meaning of the Housing Associations Act 1985 or Article 3 of the Housing (Northern Ireland) Order 1992;
- (ii) that the rules of the association restrict membership to persons who are tenants or prospective tenants of the association, and preclude the granting or assignment (or, in Scotland, the granting or assignation) of tenancies to persons other than members; and
- (iii) that the association satisfies such other requirements as may be prescribed by the Secretary of State as respects Great Britain, or the Head of the Department for Social Development for Northern Ireland as respects Northern Ireland, and will comply with such conditions as may for the time being be so prescribed.
- (7) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the approving authority and shall cease to have effect if revoked.
- (7A) The Secretary of State may delegate any of his functions under subsections (6) and (7)—
- (a) to the Housing Corporation, in the case of a body registered as a social landlord in the register maintained by the Housing Corporation under Part I of the Housing Act 1996, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (8) The Secretary of State as respects Great Britain, or the Head of the Department of the Environment for Northern Ireland as respects Northern Ireland, may make regulations for the purpose of carrying out the provisions of this section; and, from the coming into operation of regulations under this subsection prescribing requirements or conditions for the purposes of subsection (6)(iii) above, “prescribed” in subsection (6)(iii) above shall mean prescribed by or under such regulations.
- (9) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (10) Subject to subsection (11) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no property belonging to the association making the claim was let otherwise than to a member of the association;
- (b) no property let by the association, and no part of such property, was occupied, whether solely or as joint occupier, by a person not being a member of the association;
- (c) the association making the claim satisfies the conditions specified in subsection (6)(i) and (ii) above and has complied with the conditions prescribed under subsection (6)(iii) for the time being in force; and
- (d) any covenants required to be included in grants of tenancies by those conditions have been observed.
- (11) A housing association may make a claim under this section notwithstanding anything in subsection (10) above, if the association reasonably considers that the requirements of that subsection are substantially complied with.
- (11A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a housing association is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a housing association, or an amendment of such a claim,
an amendment is made to the association’s return or, as the case may be, to the claim, the liability of the association to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Self-build societies
##### 489
- (1) Where a self-build society makes a claim in that behalf for any year or part of a year of assessment during which the society was approved for the purposes of this section, rent to which the society was entitled from its members for the year or part shall be disregarded for tax purposes.
- (2) Where a claim under subsection (1) above has effect, any adjustment of the society’s liability to tax which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (3) Where a self-build society makes a claim in that behalf for an accounting period or part during which it was approved for the purposes of this section, the society shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part thereof on the disposal of any land to a member of the society.
- (4) References in this section to the approval of a self-build society are references to its approval by the Secretary of State, and the Secretary of State shall not approve a self-build society for the purposes of this section unless he is satisfied—
- (a) that the society is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965; and
- (b) that the society satisfies such other requirements as may be prescribed by or under regulations under subsection (6) below and will comply with such conditions as may for the time being be so prescribed.
- (5) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the Secretary of State and shall cease to have effect if revoked by him.
- (5A) The Secretary of State may delegate any of his functions under subsections (4) and (5) to—
- (a) the Housing Corporation, where the society has its registered office in England for the purposes of the Industrial and Provident Societies Act 1965,. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (6) The Secretary of State may by statutory instrument make regulations for the purpose of carrying out the provisions of this section; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (7) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (8) Subject to subsection (9) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no land owned by the society was occupied, in whole or in part and whether solely or as joint occupier, by a person who was not, at the time of his occupation, a member of the society; and
- (b) the society making the claim satisfies the condition specified in paragraph (a) of subsection (4) above and has complied with the conditions prescribed under paragraph (b) of that subsection and for the time being in force;
and for the purposes of paragraph (a) above, occupation by any other person in accordance with the will, or the provisions applicable on the intestacy, of a deceased member, shall be treated during the first six months after the death as if it were occupation by a member.
- (9) A self-build society may make a claim under this section notwithstanding anything in subsection (8) above, if the society reasonably considers that the requirements of that subsection are substantially complied with.
- (9A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a self-build society is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a self-build society or an amendment of such a claim,
an amendment is made to the society’s return or, as the case may be, to the claim, the society’s liability to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (10) A claim under this section shall be in such form and contain such particulars as may be prescribed by the Board.
- (11) In this section—
- “*self-build society*” has the same meaning as in the Housing Associations Act 1985 or, in Northern Ireland, Part VII of the Housing (Northern Ireland) Order 1981; and
- “*rent*” includes any sums to which a self-build society is entitled in respect of the occupation of any of its land under a licence or otherwise.
- (12) In the application of this section to Northern Ireland—
- (a) any reference in subsections (4) and (5) above to the Secretary of State shall be construed as a reference to the Department of the Environment for Northern Ireland;
- (b) the reference in subsection (4)(a) to the Industrial and Provident Societies Act 1965 shall be construed as a reference to the Industrial and Provident Societies Act (Northern Ireland) 1969; and
- (c) for subsection (6) there shall be substituted the following subsection—
> (6) the Department of the Environment for Northern Ireland may by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 make regulations for the purpose of carrying out the provisions of this section; and a statutory rule containing any such regulations shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
#### Companies carrying on a mutual business or not carrying on a business
##### 490
- (1) Subject to subsection (2) below, where a company carries on any business of mutual trading or mutual insurance or other mutual business the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company notwithstanding that they are made to persons participating in the mutual activities of that business and derive from those activities, but shall so apply only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income . . . . . . .
- (2) In the case of a company carrying on any mutual life assurance business, the provisions of the Tax Acts relating to distributions shall not apply to distributions made to persons participating in the mutual activities of that business and derived from those activities . . . .
- (3) Subject to subsections (1) and (2) above, the fact that a distribution made by a company carrying on any such business is derived from the mutual activities of that business and the recipient is a person participating in those activities shall not affect the character which the payment or other receipt has for purposes of corporation tax or income tax in the hands of the recipient.
- (4) Where a company does not carry on, and never has carried on, a trade or a business of holding investments, and is not established for purposes which include the carrying on of a trade or of such a business, the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of assets of body corporate carrying on mutual business
##### 491
- (1) Where any company receives any money or money’s worth—
- (a) forming part of the assets of a body corporate, other than assets representing capital; or
- (b) forming part of the consideration for the transfer of the assets of a body corporate, other than assets representing capital, as part of a scheme of amalgamation or reconstruction which involves the winding up of the body corporate; or
- (c) consisting of the consideration for a transfer or surrender of a right to receive anything falling under paragraph (a) or (b) above, being a receipt not giving rise to any charge to tax on the recipient apart from this section,
and the body corporate has at any time carried on a trade which consists of or includes the conducting of any mutual business (whether confined to members of the body corporate or not), and is being or has been wound up or dissolved, the provisions of this section shall apply to the receipt.
- (2) If a transfer or surrender of a right under subsection (1)(c) above is not at arm’s length, the company making the transfer or surrender shall, for the purposes of this section, be deemed then to have received consideration equal to the value of the right.
- (3) If in respect of a payment of any amount made to the body corporate for the purposes of its mutual business any deduction has been allowed for the purposes of corporation tax in computing the profits or losses of a trade, then—
- (a) if at the time of the receipt the recipient company is the person, or one of the persons, carrying on that trade, the amount or value of the receipt shall be treated for the purposes of corporation tax as a trading receipt of that trade; and
- (b) if at the time of the receipt the recipient company is not the person, or one of the persons, carrying on that trade, but was the person, or one of the persons, carrying on that trade when any payment was made to the body corporate for the purposes of its mutual business in respect of which a deduction was allowed for the purposes of corporation tax in computing the profits or losses of the trade, the recipient company shall, subject to subsection (6) below, be charged to corporation tax under Case VI of Schedule D for the accounting period in which the receipt falls on an amount equal to the amount or value of the receipt.
- (4) Subsection (3)(a) above applies notwithstanding that, as a result of a change in the persons carrying on the trade, the profits are under section . . . 337(1) determined as if it had been permanently discontinued and a new trade set up and commenced.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) If the trade mentioned in subsection (3)(b) above was permanently discontinued before the time of the receipt, then in computing the charge to tax under subsection (3)(b) above there shall be deducted from the amount or value of the receipt—
- (a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade had not been discontinued, would have been deducted in computing for tax purposes the profits or losses of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and
- (b) any capital allowance to which the person who carried on the trade was entitled immediately before the discontinuance and to which effect has not been given by way of relief before discontinuance.
- (7) Relief shall not be given under subsection (6) above or under section 105(1) in respect of any loss, expense, debit or allowance if and so far as it has been so given by reference to another charge to tax under this section or under section 103.
- (8) For the purposes of subsection (1) above assets representing capital consist of—
- (a) assets representing any loan or other capital subscribed, including income derived from any investment of any part of that capital, but not including profits from the employment of that capital for the purposes of the mutual business of the body corporate;
- (b) assets representing any profits charged to tax as being profits of any part of the trade carried on by the body corporate which does not consist of the conducting of any mutual business;
- (c) (so far as not comprised in paragraphs (a) and (b) above) assets representing taxed income from any investments.
- (9) In this section “*mutual business*” includes any business of mutual insurance or mutual trading.
- (10) Subsections (3) to (7) above shall apply with any necessary modifications—
- (a) to a profession . . . ; and
- (b) to the occupation of woodlands the profits or gains of which are assessable under Schedule D;
as they apply to a trade.
- (11) It is hereby declared that the description of trades in subsection (1) above does not include any trade all the profits of which are chargeable to tax and, in particular, does not include such a trade carried on by any registered industrial and provident society.
### CHAPTER V
#### Treatment of oil extraction activities etc. for tax purposes
##### 492
those activities shall be treated for the purposes of the charge of corporation tax on income as a separate trade, distinct from all other activities carried on by him as part of the trade.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Relief in respect of a loss incurred by a person shall not be given under section 393A(1) against his ring fence profits except to the extent that the loss arises from oil extraction activities or from oil rights.
- (4) In any case where—
- (a) in any accounting period a company incurs a loss in activities (“separate activities”) which, for that or any subsequent accounting period, are treated by virtue of subsection (1) above as a separate trade for the purposes specified in that subsection, and
- (b) in any subsequent accounting period any of its trading income is derived from activities (“related activities”) which are not part of the separate activities but which, apart from subsection (1) above, would together with those activities constitute a single trade,
then, notwithstanding anything in subsection (1) above, the amount of the loss may be set off, in accordance with section 393(1), against so much of its trading income in any subsequent accounting period as is derived from the related activities.
- (5) Subject to subsection (7) below, a capital allowance which is to be given to any person by discharge or repayment of tax shall not to any extent be given effect under section 258 of the Capital Allowances Act by deduction from or set off against his ring fence income.
- (6) Subject to subsection (7) below, a capital allowance which is to be given to any person by discharge or repayment of tax shall not to any extent be given effect under section 259 or 260 of the Capital Allowances Act by deduction from or set off against his ring fence profits.
- (7) Subsection (5) or (6) above shall not apply to a capital allowance which falls to be made to a company for any accounting period in respect of an asset used in the relevant accounting period by a company associated with it and so used in carrying on oil extraction activities. For the purposes of this subsection, the relevant accounting period is that in which the allowance in question first falls to be made to the company (whether or not it can to any extent be given effect in that period under section 259 of the Capital Allowances Act.
- (8) On a claim for group relief made by a claimant company in relation to a surrendering company, group relief shall not be allowed against the claimant company’s ring fence profits except to the extent that the claim relates to losses incurred by the surrendering company that arose from oil extraction activities or from oil rights.
#### Valuation of oil disposed of or appropriated in certain circumstances
##### 493
- (A1) Where the conditions in subsection (A2) below are met in the case of a disposal of oil by a person, section 2(5A) of the Oil Taxation Act 1975 (“*the 1975 Act*”) (transportation etc) is to apply in determining the amount which the person is to bring into account for the purposes of the charge to corporation tax on income in respect of the disposal as it applies (or would apply) for the purposes of petroleum revenue tax.
- (A2) The conditions are that—
- (a) the oil is oil won from an oil field in the United Kingdom,
- (b) the disposal is a disposal of the oil by the person crude in a sale at arm's length, as defined in paragraph 1 of Schedule 3 to the 1975 Act,
- (c) the circumstances are such that the price received or receivable—
- (i) falls to be taken into account under section 2(5)(a) of that Act in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to the person in any chargeable period from the oil field, or
- (ii) would fall to be so taken into account, had the oil field been a taxable field, as defined in section 185 of the Finance Act 1993,
- (d) the terms of the contract are such as are described in the opening words of section 2(5A) of the 1975 Act,
- (e) apart from subsection (A1) above, the person is not entitled to a transportation allowance in respect of the oil (see subsection (A3)) in computing his ring fence profits,
- (f) the person does not claim a transportation allowance in respect of the oil in computing for the purposes of corporation tax any profits of his that are not ring fence profits.
- (A3) In subsection (A2) above “*transportation allowance*”, in relation to any oil, means any of the following—
- (a) a deduction in respect of the expense of transporting the oil as mentioned in the opening words of section 2(5A) of the 1975 Act,
- (b) a deduction in respect of any costs of or incidental to the transportation of the oil as there mentioned,
- (c) any such reduction in the price to be regarded as received or receivable for the oil as would result from the application of section 2(5A) of the 1975 Act, if that provision applied for the purposes of corporation tax.
- (1) Where a person disposes of any oil in circumstances such that the market value of that oil . . . falls to be taken into account under section 2 of the 1975 Act, otherwise than by virtue of paragraph 6 of Schedule 3 to that Act, in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to him in any chargeable period from an oil field (or as would so fall but for section 10 of that Act), then—
- (a) for all purposes of income tax, and
- (b) for the purposes of the charge of corporation tax on income,
the disposal of the oil and its acquisition by the person to whom it was disposed of shall be treated as having been for a consideration equal to the market value of the oil as so taken into account under section 2 of that Act (or as would have been so taken into account under that section but for section 10 of that Act).
- (1A) Where an excess of nominated proceeds in a chargeable period (within the meaning given by section 61 of the Finance Act 1987) is taken into account in computing a person's profits under section 2(5)(e) of the 1975 Act (or would be taken into account if the person were chargeable to tax under that Act in respect of a field)—
- (a) for the purposes of subsection (1) the amount of the excess shall be added to the consideration which the person is deemed to have received in respect of oil disposed of by him in the period, and
- (b) for the purposes of corporation tax, that amount shall be available to the person as a deduction in computing the profits of any trade to which section 492(1) does not apply.
- (2) Where a person makes a relevant appropriation of any oil without disposing of it and does so in circumstances such that the market value of that oil . . . falls to be taken into account under section 2 of the 1975 Act in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to him in any chargeable period from an oil field (or would so fall but for section 10 of that Act), then for all the purposes of income tax and for the purposes of the charge of corporation tax on income, he shall be treated—
- (a) as having, at the time of the appropriation—
- (i) sold the oil in the course of the separate trade consisting of activities falling within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1)(a) or (b) above; and
- (ii) bought it in the course of the separate trade consisting of activities not so falling; and
- (b) as having so sold and bought it at a price equal to its market value as so taken into account under section 2 of the 1975 Act (or as would have been so taken into account under that section but for section 10 of that Act).
In this subsection “*relevant appropriation*” has the meaning given by section 12(1) of the 1975 Act.
- (3) Where—
- (a) a person disposes otherwise than in a sale at arm’s length (as defined in paragraph 1 of Schedule 3 to the 1975 Act) of oil acquired by him in the course of oil extraction activities carried on by him or by virtue of oil rights held by him, and
- (b) subsection (1) above does not apply in relation to the disposal,
then, for all purposes of income tax and for the purposes of the charge of corporation tax on income, the disposal of the oil and its acquisition by the person to whom it was disposed of shall be treated as having been for a consideration equal to the market value of the oil . . . .
- (4) If a person appropriates oil acquired by him in the course of oil extraction activities carried on by him or by virtue of oil rights held by him and the appropriation is to refining or to any use except for production purposes of an oil field, within the meaning of Part I of the 1975 Act, then, unless subsection (2) above applies, for all purposes of income tax and for the purposes of the charge of corporation tax on income—
- (a) he shall be treated as having, at the time of the appropriation, sold and bought the oil as mentioned in subsection (2)(a)(i) and (ii) above; and
- (b) that sale and purchase shall be deemed to have been at a price equal to the market value of the oil . . . .
- (5) For the purposes of subsections (3) and (4) above, paragraph 2 of Schedule 3 to the 1975 Act shall apply as it applies for the purposes of Part 1 of that Act, but with the following modifications—
- (a) sub-paragraph (4) shall be treated as omitted;
- (b) any reference in paragraphs 2 and 2A to oil being relevantly appropriated shall be construed as a reference to its being appropriated as mentioned in section 493(4) of the Taxes Act; and
- (c) any reference in paragraph 2 to the notional delivery day for the actual oil shall be construed as a reference to the day on which the oil is disposed of or appropriated as mentioned in subsection (3) or (4) above.
- (6) In subsections (3) and (4) above the references to the market value of any oil in the calendar month in which a disposal of the oil was made or, as the case may be, in which it was appropriated shall each have effect in relation to light gases (within the meaning of the 1975 Act) as a reference to the amount which, if paragraph 3A of Schedule 3 to the 1975 Act applied, would be the market value of that oil in relation to the disposal or appropriation in question.
#### Charges on income
##### 494
- (1) . . . Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall have effect subject to the following provisions of this section.
- (2) Debits shall not be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a company in any manner that results in a reduction of what would otherwise be the company’s ring fence profits except—
- (a) to the extent that the loan relationship is in respect of money borrowed by the company which has been—
- (i) used to meet expenditure incurred by the company in carrying on oil extraction activities or in acquiring oil rights otherwise than from a connected person; or
- (ii) appropriated to meeting expenditure to be so incurred by the company;
- (b) in the case of debits falling to be brought into account by virtue of subsection (4) of section 84 of that Act in respect of a loan relationship that has not been entered into, to the extent that the relationship would have been one entered into for the purpose of borrowing money to be used or appropriated as mentioned in paragraph (a) above; and
- (c) in the case of debits in respect of a relationship to which section 100 of that Act applies, to the extent that—
- (i) the payment of interest under that relationship is expenditure incurred as mentioned in sub-paragraph (i) of paragraph (a) above; or
- (ii) the exchange loss arising from that relationship is in respect of a money debt on which the interest payable (if any) is, or would be, such expenditure;
as the case may be;. . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- In this subsection “*debtor relationship*” and “*creditor relationship*” have the same meanings as in Chapter II of Part IV of the Finance Act 1996, and references to a loan relationship, in relation to the borrowing of money, do not include references to any relationship to which section 100 of that Act applies.
- Section 839 shall apply for the purposes of this subsection.
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2ZA) Credits in respect of exchange gains from a company’s loan relationships shall not be brought into account for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 in respect of any loan relationship of a company in any manner that results in an increase of what would otherwise be the company’s ring fence profits, except to the extent that, if the credit had been a debit in respect of an exchange loss from the relationship, it would have been brought into account by virtue of any of paragraphs (a) to (c) of subsection (2) above.
- (2A) Where any debit or credit—
- (a) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a company, but
- (b) in accordance with subsection (2) or (2ZA) above cannot be brought into account in a manner that results in any reduction or, as the case may be, increase of what would otherwise be the company’s ring fence profits,
then (notwithstanding anything in section 82(2) of that Act) that debit or credit shall be brought into account for those purposes as a non-trading debit or, as the case may be, non-trading credit.
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Regional development grants
##### 495
- (1) Subsection (2) below applies in any case where—
- (a) a person has incurred expenditure (by way of purchase, rent or otherwise) on the acquisition of an asset in a transaction to which paragraph 2 of Schedule 4 to the 1975 Act applies (transactions between connected persons and otherwise than at arm’s length), and
- (b) the expenditure incurred by the other person referred to in that paragraph in acquiring, bringing into existence or enhancing the value of the asset as mentioned in that paragraph has been or is to be met by a regional development grant and, in whole or in part, falls to be taken into account Part 2, 3 or 6 of the Capital Allowances Act (capital allowances relating to plant and machinery, industrial buildings or research and development).
- (2) Where this subsection applies, for the purposes of the charge of income tax or corporation tax on the income arising from those activities of the person referred to in paragraph (a) of subsection (1) above which are treated by virtue of section 16(1) of ITTOIA 2005 or section 492(1) above as a separate trade for those purposes, the expenditure referred to in that paragraph shall be treated as reduced by the amount of the regional development grant referred to in paragraph (b) of that subsection.
- (3) Subsections (4) to (6) below apply where—
- (a) expenditure incurred by any person in relation to an asset in any relevant period (“*the initial period*”) has been or is to be met by a regional development grant; and
- (b) notwithstanding the provisions of section 137 of the Finance Act 1982 and subsections (1) and (2) above, in determining that person’s liability to income tax or corporation tax for the initial period the whole or some part of that expenditure falls to be taken into account Part 2, 3 or 6 of the Capital Allowances Act; and
- (c) in a relevant period subsequent to the initial period either expenditure on the asset becomes allowable under section 3 or 4 of the 1975 Act or the proportion of any such expenditure which is allowable is different as compared with the initial period;
and in subsections (4) to (6) below the subsequent relevant period referred to in paragraph (c) above is referred to as “*the adjustment period*”.
- (4) Where this subsection applies—
- (a) there shall be redetermined for the purposes of subsections (5) and (6) below the amount of the expenditure referred to in subsection (3)(a) above which would have been taken into account as mentioned in subsection (3)(b) if the circumstances referred to in subsection (3)(c) had existed in the initial period; and
- (b) according to whether the amount as so redetermined is greater or less than the amount actually taken into account as mentioned in subsection (3)(b), the difference is in subsections (5) and (6) below referred to as the increase or the reduction in the allowance.
- (5) If there is an increase in the allowance, then, for the purposes of the provisions referred to in subsection (3)(b) above, an amount of capital expenditure equal to the increase shall be deemed to have been incurred by the person concerned in the adjustment period on an extension of or addition to the asset referred to in subsection (3)(a) above.
- (6) If there is a reduction in the allowance, then, for the purpose of determining the liability to income tax or corporation tax of the person concerned, he shall be treated as having received in the adjustment period, as income of the trade in connection with which the expenditure referred to in subsection (3)(a) above was incurred, a sum equal to the amount of the reduction in the allowance.
- (7) In this section—
- “*regional development grant*” means a grant falling within section 534(1) of the Capital Allowances Act; and
- “*relevant period*” means an accounting period of a company or a year of assessment.
#### Tariff receipts
##### 496
- (1) Any sum which—
- (a) constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator in an oil field, and
- (b) constitutes consideration in the nature of income rather than capital, and
- (c) would not, apart from this subsection, be treated for the purposes of this Chapter as a receipt of the separate trade referred to in section 16(1) of ITTOIA 2005 or section 492(1) above,
shall be so treated for those purposes.
- (2) To the extent that they would not otherwise be so treated, the activities of a participator in an oil field or a person connected with him in making available an asset in a way which gives rise to tariff receipts or tax-exempt tariffing receipts of the participator shall be treated for the purposes of this Chapter as oil extraction activities.
- (3) In determining for the purposes of subsection (1) above whether any sum constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator, no account shall be taken of any sum which—
- (a) is in fact received or receivable by a person connected with the participator, and
- (b) constitutes a tariff receipt or tax-exempt tariffing receipt of the participator,
but in relation to the person by whom such a sum is actually received, subsection (1) above shall have effect as if he were a participator and as if the condition in paragraph (a) of that subsection were fulfilled.
- (4) References in this section to a person connected with a participator include references to a person with whom the person is associated within the meaning of paragraph 11 of Schedule 2 to the Oil Taxation Act 1983.
#### Restriction on setting ACT against income from oil extraction activities etc
##### 497
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limited right to carry back surrendered ACT
##### 498
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Surrender of ACT where oil extraction company etc. owned by a consortium
##### 499
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deduction of PRT in computing income for corporation tax purposes
##### 500
- (1) Where a participator in an oil field has paid any petroleum revenue tax with which he was chargeable for a chargeable period, then, in computing for corporation tax the amount of his income arising in the relevant accounting period from oil extraction activities or oil rights, there shall be deducted an amount equal to that petroleum revenue tax.
- (2) There shall be made all such adjustments of assessments to corporation tax as are required in order to give effect to subsection (1) above.
- (3) For the purposes of subsection (1) above, the relevant accounting period, in relation to any petroleum revenue tax paid by a company, is—
- (a) the accounting period of the company in or at the end of which the chargeable period for which that tax was charged ends; or
- (b) if that chargeable period ends after the accounting period of the company in or at the end of which the trade giving rise to the income referred to above is permanently discontinued, that accounting period.
- (4) Subject to the following provisions of this section if some or all of the petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is subsequently repaid, that deduction shall be reduced or extinguished accordingly; and any additional assessment to corporation tax required in order to give effect to this subsection may be made at any time not later than six years after the end of the calendar year in which the first-mentioned tax was repaid.
- (5) If, in a case where paragraph 17 of Schedule 2 to the 1975 Act applies, an amount of petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is repaid by virtue of an assessment under that Schedule or an amendment of such an assessment, then, so far as concerns so much of that repayment as constitutes the appropriate repayment,—
- (a) subsection (4) above shall not apply; and
- (b) the following provisions of this section shall apply in relation to the company which is entitled to the repayment.
- (6) In subsection (5) above and the following provisions of this section—
- (a) “*the appropriate repayment*” has the meaning assigned by sub-paragraph (2) of paragraph 17 of Schedule 2 to the 1975 Act;
- (b) in relation to the appropriate repayment, a “*carried back loss*” means an allowable loss which falls within sub-paragraph (1)(a) of that paragraph and which (alone or together with one or more other carried back losses) gives rise to the appropriate repayment;
- (c) in relation to a carried back loss, “*the operative chargeable period*” means the chargeable period in which the loss accrued; and
- (d) in relation to the company which is entitled to the appropriate repayment, “*the relevant accounting period*” means the accounting period in or at the end of which ends the operative chargeable period or, if the company’s ring fence trade is permanently discontinued before the end of the operative chargeable period, the last accounting period of that trade.
- (7) In computing for corporation tax the amount of the company’s income arising in the relevant accounting period from oil extraction activities or oil rights there shall be added an amount equal to the appropriate repayment; but this subsection has effect subject to subsection (8) below in any case where—
- (a) two or more carried back losses give rise to the appropriate repayment; and
- (b) the operative chargeable period in relation to each of the carried back losses is not the same; and
- (c) if subsection (6)(d) above were applied separately in relation to each of the carried back losses there would be more than one relevant accounting period.
- (8) Where paragraphs (a) to (c) of subsection (7) above apply, the appropriate repayment shall be treated as apportioned between each of the relevant accounting periods referred to in paragraph (c) of that subsection in such manner as to secure that the amount added by virtue of that subsection in relation to each of those relevant accounting periods is what it would have been if—
- (a) relief for each of the carried back losses for which there is a different operative chargeable period had been given by a separate assessment or amendment of an assessment under Schedule 2 to the 1975 Act; and
- (b) relief for a carried back loss accruing in an earlier chargeable period had been so given before relief for a carried back loss accruing in a later chargeable period.
- (9) Any additional assessment to corporation tax required in order to give effect to the addition of an amount by virtue of subsection (7) above may be made at any time not later than six years after the end of the calendar year in which is made the repayment of petroleum revenue tax comprising the appropriate repayment.
- (10) In this section “*allowable loss*” and “*chargeable period*” have the same meaning as in Part I of the 1975 Act and “*calendar year*” means a period of twelve months beginning on 1st January.
#### Interest on repayment of PRT
##### 501
Where any amount of petroleum revenue tax paid by a participator in an oil field is, under any provision of Part I of the 1975 Act, repaid to him with interest, the amount of the interest paid to him shall be disregarded in computing the amount of his income for the purposes of corporation tax.
#### Interpretation of Chapter V
##### 502
- (1) In this Chapter—
- “*the 1975 Act*” means the Oil Taxation Act 1975 ;
- “*oil*” means any substance won or capable of being won under the authority of a licence granted under either Part I of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964, other than methane gas won in the course of operations for making and keeping mines safe;
- “*oil extraction activities*” means any activities of a person—in searching for oil in the United Kingdom or a designated area or causing such searching to be carried out for him; orin extracting or causing to be extracted for him oil at any place in the United Kingdom or a designated area under rights authorising the extraction and held by him or, if the person in question is a company, by the company or a company associated with it; orin transporting or causing to be transported for him . . . oil extracted at any such place not on dry land under rights authorising the extraction and so held where the transportation is—to the place where the oil is first landed in the United Kingdom, orto the place in the United Kingdom or, in the case of oil first landed in another country, the place in that or any other country (other than the United Kingdom) at which the seller in a sale at arm’s length could reasonably be expected to deliver it or, if there is more than one such place, the one nearest to the place of extraction; orin effecting or causing to be effected for him the initial treatment or initial storage of oil won from any oil field under rights authorising its extraction and so held;
- “*oil field*” has the same meaning as in Part I of the 1975 Act;
- “*oil rights*” means rights to oil to be extracted at any place in the United Kingdom or a designated area, or to interests in or to the benefit of such oil;
- “*participator*” has the same meaning as in Part I of the 1975 Act; and
- “*ring fence income*” means income arising from oil extraction activities or oil rights; and
- “*ring fence profits*” has the meaning given by subsection (1A) below or, in any case where that subsection does not apply, means ring fence income; and
- “*ring fence trade*” means activities which—fall within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1) above; andconstitute a separate trade (whether by virtue of section 16(1) of ITTOIA 2005 or section 492(1) above or otherwise).
- (1A) Where in accordance with section 197(3) of the 1992 Act a person has an aggregate gain for any chargeable period, that gain and his ring fence income (if any) for that period together constitute his ring fence profits for the purposes of this Chapter.
- (2) For the purposes of subsection (1) above—
- (a) “*designated area*” means an area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964;
- (b) “*initial treatment*” has the same meaning as in Part I of the 1975 Act; and
- (c) the definition of “*initial storage*” in section 12(1) of the 1975 Act shall apply but, in its application for those purposes in relation to the person mentioned in subsection (1)(d) above and to oil won from any one oil field shall have effect as if the reference to the maximum daily production rate of oil for the field as there mentioned were a reference to that person’s share of that maximum daily production rate, that is to say, a share thereof proportionate to his share of the oil won from that field.
- (3) For the purposes of this Chapter two companies are associated with one another if—
- (a) one is a 51 per cent. subsidiary of the other;
- (b) each is a 51 per cent. subsidiary of a third company; or
- (c) one is owned by a consortium of which the other is a member.
- (3A) Section 413(6) applies for the purposes of subsection (3)(c) above but as if section 413 were modified as follows—
- (a) as if the definition of “company" in subsection (2) were omitted;
- (b) as if at the beginning of subsection (5) there were inserted “References in this Chapter to a company apply only to bodies corporate resident in the United Kingdom; and"; and
- (c) as if in that subsection, after the word “*receipt*”, in the second place where it occurs, there were inserted “; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.”
- (4) Without prejudice to subsection (3) above, for the purposes of this Chapter, two companies are also associated with one another if one has control of the other or both are under the control of the same person or persons; and in this subsection “control” shall be construed in accordance with section 416.
### CHAPTER VI — MISCELLANEOUS BUSINESSES AND BODIES
#### Letting of furnished holiday accommodation treated as a trade
##### 503
- (1) For the purposes of Chapter 2 of Part 10 (loss relief for corporation tax)—
- (a) a Schedule A business which consists in, or so far as it consists in, the commercial letting of furnished holiday accommodation . . . shall be treated as if it were a trade the profits of which are chargeable to corporation tax under Case I of Schedule D, and
- (b) all such lettings made by a particular company or partnership shall be treated as one trade.
The “*commercial letting of furnished holiday accommodation*” is defined below in section 504.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where there is a letting of accommodation only part of which is holiday accommodation, such apportionments shall be made for the purposes of this section as are just and reasonable.
- (5) Relief shall not be given for the same loss, or the same portion of a loss, both under a provision of Chapter 2 of Part 10 as applied by this section and under any other provision of the Corporation Tax Acts.
#### Supplementary provisions
##### 504
- (1) This section has effect for the purposes of section 503.
- (2) A letting—
- (a) is a commercial letting if it is let on a commercial basis and with a view to the realisation of profits; and
- (b) is of furnished accommodation if the tenant is entitled to the use of furniture.
- (3) Accommodation shall not be treated as holiday accommodation for the purposes of this section unless—
- (a) it is available for commercial letting to the public generally as holiday accommodation for periods which amount, in the aggregate, to not less than 140 days;
- (b) the periods for which it is so let amount in the aggregate to at least 70 days; and
- (c) for a period comprising at least seven months (which need not be continuous but includes any months in which it is let as mentioned in paragraph (b) above) it is not normally in the same occupation for a continuous period exceeding 31 days.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Any question whether accommodation let by a company is at any time in an accounting period holiday accommodation shall be determined—
- (a) if the accommodation was not let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is so let in the period of 12 months immediately following the accounting period, by reference to the 12 months beginning with the date in the accounting period on which it first so let it;
- (b) if the accommodation was let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is not so let by it in the period of 12 months immediately following the accounting period, by reference to the 12 months ending with the date in the accounting period on which it ceased so to let it;
- (c) in any other case, by reference to the period of 12 months ending with the last day of the accounting period.
- (6) Where, in any . . . accounting period, a company lets furnished accommodation which is treated as holiday accommodation for the purposes of this section in that . . . period (“*the qualifying accommodation*”), the company may make a claim under this subsection, within the time specified in subsection (6A) below, for averaging treatment to apply for that . . . period to that and any other accommodation specified in the claim which was let by the company as furnished accommodation during that . . . period and would fall to be treated as holiday accommodation in that . . . period if subsection (3)(b) above were satisfied in relation to it.
- (6A) The time mentioned in subsection (6) above is the period of two years beginning at the end of the accounting period in which the accommodation was let.
- (7) Where a claim is made under subsection (6) above in respect of any . . . accounting period, any such other accommodation shall be treated as being holiday accommodation in that . . . period if the number of days for which the qualifying accommodation and any other such accommodation was let by the claimant as mentioned in subsection (3)(a) above during the . . . period amounts on average to at least 70.
- (8) Qualifying accommodation may not be specified in more than one claim in respect of any one . . . accounting period.
- (9) For the purposes of this section a company lets accommodation if it permits another person to occupy it, whether or not in pursuance of a lease; and “*letting*” and “*tenant*” shall be construed accordingly.
#### Charities: general
##### 505
- (1) Subject to subsections (2) and (3) below, the following exemptions shall be granted on a claim in that behalf to the Board—
- (a) exemption from tax under Schedules A and D . . . in respect of any profits or gains arising in respect of rents or other receipts from an estate, interest or right in or over any land (whether situated in the United Kingdom or elsewhere) to the extent that the profits or gains—
- (i) arise in respect of rents or receipts from an estate, interest or right vested in any person for charitable purposes; and
- (ii) are applied to charitable purposes only;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) exemption—
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) from tax under Case III of Schedule D . . . ,
- (iia) from tax under Case . . . V of Schedule D in respect of income equivalent to income chargeable under Case III of that Schedule but arising from securities or other possessions outside the United Kingdom,
- (iiaa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (iib) from tax under Case V of Schedule D in respect of such dividends as would, in the case of income tax, be chargeable to tax under Chapter 4 of Part 4 of ITTOIA 2005 or such distributions (other than dividends) as would, in the case of income tax, be chargeable to tax under Chapter 8 of Part 5 of that Act so far as it would apply to what would be a relevant foreign distribution,
- (iic) from tax under Case VI of Schedule D in respect of non-trading gains on intangible fixed assets under Schedule 29 to the Finance Act 2002, and
- (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
where the income in question forms part of the income of a charitable company, or is, according to rules or regulations established by Act of Parliament, charter, decree, deed of trust or will, applicable to charitable purposes only, and so far as it is applied to charitable purposes only;
- (d) exemption from tax under Schedule D . . . in respect of public revenue dividends on securities which are in the name of trustees, to the extent that the dividends are applicable and applied only for the repair of—
- (i) any cathedral, college, church or chapel, or
- (ii) any building used only for the purposes of divine worship;
- (e) exemption from tax under Schedule D . . . in respect of the profits of any trade carried on by a charitable company(whether in the United Kingdom or elsewhere), if the profits are applied solely to the purposes of the charitable company and either—
- (i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charitable company; or
- (ii) the work in connection with the trade is mainly carried out by beneficiaries of the charitable company;
- (f) exemption from tax under Schedule D . . . in respect of profits accruing to a charitable company from a lottery if—
- (i) the lottery is promoted and conducted in accordance with section 3 or 5 of the Lotteries and Amusements Act 1976 or Article 133 or 135 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985; and
- (ii) the profits are applied solely to the charitable company's purposes.
- (1AA) In subsection (1)(c)(iib)“*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part of that Act if the company were resident in the United Kingdom.
- (1A) In subsection (1)(d) above “*public revenue dividends*” means—
- (a) income from securities which is payable out of the public revenue of the United Kingdom or Northern Ireland;
- (b) income from securities issued by or on behalf of a government or a public or local authority in a country outside the United Kingdom.
- (1B) For the purpose of subsection (1)(e)—
- (a) where a trade is exercised partly in the course of the actual carrying out of a primary purpose of the charitable company and partly otherwise, each part shall be treated as a separate trade (for which purpose reasonable apportionment of expenses and receipts shall be made), and
- (b) where the work in connection with the trade is carried out partly but not mainly by beneficiaries, the part in connection with which work is carried on by beneficiaries and the other part shall be treated as separate trades (for which purpose reasonable apportionment of expenses and receipts shall be made).
- (2) Any payment which—
- (a) is received by a charitable company from another charity; and
- (b) is not made for full consideration in money or money’s worth; and
- (c) is not chargeable to corporation tax apart from this subsection; and
- (d) is not, apart from this subsection, of a description which (on a claim) would be eligible for relief from tax by virtue of any provision of subsection (1) above;
shall be . . . chargeable to corporation tax under Case III of Schedule D but shall be eligible for relief from tax under subsection (1)(c) above as if it were an annual payment.
- (3) In subsections (4) to (7)—
- (a) “*charitable expenditure*” has the meaning given by section 506,
- (b) “*relief*” means relief or exemption under—
- (i) subsection (1) above,
- (ii) section 56(3)(c) above,
- (iii) section 761(6) below,
- (iv) section 256 of the 1992 Act (charities), or
- (v) section 46 of the Finance Act 2000 (small trades),
- (c) “*relievable income and gains*” means income and gains which would be eligible for relief or exemption under any of those provisions (disregarding subsections (4) to (6)), and
- (d) “*total income and gains*” means the aggregate of—
- (i) relievable income and gains,
- (ii) income and gains, other than relievable income and gains, chargeable to tax, and
- (iii) donations, legacies and other similar receipts that are not chargeable to tax.
- (4) If a charitable company incurs (or is treated as incurring) non-charitable expenditure in an accounting period, relief shall be disallowed in respect of such amount of relievable income and gains as equals the amount of the non-charitable expenditure.
- (5) If in an accounting period a charitable company's non-charitable expenditure exceeds its total income and gains the excess shall be treated as non-charitable expenditure of the previous period for the purposes of subsection (4); and any necessary adjustments shall be made, whether by making assessments or otherwise.
- (6) Subsection (5) may apply to an accounting period wholly or partly as a result of the application of that subsection in respect of a later period; but no excess of non-charitable expenditure shall be treated as non-charitable expenditure of an accounting period which ended more than six years before the end of the period in which the expenditure was actually incurred.
- (7) Where an amount of a charitable company's relievable income and gains is disallowed for relief by subsection (4) (whether or not as a result of the application of subsection (5))—
- (a) the charitable company may by notice to the Board specify which items of income or gains are to be disallowed, but
- (b) if the Board requires the charitable company to give a notice under paragraph (a) and the charitable company fails to comply within the period of 30 days beginning with the date on which the requirement is imposed, the Board shall determine which items to disallow.
#### Qualifying expenditure and non-qualifying expenditure
##### 506
- (1) In this section, section 505 and Schedule 20—
- “*charity*” means any body of persons or trust established for charitable purposes only;
- “*charitable company*” means any body of persons established for charitable purposes only;
- “*charitable expenditure*” means (subject to subsections (3) to (5) below) expenditure which is exclusively for charitable purposes.
- (2) For the purposes of section 505 . . . , where expenditure which is not actually incurred in a particular accounting period properly falls to be charged against the income of that accounting period as being referable to commitments (whether or not of a contractual nature) which the charitable company has entered into before or during that period, it shall be treated as incurred in that period.
- (3) A payment made (or to be made) to a body situated outside the United Kingdom shall not be charitable expenditure by virtue of this section unless the charitable company concerned has taken such steps as may be reasonable in the circumstances to ensure that the payment will be applied for charitable purposes.
- (4) If in any accounting period a charitable company—
- (a) invests any of its funds in an investment which is not a qualifying investment, as defined in Part I of Schedule 20; or
- (b) makes a loan (not being an investment) which is not a qualifying loan, as defined in Part II of that Schedule;
then, subject to subsection (5) below, the amount so invested or lent in that period shall be treated for the purposes of this section as being an amount of expenditure incurred by the charitable company, and, accordingly, as being non-charitable expenditure.
- (5) If, in any accounting period, a charitable company which has in that period made an investment or loan falling within subsection (4) above—
- (a) realises the whole or part of that investment; or
- (b) is repaid the whole or part of that loan;
any further investment or lending in that period of the sum realised or repaid shall, to the extent that it does not exceed the sum originally invested or lent, be left out of account in determining the amount which, by virtue of subsection (4) above, is treated as non-charitable expenditure incurred in that period.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The National Heritage Memorial Fund, the Historic Buildings and Monuments Commission for England and the British Museum
##### 507
- (1) There shall on a claim in that behalf to the Board be allowed in the case of—
- (a) the Trustees of the National Heritage Memorial Fund;
- (b) the Historic Buildings and Monuments Commission for England;
- (c) the Trustees of the British Museum;
- (d) the Trustees of the Natural History Museum;
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) the National Endowment for Science, Technology and the Arts;
such exemption from tax as falls to be allowed under section 505 in the case of a charitable company the whole income of which is applied to charitable purposes.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scientific research organisations
##### 508
- (1) Where—
- (a) an Association has as its object the undertaking of research and development which may lead to or facilitate an extension of any class or classes of trade; and
- (b) the memorandum of association or other similar instrument regulating the functions of the Association precludes the direct or indirect payment or transfer to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit;
there shall, on a claim in that behalf to the Board in relation to any accounting period, be allowed in the case of the Association for that accounting period such exemption from tax as falls to be allowed under section 505 in the case of a charitable company the whole income of which is applied to charitable purposes.
- (1A) The Treasury may by regulations prescribe circumstances in which the conditions in subsection (1) above shall be deemed not to be complied with.
- (1B) The Treasury may by regulations make provision specifying for the purposes of paragraph (a) of that subsection—
- (a) what shall be deemed to be, or not to be, an Association,
- (b) circumstances in which an Association shall be deemed to have, or not to have, the undertaking of research and development as its object,
- (c) circumstances in which the undertaking of research and development shall be deemed to be, or not to be, capable of leading to or facilitating an extension of a class of trade, or
- (d) what shall be deemed to be, or not to be, a class of trade.
- (2) The condition specified in paragraph (b) of subsection (1) above shall not be deemed not to be complied with in the case of any Association by reason only that the memorandum or other similar instrument regulating its functions does not prevent the payment to its members of reasonable remuneration for goods, labour or power supplied, or for services rendered, of reasonable interest for money lent, or of reasonable rent for any premises.
- (3) Section 837A (meaning of “research and development”) applies for the purposes of subsection (1)(a) above.
- (4) Regulations under subsection (3) of that section (power to prescribe activities which are, or are not, research and development) may make provision for the purposes of that section as it applies by virtue of subsection (3) of this section which is additional to, or different from, the provision made otherwise for the purposes of that section.
#### Reserves of marketing boards and certain other statutory bodies
##### 509
- (1) Where a body established by or under any enactment and having as its object, or one of its objects, the marketing of an agricultural product or the stabilising of the price of an agricultural product is required, by or under any scheme or arrangements approved by or made with a Minister of the Crown or government department, to pay the whole or part of any surplus derived from its trading operations or other trade receipts into a reserve fund satisfying the conditions specified in subsection (2) below, then, in computing for the purposes of tax the profits or losses of the body’s trade—
- (a) there shall be allowed as deductions any sums so required to be paid by the body into the reserve fund out of the profits of the trade, and
- (b) there shall be taken into account as trading receipts any sums withdrawn by the body from the fund, except so far as they are so required to be paid to a Minister or government department, or are distributed to producers of the product in question or refunded to persons paying any levy or duty.
- (2) The conditions to be satisfied by the reserve fund are as follows—
- (a) that no sum may be withdrawn from the fund without the authority or consent of a Minister of the Crown or government department; and
- (b) that where money has been paid to the body by a Minister of the Crown or government department in connection with arrangements for maintaining guaranteed prices, or in connection with the body’s trading operations, and is repayable to that Minister or department, sums afterwards standing to the credit of the fund are required as mentioned in subsection (1) above to be applied in whole or in part in repaying the money; and
- (c) that the fund is reviewed by a Minister of the Crown at intervals fixed by or under the scheme or arrangements in question, and any amount by which it appears to the Minister to exceed the reasonable requirements of the body is withdrawn therefrom.
- (3) In this section references to a Minister of the Crown or government department include references to a Head of a Department or a Department in Northern Ireland, and references to producers of a product include references to producers of one type or quality of a product from another.
#### Agricultural societies
##### 510
- (1) Profits or gains arising to an agricultural society from any exhibition or show held for the purposes of the society shall be exempt from tax if applied solely to the purposes of the society.
- (2) In this section “*agricultural society*” means any society or institution established for the purpose of promoting the interests of agriculture, horticulture, livestock breeding or forestry.
#### The Electricity Council and Boards, the Northern Ireland Electricity Service and the Gas Council
##### 511
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The Corporation Tax Acts shall apply in relation to the trade of the Gas Council as if before the beginning of April 1962 it had consisted of the trades of the Area Boards (within the meaning of the Gas Act 1948), and (without prejudice to the generality of the foregoing) allowances and balancing charges shall be made to or on the Gas Council accordingly by reference to the capital expenditure of Area Boards and to the allowances made to Area Boards in respect of that expenditure.
#### Atomic Energy Authority and National Radiological Protection Board
##### 512
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### British Airways Board and National Freight Corporation
##### 513
- (1) Subject to subsection (2) below, the successor company in which the property, rights, liabilities and obligations of the British Airways Board are vested by the Civil Aviation Act 1980 shall be treated for all purposes of corporation tax as if it were the same person as the British Airways Board; and the successor company to which the undertaking of the National Freight Corporation is transferred by the Transport Act 1980 shall be treated for those purposes as if it were the same person as the National Freight Corporation.
- (2) The transfer by the Civil Aviation Act 1980 from the British Airways Board to the successor company of liability for any loan made to the Board shall not affect any direction in respect of the loan which has been given by the Treasury under section 581.
- (3) A successor company shall not by virtue of subsection (1) above be regarded as a body falling within section 170(12) of the 1992 Act.
#### Funds for reducing the National Debt
##### 514
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Signatories to Operating Agreement for INMARSAT
##### 515
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Government securities held by non-resident central banks
##### 516
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Issue departments of the Reserve Bank of India and the State Bank of Pakistan
##### 517
There shall be exempt from corporation tax any profits or income arising or accruing to the issue department of the Reserve Bank of India constituted under an Act of the Indian legislature called the Reserve Bank of India Act 1934, or to the issue department of the State Bank of Pakistan constituted under certain orders made under section 9 of the Indian Independence Act 1947.
#### Harbour reorganisation schemes
##### 518
- (1) This section has effect where the trade of any body corporate other than a limited liability company is transferred to a harbour authority by or under a certified harbour reorganisation scheme which provides also for the dissolution of the transferor.
- (2) For the purposes of the Corporation Tax Acts, the trade shall not be treated as permanently discontinued, nor shall a new trade be treated as set up and commenced.
- (3) The transferee shall be entitled to relief from corporation tax under section 393(1), as for a loss sustained by it in carrying on the transferred trade or any trade of which it comes to form part, for any amount which, if the transferor had continued to carry it on, would have been available to the transferor for carry-forward against chargeable profits of succeeding accounting periods, but subject to any claim made by the transferor under section 393A(1).
- (4) There shall be made to or on the transferee in accordance with the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act) all such allowances and charges as would, if the transferor had continued to carry on the trade, have fallen to be made to or on it under those Acts and the amount of any such allowance or charge shall be computed as if the transferee had been carrying on the trade since the transferor had begun to do so and as if everything done to or by the transferor had been done to or by the transferee.
- (5) No sale or transfer which on the transfer of the trade is made by the transferor to the transferee of any assets in use for the purposes of the trade shall be treated as giving rise to any such allowance or charge as is mentioned in subsection (4) above.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The transferee shall be entitled to relief from corporation tax in respect of chargeable gains for any amount for which the transferor would have been entitled to claim relief in respect of allowable losses if it had continued to carry on the trade.
- (8) Where part only of such trade is transferred to a harbour authority by or under a certified harbour organisation scheme, and the transferor continues to carry on the remainder of the trade, or any such trade is, by or under a certified harbour reorganisation scheme which provides also for the dissolution of the transferor, transferred in parts to two or more harbour authorities, this section shall apply as if the transferred part, or each of the transferred parts, had at all times been a separate trade.
- (9) Where a part of any trade is to be treated by virtue of subsection (8) above as having been a separate trade over any period there shall be made any necessary adjustments of accounting periods, and such apportionments as may be just of receipts, expenses, allowances or charges.
- (10) In this section—
- “*harbour authority*” has the same meaning as in the Harbours Act 1964;
- “*harbour reorganisation scheme*” means any statutory provision providing for the management by a harbour authority of any harbour or group of harbours in the United Kingdom, and “*certified*”, in relation to any harbour reorganisation scheme, means certified by a Minister of the Crown or government department as so providing with a view to securing, in the public interest, the efficient and economical development of the harbour or harbours in question;
- “*limited liability company*” means a company having a limit on the liability of its members;
- “*statutory provision*” means any enactment, or any scheme, order or other instrument having effect under an enactment, and includes an enactment confirming a provisional order; and
- “*transferor*”, in relation to a trade, means the body from whom the trade is transferred, whether or not the transfer is effected by that body.
#### Local authorities
##### 519
- (1) A local authority in the United Kingdom shall be exempt from corporation tax.
- (2) Subsection (1) above shall apply to a local authority association as it applies to a local authority.
- (3) In this Act “*local authority association*” means any incorporated or unincorporated association—
- (a) of which all the constituent members are local authorities, groups of local authorities or local authority associations, and
- (b) which has for its object or primary object the protection and furtherance of the interests in general of local authorities or any description of local authorities;
and for this purpose, if a member of an association is a representative of or appointed by any authority, group of authorities or association, that authority, group or association (and not he) shall be treated as a constituent member of the association.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XIII — MISCELLANEOUS SPECIAL PROVISIONS
### CHAPTER I — INTELLECTUAL PROPERTY
### Patents and know-how
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure
##### 520
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 520
##### 521
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances for expenditure on purchase of patent rights: pre-1st April 1986 expenditure
##### 522
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lapses of patent rights, sales etc
##### 523
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of receipts from sale of patent rights
##### 524
- (1) Subject to subsection (2) below, where a company resident in the United Kingdom sells all or any part of any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, the company shall, subject to the provisions of this Chapter, be charged to corporation tax under Case VI of Schedule D, for the accounting period in which the sum is received by it and successive accounting periods, being charged in each period on the same fraction of the sum as the period is of six years (or such less fraction as has not already been charged).
- (2) If the company by notice served on an officer of the Board within the period specified in subsection (2A) below, elects that the whole of the sum shall be charged to corporation tax for the accounting period in which it was received, it shall be charged to corporation tax accordingly.
- (2A) The period mentioned in subsection (2) above is—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . the period of two years beginning at the end of the accounting period in which the sum was received.
- (3) Where a relevant non-resident company sells all or any part of any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, and the patent is a United Kingdom patent, then, subject to the provisions of this Chapter—
- (a) the company shall be chargeable to corporation tax in respect of that sum under Case VI of Schedule D; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In subsection (3) above “*relevant non-resident company*” means a company not resident in the United Kingdom which would be within the charge to corporation tax in respect of any proceeds of the sale of the patent rights not consisting of a capital sum.
- (6) Where subsection (3) applies to charge a company to corporation tax in respect of a sum paid to it, . . . the company may, by notice given to the Board not later than two years after the end of the accounting period in which the sum is paid, elect that the sum shall be treated as arising rateably in the accounting periods ending not later than six years from the beginning of that in which the sum is paid (being accounting periods during which the company remains within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum), and there shall be made all such repayments of tax and assessments to tax as are necessary to give effect to any such election.
- (7) Subject to subsections (8) and (9) below, where the company selling all or any part of any patent rights (“*the seller*”) acquired the rights sold, or the rights out of which they were granted, by purchase and the price paid by it consisted wholly or partly of a capital sum, the preceding provisions of this section shall apply as if any capital sum received by it when it sells the rights were reduced by the amount of that sum.
- (8) Where between the purchase and the sale the seller has sold part of the rights acquired by it and the net proceeds of that sale consist wholly or partly of a capital sum, the amount of the reduction falling to be made under subsection (7) above in respect of the subsequent sale shall be itself reduced by the amount of that sum.
- (9) If a company is chargeable to corporation tax under subsection (3) above, nothing in subsections (7) and (8) above shall affect the sum representing income tax which is to be deducted under section 910 of ITA 2007 (payments to non-UK residents) from payments of, or of instalments of, the proceeds of the sale.
- (9A) If any sum representing income tax is deducted under section 910 of ITA 2007, any adjustment necessary to give effect to the provisions of subsection (9) above shall be made by way of repayment of tax.
- (10) A claim for relief under this section shall be made to the Board.
#### Capital sums: death, winding up or partnership change
##### 525
- (1) Where a body corporate on which, by reason of the receipt of a capital sum, a charge falls or would otherwise fall to be made under section 524 commences to be wound up—
- (a) no sums shall be charged under that section on that body for any accounting period subsequent to that in which the winding up commences; and
- (b) the amount falling to be charged for the accounting period in which the winding up commences shall be increased by the total amounts which, but for the winding up, would have fallen to be charged for subsequent accounting periods.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, under section 559 of the Capital Allowances Act (effect of successions) as applied by section 532, a charge under section 524 falls to be made on two or more persons jointly as being the persons for the time being carrying on a trade, and that trade is discontinued, subsection (1) above shall have effect in relation to the discontinuance as it has effect where a body corporate commences to be wound up.
- (4) Where subsection (3) above applies—
- (a) the additional sum which, under subsection (1) above, falls to be charged for the accounting period in which the discontinuance occurs shall be apportioned among the members of the partnership immediately before the discontinuance, according to their respective interests in the partnership profits before the discontinuance, and each partner . . . shall be charged separately for its proportion; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for expenses
##### 526
- (1) Where—
- (a) a company, otherwise than for the purposes of a trade carried on by it, pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, or the obtaining of an extension of a term of a patent, or a rejected or abandoned application for a patent, and
- (b) those fees or expenses would, if they had been paid or incurred for the purposes of a trade, have been allowable as a deduction in estimating the profits of that trade,
there shall be made to the company for the purposes of corporation tax, for the accounting period in which those expenses were paid or incurred, an allowance equal to the amount thereof.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Spreading of royalties over several years
##### 527
- (1) Where—
- (a) a royalty or other sum is paid to a company in respect of the user of a patent,
- (b) the user extended over a period of six complete years or more, and
- (c) the payment is one from which a sum representing income tax must be deducted under section 903 of ITA 2007,
the company may on the making of a claim require that the corporation tax payable by it by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of corporation tax which would have been payable by it if that royalty or sum had been paid in six equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made.
- (2) Subsection (1) above shall apply in relation to a royalty or other sum where the period of the user is two complete years or more but less than six complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to six equal instalments of a reference to so many equal instalments as there are complete years comprised in that period.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manner of making allowances and charges
##### 528
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where an allowance falls to be made to a company for any accounting period under section 526. . . , and is not to be made in taxing a trade—
- (a) the allowance shall, as far as may be, be given effect by deducting the amount of the allowance from the company’s income from patents of the accounting period;
- (b) where the allowance cannot be given full effect under paragraph (a) above in that period by reason of a want or deficiency of income from patents, then (so long as the company remains within the charge to corporation tax) the amount unallowed shall be carried forward to the succeeding accounting period, and shall be treated for the purposes of that paragraph, and of any further application of this paragraph, as the amount of a corresponding allowance for that period.
- (3A) In this section references to . . . a company’s income from patents are references to that income after any allowance has been deducted from or set off against it under section . . . 480 of the Capital Allowances Act.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Patent income to be earned income in certain cases
##### 529
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal of know-how
##### 530
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 530
##### 531
- (1) Subject to subsection (7) below, where, after 19th March 1968, a company disposes of know-how which has been used in a trade carried on by the company, and continues to carry on the trade after the disposal, the amount or value of any consideration received by the company for the disposal shall—
- (a) if it is received in respect of the disposal of know-how after 31st March 1986, so far as it is not brought into account as a disposal value under section 462 of the Capital Allowances Act, nor is chargeable to corporation tax as a revenue or income receipt;
- (b) in any other case, so far as it is not chargeable to corporation tax as a revenue or income receipt,
be treated for the purposes of corporation tax as a trading receipt.
- (2) Subject to subsection (3) below, where—
- (a) a person carrying on a trade receives consideration for the disposal of know-how which has been used in the trade, and
- (b) the know-how is disposed of as part of the disposal of all or part of the trade,
the consideration shall for the purposes of corporation tax be treated as a payment for goodwill in relation both to the person making the disposal and to the person acquiring the know-how (if that person provided the consideration).
- (3) Subsection (2) above shall not apply—
- (a) if, in the case of the person disposing of the know-how being within the charge to corporation tax, that person and the person acquiring the know-how (whether or not within the charge to corporation tax) elect for that subsection not to apply by notice given jointly to the inspector within two years of the disposal, or
- (b) to the person acquiring the know-how if the trade in question was, before the acquisition, carried on wholly outside the United Kingdom;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) If—
- (a) an election is made under section 194 of ITTOIA 2005 (provision corresponding to subsections (2) and (3) of this section for the purposes of income tax), and
- (b) the person making the acquisition mentioned in that section is within the charge to corporation tax,
the persons making the election under that section are treated as also making an election under subsection (3) of this section (even though the person disposing of the know-how is not within the charge to corporation tax).
- (4) Subject to subsections (5) and (7) below, any consideration received by a company for the disposal of know-how shall—
- (a) if it is received in respect of the disposal of know-how after 31st March 1986 and is not brought into account as a disposal value under section 462 of the Capital Allowances Act, or
- (b) if it is neither chargeable to corporation tax under subsection (1) above or otherwise as a revenue or income receipt, nor dealt with in relation to the company as a payment for goodwill as mentioned in subsection (2) above, (whether the disposal took place before or after 31st March 1986),
be treated as a profit or gain chargeable to corporation tax under Case VI of Schedule D.
- (5) Where the company concerned has incurred expenditure wholly and exclusively in the acquisition or disposal of the know-how, the amount which would apart from this subsection be treated as a profit or gain chargeable to corporation tax under Case VI of Schedule D shall be reduced by the amount of that expenditure; but a deduction shall not be twice made in respect of the same expenditure, whether under this subsection or otherwise.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subsections (1) and (3) to (5) above . . . shall not apply on any sale of know-how where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them; and subsection (2) above shall apply in any such case with the omission of the words “Subject to subsection (3) below”.
- (8) Where in connection with any disposal of know-how a person gives an undertaking (whether absolute or qualified, and whether legally valid or not) the tenor or effect of which is to restrict his or another’s activities in any way, any consideration received in respect of the giving of the undertaking or its total or partial fulfilment shall be treated for the purposes of this section as consideration received for the disposal of the know-how.
#### Application of the 1968 Act
##### 532
The Corporation Tax Acts have effect as if sections 524 to 528 and 531, this section and section 533 were contained in the Capital Allowances Act.
#### Interpretation of sections 520 to 532
##### 533
- (1) In sections 524 to 528—
- “*income from patents*” means—any royalty or other sum paid in respect of the use of a patent; andany amount on which tax is payable for any accounting period by virtue of section 524 or 525 above or section 472(5) of, or paragraph 100 of Schedule 3 to, the Capital Allowances Act,but does not include any amount chargeable to income tax.
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*gilt-edged securities*” means any securities which—are gilt-edged securities for the purposes of the 1992 Act; orwill be such securities on the making of any order under paragraph 1 of Schedule 9 to that Act the making of which is anticipated in the prospectus under which they were issued,. . .
- “*registered*” means entered in the register of the Registrar;
- “*the Registrar*” means the Registrar of Government Stock, as defined in section 49(4).
#### Treasury directions as respects Northern Ireland securities
##### 51
- (1) The Treasury may, on the application of the Department of Finance and Personnel, as respects any securities to which this section applies, direct that the securities specified in the direction shall be issued, or shall be deemed to have been issued, subject to the condition that the interest thereon shall be paid without deduction of income tax; and in relation to any securities so specified and the interest thereon, section 50 shall have effect as if—
- (a) the securities were securities in respect of which a direction had been given by the Treasury under subsection (1) of that section;
- (b) references in that section to “*the Registrar*” were (notwithstanding subsection (7) of that section) references to the bank in the books of which the securities are registered or inscribed; and
- (c) the references in subsections (4) and (5) of that section to the Treasury were references to the Department of Finance and Personnel.
- (2) The securities to which this section applies are securities issued under section 11(1)(c) of the Exchequer and Financial Provisions Act (Northern Ireland) 1950 for money borrowed by the Department of Finance and Personnel for the purposes of making issues from the Consolidated Fund of Northern Ireland.
#### Taxation of interest on converted government securities and interest which becomes subject to deduction
##### 52
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART IV — PROVISIONS RELATING TO THE SCHEDULE D CHARGE
### CHAPTER I — SUPPLEMENTARY CHARGING PROVISIONS
#### Farming and other commercial occupation of land (except woodlands)
##### 53
- (1) All farming and market gardening in the United Kingdom shall be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits thereof shall be charged to corporation tax under Case I of Schedule D accordingly.
- (2) All the farming carried on by any particular company or partnership shall be treated as one trade for corporation tax purposes.
- (3) Subject to subsection (4) below, the occupation of land in the United Kingdom for any purpose other than farming or market gardening shall, if the land is managed on a commercial basis and with a view to the realisation of profits, be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits thereof shall be charged to corporation tax under Case I of Schedule D accordingly.
- (4) Subsection (3) above shall not apply in relation to the occupation of land which comprises woodlands or is being prepared for use for forestry purposes.
#### Woodlands managed on a commercial basis
##### 54
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Mines, quarries and other concerns
##### 55
- (1) profits arising out of land in the case of any concern specified in subsection (2) below shall be charged to corporation tax under Case I of Schedule D.
- (2) The concerns are—
- (a) mines and quarries (including gravel pits, sand pits and brickfields);
- (b) ironworks, gasworks, salt springs or works, alum mines or works (not being mines falling within the preceding paragraph) and waterworks and streams of water;
- (c) canals, inland navigation, docks and drains or levels;
- (d) fishings;
- (e) rights of markets and fairs, tolls, bridges and ferries;
- (f) railways and other ways;
- (g) other concerns of the like nature as any of the concerns specified in paragraphs (b) to (e) above.
#### Transactions in deposits with and without certificates or in debts
##### 56
- (1) Subsection (2) below applies to the following rights—
- (a) the right to receive the amount, with or without interest, stated in a certificate of deposit;
- (b) the right to receive an amount payable with interest—
- (i) in a transaction in which no certificate of deposit or security is issued, and
- (ii) which is payable by a bank or similar institution or a person regularly engaging in similar transactions;
and the right to receive that interest.
- (2) Profits or gains arising to a company from the disposal of a right to which this subsection applies or, except so far as it is a right to receive interest, from the exercise of any such right (whether by the person to whom the certificate was issued or by some other person, or, as the case may be, by the person who acquired the right in the transaction referred to in subsection (1) above or by some person acquiring it directly or indirectly from that person), shall, if not falling to be taken into account as a trading receipt, be treated as annual profits or gains chargeable to corporation tax under Case VI of Schedule D.
- (3) Subsection (2) above and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do not apply in the case of the disposal or exercise of a right to receive an amount stated in a certificate of deposit or interest on such an amount—
- (a) if the company disposing of the right acquired it before 7th March 1973;
- (b) to any profits or gains arising to a fund or scheme in the case of which provision is made by section 613(4) or 614(2) or (3) or section 186 of the Finance Act 2004 for exempting the whole or part of its income from income tax;
- (c) in so far as they are applied to charitable purposes only, to any profits or gains arising to a charity within the meaning of section 506.
- “*patent rights*” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;
- “*United Kingdom patent*” means a patent granted under the laws of the United Kingdom.
- (2) Subject to subsection (3) below, in sections 524 to 528 any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent.
- (3) If a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the right subsists, the grantor shall be treated for the purposes of sections 524 to 528 as thereby selling the whole of the rights.
- (4) Where, under sections 46 to 49 of the Patents Act 1949 , sections 55 to 59 of the Patents Act 1977 or any corresponding provisions of the law of any country outside the United Kingdom, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the Crown or the government of the country concerned, sections 524 to 528 shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.
- (5) Expenditure incurred in obtaining a right to acquire in the future patent rights as respects any invention in respect of which the patent has not yet been granted shall be deemed for all the purposes of sections 524 to 528 to be expenditure on the purchase of patent rights, and if the patent rights are subsequently acquired the expenditure shall be deemed for those purposes to have been expenditure on the purchase of those rights.
- (6) Any sum received from a person which by virtue of subsection (5) above is deemed to be expenditure incurred by him on the purchase of patent rights shall be deemed to be proceeds of a sale of patent rights.
- (7) In section 531“*know-how*” means any industrial information and techniques likely to assist in the manufacture or processing of goods or materials, or in the working of a mine, oil-well or other source of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto), or in the carrying out of any agricultural, forestry or fishing operations.
### Copyright and public lending right
#### Relief for copyright payments etc
##### 534
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where copyright sold after ten years or more
##### 535
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of royalties where owner abroad
##### 536
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Public lending right
##### 537
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Artists’ receipts
#### Relief for painters, sculptors and other artists
##### 538
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES
#### Introductory
##### 539
- (1) This Chapter shall have effect for the purposes of imposing, in the manner and to the extent therein provided, charges to corporation tax. . . in respect of gains to be treated in accordance with this Chapter as arising in connection with policies of life insurance, contracts for life annuities and capital redemption policies.
- (2) Nothing in this Chapter shall apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of insurance which constitutes, or is issued or held in connection with, a registered pension scheme; or
- (e) to any group life policy having as its sole object the provision, on the death or disability of any of the individuals insured under the policy, of a sum substantially the same as any amount then outstanding under a loan made by a credit union to that individual; or
- (f) to any group life policy with respect to which the conditions in section 539A are satisfied (“*an excepted group life policy*”).
- (3) In this Chapter—
- “*assignment*”, in relation to Scotland, means an assignation;
- “*capital redemption policy*” means any contract effected in the course of a capital redemption business as defined in section 458(3);
- “*charitable trust*” means any trust established for charitable purposes only;
- “*credit union*” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;
- “*excepted group life policy*” shall be construed in accordance with subsection (2)(f) above;
- “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act);
- “*group life policy*” means a policy of life insurance whose terms provide—for the payment of benefits on the death of more than one individual; andfor those benefits to be paid on the death of each of those individuals;
- “*life annuity*” means—any annuity to which section 656 (as read with section 657) applies, orany annuity that—is a purchased life annuity for the purposes of Chapter 7 of Part 4 of ITTOIA 2005 (see section 423 of that Act), andis not specified in section 718 of that Act (annuities the payments under which are not within section 717 of that Act (exemption for part of purchased life annuity payments)); and
- “*non-charitable trust*” means any trust other than a charitable trust.
- (3A) References in this Chapter to assignment of the whole of, or assignment of part of or a share in, the rights conferred by a policy or contract shall, in any case where section 546A applies, be construed in accordance with that section.
- (4) For the purposes of this Chapter the falling due of a sum payable in pursuance of a right conferred by a policy or contract to participate in profits shall be treated as the surrender of rights conferred by the policy or contract.
- (5) This Chapter shall have effect only as respects policies of life insurance issued in respect of insurances made after 19th March 1968, contracts for life annuities entered into after that date, and capital redemption policies effected after that date.
- (6) A policy of life insurance issued in respect of an insurance made on or before 19th March 1968 shall be treated for the purposes of subsection (5) above and the following provisions of this Chapter as issued in respect of one made after that date if it is varied after that date so as to increase the benefits secured or to extend the term of the insurance.
- (7) A variation effected before the end of the year 1968 shall be disregarded for the purposes of subsection (6) above if its only effect was to bring into conformity with paragraph 2 of Schedule 9 to the Finance Act 1968 (which is re-enacted, as amended, by paragraph 2 of Schedule 15 to this Act) a policy previously conforming therewith except as respects the amount guaranteed on death, and no increase was made in the premiums payable under the policy.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) A policy of life insurance issued in respect of an insurance made before 14th March 1989 shall be treated for the purposes of sections 540(5A), 547(8) and 548(3A) as issued in respect of one made on or after that date if it is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and any exercise of rights conferred by the policy shall be regarded for this purpose as a variation.
#### Life policies: chargeable events
##### 540
- (1) Subject to the provisions of this section, in this Chapter “*chargeable event*” means, in relation to a policy of life insurance—
- (a) if it is not a qualifying policy, any of the following—
- (i) any death giving rise to benefits under the policy;
- (ii) the maturity of the policy;
- (iii) the surrender in whole of the rights conferred by the policy;
- (iv) the assignment for money or money’s worth of those rights; and
- (v) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section) except, if it ends with another chargeable event, the final year; and
- (b) if it is a qualifying policy (whether or not the premiums thereunder are eligible for relief under section 266), any of the above events, but—
- (i) in the case of death or maturity, only if the policy is converted into a paid-up policy before the expiry of ten years from the making of the insurance, or, if sooner, of three-quarters of the term for which the policy is to run if not ended by death or disability;
- (ii) in the case of a surrender or assignment or (subject to section 546B(3)(a)) such an excess as is mentioned in paragraph (a)(v) above, only if it is effected or occurs within that time, or the policy has been converted into a paid-up policy within that time.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Except as provided by section 544, no event is a chargeable event in relation to a policy issued in respect of an insurance made before 26th June 1982 if the rights conferred by the policy have at any time before that date and before the event been assigned for money or money’s worth and are not at the time of the event held by the original beneficial owner.
- (4) No account shall be taken for the purposes of subsections (1) and (3) above of any assignment effected by way of security for a debt, or on the discharge of a debt secured by the rights or share concerned, or of any assignment between spouses living together or between civil partners living together.
- (5) Where subsection (1)(b) applies to a policy which has been varied so as to increase the premiums payable thereunder, it shall so apply as if the references in subsection (1)(b)(i) to the making of the insurance and the term of the policy were references respectively to the taking effect of the variation and the term of the policy as from the variation.
- (5A) Sub-paragraphs (i) and (ii) of subsection (1)(b) above shall not apply inrelation to a policy issued in respect of an insurance made on or after 14th March 1989 if, immediately before the happening of the event, the rights conferred by the policy were in the beneficial ownership of a company, or were held on trusts created, or as security for a debt owed, by a company.
- (6) This section has effect subject to paragraph 20 of Schedule 15.
#### Life policies: computation of gain
##### 541
- (1) On the happening of a chargeable event in relation to any policy of life insurance, there shall be treated as a gain arising in connection with the policy—
- (a) if the event is a death, the excess (if any) of the surrender value of the policy immediately before the death, plus the amount or value of any relevant capital payments, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (b) if the event is the maturity of the policy, or the surrender in whole of the rights thereby conferred, the excess (if any) of the amount or value of the sum payable or other benefits arising by reason of the event, plus the amount or value of any relevant capital payments, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (c) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or , subject to subsection (3A) below, of any previously assigned share in the rights conferred by the policy, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (d) if the event is the occurrence of such an excess as is mentioned in section 540(1)(a)(v), the amount of the excess (subject to section 546B(3)(a)) .
- (2) Where, in a case falling within subsection (1)(b) above, a right to periodical payments arises by reason of the event, there shall be treated as payable by reason thereof an amount equal to the capital value of those payments at the time the right arises.
- (3) Where, in a case falling within subsection (1)(c) above, the assignment is between persons who are connected with each other within the meaning of section 839, the assignment shall be deemed to have been made for a consideration equal to the market value of the rights or share assigned.
- (3A) he amount or value of such a previously assigned share as is mentioned in paragraph (c) of subsection (1) above falls to be brought into account for the purposes of that paragraph only where that share was so assigned—
- (a) in a year (as defined in section 546(4)) beginning on or before 5th April 2001; or
- (b) for money or money’s worth in a year (as so defined) beginning on or after 6th April 2001.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) Where, immediately before the happening of the chargeable event, the rights conferred by a qualifying endowment policy are held as security for a debt owed by a company, then, if—
- (a) the conditions in subsection (4B) below are satisfied,
- (b) the amount of the debt exceeds the total amount previously paid under the policy by way of premiums, and
- (c) the company makes a claim for the purpose within two years after the end of the accounting period in which the chargeable event happens,
this section shall have effect as if the references in subsection (1)(a) and (b) to that total amount were references to the amount of the debt.
- (4B) The conditions referred to in subsection (4A) above are—
- (a) that, throughout the period beginning with the making of the insurance and ending immediately before the happening of the chargeable event, the rights conferred by the policy have been held as security for a debt owed by the company;
- (b) that the capital sum payable under the policy in the event of death during the term of the policy is not less than the amount of the debt when the insurance was made;
- (c) that any sum payable under the policy by reason of the chargeable event is applied in repayment of the debt (except to the extent that its amount exceeds the amount of debt);
- (d) that the debt was incurred to defray money applied—
- (i) in purchasing an estate or interest in land to be occupied by the company for the purposes of a trade carried on by it, or
- (ii) for the purpose of the construction, extension or improvement (but not the repair or maintenance) of buildings which are or are to be so occupied.
- (4C) If the amount of the debt is higher immediately before the happening of the chargeable event than it was at some earlier time during the period mentioned in subsection (4B)(a) above, the amount to be taken into account for the purposes of subsection (1) above shall be the lowest amount at which it stood during that period.
- (4D) If during the period mentioned in subsection (4B)(a) above the company incurs a debt by borrowing in order to repay another debt, subsections (4B) and (4C) above shall have effect as if, where appropriate, references to either debt included references to the other.
- (5) In this section—
- (a) “*relevant capital payments*” means, in relation to any policy, any sum or other benefit of a capital nature, other than one attributable to a person’s disability, paid or conferred under the policy before the happening of the chargeable event; and
- (b) references in this subsection and (in relation to premiums) in subsection (1) above to “the policy” include references to any related policy, that is to say, to any policy in relation to which the policy is a new policy within the meaning of paragraph 17 of Schedule 15, and any policy in relation to which that policy is such a policy, and so on; and
- (c) “*qualifying endowment policy*” means a policy which is a qualifying policy by virtue of paragraph 2 of Schedule 15;
and the provisions of this section are subject to paragraph 20 of Schedule 15.
- (6) There shall be disregarded for the purposes of this section any amount which was treated under section 72(9) of the Finance Act 1984 as an additional premium.
#### Life annuity contracts: chargeable events
##### 542
- (1) Subject to subsections (2) and (3) below, in this Chapter “*chargeable event*” means, in relation to any contract for a life annuity—
- (a) the surrender in whole of the rights conferred by the contract, or
- (b) the assignment for money or money’s worth of those rights, or
- (c) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section) except, if it ends with another chargeable event, the final year.
- (2) Where the terms of a contract provide for the payment of a capital sum as an alternative, in whole or in part, to payments by way of annuity, the taking of the capital sum shall be treated for the purposes of this section and section 543 as a surrender in whole or in part of the rights conferred by the contract, and where the terms of the contract provide for the payment of a capital sum on death and the contract was made on or after 10th December 1974, the death shall be treated for those purposes as a surrender in whole of the rights conferred by the contract.
- (3) Except as provided by section 544, an event referred to in subsection (1) above or section 546C(7)(a) is not a chargeable event in relation to any contract made before 26th June 1982 if the rights conferred by the contract have at any time before that date and before the event been assigned for money or money’s worth and are not at the time of the event held by the original beneficial owner.
- (4) Subsection (4) of section 540 shall, with any necessary modifications, apply for the purposes of this section as it applies for the purposes of that section.
#### Life annuity contracts: computation of gain
##### 543
- (1) On the happening of a chargeable event in relation to any contract for a life annuity, there shall be treated as a gain arising in connection with the contract—
- (a) if the event is the surrender in whole of the rights conferred by the contract, the excess (if any) of the amount payable by reason of the event plus the amount or value of any relevant capital payments over the sum of the following—
- (i) the total amount previously paid under the contract, whether by way of premiums or as lump sum consideration, reduced, if before the happening of the event any payments have been made on account of the annuity, by so much of those payments as is determined to be the capital element in them under section 656 of this Act or is exempt under section 717 of ITTOIA 2005; and
- (ii) the total amount treated as a gain by virtue of paragraph (c) below or section 546C(7)(b) on the previous happening of chargeable events;
- (b) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or , subject to subsection (2A) below, of any previously assigned share in the rights conferred by the contract, over the sum of the following—
- (i) the amount specified paragraph (a)(i) above; and
- (ii) any amount treated as a gain by virtue of paragraph (c) below or section 546C(7)(b) on the previous happenings of chargeable events;
- (c) if the event is the occurrence of such an excess as is mentioned in section 542(1), the amount of the excess (subject to section 546B(3)(a)).
- (2) Subsection (3) of section 541 shall apply for the purposes of subsection (1) above as it applies for the purposes of subsection (1)(c) of that section, and subsection (4) of that section shall apply for the purposes of this section with the substitution of references to the contract for references to the policy.
- (2A) The amount or value of such a previously assigned share as is mentioned in paragraph (b) of subsection (1) above falls to be brought into account for the purposes of that paragraph only where that share was so assigned—
- (a) in a year (as defined in section 546(4)) beginning on or before 5th April 2001; or
- (b) for money or money’s worth in a year (as so defined) beginning on or after 6th April 2001.
- (3) In this section “*relevant capital payments*” means, in relation to any contract, any sum or other benefit of a capital nature paid or conferred under the contract before the happening of the chargeable event.
#### Second and subsequent assignment of life policies and contracts
##### 544
- (1) In this section “*assigned policy*” means a policy of life assurance—
- (a) which was issued in respect of an insurance made before 26th June 1982; and
- (b) the rights conferred by which have been assigned for money or money’s worth before that date; and
- (c) in relation to which an event occurring on or after that date would not, apart from this section, be a chargeable event.
- (2) In this section “*assigned contract*” means a contract for a life annuity—
- (a) which was made before 26th June 1982; and
- (b) the rights conferred by which have been assigned for money or money’s worth before that date; and
- (c) in relation to which an event occurring on or after that date would not, apart from this section, be a chargeable event.
- (3) In any case where after 23rd August 1982—
- (a) the rights conferred by an assigned policy or, as the case may be, an assigned contract are again assigned for money or money’s worth; or
- (b) a payment is made by way of premium or as lump sum consideration under the policy or contract; or
- (c) subject to subsections (5) and (7) below, a sum is lent by or by arrangement with the body issuing the policy or, as the case may be, the body with which the contract was made;
section 540(3) shall cease to apply to the policy or section 542(3) shall cease to apply to the contract, as the case may be.
- (4) No account shall be taken for the purposes of subsection (3)(a) above of any assignment effected by way of security for a debt, or on the discharge of a debt secured by the rights concerned, or of an assignment between spouses living together or between civil partners living together.
- (5) Subsection (3)(c) above does not apply unless—
- (a) the policy was issued in respect of an insurance made after 26th March 1974 or, as the case may be, the contract was entered into after that date; and
- (b) the sum concerned is lent to or at the direction of the individual who, in accordance with subsection (6) below, is at the time of the loan the chargeable individual.
- (6) The individual who is at any time the chargeable individual for the purposes of subsection (5)(b) above shall be determined as follows—
- (a) if at the time the rights conferred by the policy or contract are vested in an individual as beneficial owner or are held on trusts created by an individual (including such trusts as are referred to in section 547A(17)), that individual is the chargeable individual; and
- (b) if at that time those rights are held as security for a debt owed by an individual, that individual is the chargeable individual.
- (7) Subsection (3)(c) above does not apply in relation to a policy if—
- (a) it is a qualifying policy; and
- (b) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling-house to be used as his only or main residence.
- (8) Where section 540(3) or 542(3) ceases to apply to an assigned policy or assigned contract by virtue of paragraph (c) of subsection (3) above, the lending of the sum concerned shall be regarded for the purposes of the Income Tax Acts (other than that paragraph) as taking place immediately after the time at which section 540(3) or, as the case may be, 542(3) ceases so to apply.
#### Capital redemption policies
##### 545
- (1) Subject to subsection (2) below, in this Chapter “*chargeable event*” means, in relation to a capital redemption policy, any of the following—
- (a) the maturity of the policy, except where the sums payable on maturity are annual payments chargeable —
- (i) to corporation tax under Schedule D,
- (ii) to income tax under Part 9 of ITEPA 2003 (pension income) because section 609, 610 or 611 of that Act applies to them (certain employment related annuities), or
- (iii) to income tax under Chapter 7 of Part 4 (purchased life annuity payments) or Chapter 7 of Part 5 (annual payments not otherwise charged) of ITTOIA 2005;
- (b) the surrender in whole of the rights conferred by the policy;
- (c) the assignment for money or money’s worth of those rights; and
- (d) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section), except, if it ends with another chargeable event, the final year.
- (2) Subsection (4) of section 540 shall apply for the purposes of this section as it applies for purposes of that section.
- (3) The provisions of section 541, except subsection (3), shall, so far as appropriate and subject to subsection (4) below, apply to capital redemption policies as they apply to policies of life assurance.
- (4) Where a chargeable event happens in relation to a capital redemption policy which has previously been assigned for money or money’s worth, section 541 shall have effect in relation thereto as if, for the references to the total amount previously paid under the policy by way of premiums, there were substituted references to the amount or value of the consideration given for the last such assignment, plus the total amount of the premiums paid under the policy since that assignment.
#### Calculation of certain amounts for purposes of sections 540, 542 and 545
##### 546
- (1) For the purposes of sections 540, 542 and 545, there shall be calculated as at the end of each year—
- (a) the value, as at the time of surrender or assignment, of any part of or share in the rights conferred by the policy or contract which—
- (i) has been assigned for money or money’s worth, or surrendered, during the period ending with the end of that year and beginning with the commencement of the first year which falls wholly after 13th March 1975; or
- (ii) has been assigned otherwise than for money or money’s worth during that period but in a year beginning on or before 5th April 2001; and
- (b) the appropriate portion of any payment made up to the end of that period by way of premium or as a lump sum consideration;
and the appropriate portion of any payment shall be one-twentieth for the year in which it is made, increased by a further one-twentieth for each of the subsequent years, up to a maximum of nineteen, but excluding therefrom any such one-twentieth for any year before that first year.
- (2) The reckonable aggregate value referred to in those sections shall be—
- (a) the sum of the values calculated under subsection (1) above; less
- (b) the sum of the values so calculated for a previous year and brought into account on the previous happening of a chargeable event.
- (3) The allowable aggregate amount referred to in those sections shall be—
- (a) the aggregate of the appropriate portions calculated under subsection (1) above; less
- (b) the aggregate of the appropriate portions so calculated for a previous year and brought into account on the previous happening of a chargeable event.
- (4) In this section “*year*” means the 12 months beginning with the making of the insurance or contract and any subsequent period of 12 months; except that—
- (a) death, the maturity of the policy or the surrender of the rights conferred by the policy or contract shall be treated as ending the final year; and
- (b) if the final year would by virtue of paragraph (a) above begin and end in the same year of assessment, the final year and the year preceding it shall together be one year.
- (5) There shall be disregarded for the purposes of this section any amount which was treated under section 72(9) of the Finance Act 1984 as an additional premium.
- (6) Where any part of or share in the rights conferred by a policy or contract is assigned, the value of the part or share, as at the time of the assignment, shall be taken for the purposes of this section to be its surrender value at that time.
#### Method of charging gain to tax
##### 547
- (1) Where under section 541, 543 , 545 or 546C a gain is to be treated as arising in connection with any policy or contract—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if, immediately before the happening of the chargeable event in question, the rights conferred by the policy or contract were in the beneficial ownership of a company, or were held on non-charitable trusts created, or as security for a debt owed, by a company, the amount of the gain shall be deemed to form part of the company’s income (chargeable under Case VI of Schedule D) for the accounting period in which the event happened;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (cc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) In its application in relation to a gain which is treated as arising by virtue of section 546C(7)(b), subsection (1) above is subject to section 546C(8).
- (2) Nothing in subsection (1) above shall apply to any amount which is chargeable to tax apart from that subsection.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) References in subsection (1) above to the rights conferred by a policy or contract are, in the case of an assignment or surrender of only a part of or share in any rights, references to that part or share.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Subsection (1)(b) above shall not have effect as respects—
- (a) a policy of life insurance issued in respect of an insurance made before 14th March 1989,
- (b) a contract for a life annuity made before that date, or
- (c) a capital redemption policy issued in respect of an insurance made before that date, or issued by a company resident in the United Kingdom in respect of an insurance made on or after that date.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed surrender of certain loans
##### 548
- (1) Where—
- (a) a gain arising in connection with a policy or contract would be—
- (i) treated as forming part of the income of a company under section 547(1)(b), or
- (ii) a gain for which an individual is, or any trustees are, liable to tax under Chapter 9 of Part 4 of ITTOIA 2005; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 or the contract was made after that date; and
- (c) any sum is at any time after the making of the insurance or contract lent to or at the direction of that individual or companyor those trustees by or by arrangement with the body issuing the policy or, as the case may be, the body with which the contract was made;
then, subject to subsections (3) and (3A) below, the same results shall follow under this Chapter as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy or contract and the sum had been paid as consideration for the surrender.
- (2) If the whole or any part of the sum is repaid the repayment shall be treated, for the purpose of computing any gain arising on the happening, at the end of the final year, of a chargeable event, as a payment of a premium or lump sum consideration.
- (3) Subsections (1) and (2) above do not apply in relation—
- (a) to a policy if it is a qualifying policy and interest at a commercial rate is payable on the sum lent;
- (b) to a contract if and to the extent that interest on the sum lent is eligible for relief under section 353 by virtue of section 365.
- (3A) Subsections (1) and (2) do not apply where the rights conferred by thepolicy or contract are in the beneficial ownership of a company, or are heldon trusts created, or as security for a debt owed, by a company, if the policywas issued in respect of an insurance made before 14th March 1989 or thecontract was made before that date.
- (4) In this section “*final year*” has the same meaning as in section 546.
#### Certain deficiencies allowable as deductions
##### 549
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where gain charged at a higher rate
##### 550
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Right of individual to recover tax from trustees
##### 551
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: duty of insurers
##### 552
- (1) Where a chargeable event . . . has happened in relation to any policy or contract, the body by or with whom the policy or contract was issued, entered into or effected shall—
- (a) unless satisfied that no gain is to be treated as arising by reason of the event, deliver to the appropriate policy holder before the end of the relevant three month period a certificate specifying the information described in subsection (5) below; and
- (b) if the condition in paragraph (a) or (b) of subsection (2) below is satisfied, deliver to the inspector before the end of the relevant three month period a certificate specifying the information described in subsection (5) below together with the name and address of the appropriate policy holder.
- (2) For the purposes of this section—
- (a) the condition in this paragraph is that the event is an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract; or
- (b) the condition in this paragraph is that the amount of the gain, or the aggregate amount of the gain and any gains connected with it, exceeds one half of the basic rate limit for the relevant year of assessment.
- (3) If, in the case of every certificate which a body delivers under subsection (1)(a) above which relates to a gain attributable to a year of assessment (or, where the appropriate policy holder is a company, the corresponding financial year), the body also delivers to the inspector—
- (a) before the end of the relevant three month period for the purposes of subsection (1)(b) above,
- (b) by a means prescribed by the Board for the purposes of this subsection under section 552ZA(5), and
- (c) in a form so prescribed in the case of that means,
a certificate specifying the same information as the certificate under subsection (1)(a) together with the name and address of the appropriate policy holder, the body shall be taken to have complied with the requirements of subsection (1)(b) above in relation to that year of assessment, and the corresponding financial year, so far as relating to the chargeable events to which the certificates relate.
- (4) Where a certificate is not required to be delivered under subsection (1)(b) above in the case of any chargeable event—
- (a) the inspector may by notice require the body to deliver to him a copy of any certificate that the body was required to deliver under subsection (1)(a) above which relates to the chargeable event; and
- (b) it shall be the duty of the body to deliver such a copy within 30 days of receipt of the notice.
- (5) The information to be given to the appropriate policy holder pursuant to subsection (1)(a) above or the inspector pursuant to subsection (1)(b) above is—
- (a) any unique identifying designation given to the policy or contract;
- (b) the nature of the chargeable event and—
- (i) the date on which it happened; and
- (ii) if it is a chargeable event by virtue of section 546C(7)(a) of this Act and section 514(1) of ITTOIA 2005 (chargeable events where transaction-related calculations show gains), the date on which the year and the insurance year end;
- (c) if the event is the assignment of all the rights conferred by the policy or contract, such of the following as may be required for computing the amount of the gain to be treated as arising by virtue of this Chapter and Chapter 9 of Part 4 of ITTOIA 2005—
- (i) the amount or value of any relevant capital payments and the amount or value of any capital sums of a kind referred to in section 492(1)(b) to (e) of ITTOIA 2005;
- (ii) the amounts previously paid under the policy or contract by way of premiums or otherwise by way of consideration for an annuity;
- (iii) the capital element in any payment previously made on account of an annuity determined in accordance with section 656 and the amount of so much of any payment previously made on account of an annuity as is exempt under section 717 of ITTOIA 2005;
- (iv) the value of any previously assigned parts of or shares in the rights conferred by the policy or contract;
- (v) the total of the amounts of gains treated as arising on previous chargeable events by reason, or in consequence, of the occurrence of a section 546 excess at the end of a year and the total of the amounts of gains treated as arising on previous chargeable events within section 509(1) or 514(1) of ITTOIA 2005;
- (d) except where paragraph (c) above applies, the amount of the gain treated as arising by reason of the event;
- (e) the number of years relevant for computing the annual equivalent of the amount of the gain for the purposes of subsection (1) of section 536 of ITTOIA 2005 (top slicing relieved liability: one chargeable event), apart from subsections (6) and (8) of that section;
- (f) on the assumption that section 465 of ITTOIA 2005 (person liable: individuals) has effect in relation to the gain —
- (i) whether an individual would fall to be treated as having paid income tax at the savings rate on the amount of the gain in accordance with section 530 of that Act; and
- (ii) if so, except in a case where paragraph (c) above applies, the amount of such tax that would fall to be so treated as paid.
- (6) For the purposes of subsection (1)(a) above, the relevant three month period is whichever of the following periods ends the latest—
- (a) the period of three months following the happening of the chargeable event;
- (b) if the event is a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months following the end of the year (and the insurance year) in which the event happens;
- (c) if the event is a death or an assignment of the whole of the rights or a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months beginning with receipt of written notification of the event.
- (7) For the purposes of subsection (1)(b) above, the relevant three month period is whichever of the following periods ends the latest—
- (a) the period of three months following the end of the year of assessment, or, where the policy holder is a company, the financial year, in which the event happened;
- (b) if the event is a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months following the end of the year (and the insurance year) in which the event happens;
- (c) if the event is a death or an assignment, the period of three months beginning with receipt of written notification of the event;
- (d) if a certificate under subsection (1)(b) above would not be required in respect of the event apart from the happening of another event, and that other event is one of those mentioned in paragraph (c) above, the period of three months beginning with receipt of written notification of that other event.
- (8) For the purposes of this section the cases where a gain is connected with another gain are those cases where—
- (a) both gains arise in connection with policies or contracts containing obligations which, immediately before the chargeable event, were obligations of the same body;
- (b) the policy holder of those policies or contracts is the same;
- (c) both gains are attributable to the same year of assessment or, where the policy holder is a company, to the same financial year;
- (d) the terms of the policies or contracts are the same, apart from any difference in their maturity dates; and
- (e) the policies or contracts were issued in respect of insurances made, or were entered into or effected, on the same date.
- (9) For the purposes of this section, the year of assessment or financial year to which a gain is attributable is—
- (a) in the case of a gain treated as arising by virtue of section 546C(7)(b) of this Act (and section 514(1) of ITTOIA 2005), the year of assessment or financial year which includes the end of the year as at which the section 546 excess in question occurs (and the end of the insurance year mentioned in section 514(3) and (4) of ITTOIA 2005); or
- (b) in any other case, the year of assessment or financial year in which happens the chargeable event by reason of which the gain is treated as arising.
- (10) In this section—
- “*amount*”, in relation to any gain, means the amount of the gain apart from section 553(3) of this Act and section 528 of ITTOIA 2005;
- “*appropriate policy holder*” means—in relation to an assignment of part of or a share in the rights conferred by a policy or contract, any person who is both—the policy holder, or one of the policy holders, immediately before the assignment; andthe assignor or one of the assignors; andin relation to any other chargeable event, the person who is the policy holder immediately before the happening of the event;
- “*chargeable event*” means an event which is a chargeable event within the meaning of this Chapter and Chapter 9 of Part 4 of ITTOIA 2005;
- “*financial year*” means a period of 12 months beginning with 1st April;
- “*the relevant year of assessment*”, in the case of any gain, means—the year of assessment to which the gain is attributable, orif the gain arises to a company, the year of assessment which corresponds to the financial year to which the gain is attributable;
- “*section 546 excess*” has the meaning given in section 546B(4);
- “*year*”, in relation to any policy or contract, has the meaning given by section 546(4).
- (11) For the purposes of this section a year of assessment and a financial year correspond to each other if the financial year ends with 31st March in the year of assessment.
- (12) This section is supplemented by section 552ZA.
#### Non-resident policies and off-shore capital redemption policies
##### 553
- (1) If, in the case of a substitution of policies falling within paragraph 25(1) or (3) of Schedule 15, the new policy is a qualifying policy, section 540 shall have effect with the following modifications—
- (a) the surrender of the rights conferred by the old policy shall not be a chargeable event (within the meaning of that section); and
- (b) the new policy shall be treated as having been issued in respect of an insurance made on the day referred to in paragraph 26 of that Schedule.
- (2) If at any time the conditions in paragraph 24(3) of Schedule 15 to this Act are not fulfilled with respect to a new non-resident policy which has previously become a qualifying policy, then, from that time onwards, this Chapter shall apply in relation to the policy as if it were not a qualifying policy.
- (3) Subject to subsections (5) and (5A) below, on the happening of a chargeable event in relation to a new non-resident policy or a new offshore capital redemption policy, the amount which, apart from this subsection, would by virtue of section 541 or 546C(7)(b) be treated as a gain arising in connection with the policy shall be reduced by multiplying it by the fraction—
$$AB$where—$
A is the number of days on which the policy holder was resident in the United Kingdom in the period for which the policy has run before the happening of the chargeable event; and
B is the number of days in that period.
- (4) The number of days in the period referred to in subsection (3) shall be calculated, where appropriate, from the issue of the earliest related policy, that is, any policy in relation to which the policy is a new policy within the meaning of paragraph 17 of Schedule 15, any policy in relation to which that policy is such a policy, and so on.
- (5) If, on the happening of the chargeable event referred to in subsection (3) above or at any time during the period referred to in that subsection, the policy is or was held by a trustee resident outside the United Kingdom or by two or more trustees any of whom is or was so resident, no reduction shall be made under that subsection unless—
- (a) the policy was issued in respect of an insurance made on or before 19th March 1985; and
- (b) on that date the policy was held by a trustee who was so resident or, as the case may be, by two or more trustees any of whom was so resident.
- (5A) If, on the happening of the chargeable event referred to in subsection (3) above or at any time during the period referred to in that subsection, the policy is or was held by a foreign institution, no reduction shall be made under that subsection unless—
- (a) the policy was issued in respect of an insurance made on or before 16th March 1998; and
- (b) on that date the policy was held by a foreign institution.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) In this section—
- “*chargeable event*” has, subject to subsection (1) above, the meaning given by section 540 or, as the case may be, 545 or 546C(7)(a);
- “*foreign institution*” has the same meaning as in section 547A;
- “*new non-resident policy*” has the meaning given by paragraph 24 of Schedule 15; and
- “*new offshore capital redemption policy*” means a capital redemption policy, as defined in section 539(3), which—is issued in respect of a contract made after 22nd February 1984; andis so issued by a company resident outside the United Kingdom.
#### Borrowings on life policies to be treated as income in certain cases
##### 554
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — ENTERTAINERS AND SPORTSMEN
#### Payment of tax
##### 555
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Activity treated as trade etc. and attribution of income
##### 556
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) If—
- (a) under section 13(5) of ITTOIA 2005 a payment made to a person is treated as made instead to the performer, and
- (b) the person to whom the payment is actually made is a company within the charge to corporation tax,
the company is treated for corporation tax purposes as if the payment had not been made to it.
- (3) Regulations may provide—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) that any liability to corporation tax which would, apart from subsection (2) above, arise in relation to the payment shall not arise or shall arise only to a prescribed extent.
- (4) References in this section to a payment include references to a transfer.
- (4A) In this section “*payment*” and “*transfer*” have the same meanings as in section 13 of ITTOIA 2005.
- (5) . . . Subsections (2) and (3) above shall not apply in such circumstances as may be prescribed.
#### Charge on profits or gains
##### 557
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions
##### 558
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Regulations may make provision generally for giving effect to this Chapter, and may make different provision for different cases or descriptions of case.
- (6) In this Chapter—
- “*regulations*” means regulations made by the Treasury; and
- “*prescribed*” means prescribed by regulations.
### CHAPTER IV — SUB-CONTRACTORS IN THE CONSTRUCTION INDUSTRY
#### Deductions on account of tax etc. from payments to certain sub-contractors
##### 559
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons who are sub-contractors or contractors for purposes of Chapter IV
##### 560
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from section 559
##### 561
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions to be satisfied by individuals
##### 562
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions to be satisfied by partners who are individuals
##### 563
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions to be satisfied by firms
##### 564
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions to be satisfied by companies
##### 565
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### General powers to make regulations under Chapter IV
##### 566
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “construction operations”
##### 567
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — SCHEMES FOR RATIONALIZING INDUSTRY
#### Deductions from profits of contributions paid under certified schemes
##### 568
- (1) Notwithstanding anything contained in section 74 of this Act or section 33 of ITTOIA 2005 but subject to the following provisions of this Chapter, where a person pays, wholly and exclusively for the purposes of a trade in respect of which he is chargeable under Case I of Schedule D, or under Part 2 of ITTOIA 2005, a contribution in furtherance of a scheme which is for the time being certified by the Secretary of State under this section, the contribution shall, in so far as it is paid in furtherance of the primary object of the scheme, be allowed to be deducted as an expense in computing the profits of that trade.
- (2) The Secretary of State shall certify a scheme under this section if he is satisfied—
- (a) that the primary object of the scheme is the elimination of redundant works or machinery or plant from use in an industry in the United Kingdom; and
- (b) that the scheme is in the national interest and in the interests of that industry as a whole; and
- (c) that such number of persons engaged in that industry as are substantially representative of the industry are liable to pay contributions in furtherance of the primary object of the scheme by agreement between them and the body of persons carrying out the scheme.
- (3) The Secretary of State shall cancel any certificate granted under this section if he ceases to be satisfied as to any of the matters referred to in subsection (2) above.
- (4) The Secretary of State may at any time require the body of persons carrying out a scheme certified under this section to produce any books or documents of whatever nature relating to the scheme and, if the requirement is not complied with, he may cancel the certificate.
- (5) In this section and in section 569 “*contribution*”, in relation to a scheme, does not include a sum paid by a person by way of loan or subscription of share capital, or in consideration of the transfer of assets to him, or by way of a penalty for contravening or failing to comply with the scheme.
#### Repayment of contributions
##### 569
- (1) In the event of the repayment, whether directly or by way of distribution of assets on a winding up or otherwise, of a contribution or any part of a contribution which has been allowed to be deducted under section 568, the deduction of the contribution, or so much of it as has been repaid, shall be deemed to be an unauthorised deduction in respect of which an assessment shall be made, and, notwithstanding the provisions of the Tax Acts requiring assessments to be made within six years after the end of the chargeable period to which they relate, any such assessment and any consequential assessment may be made at any time within three years after the end of the chargeable period in which the repayment was made.
- (2) For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on.
#### Payments under certified schemes which are not repayments of contributions
##### 570
- (1) Subject to the provisions of this section, where, under any scheme which is for the time being certified or has at any time been certified by the Secretary of State under section 568, any payment (not being a payment made by way of repayment of contributions) is made to a person carrying on a trade to which the scheme relates, that payment shall be treated for the purposes of the Tax Acts as a trading receipt of the trade, and shall accordingly be taken into account in computing the profits of the trade for those purposes.
- (2) Where . . . the payments which have been made under such a scheme in respect of a trade (not being payments made by way of repayment of contributions) have been made wholly or partly in respect of damage in respect of which no relief may be given under the Tax Acts, and a claim is made to that effect, then, subject to and in accordance with the provisions of Schedule 21—
- (a) relief shall be given in respect of those payments by reducing the amounts which are to be treated as trading receipts of the trade under subsection (1) above; but
- (b) where such relief is given, section 568 shall, in relation to contributions subsequently paid under the scheme in respect of the trade, have effect subject to the modifications specified in Part III of that Schedule,
and paragraph 6 of that Schedule applies for the purposes of this subsection as it applies for the purposes of that Schedule.
- (3) The provisions of this section and Schedule 21 shall apply in relation to any payment made to a person who has ceased to carry on a trade to which any such scheme as is mentioned in subsection (1) above relates as they apply in relation to payments made to a person carrying on such a trade, subject to the modification that so much of that payment as falls to be treated as a trading receipt by virtue of those provisions shall be deemed for the purposes of those provisions to have been made to him on the last day on which he was engaged in carrying on the trade.
- (4) In determining for the purposes of this section and of Schedule 21—
- (a) whether any trade has ceased to be carried on; or
- (b) whether any contribution is paid in respect of a trade in respect of which a payment has been made; or
- (c) whether any payment is made in respect of a trade in respect of which a contribution has been paid,
no regard shall be had to any event which, by virtue of section 337(1) above or section 18 of ITTOIA 2005 (companies beginning or ceasing to carry on trade), is to be treated as effecting a discontinuance of a trade.
#### Cancellation of certificates
##### 571
- (1) Where any certificate granted with respect to a scheme under section 568 is cancelled by the Secretary of State, and any deductible contributions paid in furtherance of the scheme have not been repaid at the expiration of one year from the cancellation, the body of persons carrying out the scheme shall, for the chargeable period in which that year expires, be charged to tax (in the case of corporation tax, under Case VI of Schedule D) upon the aggregate amount of the deductible contributions which have not been repaid at that time.
- (1A) An amount charged to income tax under subsection (1) above is treated for income tax purposes as an amount of income.
- (2) The charge to tax under subsection (1) above shall not be made if the total amount of any contributions, other than deductible contributions, which have been paid under the scheme and have not been repaid before that time is greater than the available resources of the scheme, and shall not in any case be made upon an amount greater than the excess, if any, of those resources over that total amount.
- (3) In subsection (2) above “*the available resources*”, in relation to any scheme, means a sum representing the total funds held for the purposes of the scheme at the expiration of one year from the cancellation of the certificate plus a sum representing any funds held for the purposes of the scheme which, during that year, have been applied otherwise than in accordance with the provisions of the scheme as in force when the certificate was granted.
- (4) Where the body of persons carrying out a scheme are charged to tax by virtue of subsection (1) above, and, after the expiration of one year from the cancellation of the certificate, any deductible contribution paid in furtherance of the scheme is repaid, the amount upon which the charge is made shall on the making of a claim be reduced by the amount repaid, and all such repayments of tax shall be made as are necessary to give effect to the provisions of this subsection.
- (5) In this section “*contribution*” includes a part of a contribution, and “*deductible contribution*” means a contribution allowed to be deducted under section 568, any reduction under Part III of Schedule 21 being left out of account.
- (6) For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on.
#### Application to statutory redundancy schemes
##### 572
- (1) Sections 569 to 571 and Schedule 21 shall, subject to the adaptations specified in subsection (2) below, apply in relation to a statutory redundancy scheme as they apply in relation to a scheme certified under section 568.
- (2) The adaptations referred to above are as follows, that is to say—
- (a) for any reference to a contribution allowed to be deducted under section 568 there shall be substituted a reference to a contribution allowed to be deducted under any provision of the Tax Acts other than that section;
- (b) any provision that section 568 shall, in relation to contributions, have effect subject to modifications, shall be construed as a provision that so much of any provision of the Tax Acts other than that section as authorises the deduction of contributions shall, in relation to the contributions in question, have effect subject to the modifications in question;
- (c) for any reference to the cancellation of a certificate with respect to a scheme there shall be substituted a reference to the scheme ceasing to have effect; and
- (d) for any reference to the provisions of the scheme as in force when the certificate was granted there shall be substituted a reference to the provisions of the scheme as in force when the contributions were first paid thereunder.
- (3) In this section “*statutory redundancy scheme*” means a scheme for the elimination or reduction of redundant works, machinery or plant, or for other similar purposes, to which effect is given by or under any Act, whether passed before or after this Act.
### CHAPTER VI — OTHER PROVISIONS
### Relief for losses on unquoted shares in trading companies
#### Relief for companies
##### 573
- (1) Subsection (2) below has effect where a company which has subscribed for shares in a qualifying trading company incurs an allowable loss (for the purpose of corporation tax on chargeable gains) on the disposal of the shares in any accounting period and the company disposing of the shares—
- (a) is an investment company on the date of the disposal and either—
- (i) has been an investment company for a continuous period of six years ending on that date; or
- (ii) has been an investment company for a shorter continuous period ending on that date and has not before the beginning of that period been a trading company or an excluded company; and
- (b) was not associated with, or a member of the same group as, the qualifying trading company at any time in the period beginning with the date when it subscribed for the shares and ending with the date of the disposal.
- (2) The company disposing of the shares may, within two years after the end of the accounting period in which the loss was incurred, make a claim requiring that the loss be set off for the purposes of corporation tax against income—
- (a) of that accounting period; and
- (b) if the company was then an investment company and the claim so requires, of preceding accounting periods ending within the time specified in subsection (3) below;
and, subject to any relief for an earlier loss, the income of any of those periods shall then be treated as reduced by the amount of the loss or by so much of it as cannot be relieved under this subsection against income of a later accounting period.
- (3) The time referred to in subsection (2) above is the period of 12 months ending immediately before the accounting period in which the loss is incurred; but the amount of the reduction which may be made under that subsection in the income of an accounting period falling partly before that time shall not exceed a part of that income proportionate to the part of the accounting period falling within that time.
- (4) Where relief is claimed under subsection (2) above, it must be claimed before any deduction is made for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of any description; . . . .
This subsection is subject to subsection (4A) below.
- (4A) Paragraph 70 of Schedule 15 to the Finance Act 2000 (priority of loss relief) provides that where relief under Part VII of that Schedule (relief for losses on disposals of shares to which investment relief is attributable) is claimed it must be claimed in priority to relief under subsection (2) above.
- (5) For the purposes of subsection (1)(b) above companies are associated with each other if one controls the other or both are under the control of the same person or persons; and section 416(2) to (6) shall apply for the purposes of this subsection.
- (6) For the purposes of this section a company subscribes for shares in another company if they are issued to it by that other company in consideration of money or money’s worth.
#### Relief for individuals
##### 574
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusion of relief under section 573 or 574 in certain cases
##### 575
- (1) Section 573 does not apply unless the disposal is—
- (a) by way of a bargain made at arm’s length for full consideration; or
- (b) by way of a distribution in the course of dissolving or winding up the company; or
- (ba) a disposal within section 24(1) of the 1992 Act (entire loss, destruction, dissipation or extinction of asset); or
- (c) a deemed disposal under section 24(2) of the 1992 Act (claim that value of asset has become negligible).
- (2) Where a company disposes of shares (“*the new shares*”) which by virtue of section 127 of the 1992 Act (reorganisation etc. treated as not involving disposal) are identified with other shares (“*the old shares*”) previously held by it, relief shall not be given under section 573 . . . on the disposal of the new shares unless—
- (a) relief under section 573 . . . could (or if this section had been in force could) have been given on a disposal of the old shares if it had incurred an allowable loss in disposing of them as mentioned in subsection (1)(a) above on the occasion of the disposal that would have occurred but for section 127 of the 1992 Act; or
- (b) it gave new consideration for the new shares;
but in a case within paragraph (b) above the amount of relief under section 573 . . . on the disposal of the new shares shall not exceed the amount or value of the new consideration taken into account as a deduction in computing the loss incurred on their disposal.
- (3) Where the shares are the subject of an exchange or arrangement of the kind mentioned in section 135 or 136 of the 1992 Act (company reconstructions etc.) which by reason of section 137 of that Act involves a disposal of the shares, section 573 . . . shall not apply to any allowable loss incurred on the disposal.
- (4) In this section “*new consideration*” means consideration in money or money's worth other than consideration of the kind excluded by paragraph (a) or (b) of section 128(2) of the 1992 Act.
#### Provisions supplementary to sections 573 to 575
##### 576
- (1) Subject to subsection (1C) below, where a company holds shares in another company which constitute a holding and comprise—
- (a) shares for which it has subscribed (“*qualifying shares*”); and
- (b) shares which it has acquired otherwise than by subscription,
any question whether a disposal by it of shares forming part of the holding is of qualifying shares shall be determined by treating that and any previous disposal by it out of the holding as relating to shares acquired later rather than earlier; and if a disposal by it is of qualifying shares forming part of a holding and it makes a claim under section 573 . . . in respect of a loss incurred on their disposal, the amount of relief under that section on the disposal shall not exceed the sums that would be allowed as deductions in computing the loss if the shares had not been part of the holding.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) Where the holding mentioned in subsection (1) above comprises any shares—
- (a) to which investment relief is attributable under Schedule 15 to the Finance Act 2000 (corporate venturing scheme), and
- (b) which have been held continuously (within the meaning of paragraph 97 of that Schedule) from the time they were issued until the disposal,
any such question as is mentioned in that subsection shall not be determined as provided by that subsection, but shall be determined instead as provided by paragraph 93 of that Schedule (identification of shares on a disposal of part of a holding where investment relief is attributable to any shares in the holding held continuously by the disposing company).
For this purpose paragraph 93 of that Schedule shall have effect as if the references in it to a disposal had the same meaning as in subsection (1) above.
- (1D) In this section “*holding*” means any number of shares of the same class held by one company in one capacity, growing or diminishing as shares of that class are acquired or disposed of.
For this purpose—
- (a) shares are not to be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt in on such an exchange, and
- (b) subsection (4) of section 104 of the 1992 Act applies as it applies for the purposes of subsection (1) of that section.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Miscellaneous
#### Business entertaining expenses
##### 577
- (1) Subject to the provisions of this section—
- (a) no deduction shall be made in computing profits chargeable to corporation tax under . . . Schedule D for any expenses incurred in providing business entertainment, and such expenses—
- (i) shall not be included in computing any expenses of management in respect of which relief may be given under the Corporation Tax Acts; and
- (ii) shall not be brought into account under section 76 as expenses payable.. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The expenses to which paragraph (a) of subsection (1) above applies include, in the case of any company, any sums paid by the company to, or on behalf of, or placed by the company at the disposal of an employee of the company exclusively for the purpose of defraying expenses incurred or to be incurred by him in providing business entertainment . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of this section “*business entertainment*” means entertainment (including hospitality of any kind) provided by a company, or by an employee of the company, in connection with a trade carried on by the company, but does not include anything provided by the company for bona fide employees of the company unless its provision for them is incidental to its provision also for others.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In this section—
- (a) any reference to expenses incurred in . . . providing entertainment includes a reference to expenses incurred in . . . providing anything incidental thereto;
- (b) references to a trade include references to any business or profession; and
- (c) references to a company's employees are references to persons employed by the company, directors of the company or persons engaged in the management of the company being for this purpose deemed to be persons employed by it.
- (8) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment, except that it shall not by virtue of this subsection apply in relation to the provision for any person of a gift consisting of an article incorporating a conspicuous advertisement for the donor, being an article—
- (a) which is not food, drink, tobacco or a token or voucher exchangeable for goods; and
- (b) the cost of which to the donor, taken together with the cost to the donor of any other such articles given by the donor to that person in the same accounting period, does not exceed £50.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Subsection (8) above shall not preclude the deduction, in computing profits under . . . Case I or II of Schedule D, of expenditure incurred in making a gift to a body of persons or trust established for charitable purposes only; and for the purposes of this subsection the Historic Buildings and Monuments Commission for England and the Trustees of the National Heritage Memorial Fund shall each be treated as such a body of persons.
- (10) Nothing in this section shall be taken as precluding the deduction of expenses incurred in . . . the provision by any company of anything which it is its trade to provide, and which is provided by the company in the ordinary course of that trade for payment or, with the object of advertising to the public generally, gratuitously.
#### Housing grants
##### 578
- (1) Where, under any enactment relating to the giving of financial assistance for the provision, maintenance or improvement of housing accommodation or other residential accommodation, a payment is made to a person by way of grant or other contribution towards expenses incurred, or to be incurred, by that or any other person, the payment shall not be treated as a receipt in computing income for corporation tax purposes.
- (2) Subsection (1) above shall not apply to a payment in so far as it is made in respect of an expense giving rise to a deduction in computing income for any tax purpose.
#### Statutory redundancy payments
##### 579
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where a redundancy payment or other employer’s payment is made by a company in respect of employment wholly in a trade or profession carried on by the company, and within the charge to tax, the amount of the redundancy payment or the corresponding amount of the other employer’s payment shall (if not otherwise so allowable) be allowable as a deduction in computing for the purposes of Schedule D the profits or losses of the trade or profession, but—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if the employer’s payment was made after the discontinuance of the trade or profession the . . . amount so deductible shall be treated as if it were a payment made on the last day on which the trade or profession was carried on.
- (3) Where a redundancy payment or other employer’s payment is made by a company in respect of employment wholly in a business carried on by the company and—
- (a) expenses of management of the business are deductible under section 75, or
- (b) a deduction for expenses payable falls to be allowed in accordance with section 76 in computing profits of the business,
the amount of the redundancy payment, or the corresponding amount of the other employer’s payment, shall (to the extent that it would not otherwise fall to be so treated) be deductible under section 75 as expenses of management or as the case may be, be included at Step 1 in section 76(7).
- (3A) If in a case where subsection (3) above applies, the payment in question is for the purposes of section 75 or 76 referable to an accounting period beginning after discontinuance, it shall be treated as referable to the accounting period ending on the last day on which the business was carried on.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Relief shall not be given under subsections (2) and (3) above, or otherwise, more than once in respect of any employer’s payment, and if the employee was being employed in such a way that different parts of his remuneration fell for corporation tax purposes to be treated in different ways—
- (a) the amount of the redundancy payment or the corresponding amount of the other employer’s payment shall be apportioned to the different capacities in which the employee was employed; and
- (b) subsections (2) and (3) above shall apply separately to the employment in those capacities, and by reference to the apportioned part of that amount, instead of by reference to the full amount of the employer’s payment . . . .
- (6) Where the Minister pays a sum under section 166 of the Employment Rights Act 1996 or Article 201 of the Employment Rights (Northern Ireland) Order 1996 in respect of an employer’s payment this section shall apply as if—
- (a) that sum had been paid on account of that redundancy or other employer’s payment, and
- (b) so far as the company has reimbursed the Minister, it had been so paid by the company.
#### Provisions supplementary to section 579
##### 580
- (1) In section 579—
- (a) “*redundancy payment*” and “*employer’s payment*” have the same meaning as in Part XI of the Employment Rights Act 1996 or Part XII of the Employment Rights (Northern Ireland) Order 1996;
- (b) references to the corresponding amount of an employer’s payment (other than a redundancy payment) are references to the amount of that employer’s payment so far as not in excess of the amount which would have been payable as a redundancy payment had one been payable;
- (c) “*the Minister*” in relation to the Employment Rights Act 1996 means the Secretary of State and in relation to the Employment Rights (Northern Ireland) Order 1996 means the Department of Health and Social Services.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Borrowing in foreign currency by local authorities and statutory corporations
##### 581
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funding bonds issued in respect of interest on certain debts
##### 582
- (1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on any debt to which this section applies—
- (a) the issue of the bonds shall be treated for all the purposes of the Corporation Tax Acts as if it were the payment of an amount of that interest equal to the value of the bonds at the time of their issue, and
- (b) where paragraph (a) above . . . applies the redemption of the bonds shall not be treated for those purposes as the payment of any amount of that interest.
- (2) Subsection (2A) applies if an issue of funding bonds is treated as a payment of interest as mentioned in subsection (1)(a) and—
- (a) the person by or through whom the bonds are issued is required to retain bonds under section 939(2) of ITA 2007, but
- (b) it is impracticable for the person to do so.
- (2A) In that case, tax in respect of the amount of interest treated by virtue of subsection (1)(a) as having been paid by the issue of the bonds shall be charged under Case VI of Schedule D for the chargeable period in which the bonds are issued on the persons receiving or entitled to the bonds.
- (3) This section applies to any debt incurred, whether in respect of any money borrowed or otherwise, by any government, public authority or public institution whatsoever, or by any body corporate whatsoever.
- (3A) Chapter 2 of Part 4 of the Finance Act 1996 has effect subject to and in accordance with this section, notwithstanding anything in section 80(5) of that Act (matters to be brought into account in the case of loan relationships only under Chapter 2 of Part 4 of that Act).
- (4) For the purposes of this section “*funding bonds*” includes any bonds, stocks, shares, securities or certificates of indebtedness.
#### Inter-American Development Bank
##### 583
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for unremittable overseas income
##### 584
- (1) Where a company is chargeable to corporation tax by reference to the amount of any income arising in a territory outside the United Kingdom (“*overseas income*”), then for the purposes of corporation tax this section shall apply to the overseas income in so far as—
- (a) the company is prevented from transferring the amount of the overseas income to the United Kingdom, either by the laws of that territory or any executive action of its government or by the impossibility of obtaining foreign currency in that territory; and
- (b) the company has not realised the overseas income outside that territory for a consideration in sterling or a consideration in some other currency which the company is not prevented from transferring to the United Kingdom.
- (2) Subject to subsection (2A) below, where a company so chargeable makes a claim under this subsection in relation to any overseas income—
- (a) which is unremittable; and
- (b) to which subsection (1)(a) above will continue to apply notwithstanding any reasonable endeavours on its part,
then, in the first instance, account shall not be taken of that income, and corporation tax shall be assessable and shall be charged on all persons concerned and for all periods accordingly.
- (2A) If on any date paragraph (a) or (b) of subsection (2) above ceases to apply to any part of any overseas income in relation to which a claim has been made under that subsection—
- (a) that part of the income shall be treated as income arising on that date, and
- (b) account shall be taken of it, and of any tax payable in respect of it under the law of the territory where it arises, according to their value at that date.
- (4) Where a company becomes chargeable to corporation tax in respect of income from any source by virtue of subsection (2) or (2A) above after it has ceased to possess that source of income, the income shall be chargeable under Case VI of Schedule D.
- (5) Where under an agreement entered into under arrangements made by the Secretary of State in pursuance of section 11 of the Export Guarantees and Overseas Investment Act 1978 any payment is made by the Export Credit Guarantee Department in respect of any income which cannot be transferred to the United Kingdom, then, to the extent of the payment, the income shall be treated as income to which paragraphs (a) and (b) of subsection (2) above do not apply (and accordingly cannot cease to apply).
- (6) A claim under subsection (2) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) for the purposes of corporation tax, shall be made no later than two years after the end of the accounting period in which the income arises.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Subject to subsections (2) and (2A) above, the amount of any unremittable overseas income shall be determined by reference to the generally recognised market value in the United Kingdom (if any), or, in the absence of any such value, according to the official rate of exchange of the territory where the income arises.
- (9) Any appeal against an assessment which involves a question as to the operation of this section shall be made to the Special Commissioners and not to the General Commissioners.
- (10) This section shall have effect as respects any accounting period in which the conditions in subsection (2) above cease to be satisfied in relation to any income, being an accounting period ending on or before such day, not being earlier than 31st March 1992, as the Treasury may by order appoint for the purposes of this section, with the omission of subsections (3) and (4).
#### Relief from tax on delayed remittances
##### 585
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of deductions for war risk premiums
##### 586
- (1) In computing the amount of the profits or gains of any person for any corporation tax purpose, no sum shall be deducted in respect of any payment made by him to which this section applies.
- (2) No payment to which this section applies shall be included in computing the expenses of management in respect of which relief may be given under section 75 or 76.
- (3) Subject to subsections (4) and (5) below, this section applies to any payment made by any person under any contract or arrangement under which that person is, in the event of war damage, entitled or eligible, either absolutely or conditionally, to or for any form of indemnification, whether total or partial, and whether by way of a money payment or not, in respect of that war damage.
- (4) Where the payment is made in respect of the right or eligibility mentioned in subsection (3) above and also in respect of other matters, the deduction or inclusion of so much of the payment as is properly attributable to the other matters shall not be disallowed by virtue only of subsection (1) or (2) above.
- (5) This section shall not apply to any payment made under any contract of marine insurance, or any contract of insurance of an aircraft, or any contract of insurance of goods in transit.
- (6) In this section “*war damage*” means loss or damage arising from action taken by an enemy of Her Majesty, or action taken in combating such an enemy or in repelling an imagined attack by such an enemy, or action taken in anticipation of or in consequence of an attack by such an enemy.
#### Disallowance of certain payments in respect of war injuries to employees
##### 587
- (1) In computing the amount of the profits or gains . . . of any person for any corporation tax purpose, no sum shall be deducted in respect of any payment made by him to which this section applies.
- (2) No payment to which this section applies shall be included in computing—
- (a) the expenses of management in respect of which relief may be given under section 75 or 76; or
- (b) the expenses of management or supervision in respect of which relief may be given under section 121(3).
- (3) Subject to subsections (4) and (5) below, this section applies—
- (a) to any payments by way of benefit made by any person to, or to the personal representatives or dependants of, any employees of his on account of their incapacity, retirement or death owing to war injuries, whether sustained in the United Kingdom or elsewhere; and
- (b) to any payments made by any person by way of premium or contribution under any policy, agreement, scheme or arrangement providing for the payment of benefits to, or to the personal representatives or dependants of, any employees of his on account of their incapacity, retirement or death owing to such war injuries.
- (4) This section shall not apply to any payment (whether by way of benefit or by way of premium or contribution) which is payable under any policy, agreement, scheme or arrangement made before 3rd September 1939, except to the extent that the amount of the payment is increased by any variation of the terms of that policy, agreement, scheme or arrangement made on or after that date.
- (5) This section shall not apply to any payment by way of benefit if, in the opinion of the Board, that payment was made under an established practice which was such that the same or a greater payment would have been made if the incapacity, retirement or death had not been due to war injuries.
- (6) Where a person makes a payment by way of benefit to which this section applies and, in the opinion of the Board, there is an established practice under which a smaller payment would have been made if the incapacity, retirement or death had not been due to war injuries, the deduction or inclusion of an amount equal to that smaller payment shall not be disallowed by virtue only of subsection (1) or (2) above.
- (7) Where a person makes a payment to which this section applies by way of premium or contribution, and the policy, agreement, scheme or arrangement provides for the payment of any benefit in the event of incapacity, retirement or death not due to war injuries, the deduction or inclusion of so much of the payment of premium or contribution as, in the opinion of the Board, is properly attributable to benefit payable in the event of incapacity, retirement or death not due to war injuries shall not be disallowed by virtue only of subsection (1) or (2) above.
- (8) In this section “*war injuries*” means physical injuries—
- (a) caused by—
- (i) the discharge of any missile (including liquids and gas);
- (ii) the use of any weapon, explosive or other noxious thing; or
- (iii) the doing of any other injurious act,
either by the enemy or in combating the enemy or in repelling an imagined attack by the enemy; or
- (b) caused by the impact on any person or property of any enemy aircraft, or any aircraft belonging to, or held by any person on behalf of, or for the benefit of, Her Majesty or any allied power, or any part of, or anything dropped from, any such aircraft.
#### Training courses for employees
##### 588
- (1) This section applies where a company (“*the employer*”) incurs retraining course expenses within the meaning of section 311 of ITEPA 2003 (exemptions: retraining courses).
- (3) Subject to subsection (4) below, where—
- (a) an employer incurs expenditure in paying or reimbursing retraining course expenses as mentioned in subsection (1) above; and
- (b) by virtue of section 311 of ITEPA 2003, no liability to income tax arises in respect of the payment or reimbursement,
then, if and so far as that expenditure would not, apart from this subsection, be so deductible, it shall be deductible in computing for the purposes of Schedule D the profits of the trade or profession of the employer for the purposes of which the employee is or was employed.
- (4) Where the employer is a company with investment business or a company carrying on life assurance business, subsection (3) above shall have effect with the substitution for the words following paragraph (b) of—
- (5) In any case where—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) an employer’s liability to corporation tax for any accounting period is determined (by assessment or otherwise) on the assumption that, by virtue only of subsection (3) above (or subsections (3) and (4) above), it is entitled to a deduction on account of any expenditure and, subsequently, there is a failure to meet a condition of the kind mentioned in section 312(1)(b)(i) or (ii) of ITEPA 2003;
an assessment under . . . paragraph 41 of Schedule 18 to the Finance Act 1998, of an amount due in consequence of the failure referred to above may be made at any time not later than six years after the end of the accounting period in which the failure occurred.
- (5A) The reference in subsection (5)(b) above to a deduction on account of any expenditure includes a reference to bringing an amount into account in determining the amount of the deduction to be made under section 76.
- (6) Where an event occurs by reason of which there is a failure to meet a condition in section 312(1)(b)(i) or (ii) of ITEPA 2003, the employer of the employee concerned shall within 60 days of coming to know of the event give a notice to the inspector containing particulars of the event.
- (7) If the inspector has reason to believe that an employer has not given a notice which it is required to give under subsection (6) above in respect of any event, the inspector may by notice require the employer to furnish him within such time (not less that 60 days) as may be specified in the notice with such information relating to the event as the inspector may reasonably require for the purposes of this section.
#### Qualifying courses of training etc
##### 589
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XIV — PENSION SCHEMES, SOCIAL SECURITY BENEFITS, LIFE ANNUITIES ETC.
### CHAPTER I — RETIREMENT BENEFIT SCHEMES
### Approval of schemes
#### Conditions for approval of retirement benefit schemes
##### 590
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Discretionary approval
##### 591
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Tax reliefs
#### Exempt approved schemes
##### 592
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief by way of deductions from contributions
##### 593
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exempt statutory schemes
##### 594
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Charge to tax in certain cases
#### Charge to tax in respect of certain sums paid by employer etc
##### 595
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from section 595
##### 596
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: pensions
##### 597
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: repayment of employee’s contributions
##### 598
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: commutation of entire pension in special circumstances
##### 599
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: unauthorised payments to or for employees
##### 600
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: payments to employers
##### 601
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Regulations relating to pension fund surpluses
##### 602
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of surpluses
##### 603
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
#### Application for approval of a scheme
##### 604
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 605
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Responsibilities of administrator of scheme, and employer
##### 606
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pilots' benefit fund
##### 607
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Superannuation funds approved before 6th April 1980
##### 608
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schemes approved before 23rd July 1987
##### 609
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amendments of schemes
##### 610
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definition of “retirement benefits scheme”
##### 611
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other interpretative provisions, and regulations for purposes of this Chapter
##### 612
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — OTHER PENSION FUNDS AND SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS
#### Parliamentary pension funds
##### 613
- (1) The salary of a Member of the House of Commons shall, for all the purposes of the Income Tax Acts, be treated as reduced by the amounts deducted in pursuance of section 1 of the House of Commons Members’ Fund Act 1939; but a Member shall not by reason of any such deduction be entitled to relief under any other provision of the Income Tax Acts.
- (2) In subsection (1) above the reference to salary shall be construed as mentioned in subsection (3) of section 1 of the House of Commons Members’ Fund Act 1939, the reference to amounts deducted includes a reference to amounts required to be set aside under that subsection, and “deduction” shall be construed accordingly.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The . . . trustees of—
- (a) the House of Commons Members’ Fund established under section 1 of that Act of 1939;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
shall be entitled to exemption from income tax in respect of all income derived from that Fund or any investment of that Fund.
#### Exemptions and reliefs in respect of income from investments etc. of certain pension schemes
##### 614
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Any interest or dividends received by the person in whom is vested any of the Family Pension Funds mentioned in section 273 of the Government of India Act 1935, and having effect as a scheme made under section 2 of the Overseas Pensions Act 1973, on sums forming part of that fund shall be exempt from income tax.
- (2A) The reference in subsection (2) above to interest on sums forming part of a fund include references to any amount which is treated as income by virtue of Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) and derives from any investment forming part of that fund.
- (3) Income derived from investments or deposits of any fund referred to in section 648, 649, 650 or 651 of ITEPA 2003 shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income.
- (4) In respect of income derived from investments or deposits of the Overseas Service Pensions Fund established pursuant to section 7(1) of the Overseas Aid Act 1966, the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
- (5) In respect of dividends and other income derived from investments, deposits or other property of a superannuation fund to which section 615(3) applies the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
- (6) A claim under this section shall be made to the Board.
#### Exemption from tax in respect of certain pensions
##### 615
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments and patent royalties) by the trustees or other persons having the control of the fund.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Subsection (3) above applies to any superannuation fund which—
- (a) is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom;
- (b) has for its sole purpose (subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme) the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; and
- (c) is recognised by the employer and employed persons in the trade or undertaking;
and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom.
- (7) In this section—
- “*pension*” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto;
- “*overseas territory*” means any territory or country outside the United Kingdom;
- “*the Pensions (Increase) Acts*” means the Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act;
- “*United Kingdom trust territory*” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of this section, a person shall be taken to be employed in the public service of an overseas territory at any time when—
- (a) he is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,
- (b) he is employed, in circumstances not falling within paragraph (a) above, by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or
- (c) he is the holder of a public office in that territory in circumstances not falling within either paragraph (a) or (b).
- (10) For the purposes of subsection (9), references to the government of an overseas territory include references to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.
#### Other overseas pensions
##### 616
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Social security benefits and contributions
##### 617
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to subsections (4) and (5) below, no relief or deduction shall be given or allowed for corporation tax purposes in respect of any contribution paid by any person under—
- (a) Part I of the Social Security Contributions and Benefits Act 1992, or
- (b) Part I of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
- (4) Subsection (3) above shall not apply to a contribution if it is a secondary Class 1 contribution , a Class 1A contribution or a Class 1B contribution (within the meaning of Part I of either of those Acts) and is allowable—
- (a) as a deduction in computing profits or gains;
- (b) as expenses of management deductible under section 75 or falls to be brought into account under section 76 as expenses payable; or
- (c) as expenses of management or supervision deductible under section 121;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Subsection (3) above shall not apply for the purposes of deductions under Chapter 2 of Part 5 of ITEPA 2003 (in relation to which section 360A of that Act applies).
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — RETIREMENT ANNUITIES
#### Termination of relief under this Chapter, and transitional provisions
##### 618
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from tax in respect of qualifying premiums
##### 619
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying premiums
##### 620
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other approved contracts
##### 621
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substituted retirement annuity contracts
##### 622
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relevant earnings
##### 623
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sponsored superannuation schemes and controlling directors
##### 624
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward of unused relief under section 619
##### 625
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Modification of section 619 in relation to persons over 50
##### 626
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lloyd’s underwriters
##### 627
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partnership retirement annuities
##### 628
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity premiums of Ministers and other officers
##### 629
- (1) For the purposes of this Chapter so much of any salary which—
- (a) is payable to the holder of a qualifying office who is also a Member of the House of Commons, and
- (b) is payable for a period in respect of which the holder is not a participant in relation to that office in arrangements contained in the Parliamentary pension scheme but is a participant in relation to his membership of the House of Commons in any such arrangements, or for any part of such a period,
as is equal to the difference between a Member’s pensionable salary and the salary which (in accordance with any such resolution as is mentioned in subsection (3)(a) below) is payable to him as a Member holding that qualifying office shall be treated as remuneration from the office of Member and not from the qualifying office.
- (2) In this section—
- “*Member’s pensionable salary*” means a Member’s ordinary salary under any resolution of the House of Commons which, being framed otherwise than as an expression of opinion, is for the time being in force relating to the remuneration of Members or, if the resolution provides for a Member’s ordinary salary thereunder to be treated for pension purposes as being at a higher rate, a notional yearly salary at that higher rate;
- “*qualifying office*” means an office mentioned in section 2(2)(b), (c) or (d) of the Parliamentary and other Pensions Act 1987;
- “*the Parliamentary pension scheme*” has the same meaning as in that Act;
and without prejudice to the power conferred by virtue of paragraph 13 of Schedule 1 to that Act, regulations under section 2 of that Act may make provision specifying the circumstances in which a person is to be regarded for the purposes of this section as being or not being a participant in relation to his Membership of the House of Commons, or in relation to any office, in arrangements contained in the Parliamentary pension scheme.
- (3) In subsection (2) above “*a Member’s ordinary salary*”, in relation to any resolution of the House of Commons, means—
- (a) if the resolution provides for salary to be paid to Members at different rates according to whether or not they are holders of particular offices, or are in receipt of salaries or pensions as the holders or former holders of particular offices, a Member’s yearly salary at the higher or highest rate; and
- (b) in any other case, a Member’s yearly salary at the rate specified in or determined under the resolution.
### CHAPTER IV — PERSONAL PENSION SCHEMES
### Preliminary
#### Interpretation
##### 630
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Approval of schemes
##### 631
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Restrictions on approval
#### Establishment of schemes
##### 632
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scope of benefits
##### 633
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity to member
##### 634
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lump sum to member
##### 635
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity after death of member
##### 636
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lump sum on death of member
##### 637
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other restrictions on approval
##### 638
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Tax reliefs
#### Member’s contributions
##### 639
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Maximum amount of deductions
##### 640
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of contributions
##### 641
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward of relief
##### 642
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employer’s contributions and personal pension income etc
##### 643
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “relevant earnings”
##### 644
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Earnings from pensionable employment
##### 645
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “net relevant earnings”
##### 646
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Charge to tax
#### Unauthorised payments
##### 647
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Contributions under unapproved arrangements
##### 648
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Miscellaneous
#### Minimum contributions under Social Security Act 1986
##### 649
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Withdrawal of approval
##### 650
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Appeals
##### 651
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information about payments
##### 652
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: penalties
##### 653
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Remuneration of Ministers and other officers
##### 654
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transitional provisions
##### 655
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — PURCHASED LIFE ANNUITIES
#### Purchased life annuities other than retirement annuities
##### 656
- (1) Subject to section 657, a purchased life annuity shall, for the purposes of the provisions of the Corporation Tax Acts relating to tax on annuities and other annual payments, be treated as containing a capital element and, to the extent of the capital element, as not being an annual payment or in the nature of an annual payment; but the capital element in such an annuity shall be taken into account in computing profits or gains or losses for other corporation tax purposes in any circumstances in which a lump sum payment would be taken into account.
- (2) Where, in the case of any purchased life annuity to which this section applies, the amount of any annuity payment (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives—
- (a) the capital element shall be determined by reference—
- (i) to the amount or value of the payments made or other consideration given for the grant of the annuity (“*the purchase price*”); and
- (ii) to the expected term of the annuity, as at the date when the first annuity payment began to accrue, expressed in years (and any odd fraction of a year), and determined by reference to the prescribed tables of mortality;
and in head (ii) above “*term*” means the period from the date when the first annuity payment begins to accrue to the date when the last payment becomes payable;
- (b) the capital element in any annuity payment made in respect of a period of 12 months shall be a fraction—
$1E$
of the purchase price, where E is the expected term referred to in paragraph (a)(ii) above;
- (c) the capital element in any annuity payment made in respect of a period of less than, or more than, 12 months shall be the amount at (b) above reduced or, as the case may be, increased, in the same proportion as the length of that period bears to a period of 12 months;
- (d) subsection (3) below shall not apply but paragraphs (a) and (b) of subsection (4) below shall apply as they apply to that subsection.
- (3) Subject to subsection (2) above, in the case of any purchased life annuity to which this section applies—
- (a) the capital element shall be determined by reference to the amount or value of the payments made or other consideration given for the grant of the annuity; and
- (b) the proportion which the capital element in any annuity payment bears to the total amount of that payment shall be constant for all payments on account of the annuity; and
- (c) where neither the term of the annuity nor the amount of any annuity payment depends on any contingency other than the duration of a human life or lives, that proportion shall be the same proportion which the total amount or value of the consideration for the grant of the annuity bears to the actuarial value of the annuity payments as determined in accordance with subsection (4) below; and
- (d) where either the term of the annuity or the amount of any annuity payment (but not both) depends on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to paragraph (c) above and to the contingencies affecting the annuity; and
- (e) where both the term of the annuity and the amount of any annuity payment depend on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to subsection (2) above and to the contingencies affecting the annuity.
- (4) For the purposes of subsection (3) above—
- (a) any entire consideration given for the grant of an annuity and for some other matter shall be apportioned as appears just (but so that a right to a return of premiums or other consideration for an annuity shall not be treated for this purpose as a distinct matter from the annuity);
- (b) where it appears that the amount or value of the consideration purporting to be given for the grant of an annuity has affected, or has been affected by, the consideration given for some other matter, the aggregate amount or value of those considerations shall be treated as one entire consideration given for both and shall be apportioned under paragraph (a) above accordingly; and
- (c) the actuarial value of any annuity payments shall be taken to be their value as at the date when the first of those payments begins to accrue, that value being determined by reference to the prescribed tables of mortality and without discounting any payment for the time to elapse between that date and the date it is to be made.
- (5) Where a person making a payment on account of any life annuity has been notified in the prescribed manner of any decision as to its being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), and has not been notified of any alteration of that decision, the notice shall be conclusive as to those matters for the purpose of determining the amount of income tax which the person is entitled or required to deduct from the payment, or for which the person is chargeable in respect of it.
- (6) Where a person making a payment on account of a purchased life annuity to which this section applies has not been notified in the prescribed manner of the amount of the capital element, the amount of income tax which the person is entitled or required to deduct from the payment, or for which the person is chargeable in respect of it, shall be the same as if the annuity were not a purchased life annuity to which this section applies.
- (7) In using the prescribed tables of mortality to determine—
- (a) the expected term of an annuity for the purposes of subsection (2)(a) above, or
- (b) the actuarial value of any annuity payments for the purposes of subsection (4)(c) above,
the age, as at the date when the first of the annuity payments begins to accrue, of a person during whose life the annuity is payable shall be taken to be the number of years of his age at his last birthday preceding that date.
- (8) In any case where it is not possible to determine the expected term of an annuity for the purposes of subsection (2)(a) above by reference to the prescribed tables of mortality, that term shall for those purposes be such period as may be certified by the Government Actuary or the Deputy Government Actuary.
- (9) In any case where it is not possible to determine the actuarial value of any annuity payments for the purposes of subsection (4)(c) above by reference to the prescribed tables of mortality, that value shall for those purposes be such amount as may be certified by the Government Actuary or the Deputy Government Actuary.
#### Purchased life annuities to which section 656 applies
##### 657
- (1) For the purposes of section 656—
- “*life annuity*” means an annuity payable for a term ending with (or at a time ascertainable only by reference to) the end of a human life, whether or not there is provision for the annuity to end during the life on the expiration of a fixed term or on the happening of any event or otherwise, or to continue after the end of the life in particular circumstances; and
- “*purchased life annuity*” means a life annuity granted for consideration in money or money’s worth in the ordinary course of a business of granting annuities on human life.
- (2) Section 656 does not apply—
- (a) to any annuity which would, apart from that section, be treated for the purposes of the provisions of the Corporation Tax Acts relating to tax on annuities and other annual payments as consisting to any extent in the payment or repayment of a capital sum;
- (b) to any annuity where the whole or part of the consideration for the grant of the annuity consisted of sums satisfying the conditions for relief under section 266 or 273 of this Act or section 459 of ITA 2007;
- (c) to any annuity purchased in pursuance of any direction in a will, or to provide for an annuity payable by virtue of a will or settlement out of income of property disposed of by the will or settlement (whether with or without resort to capital);
- (d) to any annuity under, or purchased with sums or assets held for the purposes of, a registered pension scheme; or
- (e) to any annuity purchased by any person in recognition of another’s services (or past services) in any office or employment.
#### Supplementary
##### 658
- (1) Any question whether an annuity is a purchased life annuity to which section 656 applies, or what is the capital element in such an annuity, shall be determined by the inspector; but a person aggrieved by the inspector’s decision on any such question may appeal within the prescribed time to the Special Commissioners.
- (2) Save as otherwise provided in this Chapter, the procedure to be adopted in giving effect to this Chapter shall be such as may be prescribed.
- (3) The Board may make regulations for prescribing anything which is to be prescribed under this Chapter, and the regulations may apply for the purposes of this Chapter or of the regulations any provision of the Income Tax Acts, with or without modifications.
- (4) Regulations under subsection (3) above may in particular make provision as to the time limit for making any claim for relief from or repayment of tax under this Chapter and as to all or any of the following matters, that is to say—
- (a) as to the information to be furnished in connection with the determination of any question whether an annuity is a purchased life annuity to which section 656 applies or what is the capital element in an annuity, and as to the persons who may be required to furnish any such information;
- (b) as to the manner of giving effect to the decision on any such question, and . . . as to the making of assessments for the purpose on the person entitled to the annuity; and
- (c) as to the extent to which the decision on any such question is to be binding, and the circumstances in which it may be reviewed.
- (5) Any person who, for the purpose of obtaining . . . any relief from or repayment of tax under this Chapter, knowingly makes any false statement or false representation . . . shall be liable to a penalty not exceeding £3,000.
- (6) It does not matter for whom that relief or repayment is to be obtained.
### CHAPTER VI — MISCELLANEOUS
#### Financial futures and traded options
##### 659
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XV — SETTLEMENTS
### CHAPTER I — DISPOSITIONS FOR SHORT PERIODS
#### Dispositions for period which cannot exceed six years
##### 660
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments between disponor and trustees
##### 661
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter I to dispositions by two or more disponors
##### 662
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — SETTLEMENTS ON CHILDREN
#### The general rule
##### 663
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accumulation settlements
##### 664
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “irrevocable”
##### 665
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid by trustees
##### 666
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments between disponor and trustees
##### 667
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter II to settlements by two or more settlors
##### 668
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information under Chapter II
##### 669
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter II
##### 670
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — REVOCABLE SETTLEMENTS ETC.
#### Revocable settlements allowing release of obligation
##### 671
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing reversion of property
##### 672
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements where settlor retains an interest
##### 673
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements: discretionary power for benefit of settlor etc
##### 674
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 671 to 674
##### 675
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of deduction from total income of certain sums paid by settlor
##### 676
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sums paid to settlor otherwise than as income
##### 677
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Capital sums paid by body connected with settlement
##### 678
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter III to settlements by two or more settlors
##### 679
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information for purposes of Chapter III
##### 680
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter III
##### 681
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Ascertainment of undistributed income
##### 682
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — LIABILITY TO HIGHER RATE AND ADDITIONAL RATE TAX
### Liability of settlors
#### Settlements made after 6th April 1965
##### 683
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements made before 7th April 1965 but after 9th April 1946
##### 684
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 683 and 684
##### 685
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Liability of trustees
#### Liability to additional rate tax of certain income of discretionary trusts
##### 686
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments under discretionary trusts
##### 687
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schemes for employees and directors to acquire shares
##### 688
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery from trustees of discretionary trusts of higher rate tax due from beneficiaries
##### 689
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — MAINTENANCE FUNDS FOR HISTORIC BUILDINGS
#### Schedule 4 directions
##### 690
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certain income not to be income of settlor etc
##### 691
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reimbursement of settlor
##### 692
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Severance of settled property for certain purposes
##### 693
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Trustees chargeable to income tax at 30 per cent. in certain cases
##### 694
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XVI — ESTATES OF DECEASED PERSONS IN COURSE OF ADMINISTRATION
#### Limited interests in residue
##### 695
- (1) The following provisions of this section shall have effect in relation to a company which, during the period commencing on the death of a deceased person and ending on the completion of the administration of his estate (“*the administration period*”) or during a part of that period, has a limited interest in the residue of the estate or in a part thereof.
- (2) When any sum has been paid during the administration period in respect of that limited interest, the amount of that sum shall . . . be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which that sum was paid or, in the case of a sum paid in respect of an interest that has ceased, for the last accounting period in which it was subsisting.
- (3) Where, on the completion of the administration of the estate, there is an amount which remains payable in respect of that limited interest, that amount shall be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which the administration period ends or, in the case of a sum which is deemed to be paid in respect of an interest that ceased before the end of the administration period, for the last accounting period in which that interest was subsisting.
- (4) Any amount which is deemed to have been paid to that company as income for any accounting period by virtue of this section shall—
- (a) in the case of a United Kingdom estate, be deemed to be income of such an amount as would after deduction of income tax for the relevant year of assessment be equal to the amount deemed to have been so paid, and to be income which has borne income tax at the applicable rate; and
- (b) in the case of a foreign estate, be deemed to be income of the amount deemed to have been so paid . . . .
- (5) Where—
- (a) a company has been charged to corporation tax for any accounting period by virtue of this section in respect of an amount deemed to have been paid to it as income in respect of an interest in a foreign estate (“*the deemed income*”), and
- (b) any part of the aggregate income of that estate for the relevant year of assessment has borne United Kingdom income tax by deduction or otherwise (“*the aggregate income*”),
the tax so charged on it shall, on proof of the facts on a claim, be reduced by an amount bearing the same proportion thereto as the amount of the deemed income which has borne United Kingdom income tax, less the tax so borne, bears to the amount of the aggregate income, less the tax so borne.
- (6) Where relief has been given under subsection (5) above, such part of the amount in respect of which the company has been charged to corporation tax as corresponds to the proportion mentioned in that subsection shall . . . be deemed to represent income of such an amount as would after deduction of income tax be equal to that part of the amount charged.
- (7) In this section “*the relevant year of assessment*”, in relation to an amount deemed to have been paid to a company as income for an accounting period by virtue of this section, means the year of assessment for which the amount would have been deemed to have been paid as income if references to accounting periods in subsections (2) and (3) were references to years of assessment.
#### Absolute interests in residue
##### 696
- (1) The following provisions of this section shall have effect in relation to a company which, during the administration period or during a part of that period, has an absolute interest in the residue of the estate of a deceased person or in a part thereof.
- (2) There shall be ascertained in accordance with section 697 the amount of the residuary income of the estate for each whole year of assessment, and for each broken part of a year of assessment, during which—
- (a) the administration period was current, and
- (b) that company had that interest;
and the amount so ascertained in respect of any year or part of a year or, in the case of a company having an absolute interest in a part of a residue, a proportionate part of that amount, is in this Part referred to as the “*residuary income*” of that company for that year of assessment ; and references to the residuary income of a company for an accounting period are to be construed in accordance with subsection (8).
- (3) When any sum has been paid during the administration period in respect of that absolute interest, that sum, except so far as it is excluded from the operation of this subsection, shall be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which it was actually paid.
- (3A) A payment shall be excluded from the operation of subsection (3) above to the extent (if any) that the aggregate of that sum and all the sums which—
- (a) have been paid previously during the administration period in respect of that absolute interest, and
- (b) fall under this section to be treated as paid to that company as income (whether or not the company was a company liable to corporation tax at the time of payment),
exceeds the aggregated income entitlement of that company for the accounting period in which the sum is paid.
- (3B) For the purposes of this section the aggregated income entitlement of that company for any accounting period is the amount which would be the aggregate of the amounts received for that accounting period and all previous accounting periods in respect of the interest if that company had a right in each accounting period to receive, and had received—
- (a) in the case of a United Kingdom estate, its residuary income for that accounting period less income tax at the applicable rate for that accounting period; and
- (b) in the case of a foreign estate, its residuary income for that accounting period.
- (4) In the case of a United Kingdom estate, any amount which is deemed to have been paid to that company as income for any accounting period by virtue of subsection (3) above shall be deemed to be income of such an amount as would, after deduction of income tax for that accounting period, be equal to the amount deemed to have been so paid, and to be income that has borne income tax at the applicable rate.
- (5) Where, on the completion of the administration of the estate, the aggregate of all the sums which, apart from this subsection—
- (a) have been paid during the administration period in respect of that absolute interest, and
- (b) fall under this section to be treated as paid to that company as income,
is exceeded by the aggregated income entitlement of that company for the accounting period in which the administration of the estate is completed, then an amount equal to the amount of the excess shall be treated for the purposes of subsections (3) to (4) above as having been actually paid, immediately before the end of the administration period, in respect of that interest.
- (6) In the case of a foreign estate, any amount which is deemed to have been paid to that company as income for any accounting period by virtue of this section shall be deemed to be income of that amount . . . .
- (7) Where—
- (a) a company has been charged to corporation tax for any accounting period by virtue of this section in respect of an amount deemed to have been paid to it as income in respect of an interest in a foreign estate (“*the deemed income*”), and
- (b) any part of the aggregate income of that estate for the relevant year of assessment has borne United Kingdom income tax by deduction or otherwise (“*the aggregate income*”),
the tax so charged on it shall, on proof of the facts on a claim, be reduced by an amount bearing the same proportion thereto as the amount of the deemed income which has borne United Kingdom income tax bears to the amount of the aggregate income.
- (8) . . . The residuary income of a company shall be computed in the first instance by reference to years of assessment, and the residuary income for any such year shall be apportioned between the accounting periods (if more than one) comprising that year.
- (9) In subsection (7) “*the relevant year of assessment*”, in relation to an amount deemed to have been paid to a company as income for an accounting period by virtue of this section, means the year of assessment for which the amount would have been deemed to have been paid as income if references in subsections (3) to (6) to accounting periods were references to years of assessment.
#### Supplementary provisions as to absolute interests in residue
##### 697
- (1) The amount of the residuary income of an estate for any year of assessment shall be ascertained by deducting from the aggregate income of the estate for that year—
- (a) the amount of any annual interest, annuity or other annual payment for that year which is a charge on residue and the amount of any payment made in that year in respect of any such expenses incurred by the personal representatives as such in the management of the assets of the estate as, in the absence of any express provision in a will, would be properly chargeable to income, but excluding any such interest, annuity or payment allowed or allowable in computing the aggregate income of the estate; and
- (b) the amount of any of the aggregate income of the estate for that year to which a person has on or after assent become entitled by virtue of a specific disposition either for a vested interest during the administration period or for a vested or contingent interest on the completion of the administration.
- (1A) For the purpose of ascertaining under subsection (1) above the residuary income of an estate for any year, where the amount of the deductions falling to be made from the aggregate income of the estate for that year (including any falling to be made by virtue of this subsection) exceeds the amount of that income, the excess shall be carried forward and treated for that purpose as an amount falling to be deducted from the aggregate income of the estate for the following year.
- (2) In the event of its appearing, on the completion of the administration of an estate in the residue of which, or in a part of the residue of which, a company had an absolute interest at the completion of the administration, that the aggregate of the benefits received in respect of that interest does not amount to as much as the aggregate for all years of the residuary income of the company having that interest, section 696 shall have effect as if the amount of the deficiency were to be applied in reducing the amount taken to be its residuary income for the year in which the administration of the estate is completed and, in so far as the deficiency exceeds that income, in reducing the amount taken to be its residuary income for the previous year, and so on.
- (3) In subsection (2) above “*benefits received*” in respect of an absolute interest means the following amounts in respect of all sums paid before, or payable on, the completion of the administration in respect of that interest, that is to say—
- (a) as regards a sum paid before the completion of the administration, in the case of a United Kingdom estate such an amount as would, after deduction of income tax for the year of assessment in which that sum was paid, be equal to that sum, or in the case of a foreign estate the amount of that sum; and
- (b) as regards a sum payable on the completion of the administration, in the case of a United Kingdom estate such an amount as would, after deduction of income tax for the year of assessment in which the administration is completed, be equal to that sum, or in the case of a foreign estate the amount of that sum.
- (4) In the application of subsection (2) above to a residue or a part of a residue in which a person other than the person having an absolute interest at the completion of the administration had an absolute interest at any time during the administration period, the aggregates mentioned in that subsection shall be computed in relation to those interests taken together . . . .
- (5) If the amount resulting from the computation mentioned in subsection (4) is greater than the total amount of the reduction which can be made under subsection (2), the share of the residuary income of the estate of the last previous holder of the interest for the last year in which that person had that interest is to be reduced, and so on.
#### Special provisions as to certain interests in residue
##### 698
- (1) Where the personal representatives of a deceased person have as such a right in relation to the estate of another deceased person such that, if that right were vested in them for their own benefit, they would have an absolute or limited interest in the residue of that estate or in a part of that residue, they shall be deemed to have that interest notwithstanding that that right is not vested in them for their own benefit, and any amount deemed to be paid to them as income by virtue of this Part shall be treated as part of the aggregate income of the estate of the person whose personal representatives they are.
- (1A) Subsection (1B) below applies where—
- (a) successively during the administration period there are different persons with interests in the residue of the estate of a deceased person or in parts of such a residue;
- (b) the later interest or, as the case may be, each of the later interests arises or is created on the cessation otherwise than by death of the interest that precedes it; and
- (c) the earlier or, as the case may be, earliest interest is a limited interest.
- (1B) Where this subsection applies, this Part shall have effect in relation to any payment made in respect of any of the interests referred to in subsection (1A) above—
- (a) as if all those interests were the same interest so that none of them is to be treated as having ceased on being succeeded by any of the others;
- (b) as if (subject to paragraph (c) below) the interest which is deemed to exist by virtue of paragraph (a) above (“the deemed single interest”) were an interest of—
- (i) except in a case to which sub-paragraph (ii) below applies, the person in respect of whose interest or previous interest the payment is made;
- (ii) in a case where the person entitled to receive the payment is any other person who has or has had an interest which is deemed to be comprised in the deemed single interest, that other person;
and
- (c) in so far as any of the later interests is an absolute interest as if, for the purposes of section 696(3A) to (5)—
- (i) the earlier interest or interests had never existed and the absolute interest had always existed;
- (ii) the sums (if any) which were deemed in relation to the earlier interest or interests to have been paid as income for any accounting period to any of the persons entitled thereto were sums previously paid during the administration period in respect of the absolute interest; and
- (iii) those sums were sums falling to be treated as sums paid as income to the person entitled to the absolute interest.
- (2) Where successively during the administration period there are different persons with absolute interests in the residue of the estate of a deceased person or in parts of such a residue, the aggregate payments and aggregated income entitlement referred to in subsections (3A) and (3B) of section 696 shall be computed for the purposes of that section in relation to an absolute interest subsisting at any time (“the subsequent interest”)—
- (a) as if the subsequent interest and any previous absolute interest corresponding to the subsequent interest, or relating to any part of the residue to which the subsequent interest relates, were the same interest; and
- (b) as if the residuary income for any accounting period of the person entitled to the previous interest were residuary income of the person entitled to the subsequent interest and any amount deemed to be paid as income to the person entitled to the previous interest were an amount deemed to have been paid to the person entitled to the subsequent interest.
- (3) Where, upon the exercise of a discretion, any of the income of the residue of the estate of a deceased person for any period (being the administration period or a part of the administration period) would, if the residue had been ascertained at the commencement of that period, be properly payable to any person, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person—
- (a) the amount of any sum paid pursuant to an exercise of the discretion in favour of that person shall be deemed for corporation tax purposes to have been paid to that person as income for the accounting period in which it was paid; and
- (b) section 695(4) to (6) shall have effect in relation to an amount which is deemed to have been paid as income by virtue of paragraph (a) above.
- (4) Subsection (5) applies in any case where—
- (a) successively during the administration period there are different persons with absolute interests in the residue of the estate of a deceased person, or in parts of such a residue, and
- (b) some, but not all are companies liable to corporation tax in respect of income within this Part.
- (5) References in this section—
- (a) to sums deemed to be paid as income for an accounting period to a person who is not such a company,
- (b) to the residuary income for any accounting period of such a person, or
- (c) to amounts deemed to be paid to such a person as income,
are references to sums that would be so deemed, to the income that would be such residuary income or, as the case may be, to the amounts that would be so deemed if the assumptions in subsection (6) were made.
- (6) The assumptions are—
- (a) that each of the persons who is not a company liable to corporation tax in respect of income within this Part is such a company, and
- (b) that in the case of each person who is not a company, the person's accounting periods correspond with years of assessment.
#### Relief from higher rate tax for inheritance tax on accrued income
##### 699
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments and information
##### 700
- (1) Where on the completion of the administration of an estate any amount is deemed by virtue of this Part to have been paid to any company as income for any accounting period and—
- (a) that amount is greater than the amount that has previously been deemed to have been paid to it as income for that accounting period by virtue of this Part; or
- (b) no amount has previously been so deemed to have been paid to it as income for that accounting period;
an assessment may be made upon it for that accounting period and corporation tax charged accordingly or, on a claim being made for the purpose, any relief or additional relief to which it may be entitled shall be allowed accordingly.
- (2) Where on the completion of the administration of an estate any amount is deemed by virtue of this Part to have been paid to any company as income for any accounting period, and that amount is less than the amount that has previously been so deemed to have been paid to it, then—
- (a) if an assessment has already been made upon it for that accounting period, such adjustments shall be made in that assessment as may be necessary for the purpose of giving effect to the provisions of this Part which take effect on the completion of the administration, and any corporation tax overpaid shall be repaid; and
- (b) if—
- (i) any relief has been allowed to it by reference to the amount which has been previously deemed by virtue of this Part to have been paid to it as income for that accounting period, and
- (ii) the amount of that relief exceeds the amount of relief which could have been given by reference to the amount which, on the completion of the administration, is deemed to have been paid to it as income for that accounting period,
the relief so given in excess may, if not otherwise made good, be charged under Case VI of Schedule D and recovered from that company accordingly.
- (3) Notwithstanding anything in the Tax Acts, the time within which an assessment may be made for the purposes of this Part, or an assessment may be adjusted for those purposes, or a claim for relief may be made by virtue of this Part, shall not expire before the end of the period of three years beginning with the 31st January next following the accounting period in which the administration of the estate in question was completed.
- (4) An inspector may by notice require any person being or having been a personal representative of a deceased person, or having or having had an absolute or limited interest in the residue of the estate of a deceased person or in a part of such residue, to furnish him within such time as he may direct (not being less than 28 days) with such particulars as he thinks necessary for the purposes of this Part or Chapter 6 of Part 5 of ITTOIA 2005.
- (5) It shall be the duty of a personal representative of a deceased person, if a request to do so is made in writing by a person who has, or has had, an absolute or limited interest in the residue of the estate of the deceased or by a person to whom any of the income of the residue of that estate has been paid in the exercise of any discretion, to furnish the person making the request with a statement in writing setting out—
- (a) in respect of every amount which has been, or is treated as having been, actually paid to that person in respect of that interest or in the exercise of that discretion, the amount (if any) deemed under this Part to have been paid to him as income for an accounting period; . . .
- (aa) the amount treated as estate income under Chapter 6 of Part 5 of ITTOIA 2005 in respect of that interest or the exercise of that discretion for which he is liable to income tax for a year of assessment, and
- (b) the amount of any tax at the applicable rate which any amount falling within paragraph (a) or (aa) above is deemed to have borne;
and, where an amount deemed to have been paid as income to any person for any accounting period under this Part or treated as estate income under that Chapter is deemed for any of the purposes of this Part or that Chapter to have borne tax on different parts of it at different applicable rates, the matters to be set out in pursuance of paragraphs (a) to (b) above shall be set out separately as respects each part of that amount.
- (6) The duty imposed by subsection (5) above shall be enforceable at the suit or instance of the person making the request.
#### Interpretation
##### 701
- (1) The following provisions of this section shall have effect for the purpose of the interpretation of sections 695 to 700.
- (2) A person shall be deemed to have an absolute interest in the residue of the estate of a deceased person, or in a part of such residue, if and so long as the capital of the residue or of that part would, if the residue had been ascertained, be properly payable to him, or to another in his right, for his benefit, or is properly so payable, whether directly by the personal representatives or indirectly through a trustee or other person.
- (3) A person shall be deemed to have a limited interest in the residue of the estate of a deceased person, or in a part of such residue, during any period, being a period during which he has not an absolute interest in the residue or in that part, where the income of the residue or of that part for that period would, if the residue had been ascertained at the commencement of that period, be properly payable to him, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person.
- (3A) “*Applicable rate*”, in relation to any amount which a person is deemed by virtue of this Part to receive or to have a right to receive, means the basic rate , the savings rate or the dividend ordinary rate according as the income of the residue of the estate out of which that amount is or would be paid bears tax at the basic rate , the savings rate or the dividend ordinary rate; and in determining for the purposes of this Part whether or how much of any payment is or would be deemed to be made out of income that bears tax at one rate rather than another—
- (a) such apportionments of the amounts bearing tax at different rates shall be made between different persons with interests in the residue of the estate as are just and reasonable in relation to their different interests; and
- (b) subject to paragraph (a) above, it shall be assumed that—
- (i) payments are to be made out of income bearing tax at the basic rate before they are made out of income bearing tax at the savings rateor the dividend ordinary rate; and
- (ii) that payments are to be made out of income bearing tax at the savings rate before they are made out of income bearing tax at the dividend ordinary rate.
- (4) “*Personal representatives*” means, in relation to the estate of a deceased person, his personal representatives as defined in relation to England and Wales by section 55 of the Administration of Estates Act 1925, and persons having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under the law of England and Wales of personal representatives as so defined; and references to “*personal representatives as such*” shall be construed as references to personal representatives in their capacity as having such functions.
- (5) “*Specific disposition*” means a specific devise or bequest made by a testator, and includes the disposition of personal chattels made by section 46 of the Administration of Estates Act 1925 and any disposition having, whether by virtue of any enactment or otherwise, under the law of another country an effect similar to that of a specific devise or bequest under the law of England and Wales.
- (6) Subject to subsection (7) below, “*charges on residue*” means, in relation to the estate of a deceased person, the following liabilities, properly payable thereout and interest payable in respect of those liabilities, that is to say—
- (a) funeral, testamentary and administration expenses and debts, and
- (b) general legacies, demonstrative legacies, annuities and any sum payable out of residue to which a person is entitled under the law of intestacy of any part of the United Kingdom or any other country, and
- (c) any other liabilities of his personal representatives as such.
- (7) Where, as between persons interested under a specific disposition or in a general or demonstrative legacy or in an annuity and persons interested in the residue of the estate, any such liabilities as are mentioned in subsection (6) above fall exclusively or primarily upon the property that is the subject of the specific disposition or upon the legacy or annuity, only such part (if any) of those liabilities as falls ultimately upon the residue shall be treated as charges on residue.
- (8) References to the aggregate income of the estate of a deceased person for any year of assessment shall be construed as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—
- (a) any such income which is chargeable to United Kingdom income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year; . . .
- (b) any such income which would have been so chargeable if it had arisen in the United Kingdom to a person resident and ordinarily resident there, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to United Kingdom income tax;
- (c) any amount of income treated as arising to the personal representatives under section 410(4) of ITTOIA 2005 (stock dividends) that would be charged to income tax under Chapter 5 of Part 4 of that Act if income arising to personal representatives were so charged (see section 413 of that Act);
- (d) in a case where section 419(2) of that Act applies (release of loans to participator in close company: debts due from personal representatives), the amount that would be charged to income tax under Chapter 6 of Part 4 apart from that section; and
- (e) any amount that would have been treated as income of the personal representatives as such under section 466 of that Act if the condition in section 466(2) had been met (gains from contracts for life insurance);
but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased.
- (9) “*United Kingdom estate*” means, as regards any year of assessment or accounting period, an estate the income of which comprises only income which either—
- (a) has borne United Kingdom income tax by deduction, or
- (b) in respect of which the personal representatives are directly assessable to United Kingdom income tax,
not being an estate any part of the income of which is income in respect of which the personal representatives are entitled to claim exemption from United Kingdom income tax by reference to the fact that they are not resident, or not ordinarily resident, in the United Kingdom.
- (10) “*Foreign estate*” means, as regards any year of assessment or accounting period, an estate which is not a United Kingdom estate.
- (10A) Amounts to which section 699A(1)(a) and (b) applies shall be disregarded in determining whether an estate is a United Kingdom estate or a foreign estate, except that any estate the aggregate income of which comprises only such amounts shall be a United Kingdom estate.
- (11) In a case in which different parts of the estate of a deceased person are the subjects respectively of different residuary dispositions, this Part shall have effect in relation to each of those parts with the substitution—
- (a) for references to the estate of references to that part of the estate; and
- (b) for references to the personal representatives of the deceased as such of references to his personal representatives in their capacity as having the functions referred to in subsection (4) above in relation to that part of the estate.
- (12) In this Part—
- (a) references to sums paid include references to assets that are transferred or that are appropriated by a personal representative to himself, and to debts that are set off or released;
- (b) references to sums payable include references to assets as to which an obligation to transfer or a right of a personal representative to appropriate to himself is subsisting on the completion of the administration and to debts as to which an obligation to release or set off, or a right of a personal representative so to do in his own favour, is then subsisting; and
- (c) references to amount shall be construed, in relation to such assets as are referred to in paragraph (a) or (b) above, as references to their value at the date on which they were transferred or appropriated, or at the completion of the administration, as the case may require, and, in relation to such debts as are so referred to, as references to the amount thereof.
- (13) In this Part references to the administration period shall be construed in accordance with section 695(1).
- (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application to Scotland
##### 702
For the purpose of the application of this Part to Scotland—
- (a) any reference to the completion of the administration of an estate shall be construed as a reference to the date at which, after discharge of, or provision for, liabilities falling to be met out of the deceased’s estate (including, without prejudice to the generality of the foregoing, debts, legacies immediately payable, prior rights of surviving spouse or civil partner on intestacy and legal rights of surviving spouse or civil partner or children), the free balance held in trust for behoof of the residuary legatees has been ascertained;
- (b) for paragraph (b) of section 697(1) the following paragraph shall be substituted—
> (b) the amount of any of the aggregate income of the estate for that year to which a person has become entitled by virtue of a specific disposition
;
- (c) “*real estate*” means heritable estate, and
- (d) “*charge on residue*” shall include, in addition to the liabilities specified in section 701(6), any sums required to meet claims in respect of prior rights by surviving spouse or civil partner or in respect of legal rights by surviving spouse or civil partner or children.
## PART XVII — TAX AVOIDANCE
### CHAPTER I — CANCELLATION OF CORPORATION TAX ADVANTAGES FROM CERTAIN TRANSACTIONS IN SECURITIES
#### Cancellation of tax advantage
##### 703
- (1) Where—
- (a) in any such circumstances as are mentioned in section 704, and
- (b) in consequence of a transaction in securities or of the combined effect of two or more such transactions,
a company is in a position to obtain, or has obtained, a corporation tax advantage, then unless it shows that the transaction or transactions were carried out either for bona fide commercial reasons or in the ordinary course of making or managing investments, and that none of them had as their main object, or one of their main objects, to enable corporation tax advantages to be obtained, this section shall apply to it in respect of that transaction or those transactions.
- (2) For the purposes of this Chapter a corporation tax advantage obtained or obtainable by a company shall be deemed to be obtained or obtainable by it in consequence of a transaction in securities or of the combined effect of two or more such transactions, if it is obtained or obtainable in consequence of the combined effect of the transaction or transactions and the liquidation of a company.
- (3) Where this section applies to a company in respect of any transaction or transactions, the corporation tax advantage obtained or obtainable by it in consequence thereof shall be counteracted by such of the following adjustments, that is to say an assessment, the nullifying of a right to repayment or the requiring of the return of a repayment already made (the amount to be returned being chargeable . . . under Case VI of Schedule D and recoverable accordingly), or the computation or recomputation of profits or gains, or liability to corporation tax, on such basis as the Board may specify by notice served on it as being requisite for counteracting the corporation tax advantage so obtained or obtainable.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) *In the case of a man and his wife living with him (whether or not she is separately assessed to tax), this Chapter shall, subject to subsection* (8)*below, be treated as applying to him in respect of any transaction or transactions as it would apply if any property, rights or liabilities of the wife were his property, rights or liabilities in relation to which she had acted only as nominee for him, and shall be treated as applying to the wife in respect of any transaction or transactions as it would apply if any property, rights or liabilities of the man were her property, rights or liabilities in relation to which he had acted only as nominee for her*.
- (8) *No adjustment made under subsection* (3)*above by reference to any transaction or transactions to counteract any tax advantage shall by virtue of subsection* (7)*above be so made that a person bears more tax than if the transaction or transactions had not had as a consequence that any relief or increased relief from, or repayment or increased repayment of, income tax, or any deduction in computing profits or gains, was obtained or obtainable, or that the way in which receipts accrued was such that the recipient did not pay or bear tax on them*.
- (9) The Board shall not give a notice under subsection (3) above until they have notified the company in question that they have reason to believe that this section may apply to it in respect of a transaction or transactions specified in the notification; and if within 30 days of the issue of the notification that company, being of opinion that this section does not so apply to it, makes a statutory declaration to that effect stating the facts and circumstances upon which its opinion is based, and sends it to the Board, then subject to subsection (10) below, this section shall not apply to it in respect of the transaction or transactions.
- (10) If, when a statutory declaration has been sent to the Board under subsection (9) above, they see reason to take further action in the matter—
- (a) the Board shall send to the tribunal a certificate to that effect, together with the statutory declaration, and may also send therewith a counter-statement with reference to the matter;
- (b) the tribunal shall take into consideration the declaration and the certificate, and the counter-statement, if any, and shall determine whether there is or is not a prima facie case for proceeding in the matter, and if they determine that there is no such case this section shall not apply to the company in question in respect of the transaction or transactions;
but any such determination shall not affect the operation of this section in respect of transactions which include that transaction or some or all of those transactions and also include another transaction or other transactions.
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) This section applies whether the corporation tax advantage in question relates to a chargeable period ending before or after the commencement of this Act, but nothing in this section shall authorise the making of an assessment later than six years after the accounting period to which the corporation tax advantage relates; and no other provision contained in the Corporation Tax Acts shall be construed as limiting the powers conferred by this section.
#### The prescribed circumstances
##### 704
The circumstances mentioned in section 703(1) are as follows (and in this section references to “*the section 703(1) company*” are references to the company referred to in that section)
- (A) That in connection with the distribution of profits of a company, or in connection with the sale or purchase of securities being a sale or purchase followed by the purchase or sale of the same or other securities, the section 703(1) company receives an abnormal amount by way of dividend, and the amount so received is taken into account for any of the following purposes—
- (a) any exemption from corporation tax, or
- (b) the setting-off of losses against profits or income, or
- (c) the giving of group relief, or
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Appeals against Board’s notices under section 703
##### 705
- (1) Any company to which notice has been given under section 703(3) may within 30 days by notice to the Board appeal to the Special Commissioners on the grounds that section 703 does not apply to it in respect of the transaction or transactions in question, or that the adjustments directed to be made are inappropriate.
- (2) If the company or the Board are dissatisfied with the determination of the Special Commissioners the company or the Board may, on giving notice to the clerk to the Special Commissioners within 30 days after the determination, require the appeal to be re-heard by the tribunal, and the Special Commissioners shall transmit to the tribunal any document in their possession which was delivered to them for the purposes of the appeal.
- (3) Where notice is given under subsection (2) above, the tribunal shall re-hear and determine the appeal and shall have and exercise the same powers and authorities in relation to the appeal as the Special Commissioners might have and exercise, and the determination of the tribunal thereon shall be final and conclusive.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) On an appeal under subsections (1) to (3) above the Special Commissioners or the tribunal shall have power to cancel or vary a notice under subsection (3) of section 703 or to vary or quash an assessment made in accordance with such a notice, but the bringing of an appeal or the statement of a case shall not affect the validity of a notice given or of any other thing done in pursuance of that subsection pending the determination of the proceedings.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The tribunal
##### 706
- (1) For the purposes of this Chapter the tribunal shall consist of—
- (a) a chairman, appointed by the Lord Chancellor, and
- (b) two or more persons appointed by the Lord Chancellor as having special knowledge of and experience in financial or commercial matters.
- (2) A person appointed as chairman or other member of the tribunal shall vacate his office on the day on which he attains the age of 70; but this subsection is subject to section 26(4) to (6) of the Judicial Pensions and Retirement Act 1993 (power to authorise continuance in office up to the age of 75).
#### Procedure for clearance in advance
##### 707
- (1) The following provisions shall have effect where in pursuance of this section a company furnishes to the Board particulars of a transaction or transactions effected or to be effected by it , that is to say—
- (a) if the Board are of opinion that the particulars, or any further information furnished in pursuance of this paragraph, are not sufficient for the purposes of this section, they shall within 30 days of the receipt thereof notify to that company what further information they require for those purposes, and unless that further information is furnished to the Board within 30 days from the notification, or such further time as the Board may allow, they shall not be required to proceed further under this section;
- (b) subject to paragraph (a) above, the Board shall within 30 days of the receipt of the particulars, or, where that paragraph has effect, of all further information required, notify that company whether or not they are satisfied that the transaction or transactions as described in the particulars were or will be such that no notice under section 703(3) ought to be given in respect of it or them;
and, subject to the following provisions of this section, if the Board notify it that they are so satisfied, section 703 shall not apply to it in respect of that transaction or those transactions.
- (2) If the particulars, and any further information given under this section with respect to any transaction or transactions, are not such as to make full and accurate disclosure of all facts and considerations relating thereto which are material to be known to the Board, any notification given by the Board under this section shall be void.
- (3) In no event shall the giving of a notification under this section with respect to any transaction or transactions prevent section 703 applying to a company in respect of transactions which include that transaction or all or some of those transactions and also include another transaction or other transactions.
#### Power to obtain information
##### 708
Where it appears to the Board that by reason of any transaction or transactions a company may be a company to which section 703 applies, the Board may by notice served on it require it, within such time not less than 28 days as may be specified in the notice, to furnish information in its possession with respect to the transaction or any of the transactions, being information as to matters, specified in the notice, which are relevant to the question whether a notice under section 703(3) should be given in respect of it.
#### Meaning of “tax advantage” and other expressions
##### 709
- (1) In this Chapter “*corporation tax advantage*” means a relief or increased relief from, or repayment or increased repayment of, corporation tax, or the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax or the avoidance of a possible assessment thereto, whether the avoidance or reduction is effected by receipts accruing in such a way that the recipient does not pay or bear corporation tax on them, or by a deduction in computing profits or gains.
- (2) In this Chapter—
- “*company*” includes any body corporate,
- “*securities*”—includes shares and stock, andin relation to a company not limited by shares (whether or not it has a share capital) includes also a reference to the interest of a member of the company as such, whatever the form of that interest;
- “*trading stock*” has the same meaning as in section 100(1);
- “*transaction in securities*” includes transactions, of whatever description, relating to securities, and in particular—the purchase, sale or exchange of securities;the issuing or securing the issue of, or applying or subscribing for, new securities;the altering, or securing the alteration of, the rights attached to securities;and references to dividends include references to other qualifying distributions and to interest.
- (2A) In this Chapter references to a relief . . . include . . . references to a tax credit . . . .
- (3) In section 704—
- (a) references to profits include references to income, reserves or other assets;
- (b) references to distribution include references to transfer or realisation (including application in discharge of liabilities); and
- (c) references to the receipt of consideration include references to the receipt of any money or money’s worth.
- (4) For the purposes of section 704 an amount received by way of dividend shall be treated as abnormal if the Board, the Special Commissioners or the tribunal, as the case may be, are satisfied—
- (a) in the case of a dividend at a fixed rate, that it substantially exceeds the amount which the recipient would have received if the dividend had accrued from day to day and the recipient had been entitled only to so much of the dividend as accrued while the recipient held the securities, so however that an amount shall not be treated as abnormal by virtue only of this paragraph if during the six months beginning with the purchase of the securities the recipient does not sell or otherwise dispose of, or acquire an option to sell, any of those securities or any securities similar to those securities; or
- (b) in any case, that it substantially exceeds a normal return on the consideration provided by the recipient for the relevant securities, that is to say, the securities in respect of which the dividend was received and, if those securities are derived from securities previously acquired by the recipient, the securities which were previously acquired.
- (5) For the purposes of subsection (4)(a) above securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred, and for those purposes rights guaranteed by the Treasury shall be treated as rights against the Treasury.
- (6) For the purposes of subsection (4)(b) above—
- (a) if the consideration provided by the recipient for any of the relevant securities was in excess of their market value at the time the recipient acquired them, or if no consideration was provided by the recipient for any of the relevant securities, the recipient shall be taken to have provided for those securities consideration equal to their market value at the time the recipient acquired them; and
- (b) in determining whether an amount received by way of dividend exceeds a normal return, regard shall be had to the length of time previous to the receipt of that amount that the recipient first acquired any of the relevant securities and to any dividends and other distributions made in respect of them during that time.
### CHAPTER II — TRANSFERS OF SECURITIES
### Transfers with or without accrued interest: introductory
#### Meaning of “securities”, “transfer” etc. for purposes of sections 711 to 728
##### 710
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “interest”, “transfers with or without accrued interest” etc
##### 711
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “settlement day” for purposes of sections 711 to 728
##### 712
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Transfers with or without accrued interest: charge to tax and reliefs
#### Deemed sums and reliefs
##### 713
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of deemed sums and reliefs
##### 714
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from sections 713 and 714
##### 715
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of unrealised interest
##### 716
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variable interest rate
##### 717
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest in default
##### 718
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Unrealised interest in default
##### 719
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Transfers with or without accrued interest: supplemental
#### Nominees, trustees etc
##### 720
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Death
##### 721
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Trading stock
##### 722
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign securities: delayed remittances
##### 723
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies
##### 724
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lloyd’s underwriters
##### 725
#### Building societies
##### 726
#### Stock lending
##### 727
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 728
- (1) In order to obtain for the purposes of Part 12 of ITA 2007 (accrued income profits) particulars relating to securities, an inspector may by notice require a return under subsection (2) or (3) below.
- (2) A member of the Stock Exchange, other than a market maker, may be required to make a return giving, in relation to any transactions effected by him in the course of his business in the period specified in the notice, such particulars as may be so specified.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) A person (other than a member of the Stock Exchange), who acts as an agent or broker in the United Kingdom in transactions in securities, may be required to make a return giving, in relation to any such transactions effected by him in the period specified in the notice, such particulars as may be so specified.
- (4) No person shall be required under subsection (2) or (3) above to include in a return particulars of any transaction effected more than three years before the service of the notice requiring him to make the return.
- (5) In order to obtain for the purposes of Part 12 of ITA 2007 (accrued income profits) particulars relating to securities, the Board or an inspector may by notice require any person in whose name any securities are registered to state whether or not he is the beneficial owner of those securities and, if he is not the beneficial owner of them or any of them, to furnish the name and address of the person or persons on whose behalf the securities are registered in his name.
- (6) In this section “*market maker*”, in relation to securities, means a person who—
- (a) holds himself out at all normal times in compliance with the rules of the Stock Exchange as willing to buy and sell securities of the kind concerned at a price specified by him; and
- (b) is recognised as doing so by the Council of the Stock Exchange.
- (7) The Board may by regulations provide that—
- (a) subsections (2), (3) and (6)(a) above shall have effect as if references to the Stock Exchange were to any recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations; and
- (b) subsection (6)(b) shall have effect as if the reference to the Council of the Stock Exchange were to the investment exchange concerned.
- (8) Regulations under subsection (7) above shall apply in relation to transactions effected on or after such day as may be specified in the regulations.
- (9) In this section “*securities*” has the meaning given by section 619 of ITA 2007.
### Other transfers of securities
#### Sale and repurchase of securities
##### 729
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of income arising from securities
##### 730
- (1) Where in any chargeable period the owner of any shares (“the owner”) sells or transfers the right to receive any distribution payable (whether before or after the sale or transfer) in respect of the shares without selling or transferring the shares, then, for all the purposes of the Tax Acts, that distribution, whether it would or would not be chargeable to tax apart from the provisions of this section—
- (a) shall be treated as the income of the owner or, in a case where the owner is not the beneficial owner of the shares and some other person (“a beneficiary”) is beneficially entitled to the income arising from the shares, the income of the beneficiary, and
- (b) shall be treated as the income of the owner or beneficiary for that chargeable period, . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) This section does not have effect in relation to a sale or transfer if the proceeds of the sale or transfer are chargeable to tax.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where—
- (a) the shares are of such a character that the distribution payable in respect thereof may be paid without deduction of income tax, and
- (b) the owner or beneficiary does not show that the proceeds of any sale or other realisation of the right to receive the distribution which is deemed to be his income by virtue of this section have been charged to income tax under Chapter 13 of Part 4 of ITTOIA 2005 (sales of foreign dividend coupons),
then that distribution shall be charged to income tax.
- (4A) The income tax chargeable by virtue of subsection (4) above shall, subject to subsection (5) below, be charged on the full amount of the distribution in the year of assessment.
- (4B) The person liable for any tax chargeable by virtue of subsection (4) above is the owner or beneficiary, but he shall be entitled to credit for any tax which the distribution is shown to have borne.
- (5) But, in any case where, if the distribution had been relevant foreign income, the computation of tax would have been made by reference to the amount received in the United Kingdom, the income tax chargeable by virtue of subsection (4) above shall be computed on the full amount of the sums which have been or will be received in the United Kingdom in the year of assessment or any subsequent year in which the owner remains the owner of the shares.
- (6) In relation to corporation tax, subsections (4) and (5) above shall not apply but, subject to the provisions of the Tax Acts about distributions, the owner or beneficiary shall, in respect of any distribution which is deemed to be his income by virtue of this section, be chargeable to corporation tax under Case VI of Schedule D unless he shows that the proceeds of any sale or other realisation of the right to receive that distribution have been charged to tax by virtue of section 18(3B).
- (7) In this section—
- “*distribution*”, in relation to shares in a company,—has the same meaning as it has in the Corporation Tax Acts (see section 209), butalso includes any amount that would be a distribution if the company paying it were resident in the United Kingdom;
- “*shares*” means shares in a company.
- (8) The Board may by notice require any person to furnish them within such time as they may direct (not being less than 28 days), in respect of all shares of which he was the owner at any time during the period specified in the notice, with such particulars as they consider necessary for the purposes of this section . . . .
### Purchase and sale of securities
#### Application and interpretation of sections 732 to 734
##### 731
- (1) In this section “*the relevant provisions*” means sections 732, 733, 734 and this section.
- (2) Subject to subsections (2A) to (10) below, the relevant provisions apply to cases of a purchase by a person (“the first buyer”) of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (“the interest”) is receivable by the first buyer.
- (2A) The relevant provisions do not apply where the first buyer is required under the arrangements for the purchase of the securities to make to the person from whom he purchased the securities, not later than the date on which he subsequently sells the securities, a payment of an amount representative of the interest, or is treated by virtue of section 737A(5) below or section 602(1) of ITA 2007 as required to make such a payment.
- (2B) Subject to subsection (2E) below, where there is a repo agreement in relation to any securities—
- (a) neither—
- (i) the purchase of the securities by the interim holder from the original owner, nor
- (ii) the repurchase of the securities by the original owner,
shall be a purchase of those securities for the purposes of subsection (2) above; and
- (b) neither—
- (i) the sale of the securities by the original owner to the interim holder, nor
- (ii) the sale by the interim holder under which the securities are bought back by the original owner,
shall be taken for the purposes of subsection (2) above to be a subsequent sale of securities previously purchased by the seller.
- (2C) Accordingly, where there is a repo agreement, the securities repurchased by the original owner shall be treated for the purposes of subsection (2) above (to the extent that that would not otherwise be the case) as if they were the same as, and were purchased by the original owner at the same time as, the securities sold by him to the interim holder.
- (2D) For the purposes of subsections (2B) and (2C) above there is a repo agreement in relation to any securities if there is an agreement in pursuance of which a person (“*the original owner*”) sells the securities to another (“*the interim holder*”) and the original owner—
- (a) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement,
- (b) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises, or
- (c) under that agreement or any related agreement, is entitled, in pursuance of any obligation arising on a person’s becoming entitled to receive an amount in respect of the redemption of those securities, to receive from the interim holder an amount equal to the amount of the entitlement.
- (2E) Subsections (2B) and (2C) above do not apply if—
- (a) the agreement or agreements under which the arrangements are made for the sale and repurchase of the securities are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) any of the benefits or risks arising from fluctuations, before the securities are repurchased, in the market value of the securities in question accrues to or falls on the interim holder.
- (2F) Section 730B applies for the purposes of subsections (2B) to (2E) above as it applies for the purposes of section 730A.
- (3) The relevant provisions do not apply where—
- (a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or
- (b) that time exceeded one month and the purchase and sale were each effected at the current market price, and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The reference in subsection (3) above to the first buyer taking steps to dispose of the securities shall be construed—
- (a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,
- (b) in any other case, as a reference to his selling them.
- (4A) For the purposes of subsection (3) above, where a purchase or sale is effected as a direct result of the exercise of a qualifying option, it shall be treated as effected at the current market price if the terms under which the first buyer acquired the option, or, as the case may be, became subject to it, were arm’s length terms.
- (4B) For the purposes of subsection (4A) above an option is a “*qualifying option*” if it would be a traded option or financial option as defined in subsection (8) of section 144 of the 1992 Act were the reference in paragraph (b) of that subsection to the time of the abandonment or other disposal a reference to the time of exercise.
- (4C) In subsection (4A) above the reference to arm’s length terms is to terms—
- (a) agreed between persons dealing at arm’s length, or
- (b) not so agreed, but nonetheless such as might reasonably be expected to have been agreed between persons so dealing.
- (5) For the purposes of the relevant provisions, a sale of securities similar to, and of the like nominal amount as, securities previously bought (“the original securities”) shall be equivalent to a sale of the original securities, and subsection (4) above shall apply accordingly; and where the first buyer bought parcels of similar securities at different times a subsequent sale of any of the securities shall, so far as may be, be related to the last to be bought of the parcels, and then to the last but one, and so on.
- (6) A person shall be under no greater liability to tax by virtue of subsection (5) above than he would have been under if instead of selling the similar securities he had sold the original securities.
- (7) Where at the time when a trade is, or is deemed to be, set up and commenced , or when a trade is subject to a relevant change, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section—
- (a) as having been sold at that time in the open market by the person to whom they belonged immediately before that time, and
- (b) as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade.
- (7A) For the purposes of subsection (7) above a trade is subject to a relevant change—
- (a) when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on, or
- (b) when a company starts to be within the charge to income tax under Chapter 2 of Part 2 of ITTOIA 2005 in respect of the trade.
- (8) Subject to subsection (7) above, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.
- (9) For the purposes of the relevant provisions—
- “*interest*” includes a qualifying distribution and any dividend which is not a qualifying distribution . . . ;
- “*person*” includes any body of persons, and references to a person entitled to any exemption from tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;
- “*securities*” includes stocks and shares, except securities which are securities within the meaning of Chapter 2 of Part 12 of ITA 2007 (accrued income profits).
- (9A) In applying references in the relevant provisions to interest in relation to a qualifying distribution . . . —
- (a) “*gross interest*” means the qualifying distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it, and
- (b) “*net interest*” means the qualifying distribution exclusive of any such tax credit.
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of the relevant provisions, securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred; and for the purposes of this subsection, rights guaranteed by the Treasury shall be treated as rights against the Treasury.
#### Dealers in securities
##### 732
- (1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealing in securities, then, in computing for any of the purposes of the Tax Acts the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with section 735.
- (1A) Subsection (1) above shall not apply if the interest receivable by the first buyer falls to be taken into account either—
- (a) by virtue of section 366(1) of ITTOIA 2005 in computing profits chargeable to income tax under Chapter 2 of Part 2 of that Act, or
- (b) by virtue of section 95(1) of this Act in computing profits chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (1) above shall not apply if the securities are overseas securities bought by the first buyer . . . in the ordinary course of his trade as a dealer in securities and the following conditions are satisfied, namely—
- (a) the interest is brought into account in computing for the purposes of the Tax Acts the profits arising from or loss sustained in the trade, and
- (b) where credit against tax would fall to be allowed in respect of the interest under section 788 or 790, the first buyer elects that credit shall not be so allowed.
In this subsection “overseas securities” means securities issued—
- (a) by a government or public or local authority of a territory outside the United Kingdom; or
- (b) by any other body of persons not resident in the United Kingdom.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons entitled to exemptions
##### 733
- (1) If the first buyer is entitled under any enactment to an exemption from tax which, apart from this subsection, would extend to the interest, then the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with section 735.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons other than dealers in securities
##### 734
- (1) If the first buyer carries on a trade not falling within section 732, then in ascertaining whether any or what repayment of income tax is to be made to him under section 64 or 72 of ITA 2007 by reference to any loss sustained in the trade and the amount of his income for the year of assessment his income for which includes the interest, there shall be left out of account—
- (a) the appropriate amount in respect of the interest, as determined in accordance with section 735, and
- (b) any tax paid on that amount.
- (2) Where the first buyer is a company which does not carry on a trade falling within section 732—
- (a) the appropriate amount in respect of the interest, as determined in accordance with section 735(2), and
- (b) any tax paid in respect of or deducted from that amount,
shall be disregarded except that, for the purposes of corporation tax on chargeable gains, the appropriate proportion of the net interest receivable by the first buyer as mentioned in section 735(2) shall be treated as if it were a capital distribution within the meaning of section 122(5)(b) of the 1992 Act received in respect of the holding of the securities concerned.
- (3) In applying references in this section to interest in relation to a qualifying distribution, references to any tax paid on or in respect of an amount shall be construed as references to so much of any related tax credit as is attributable to that amount; and for this purpose “*related tax credit*”, in relation to an amount, means the tax credit to which the recipient of the distribution of which that amount is a proportion is entitled.
#### Meaning of “appropriate amount in respect of” interest
##### 735
- (1) For the purposes of section 732 the appropriate amount in respect of the interest is the appropriate proportion of the net interest receivable by the first buyer.
- (2) For the purposes of sections 733 and 734 the appropriate amount in respect of the interest is the gross amount corresponding with the appropriate proportion of the net interest receivable by the first buyer.
- (3) For the purposes of this section the appropriate proportion , in relation to securities listed in the Official List of the Stock Exchange, is the proportion which—
- (a) the period beginning with the date on which the securities were , in accordance with announcements made by The Stock Exchange, first to be dealt in without carrying rights to the interest payment last payable before the interest receivable by the first buyer, and ending with the day before the day on which the first buyer bought the securities, bears to—
- (b) the period beginning with that date and ending with the day before the first date after the purchase by the first buyer on which the securities are , in accordance with such announcements, first to be dealt in without carrying rights to the interest receivable by the first buyer.
- (4) Where the interest receivable by the first buyer was the first interest payment payable in respect of the securities, paragraphs (a) and (b) of subsection (3) above shall have effect with the substitution, for references to the date on which the securities were first to be dealt in as mentioned in paragraph (a), of the beginning of the period for which the interest was payable; except that where the capital amount of the securities was not fully paid at the beginning of that period and one or more instalments of capital were paid during that period—
- (a) the interest shall be treated as divided into parts, calculated by reference to the amount of the interest attributable to the capital paid at or before the beginning of that period and the amount thereof attributable to each such instalment, and
- (b) treating each of those parts as interest payable for that period or, where the part was calculated by reference to any such instalment, as interest payable for the part of that period beginning with the payment of the instalment, there shall be calculated, in accordance with the preceding provisions of this section, the amount constituting the appropriate proportion of each part, and
- (c) the appropriate proportion of the interest for the purposes of this section shall be the proportion thereof constituted by the sum of those amounts.
- (5) In relation to securities not listed in the Official List of The Stock Exchange, subsection (3) above shall have effect as it has effect in relation to securities which are so listed but with the substitution for the periods therein mentioned of such periods as in the opinion of the Commissioners having jurisdiction in the matter, correspond therewith in the case of the securities in question.
### Miscellaneous provisions relating to securities
#### Company dealing in securities: distribution materially reducing value of holding
##### 736
- (1) Subsection (2) below applies where a company has, as a dealing company, a holding in another company resident in the United Kingdom (being a body corporate), and—
- (a) the holding amounts to, or is an ingredient in a holding amounting to, 10 per cent. of all holdings of the same class in that company, and
- (b) a distribution is, or two or more distributions are, made in respect of the holding, and
- (c) the value (at any accounting date or immediately before realisation or appropriation) of any security comprised in the holding is materially reduced below the value of the security at the time when it was acquired, and the whole or any part of this reduction is attributable to any distribution falling within paragraph (b) above;
and in relation to any security comprised in the holding, the company having the holding is in subsection (2) below referred to as “*the dealing company*” and so much of any reduction in the value of the security as is attributable to any distribution falling within paragraph (b) above is in that subsection referred to as “the relevant reduction”.
- (2) Where this subsection applies, an amount equal to the relevant reduction in the value of a security comprised in the holding—
- (a) shall, if and so long as the security is not realised or appropriated as mentioned below, be added to the value of the security for the purposes of any valuation;
- (b) shall be treated, on any realisation of the security in the course of trade, as a trading receipt of the dealing company or, in the event of a partial realisation, shall be so treated to an appropriate extent, and
- (c) shall be treated as a trading receipt of the dealing company if the security is appropriated in such circumstances that a profit on the sale of the security would no longer form part of the dealing company’s trading profits.
- (3) References in this section to a holding in a company refer to a holding of securities by virtue of which the holder may receive distributions made by the company, but so that—
- (a) a company’s holdings of different classes in another company shall be treated as separate holdings, and
- (b) holdings of securities which differ in the entitlements or obligations they confer or impose shall be regarded as holdings of different classes.
- (4) For the purposes of subsection (2) above—
- (a) all a company’s holdings of the same class in another company are to be treated as ingredients constituting a single holding, and
- (b) a company’s holding of a particular class shall be treated as an ingredient in a holding amounting to 10 per cent. of all holdings of that class if the aggregate of that holding and other holdings of that class held by connected persons amounts to 10 per cent. of all holdings of that class;
and , for the purposes of paragraph (b) above, whether persons are connected is determined in accordance with section 839, but as if, in subsection (7) of that section, after the words “or exercise control of” in each place where they occur there were inserted the words “ or to acquire a holding in ”.
- (5) Where this section applies in relation to a distribution which consists of or includes interest to which section 732 applies, any reduction under that section in the price paid for the securities in respect of which the distribution is made shall be adjusted in such manner as seems appropriate to the Board to take account of subsection (2) above.
- (6) For the purposes of this section “*security*” includes a share or other right and a company is a “dealing company” in relation to a holding if a profit on a sale of the holding would be taken into account in computing the company’s trading profits.
#### Manufactured dividends: treatment of tax deducted
##### 737
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Power to amend sections 732, 735 and 737
##### 738
- (1) The Board may by regulations provide for all or any of the following—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) that for section 735(3) and (5) (which refer to the Stock Exchange Daily Official List) there shall be substituted such provisions as the Board think fit to take account of recognised investment exchanges.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section “*recognised investment exchange*”has the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000.
### CHAPTER III — TRANSFER OF ASSETS ABROAD
#### Prevention of avoidance of income tax
##### 739
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Liability of non-transferors
##### 740
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740
##### 741
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 739 to 741
##### 742
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplemental provisions
##### 743
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### No duplication of charge
##### 744
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information
##### 745
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons resident in the Republic of Ireland
##### 746
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — CONTROLLED FOREIGN COMPANIES
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
##### 747
- (1) If . . . in any accounting period a company—
- (a) is resident outside the United Kingdom, and
- (b) is controlled by persons resident in the United Kingdom, and
- (c) is subject to a lower level of taxation in the territory in which it is resident,
. . . the provisions of this Chapter shall apply in relation to that accounting period.
- (1A) A company which would not, apart from this subsection, fall to be regarded as controlled by persons resident in the United Kingdom shall be taken for the purposes of this Chapter to be so controlled if—
- (a) there are two persons who, taken together, control the company;
- (b) one of those persons is resident in the United Kingdom and is a person in whose case the 40 per cent test in section 755D(3) is satisfied; and
- (c) the other is a person in whose case the 40 per cent test in section 755D(4) is satisfied.
- (1B) In determining, for the purposes of any provision of this Chapter except subsection (1)(a) above, whether a company is a person resident in the United Kingdom, section 249 of the Finance Act 1994 (under which a company is treated as non-resident if it is so treated for double taxation relief purposes) shall be disregarded.
- (2) A company which falls within paragraphs (a) to (c) of subsection (1) above is in this Chapter referred to as a “*controlled foreign company*”.
- (3) Subject to section 748, where the provisions of this Chapter apply in relation to an accounting period of a controlled foreign company, the chargeable profits of that company for that period and its creditable tax (if any) for that period shall each be apportioned in accordance with section 752 among the persons (whether resident in the United Kingdom or not) who had an interest in that company at any time during that accounting period.
- (4) Where, on such an apportionment of a controlled foreign company’s chargeable profits for an accounting period as is referred to in subsection (3) above, an amount of those profits is apportioned to a company resident in the United Kingdom then, subject to subsection (5) below—
- (a) a sum equal to corporation tax at the appropriate rate on that apportioned amount of profits, less the portion of the controlled foreign company’s creditable tax for that period (if any) which is apportioned to the resident company, shall be chargeable on the resident company as if it were an amount of corporation tax chargeable on that company; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and for the purposes of paragraph (a) above “*the appropriate rate*” means the rate of corporation tax applicable to profits of that accounting period of the resident company in which ends the accounting period of the controlled foreign company which is mentioned in subsection (1) above or, if there is more than one such rate, the average rate over the whole of that accounting period of the resident company.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Tax shall not, by virtue of subsection (4) above, be chargeable on a company resident in the United Kingdom unless, on the apportionment in question, the aggregate of—
- (a) the amount of the controlled foreign company’s chargeable profits for the accounting period in question which is apportioned to the resident company, and
- (b) any amounts of those chargeable profits which are apportioned to persons who are connected or associated with the resident company,
is at least 25 per cent. of the total of those chargeable profits.
- (6) In relation to a company resident outside the United Kingdom—
- (a) any reference in this Chapter to its chargeable profits for an accounting period is a reference to the amount which, on the assumptions in Schedule 24, would be the amount of the total profits of the company for that period on which, after allowing for any deductions available against those profits, corporation tax would be chargeable; and
- (b) any reference in this Chapter to profits does not include a reference to chargeable gains but otherwise (except as provided by paragraph (a) above) has the same meaning as it has for the purposes of corporation tax.
#### Limitations on direction-making power
##### 748
- (1) No apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company if—
- (a) in respect of that period the company pursues, within the meaning of Part 1 of Schedule 25, an acceptable distribution policy; or
- (b) throughout that period the company is, within the meaning of Part II of that Schedule, engaged in exempt activities; or
- (c) the public quotation condition set out in Part III of that Schedule is fulfilled with respect to that period; or
- (d) the chargeable profits of the accounting period do not exceed £50,000 or, if the accounting period is less than 12 months, a proportionately reduced amount; or
- (e) as respects the accounting period, the company is, within the meaning of regulations made by the Board for the purposes of this paragraph, resident in a territory specified in the regulations and satisfies—
- (i) such conditions with respect to its income or gains as may be so specified; and
- (ii) such other conditions (if any) as may be so specified.
- (1A) Regulations under paragraph (e) of subsection (1) above may—
- (a) make different provision for different cases or with respect to different territories;
- (b) make provision having effect in relation to accounting periods of controlled foreign companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Board may think fit.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Notwithstanding that none of paragraphs (a) to (e) of subsection (1) above applies to an accounting period of a controlled foreign company, no apportionment under section 747(3) falls to be made as regards that accounting period if it is the case that—
- (a) in so far as any of the transactions the results of which are reflected in the profits arising in that accounting period, or any two or more transactions taken together, the results of at least one of which are so reflected, achieved a reduction in United Kingdom tax, either the reduction so achieved was minimal or it was not the main purpose or one of the main purposes of that transaction or, as the case may be, of those transactions taken together to achieve that reduction, and
- (b) it was not the main reason or, as the case may be, one of the main reasons for the company’s existence in that accounting period to achieve a reduction in United Kingdom tax by a diversion of profits from the United Kingdom,
and Part IV of Schedule 25 shall have effect with respect to the preceding provisions of this subsection.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) This section is subject to section 748A.
#### Residence and interest
##### 749
- (1) Subject to subsections (2) to (4) and (6) below, in any accounting period in which a company is resident outside the United Kingdom, it shall be regarded for the purposes of this Chapter as resident in that territory in which, throughout that period, it is liable to tax by reason of domicile, residence or place of management.
- (2) If, in the case of any company,—
- (a) there are in any accounting period two or more territories falling within subsection (1) above, and
- (b) no election or designation made under paragraph (d) or (e) of subsection (3) below in relation to an earlier accounting period of the company has effect by virtue of section 749A(1) in relation to that accounting period,
subsection (3) below shall apply with respect to that company and that accounting period.
- (3) Where this subsection applies, the company shall in that accounting period be regarded for the purposes of this Chapter as resident in only one of those territories, namely—
- (a) if, throughout the accounting period, the company’s place of effective management is situated in one of those territories only, in that territory;
- (b) if, throughout the accounting period, the company’s place of effective management is situated in two or more of those territories, in that one of them in which, at the end of the accounting period, the greater amount of the company’s assets is situated;
- (c) if neither paragraph (a) nor paragraph (b) above applies, in that one of the territories falling within subsection (1) above in which, at the end of the accounting period, the greater amount of the company’s assets is situated;
- (d) if—
- (i) paragraph (a) above does not apply, and
- (ii) neither paragraph (b) nor paragraph (c) above produces one, and only one, of those territories,
in that one of them (if any) which is specified in an election made in relation to that accounting period by any one or more persons who together have a majority assessable interest in the company in that accounting period; and
- (e) if, in a case falling within paragraph (d) above, the time by which any election under that paragraph in relation to that accounting period must be made in accordance with section 749A(3)(b) expires without such an election having been made, in that one of those territories which the Board justly and reasonably designates in relation to that accounting period.
- (4) If, in the case of any company,—
- (a) there are in any accounting period two or more territories falling within subsection (1) above, and
- (b) an election or designation made under paragraph (d) or (e) of subsection (3) above in relation to an earlier accounting period of the company has effect by virtue of section 749A(1) in relation to the accounting period mentioned in paragraph (a) above,
the company shall in that accounting period be regarded for the purposes of this Chapter as resident in that one of those territories which is the subject of the election or designation.
- (5) If, in the case of any company, there is in any accounting period no territory falling within subsection (1) above, then, for the purposes of this Chapter, it shall be conclusively presumed that the company is in that accounting period resident in a territory in which it is subject to a lower level of taxation.
- (6) In any case where it becomes necessary for the purposes of subsection (3) above to determine in which of two or more territories the greater amount of a company’s assets is situated at the end of an accounting period—
- (a) account shall be taken only of those assets which, immediately before the end of that period, are situated in those territories; and
- (b) the amount of them shall be determined by reference to their market value at that time.
- (7) This section is without prejudice to the provision that may be made in regulations under section 748(1)(e).
- (8) For the purposes of this section, one or more persons together have a “majority assessable interest" in a controlled foreign company in an accounting period of the company if—
- (a) each of them has an assessable interest in the company in that accounting period; and
- (b) it is likely that, were an apportionment of the chargeable profits of the company for that accounting period made under section 747(3), the aggregate of the amounts which would be apportioned to them is greater than 50 per cent. of the aggregate of the amounts which would be apportioned to all the persons who have an assessable interest in the company in that accounting period.
- (9) For the purposes of subsection (8) above, a person has an “assessable interest" in a controlled foreign company in an accounting period of the company if he is one of the persons who it is likely would be chargeable to tax under section 747(4)(a) on an apportionment of the chargeable profits and creditable tax (if any) of the company for that accounting period under section 747(3).
#### Territories with a lower level of taxation
##### 750
- (1) Without prejudice to subsection (5) of section 749, a company which, by virtue of any of subsections (1) to (4) of that section, is to be regarded as resident in a particular territory outside the United Kingdom shall be considered to be subject to a lower level of taxation in that territory if , after giving effect to subsections (1A) and (1B) below, the amount of tax (“the local tax”) which is paid under the law of that territory in respect of the profits of the company which arise in any accounting period is less than three-quarters of the corresponding United Kingdom tax on those profits.
- (1A) If in the case of that accounting period there is any income, or any income and any expenditure, of the company—
- (a) which is brought into account in determining the profits of the company in respect of which tax is paid under the law of that territory, but
- (b) which does not also fall to be brought into account in determining the chargeable profits of the company,
the local tax shall be treated for the purposes of this Chapter as reduced to what it would have been had that income and any such expenditure not been so brought into account.
- (1B) If—
- (a) under the law of that territory any tax (“the company's tax”) falls to be paid by the company in respect of profits of the company arising in that accounting period,
- (b) under that law, any repayment of tax, or any payment in respect of a credit for tax, is made to a person other than the company, and
- (c) that payment or repayment is directly or indirectly in respect of the company's tax,
the local tax shall be treated for the purposes of this Chapter as reduced (or further reduced) by the amount of that payment or repayment.
- (2) For the purposes of this Chapter, the amount of the corresponding United Kingdom tax on the profits arising in an accounting period of a company resident outside the United Kingdom is the amount of corporation tax which, on the assumptions set out in Schedule 24 and subject to subsection (3) below, would be chargeable in respect of the chargeable profits of the company for that accounting period.
- (3) In determining the amount of corporation tax which, in accordance with subsection (2) above, would be chargeable in respect of the chargeable profits of an accounting period of a company resident outside the United Kingdom—
- (a) it shall be assumed for the purposes of Schedule 24 that an apportionment under section 747(3) falls to be made as regards that period; and
- (b) there shall be disregarded so much of any relief from corporation tax in respect of income as would be attributable to the local tax and would fall to be given by virtue of any provision of Part XVIII . . . ; and
- (c) there shall be deducted from what would otherwise be the amount of that corporation tax—
- (i) any amount which (on the assumptions set out in Schedule 24) would fall to be set off against corporation tax by virtue of section 7(2); and
- (ii) any amount of income tax or corporation tax actually charged in respect of any of those chargeable profits.
- (4) The references in subsection (3)(c) above to an amount falling to be set off or an amount actually charged do not include so much of any such amount as has been or falls to be repaid to the company whether on the making of a claim or otherwise.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods and creditable tax
##### 751
- (1) For the purposes of this Chapter, an accounting period of a company resident outside the United Kingdom shall begin—
- (a) whenever the company comes under the control of persons resident in the United Kingdom;
- (b) whenever the company . . . commences to carry on business unless an accounting period of the company has previously begun as respects which an apportionment under section 747(3) falls or has fallen to be made; and
- (c) whenever an accounting period of the company ends without the company then ceasing either to carry on business or to have any source of income whatsoever.
- (2) For the purposes of this Chapter, an accounting period of a company resident outside the United Kingdom shall end if and at the time when—
- (a) the company ceases to be under the control of persons resident in the United Kingdom; or
- (b) the company becomes, or ceases to be, liable to tax in a territory; or
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the company ceases to have any source of income whatsoever;
and for the purposes of paragraph (b) above “*liable to tax*” means liable to tax by reason of domicile, residence or place of management.
- (3) Without prejudice to subsections (1) and (2) above, subsections (3), (5) and (7) of section 12 shall apply for the purposes of this Chapter as they apply for the purposes of corporation tax, but with the omission of so much of those provisions as relates to a company coming or ceasing to be within the charge to corporation tax.
- (4) Where it appears to the Board that the beginning or end of any accounting period of a company resident outside the United Kingdom is uncertain, the Board may by notice specify as an accounting period of the company such period, not exceeding 12 months, as appears to the Board to be appropriate, and that period shall be treated for the purposes of this Chapter as an accounting period of the company unless the notice is subsequently amended under subsection (5) below.
- (5) If, on further facts coming to the knowledge of the Board after the giving of a notice under subsection (4) above, it appears to the Board that any accounting period specified in the notice is not the true accounting period, the Board shall amend the notice so as to specify the true period.
- (5A) Any notice under subsection (4) above, and notice of any amendment of such a notice under subsection (5) above, shall be given to every person who has an assessable interest (as defined in section 749(9)) in the company in the accounting period in question.
- (6) In this Chapter, in relation to an accounting period of a controlled foreign company as regards which an apportionment under section 747(3) falls to be made, the creditable tax means the aggregate of—
- (a) the amount of any relief from corporation tax in respect of income which (on the assumptions set out in Schedule 24 and assuming the company to be liable for corporation tax on the chargeable profits of that accounting period) would fall to be given to the company by virtue of any provision of Part XVIII in respect of foreign tax attributable to any income which is brought into account in determining those chargeable profits; and
- (b) any amount which (on those assumptions) would fall to be set off against corporation tax on those chargeable profits by virtue of section 7(2); and
- (c) the amount of any income tax or corporation tax actually charged in respect of the chargeable profits of that accounting period, less any of that tax which has been or falls to be repaid to the company, whether on the making of a claim or otherwise.
#### Apportionment of chargeable profits and creditable tax
##### 752
- (1) This section applies in any case where an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company.
- (2) Where—
- (a) the persons who have relevant interests in the controlled foreign company at any time in the relevant accounting period have those interests by virtue only of directly or indirectly holding ordinary shares of the company,
- (b) each of those persons satisfies the condition that he is either—
- (i) resident in the United Kingdom throughout that accounting period, or
- (ii) resident in the United Kingdom at no time in that accounting period, and
- (c) no company which has an intermediate interest in the controlled foreign company at any time in the relevant accounting period has that interest otherwise than by virtue of directly or indirectly holding ordinary shares of the controlled foreign company,
subsection (3) below shall apply.
- (3) Where this subsection applies, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made among the persons who have relevant interests in the company at any time in that period in direct proportion to the percentage of the issued ordinary shares of the controlled foreign company which, in accordance with section 752B, each of those relevant interests represents.
- (4) Where subsection (3) above does not apply, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made on a just and reasonable basis among the persons who have relevant interests in the company at any time in that period.
#### Notices and appeals
##### 753
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Assessment, recovery and postponement of tax
##### 754
- (1) Subject to the following provisions of this section, the provisions of section 747(4)(a) relating to the charging of a sum as if it were an amount of corporation tax shall be taken as applying, subject to the provisions of the Taxes Acts, and to any necessary modifications, all enactments applying generally to corporation tax, including those relating to company tax returns, those relating to the assessing, collecting and receiving of corporation tax, those conferring or regulating a right of appeal and those concerning administration, penalties, interest on unpaid tax and priority of tax in cases of insolvency under the law of any part of the United Kingdom.
- (1A) Accordingly (but without prejudice to subsection (1) above) the Management Act shall have effect as if—
- (a) any reference to corporation tax included a reference to a sum chargeable under section 747(4)(a) as if it were an amount of corporation tax; and
- (b) any reference to profits of a company included a reference to an amount of chargeable profits of a controlled foreign company which falls to be apportioned to a company under section 747(3).
- (2) For the purposes of the Taxes Acts, any sum chargeable on a company under section 747(4)(a) is chargeable for the accounting period of the company in which ends that one of the controlled foreign company’s accounting periods the chargeable profits of which give rise to that sum.
- (2A) Where—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company, and
- (b) the apportionment falls to be made in accordance with section 752(4) on a just and reasonable basis, and
- (c) a company tax return is made or amended using for the apportionment a particular basis adopted by the company making the return,
the Board may determine that another basis is to be used for the apportionment.
- (2B) For the purposes of subsection (2A) above, the Board may by notice require the company making the return—
- (a) to produce to them such documents in the company’s power or possession, and
- (b) to provide them with such information, in such form,
as they may reasonably require for the purpose of determining the basis which is to be used for making the apportionment.
- (2C) The provisions of paragraphs 27 to 29 of Schedule 18 to the Finance Act 1998 (notice to produce documents etc for the purposes of enquiry: supplementary provisions and penalty) shall apply in relation to a notice under subsection (2B) above.
- (2D) Once the Board have determined under subsection (2A) above the basis to be used for the apportionment, matters shall proceed as if that were the only basis allowed by the Tax Acts.
- (2E) A determination under subsection (2A) above may be questioned on an appeal against an amendment, made under paragraph 30 or 34(2) of Schedule 18 to the Finance Act 1998, of the company’s company tax return, but only on the ground that the basis of apportionment determined by the Board is not just and reasonable.
- (3) Where any appeal—
- (a) under paragraph 34(3) of Schedule 18 to the Finance Act 1998 against an amendment of a company tax return, or
- (b) under paragraph 48 of that Schedule against a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule),
involves any question concerning the application of this Chapter in relation to any particular person, that appeal shall be to the Special Commissioners.
- (3A) Where—
- (a) any such question as is mentioned in subsection (3) above falls to be determined by the Special Commissioners for the purposes of any proceedings before them, and
- (b) the question is one whose resolution is likely to affect the liability of more than one person under this Chapter in respect of the controlled foreign company concerned,
subsection (3B) below shall apply.
- (3B) Where this subsection applies—
- (a) each of the persons whose liability under this Chapter in respect of the controlled foreign company concerned is likely to be affected by the resolution of the question shall be entitled to appear and be heard by the Special Commissioners, or to make representations to them in writing;
- (b) the Special Commissioners shall determine that question separately from any other questions in those proceedings; and
- (c) their determination on that question shall have effect as if made in an appeal to which each of those persons was a party.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Schedule 26 shall have effect with respect to the reliefs which may be claimed by a company resident in the United Kingdom which has a liability for tax in respect of an amount of chargeable profits; and no reliefs other than those provided for by that Schedule shall be allowed against any such liability.
- (6) In any case where—
- (a) the whole or any part of the tax chargeable on a company (“the chargeable company”) by virtue of section 747(4)(a) is not paid before the date on which it is due and payable in accordance with this Act or, as the case may be, the Management Act; and
- (b) the Board serve a notice of liability to tax under this subsection on another company (“the responsible company”) which is resident in the United Kingdom and holds or has held (whether directly or indirectly) the whole or any part of the same interest in the controlled foreign company as is or was held by the chargeable company,
the whole or, as the case may be, the corresponding part of the tax chargeable on the chargeable company or, as the case may be, so much of it as remains unpaid shall be payable by the responsible company upon service of the notice.
- (7) Where a notice of liability is served under subsection (6) above—
- (a) the whole, or (as the case may be) the corresponding part, of any interest due on the tax chargeable on the chargeable company and not paid; and
- (b) any interest accruing due on that tax after the date of service,
shall be payable by the responsible company (so far as referable to tax payable by the responsible company by virtue of the notice).
- (8) In any case where—
- (a) a notice of liability is served on the responsible company under subsection (6) above, and
- (b) the relevant tax and any interest payable by the responsible company under subsection (7) above is not paid by that company before the expiry of the period of three months beginning on the date of service of the notice,
that tax and interest may, without prejudice to the right of recovery from the responsible company, be recovered from the chargeable company.
- (9) In this section “*the Taxes Acts*” has the same meaning as in the Management Act.
#### Information relating to controlled foreign companies
##### 755
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation and construction of Chapter IV
##### 756
- (1) In this Chapter—
- “*company tax return*” means a return required to be made under Schedule 18 to the Finance Act 1998;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades.
- (2) For the purposes of this Chapter—
- (a) section 839 applies; and
- (b) subsection (10) of section 783 applies as it applies for the purposes of that section.
- (3) The following provisions of Part XI apply for the purposes of this Chapter as they apply for the purposes of that Part—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) section 417(7) to (9);
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
### CHAPTER V — OFFSHORE FUNDS
### Material interests in non-qualifying offshore funds
#### Disposal of material interests in non-qualifying offshore funds
##### 757
- (1) This Chapter applies to a disposal by any person of an asset if—
- (a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which is or has at any material time been a non-qualifying offshore fund; or
- (b) at the time of the disposal, the asset constitutes an interest in a company resident in the United Kingdom or in a unit trust scheme, the trustees of which are at that time resident in the United Kingdom and at a material time after 31st December 1984 the interest was a material interest in a non-qualifying offshore fund;
and for the purpose of determining whether the asset disposed of falls within paragraph (b) above, section 127 of the 1992 Act (equation of original shares and new holding) shall have effect as it has effect for the purposes of that Act.
- (2) Subject to the following provisions of this section and section 758, there is a disposal of an asset for the purposes of this Chapter if there would be such a disposal for the purposes of the 1992 Act.
- (3) Notwithstanding anything in paragraph (b) of subsection (1) of section 62 of the 1992 Act (general provisions applicable on death: no deemed disposal by the deceased) where a person dies and the assets of which he was competent to dispose include an asset which is or has at any time been a material interest in a non-qualifying offshore fund, then, for the purposes of this Chapter, other than section 758—
- (a) immediately before the acquisition referred to in paragraph (a) of that subsection, that interest shall be deemed to be disposed of by the deceased for such a consideration as is mentioned in that subsection; but
- (b) nothing in this subsection affects the determination, in accordance with subsection (1) above, of the question whether that deemed disposal is one to which this Chapter applies.
- (4) Subject to subsection (3) above, section 62 of the 1992 Act applies for the purposes of this Chapter as it applies for the purposes of that Act, and the reference in that subsection to the assets of which a deceased person was competent to dispose shall be construed in accordance with subsection (10) of that section.
- (5) Section 135 of the 1992 Act (exchange of securities for those in another company treated as not involving a disposal) does not apply for the purposes of this Chapter to the extent that—
- (a) the interest in the entity that is company A for the purposes of that section that is exchanged is or was at a material time an interest in a non-qualifying offshore fund, and
- (b) the interest in the entity that is company B for those purposes that is exchanged is not an interest in such a fund.
In a case where that section would apply apart from this subsection, the exchange in question (of interests in or of an entity that are or were at a material time interests in a non-qualifying offshore fund) shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the exchange.
- (6) Section 136 of the 1992 Act (scheme of reconstruction involving issue of securities treated as exchange not involving disposal) does not apply for the purposes of this Chapter to the extent that—
- (a) the interest in the entity that is company A for the purposes of that section that is exchanged is or was at a material time an interest in a non-qualifying offshore fund, and
- (b) the interest in the entity that is company B for those purposes that is exchanged is not an interest in such a fund.
In a case where that section would apply apart from this subsection, the deemed exchange in question (of interests in or of an entity that are or were at a material time interests in a non-qualifying offshore fund) shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the deemed exchange.
- (7) For the purposes of this section—
- (a) a material time, in relation to the disposal of an asset, is any time on or after the earliest date on which any relevant consideration was given for the acquisition of the asset or, if that date is earlier than 1st January 1984, any time on or after 1st January 1984; and
- (b) “*relevant consideration*” means consideration which, assuming the application to the disposal of Chapter III of Part II of the 1992 Act, would fall to be taken into account in determining the amount of the gain or loss accruing on the disposal, whether that consideration was given by or on behalf of the person making the disposal or by or on behalf of a predecessor in title of his whose acquisition cost represents, directly or indirectly, the whole or any part of the acquisition cost of the person making the disposal.
#### Offshore funds operating equalisation arrangements
##### 758
- (1) For the purposes of this Chapter, an offshore fund operates equalisation arrangements if, and at a time when, arrangements are in existence which have the result that where—
- (a) a person acquires by way of initial purchase a material interest in the fund at some time during a period relevant to the arrangements; and
- (b) the fund makes a distribution for a period which begins before the date of his acquisition of that interest;
the amount of that distribution which is paid to him (assuming him still to retain that interest) will include a payment of capital which is debited to an account maintained under the arrangements (“the equalisation account”) and which is determined by reference to the income which had accrued to the fund at the date of his acquisition.
- (2) For the purposes of this section, a person acquires an interest in an offshore fund by way of initial purchase if—
- (a) his acquisition is by way of subscription for or allotment of new shares, units or other interests issued or created by the fund; or
- (b) his acquisition is by way of direct purchase from the persons concerned with the management of the fund and their sale to him is made in their capacity as managers of the fund.
- (3) Without prejudice to section 757(1), this Chapter applies, subject to the following provisions of this section, to a disposal by any person of an asset if—
- (a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which at that time is operating equalisation arrangements; and
- (b) the fund is not and has not at any material time (within the meaning of section 757(7)) been a non-qualifying offshore fund; and
- (c) the proceeds of the disposal do not fall to be taken into account as a trading receipt.
- (4) This Chapter does not, by virtue of subsection (3) above, apply to a disposal if—
- (a) it takes place during such a period as is mentioned in subsection (1)(a) above; and
- (b) throughout so much of that period as precedes the disposal, the income of the offshore fund concerned has been of such a nature as is referred to in paragraph 3(1) of Schedule 27.
- (5) An event which, apart from section 127 of the 1992 Act (reorganisations etc.), would constitute a disposal of an asset shall constitute such a disposal for the purpose of determining whether, by virtue of subsection (3) above, there is a disposal to which this Chapter applies.
- (6) The reference in subsection (5) above to section 127 of the 1992 Act includes a reference to that section as applied by any provision of Chapter 2 of Part 4 of that Act.
- (7) The Treasury may make provision by regulations as to the application of the provisions of this section in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (8) Regulations under subsection (7) may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
#### Material interests in offshore funds
##### 759
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Subject to the following provisions of this section, a person’s interest in an offshore fund is a material interest if, at the time when he acquired the interest, it could reasonably be expected that, at some time during the period of seven years beginning at the time of his acquisition, he would be able to realise the value of the interest (whether by transfer, surrender or in any other manner).
- (3) For the purposes of subsection (2) above, a person is at any time able to realise the value of an interest if at that time he can realise an amount which is reasonably approximate to that portion which the interest represents (directly or indirectly) of the market value at that time of the assets of the fund.
- (4) For the purposes of subsections (2) and (3) above—
- (a) a person is able to realise a particular amount if he is able to obtain that amount either in money or in the form of assets to the value of that amount; and
- (b) if at any time an interest in an offshore fund has a market value which is substantially greater than the portion which the interest represents, as mentioned in subsection (3) above, of the market value at that time of the assets concerned, the ability to realise such a market value of the interest shall not be regarded as an ability to realise such an amount as is referred to in that subsection.
- (5) An interest in an offshore fund is not a material interest if—
- (a) it is an interest in respect of any loan capital or debt issued or incurred for money which, in the ordinary course of a business of banking, is lent by a person carrying on that business; or
- (b) it is a right arising under a policy of insurance.
- (6) Shares in a company that is not resident in the United Kingdom(an “overseas company”) do not constitute a material interest in an offshore fund if—
- (a) the shares are held by a company and the holding of them is necessary or desirable for the maintenance and development of a trade carried on by the company or a company associated with it; and
- (b) the shares confer at least 10 per cent. of the total voting rights in the overseas company and a right, in the event of a winding-up, to at least 10 per cent. of the assets of that company remaining after the discharge of all liabilities having priority over the shares; and
- (c) not more than ten persons hold shares in the overseas company and all the shares in that company confer both voting rights and a right to participate in the assets on a winding-up; and
- (d) at the time of its acquisition of the shares, the company had such a reasonable expectation as is referred to in subsection (2) above by reason only of the existence of—
- (i) an arrangement under which, at some time within the period of seven years beginning at the time of acquisition, that company may require the other participators to purchase its shares; or
- (ii) provisions of either an agreement between the participators or the constitution of the overseas company under which the company will be wound up within a period which is, or is reasonably expected to be, shorter than the period referred to in subsection (2) above; or
- (iii) both such an arrangement and such provisions;
and in this paragraph “*participators*” means the persons holding shares falling within paragraph (c) above.
- (7) For the purposes of subsection (6)(a) above, a company is associated with another company if one of them has control of the other within the meaning of section 416 or both of them are under the control, within the meaning of that section, of the same person or persons.
- (8) An interest in a company that is not resident in the United Kingdom is not a material interest in an offshore fund at any time when the following conditions are satisfied, namely—
- (a) that the holder of the interest has the right to have the company wound up; and
- (b) that, in the event of a winding up, the holder is, by virtue of the interest and any other interest which he then holds in the same capacity, entitled to more than 50 per cent. of the assets remaining after the discharge of all liabilities having priority over the interest or interests concerned.
- (9) The market value of any asset for the purposes of this Chapter shall be determined in like manner as it would be determined for the purposes of the 1992 Act except that, in the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 272(5) of that Act (meaning of “*market value*” in relation to rights of unit holders in a unit trust scheme) shall apply with any necessary modifications for determining the market value of the interest for the purposes of this Chapter.
#### Non-qualifying offshore funds
##### 760
- (1) For the purposes of this Chapter, an offshore fund is a non-qualifying fund except during an account period of the fund in respect of which the fund is certified by the Board as a distributing fund.
- (2) An offshore fund shall not be certified as a distributing fund in respect of any account period unless, with respect to that period, the fund pursues a full distribution policy, within the meaning of Part I of Schedule 27.
- (3) Subject to Part II of that Schedule, an offshore fund shall not be certified as a distributing fund in respect of any account period if, at any time in that period—
- (a) more than 5 per cent. by value of the assets of the fund consists of interests in other offshore funds; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this Chapter, an account period of an offshore fund shall begin—
- (a) whenever the fund begins to carry on its activities; and
- (b) whenever an account period of the fund ends without the fund then ceasing to carry on its activities.
- (9) For the purposes of this Chapter, an account period of an offshore fund shall end on the first occurrence of any of the following—
- (a) the expiration of 12 months from the beginning of the period;
- (b) an accounting date of the fund or, if there is a period for which the fund does not make up accounts, the end of that period; and
- (c) the fund ceasing to carry on its activities.
- (10) For the purposes of this Chapter—
- (a) an account period of an offshore fund which is a company that is not resident in the United Kingdom shall end if, and at the time when, the company ceases to be resident outside the United Kingdom; and
- (b) an account period of an offshore fund which is a unit trust scheme of which the trustees are not resident in the United Kingdom shall end if, and at the time when, the trustees of the scheme become resident in the United Kingdom.
- (10A) For the purposes of this Chapter, in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C,
references to an account period of the offshore fund are to an account period of the umbrella fund or the main fund (as the case may be).
- (11) The provisions of Part III of Schedule 27 shall have effect with respect to the procedure for and in connection with the certification of an offshore fund as a distributing fund, and the supplementary provisions in Part IV of that Schedule shall have effect.
### Charge to tax of offshore income gains
#### Charge to income tax or corporation tax of offshore income gain
##### 761
- (1) If a disposal to which this Chapter applies gives rise in accordance with section 758 or Schedule 28 to an offshore income gain, then, subject to the provisions of this section, the amount of that gain—
- (a) shall be treated for all the purposes of the Tax Acts as income arising at the time of the disposal to the person making the disposal, and
- (b) shall be charged—
- (i) to income tax for the year of assessment in which the disposal is made, or
- (ii) to corporation tax as a profit or gain under Case VI of Schedule D for the accounting period in which the disposal is made.
- (1A) The income tax charged by virtue of subsection (1)(b)(i) above shall be charged on the full amount of the income treated as arising in the year of assessment.
- (2) Subject to subsection (3) below, sections 2(1), 10 and 10Bof the 1992 Act (persons chargeable to tax in respect of chargeable gains) and section 11(2A)(c) shall have effect in relation to income tax or corporation tax in respect of offshore income gains as they have effect in relation to capital gains tax or corporation tax in respect of chargeable gains.
- (3) In the application of sections 10 and 10Bof the 1992 Act in accordance with subsection (2) above, paragraphs (a) and (b) of subsection (1) of section 10 (which define the assets on the disposal of which chargeable gains are taxable) shall have effect with the omission of the words “situated in the United Kingdom and” and paragraphs (a) and (b) of subsection (1) of section 10B (which make similar provision in relation to corporation tax) shall have effect with the omission of the words “situated in the United Kingdom and”.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In the case of individuals resident or ordinarily resident but not domiciled in the United Kingdom, section 12 of the 1992 Act (which provides for taxation on a remittance basis) shall have effect in relation to income tax chargeable by virtue of subsection (1) above on an offshore income gain as it has effect in relation to capital gains tax in respect of gains accruing to such individuals from the disposal of assets situated outside the United Kingdom.
- (6) A charitable company shall be exempt from corporation tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes . . . .
- (6A) See section 535 of ITA 2007 for an exemption for income tax purposes for offshore income gains accruing to a charitable trust.
- (6B) If property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with Schedule 28) accruing being treated as an offshore income gain not accruing to a charity.
- (6C) In this section “*charity*” and “*charitable company*” have the same meaning as in section 506 and “*market value*” has the same meaning as in the 1992 Act.
- (7) In any case where—
- (a) a disposal to which this Chapter applies is a disposal of settled property, within the meaning of the 1992 Act, and
- (b) at the time of the disposal referred to in paragraph (a) above the trustees of the settlement are neither resident nor ordinarily resident in the United Kingdom for the purposes of the 1992 Act,
subsection (1) above shall not apply in relation to any offshore income gain to which the disposal gives rise.
#### Offshore income gains accruing to persons resident or domiciled abroad
##### 762
- (1) Section 13 of the 1992 Act (chargeable gains accruing to certain non-resident companies) shall have effect in relation to offshore income gains subject to the following modifications—
- (a) for any reference to a chargeable gain there shall be substituted a reference to an offshore income gain;
- (b) for the reference in subsection (7) to capital gains tax there shall be substituted a reference to income tax or corporation tax; and
- (c) paragraphs (b) and (c) of subsection (5) and subsection (8) shall be omitted.
- (2) Subject to subsections (3) and (4) below, sections 87 to 90 and 96 to 98 of the 1992 Act (gains of non-resident settlements) shall have effect in relation to offshore income gains subject to the following modifications—
- (a) for any reference to chargeable gains, other than the reference in section 87(6), there shall be substituted a reference to offshore income gains;
- (b) in section 87(2) of the 1992 Act for the words “tax under section 2(2)” there shall be substituted the words “ income tax by virtue of section 761 of the Taxes Act ”;
- (c) in section 87(7) the reference to tax shall be construed as a reference to income tax or corporation tax; and
- (d) sections 87(10) and 97(6) shall be omitted.
- (3) In section 87(6) of the 1992 Act, both as it applies apart from subsection (2) above and as applied by subsection (2) above, the reference to chargeable gains shall be construed as including a reference to offshore income gains.
- (4) If, in any year of assessment—
- (a) under subsection (3) of section 87 of the 1992 Act, as it applies apart from subsection (2) above, a chargeable gain falls to be attributed to a beneficiary, and
- (b) under that subsection, as applied by subsection (2) above, an offshore income gain also falls to be attributed to him,
subsection (4) of that section (gains attributed in proportion to capital payments received) shall have effect as if it required offshore income gains to be attributed before chargeable gains.
- (5) Subject to subsection (6) below, for the purpose of determining whether an individual ordinarily resident in the United Kingdom has a liability for income tax in respect of an offshore income gain which arises on a disposal to which this Chapter applies where the disposal is made by a person resident or domiciled outside the United Kingdom—
- (a) Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) shall apply as if the offshore income gain arising to the person resident or domiciled outside the United Kingdom constituted income becoming payable to him, and
- (b) any reference in that Chapter to income of (or payable or arising to) such a person accordingly includes a reference to the offshore income gain arising to him by reason of the disposal to which this Chapter applies.
- (6) To the extent that an offshore income gain is treated, by virtue of subsection (1) or subsection (2) above, as having accrued to any person resident or ordinarily resident in the United Kingdom, that gain shall not be deemed to be the income of any individual for the purposes of Chapter 2 of Part 13 of ITA 2007 or any provision of Chapter 5 of Part 5 of ITTOIA 2005.
#### Deduction of offshore income gain in determining capital gain
##### 763
- (1) The provisions of this section apply where a disposal to which this Chapter applies gives rise to an offshore income gain; and, if that disposal also constitutes the disposal of the interest concerned for the purposes of the 1992 Act, then that disposal is in the following provisions of this section referred to as the 1992 Act disposal.
- (2) So far as relates to an offshore income gain which arises on a material disposal (within the meaning of Part I of Schedule 28), subsections (3) and (4) below shall have effect in relation to the 1992 Act disposal in substitution for section 37(1) of that Act (deduction of consideration chargeable to tax on income).
- (3) Subject to the following provisions of this section, in the computation of the gain accruing on the 1992 Act disposal, a sum equal to the offshore income gain shall be deducted from the sum which would otherwise constitute the amount or value of the consideration for the disposal.
- (4) Where the 1992 Act disposal is of such a nature that, by virtue of section 42 of that Act (part disposals) an apportionment falls to be made of certain expenditure, no deduction shall be made by virtue of subsection (3) above in determining, for the purposes of the fraction in subsection (2) of that section, the amount or value of the consideration for the disposal.
- (5) If the 1992 Act disposal forms part of a transfer to which section 162 of that Act applies (roll-over relief on transfer of business in exchange wholly or partly for shares) then, for the purposes of subsection (4) of that section (determination of the amount of the deduction from the gain on the old assets) “B” in the fraction in that subsection (the value of the whole of the consideration received by the transferor in exchange for the business) shall be taken to be what it would be if the value of the consideration other than shares so received by the transferor were reduced by a sum equal to the offshore income gain.
- (6) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 757(5) or (6) or 758(5), the 1992 Act shall have effect as if an amount equal to the offshore income gain to which the disposal gives rise were given (by the person making the exchange concerned) as consideration for the new holding, within the meaning of section 128 of that Act (consideration given or received for new holding on a reorganisation).
- (6A) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 762A (exchange of interests of different classes), the 1992 Act shall have effect as if an amount equal to the offshore income gain to which that disposal gives rise were given (by the person making the exchange) as consideration for the new holding (within the meaning of section 128 of that Act (consideration given or received for new holding on a reorganisation)).
- (7) In any case where—
- (a) a disposal to which this Chapter applies by virtue of subsection (3) of section 758 is made otherwise than to the offshore fund concerned or the persons referred to in subsection (2)(b) of that section; and
- (b) subsequently, a distribution which is referable to the asset disposed of is paid either to the person who made the disposal or to a person connected with him; and
- (c) the disposal gives rise (in accordance with Part II of Schedule 28) to an offshore income gain;
then, for the purposes of the Tax Acts, the amount of the first distribution falling within paragraph (b) above shall be taken to be reduced or, as the case may be, extinguished by deducting therefrom an amount equal to the offshore income gain referred to in paragraph (c) above and, if that amount exceeds the amount of that first distribution, the balance shall be set against the second and, where necessary, any later distribution falling within paragraph (b) above, until the balance is exhausted.
- (8) For the purposes of subsection (7)(b) above, whether the person who made the disposal is connected with another person is determined in accordance with section 839.
#### Offshore income gains of trustees
##### 764
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER VI — MISCELLANEOUS
### Migration etc. of company
#### Migration etc.of companies
##### 765
- (1) Subject to the provisions of this section and section 765A, all transactions of the following classes shall be unlawful unless carried out with the consent of the Treasury, that is to say—
- (a) *for a body corporate resident in the United Kingdom to cease to be so resident; or*
- (b) *for the trade or business or any part of the trade or business of a body corporate so resident to be transferred from that body corporate to a person not so resident; or*
- (c) for a body corporate resident in the United Kingdom to cause or permit a body corporate not so resident over which it has control to create or issue any shares or debentures; or
- (d) except for the purpose of enabling a person to be qualified to act as a director, for a body corporate so resident to transfer to any person, or cause or permit to be transferred to any person, any shares or debentures of a body corporate not so resident over which it has control, being shares or debentures which it owns or in which it has an interest.
- (2) Nothing in subsection (1)(c) above shall apply to the giving to the bankers of the body corporate not resident in the United Kingdom of any security for the payment of any sum due or to become due from it to them by reason of any transaction entered into with it by them in the ordinary course of their business as bankers.
- (3) Nothing in subsection (1)(c) above shall apply to the giving by the body corporate not resident in the United Kingdom to an insurance company of any security for the payment of any sum due or to become due from that body corporate to that company by reason of any transaction entered into with that body corporate by that company in the ordinary course of that company’s business by way of investment of its funds.
- (4) Any consent granted by the Treasury under this section—
- (a) may be given either specially (that is to say, so as to apply only to specified transactions of or relating to a specified body corporate) or generally (that is to say, so as not only so to apply); and
- (b) may, if given generally, be revoked by the Treasury; and
- (c) may in any case be absolute or conditional; and
- (d) shall be published in such a way as to give any person entitled to the benefit of it an adequate opportunity of getting to know of it, unless in the opinion of the Treasury publication is not necessary for that purpose.
#### Offences under section 765
##### 766
- (1) Any person who, whether within or outside the United Kingdom, does or is a party to the doing of any act which to his knowledge amounts to or results in, or forms part of a series of acts which together amount to or result in, or will amount to or result in, something which is unlawful under section 765(1) shall be guilty of an offence under this section.
- (2) In any proceedings in respect of such an offence against a director of the body corporate in question (that is to say, the body corporate which is or was resident in the United Kingdom) or against any person who was purporting to act in that capacity—
- (a) it shall be presumed that he was a party to every act of that body corporate unless he proves that it was done without his consent or connivance; and
- (b) it shall, unless the contrary is proved, be presumed that any act which in fact amounted to or resulted in, or formed part of a series of acts which together amounted to or resulted in or would amount to or result in, something which is unlawful under section 765(1) was to his knowledge such an act.
- (3) Any person who is guilty of an offence under this section shall be liable on conviction on indictment—
- (a) to imprisonment for not more than two years or to a fine, or to both; or
- (b) where the person in question is a body corporate which is or was resident in the United Kingdom, to a fine not exceeding an amount equal to three times the corporation tax, capital gains tax and income tax paid or payable which is attributable to the income, profits or gains (including chargeable gains) arising in the 36 months immediately preceding the commission of the offence, or £10,000, whichever is the greater;
and proceedings in respect of such an offence alleged to have been committed by a person may be taken before the appropriate court in the United Kingdom having jurisdiction in the place where that person is for the time being.
- (4) No proceedings for an offence under this section shall be instituted, in England or Wales, except by or with the consent of the Attorney General, or in Northern Ireland, except by or with the consent of the Attorney General for Northern Ireland.
#### Interpretation and commencement of sections 765 and 766
##### 767
- (1) *A body corporate shall be deemed for the purposes of sections* 765*and* 766*to be resident or not to be resident in the United Kingdom according as the central management and control of its trade or business is or is not exercised in the United Kingdom.*
- (2) *If it is shown that it has been established as between the Crown and a body corporate for any income tax or corporation tax purpose that the body corporate was resident or ordinarily resident in the United Kingdom for any year of assessment or other period, it shall be presumed, except so far as the contrary is proved, that that body corporate was resident in the United Kingdom for the purposes of sections* 765*and* 766*at the beginning of that year of assessment or other period and that it continued to be so resident at all times thereafter.*
- (3) *Where the functions of a body corporate consist wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed for the purposes of this section and sections* 765*and* 766*to be a business carried on by the body corporate.*
- (4) *Notwithstanding anything in the preceding provisions of this section or in sections* 765*and* 766,*in no event shall a mere transfer of assets by a body corporate not resulting in a substantial change in the character or extent of the trade or business of that body corporate be treated for the purposes of sections* 765*and* 766*as a transfer of part of its trade or business*.
- (5) In this section and in sections 765 and 766—
- “*share*”, “*debenture*” and “*director*” have, in relation to any body corporate, the meanings respectively assigned to them by Part XXVI of the Companies Act 1985 in relation to a company;
- “*control*” (except in the expression “*central management and control*”) has, in relation to a body corporate, the meaning given by section 840;
- “*transfer*”, in relation to shares or debentures, includes a transfer of any beneficial interest therein;
- “*insurance company*” means a body corporate lawfully carrying on business as an insurer, whether in the United Kingdom or elsewhere; and
- “*funds*” in relation to an insurance company means the funds held by it in connection with that business;
*and a body corporate shall not be deemed for the purposes of this section and sections* 765*and* 766*to cease to be resident in the United Kingdom by reason only that it ceases to exist*.
- (6) This section and sections 765 and 766 shall come into force on 6th April 1988 to the exclusion of section 482 of the 1970 Act (which is re-enacted by those sections); but any offence committed before 6th April 1988 shall not be punishable under section 766 and neither this subsection nor any other provision of this Act shall prevent any such offence from being punishable as if this Act had not been passed.
### Change in ownership of company
#### Change in ownership of company: disallowance of trading losses
##### 768
- (1) If—
- (a) within any period of three years there is both a change in the ownership of a company and (either earlier or later in that period, or at the same time) a major change in the nature or conduct of a trade carried on by the company, or
- (b) at any time after the scale of the activities in a trade carried on by a company has become small or negligible, and before any considerable revival of the trade, there is a change in the ownership of the company,
no relief shall be given under section 393 by setting a loss incurred by the company in an accounting period beginning before the change of ownership against any income or other profits of an accounting period ending after the change of ownership.
- (2) In applying this section to the accounting period in which the change of ownership occurs, the part ending with the change of ownership, and the part after, shall be treated as two separate accounting periods, and the profits or losses of the accounting period shall be apportioned to the two parts.
- (3) The apportionment under subsection (2) above shall be on a time basis according to the respective lengths of those parts except that if it appears that that method would work unreasonably or unjustly such other method shall be used as appears just and reasonable.
- (4) In subsection (1) above “*major change in the nature or conduct of a trade*” includes—
- (a) a major change in the type of property dealt in, or services or facilities provided, in the trade; or
- (b) a major change in customers, outlets or markets of the trade;
and this section applies even if the change is the result of a gradual process which began outside the period of three years mentioned in subsection (1)(a) above.
- (5) In relation to any relief available under section 343 to a successor company, subsection (1) above shall apply as if any loss sustained by a predecessor company had been sustained by a successor company and as if the references to a trade included references to the trade as carried on by a predecessor company.
- (6) Where relief in respect of a company’s losses has been restricted under this section then, notwithstanding section 577(3) of the Capital Allowances Act, in applying the provisions of that Act about balancing charges to the company by reference to any event after the change of ownership of the company, any allowance or deduction falling to be made in taxing the company’s trade for any chargeable period before the change of ownership shall be disregarded unless the profits or gains of that chargeable period or of any subsequent chargeable period before the change of ownership were sufficient to give effect to the allowance or deduction.
- (7) In applying subsection (6) above it shall be assumed that any profits or gains are applied in giving effect to any such allowance or deduction in preference to being set off against any loss which is not attributable to such an allowance or deduction.
- (8) Where the operation of this section depends on circumstances or events at a time after the change of ownership (but not more than three years after), an assessment to give effect to the provisions of this section shall not be out of time if made within six years from that time, or the latest of those times.
- (9) Any person in whose name any shares, stock or securities of a company are registered shall, if required by notice by an inspector given for the purposes of this section, state whether or not he is the beneficial owner of those shares or securities and, if not the beneficial owner of those shares or securities of any of them, shall furnish the name and address of the person or persons on whose behalf those shares, stock or securities are registered in his name.
#### Rules for ascertaining change in ownership of company
##### 769
- (1) For the purposes of sections 767A, 767AA, 767C, 768, 768A, 768B , 768C and 768D there is a change in the ownership of a company—
- (a) if a single person acquires more than half the ordinary share capital of the company; or
- (b) if two or more persons each acquire a holding of 5 per cent. or more of the ordinary share capital of the company, and those holdings together amount to more than half the ordinary share capital of the company; or
- (c) if two or more persons each acquire a holding of the ordinary share capital of the company, and the holdings together amount to more than half the ordinary share capital of the company, but disregarding a holding of less than 5 per cent. unless it is an addition to an existing holding and the two holdings together amount to 5 per cent. or more of the ordinary share capital of the company.
- (2) In applying subsection (1) above—
- (a) the circumstances at any two points of time with not more than three years between may be compared, and a holder at the later time may be regarded as having acquired whatever he did not hold at the earlier time, irrespective of what he has acquired or disposed of in between;
- (b) to allow for any issue of shares or other reorganisation of capital, the comparison may be made in terms of percentage holdings of the total ordinary share capital at the respective times, so that a person whose percentage holding is greater at the later time may be regarded as having acquired a percentage holding equal to the increase;
- (c) to decide for the purposes of subsection (1)(b) or (c) above if any person has acquired a holding of at least 5 per cent., or a holding which makes at least 5 per cent. when added to an existing holding, acquisitions by, and holdings of, two or more persons who are connected persons within the meaning of section 839 shall be aggregated as if they were acquisitions by, and holdings of, one and the same person;
- (d) any acquisition of shares under the will or on the intestacy of a deceased person , and any gift of shares which is unsolicited and made without regard to the provisions of sections 767A, 767AA, 768, 768A, 768B , 768C and 768D, . . . shall be left out of account.
- (2A) Where—
- (a) persons, whether company members or not, possess extraordinary rights or powers under the articles of association or under any other document regulating the company, and
- (b) because of that fact ownership of the ordinary share capital may not be an appropriate test of whether there has been a change in the ownership of the company,
then, in considering whether there has been a change in the ownership of the company for the purposes of section 767A , 767AA or 767C, holdings of all kinds of share capital, including preference shares, or of any particular category of share capital, or voting power or any other kind of special power may be taken into account instead of ordinary share capital.
- (3) Where, because persons, whether company members or not, possess extraordinary rights or powers under the articles of association or under any other document regulating the company, ownership of the ordinary share capital may not be an appropriate test of whether there has been a major change in the persons for whose benefit the losses may ultimately enure, then, in considering whether there has been a change in the ownership of the company for the purposes of section 768 , 768A or 768D, holdings of all kinds of share capital, including preference shares, or of any particular category of share capital, or voting power or any other special kind of power, may be taken into account instead of ordinary share capital.
- (3A) Subsection (3) above shall apply for the purposes of sections 768B and 768C as if the reference to the benefit of losses were a reference to the benefit of deductions.
- (4) Where section 768, 768A, 768B , 768C or 768D has operated to restrict relief by reference to a change of ownership taking place at any time, no transaction or circumstances before that time shall be taken into account in determining whether there is any subsequent change of ownership.
- (5) A change in the ownership of a company shall be disregarded for the purposes of sections 767A, 767AA, 767C, 768, 768A, 768B , 768C and 768D if—
- (a) immediately before the change the company is the 75 per cent. subsidiary of another company, and
- (b) (although there is a change in the direct ownership of the company) that other company continues after the change to own the first-mentioned company as a 75 per cent. subsidiary.
- (6) If there is a change in the ownership of a company, including a change occurring by virtue of the application of this subsection but not a change which is to be disregarded under subsection (5) above, then—
- (a) in a case falling within subsection (1)(a) above, the person mentioned in subsection (1)(a) shall be taken for the purposes of this section to acquire at the time of the change any relevant assets owned by the company;
- (b) in a case falling within subsection (1)(b) above but not within subsection (1)(a) above, each of the persons mentioned in subsection (1)(b) shall be taken for the purposes of this section to acquire at the time of the change the appropriate proportion of any relevant assets owned by the company; and
- (c) in any other case, each of the persons mentioned in paragraph (c) of subsection (1) above (other than any whose holding is disregarded under that paragraph) shall be taken for the purposes of this section to acquire at the time of the change the appropriate proportion of any relevant assets owned by the company.
- (6A) In subsection (6) above—
- “*the appropriate proportion*”, in relation to one of two or more persons mentioned in subsection (1)(b) or (c) above, means a proportion corresponding to the proportion which the percentage of the ordinary share capital acquired by him bears to the percentage of that capital acquired by all those persons taken together; and
- “*relevant assets*”, in relation to a company, means—
- (a) any ordinary share capital of another company, and
- (b) any property or rights which under subsection (3) above may be taken into account instead of ordinary share capital of another company.
- (6B) Notwithstanding that at any time a company (“the subsidiary company”) is a 75 per cent. subsidiary of another company (“the parent company”) it shall not be treated at that time as such a subsidiary for the purposes of this section unless, additionally, at that time—
- (a) the parent company would be beneficially entitled to not less than 75 per cent. of any profits available for distribution to equity holders of the subsidiary company; and
- (b) the parent company would be beneficially entitled to not less than 75 per cent. of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (6C) Schedule 18 shall apply for the purposes of subsection (6B) above as it applies for the purposes of section 413(7).
- (7) For the purposes of this section—
- (a) references to ownership shall be construed as references to beneficial ownership, and references to acquisition shall be construed accordingly;
- (b) *a company shall be deemed to be a* 75*per cent. subsidiary of another company if and so long as not less than three-quarters of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies*;
- (c) *the amount of ordinary share capital of one company owned by a second company through another company or other companies or partly directly and partly through another company or other companies, shall be determined in accordance with subsections* (5)*to* (10)*of section* 838;*and*
- (d) “*shares*” includes stock.
- (8) If any acquisition of ordinary share capital or other property or rights taken into account in determining that there has been a change of ownership of a company was made in pursuance of a contract of sale or option or other contract, or the acquisition was made by a person holding such a contract, then the time when the change in the ownership of the company took place shall be determined as if the acquisition had been made when the contract was made with the holder or when the benefit of it was assigned to him so that, in the case of a person exercising an option to purchase shares, he shall be regarded as having purchased the shares when he acquired the option.
- (9) Subsection (8) above shall not apply in relation to section 767A , 767AA or 767C.
### Transactions between associated persons
#### Sales etc. at an undervalue or overvalue
##### 770
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions by petroleum companies
##### 771
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information for purposes of section 770, and appeals
##### 772
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 770 and 771
##### 773
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions between dealing company and associated company
##### 774
- (1) Subject to the provisions of this section, where—
- (a) a dealing company becomes entitled to a deduction, in computing the profits or gains of the company for tax purposes for any period, in respect of the depreciation in the value of any right subsisting against an associated company, being a non-dealing company; or
- (b) a dealing company makes any payment to such an associated company, being a payment in respect of which the dealing company is entitled to a deduction in computing its profits or gains for tax purposes for any period;
and the depreciation or payment is not brought into account in computing the profits or gains of the non-dealing company, that company shall be deemed to have received on the last day of the period income of an amount equal to the amount of the deduction and shall be chargeable to tax in respect thereof (in the case of corporation tax, under Case VI of Schedule D).
- (2) Where the non-dealing company is carrying on a trade, the income referred to in subsection (1) above shall, if the company so elects, not be so chargeable but shall be deemed to have been a receipt of the trade, or, if the company is carrying on more than one trade, to have been a receipt of such one of the trades as the company may choose.
- (3) Where the non-dealing company is carrying on, or was formed to carry on a trade, then if—
- (a) either—
- (i) the right subsisting against it was a right to the repayment of moneys lent for meeting expenditure which has proved (in whole or in part) abortive, or
- (ii) the payment to the company was made for meeting such expenditure, and
- (b) that expenditure is such that the company is not entitled in respect of it to any allowance or deduction in computing losses or gains,
subsection (1) above shall not apply in so far as the expenditure proved abortive.
- (4) For the purposes of this section—
- (a) “*company*” includes any body corporate;
- (b) “*dealing company*” means a company dealing in securities, land or buildings and includes any company whose profits on the sale of securities, land or buildings are part of its trading profits;
- (c) “*non-dealing company*” means any company which is not a dealing company;
- (d) two or more companies shall be treated as associated companies if one has control of the other or others, or any person has control of both or all of them;
- (e) references to a company (“the first company”) having control of another company (“the second company”) shall be construed as references to the first company having control of the second company either by itself or in conjunction with any person having control over the first company, and “*control*” has the meaning given by section 840;
- (f) “*securities*” includes shares and stock.
- (5) Where it appears to the Board that by reason of any transaction or transactions a person may by virtue of this section have incurred any liability to tax, the Board may by notice served on him require him, within such time not less than 28 days as may be specified in the notice, to furnish information in his possession with respect to the transaction or any of the transactions, being information as to matters, specified in the notice, which are relevant to the question whether he has incurred any such liability to tax.
### Other provisions
#### Sale by individual of income derived from his personal activities
##### 775
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions in land: taxation of capital gains
##### 776
- (1) This section is enacted to prevent the avoidance of tax by companies concerned with land or the development of land.
- (2) This section applies wherever—
- (a) land, or any property deriving its value from land, is acquired with the sole or main object of realising a gain from disposing of the land; or
- (b) land is held as trading stock; or
- (c) land is developed with the sole or main object of realising a gain from disposing of the land when developed;
and any gain of a capital nature is obtained from the disposal of the land—
- (i) by the person acquiring, holding or developing the land, or by any connected person, or
- (ii) where any arrangement or scheme is effected as respects the land which enables a gain to be realised by any indirect method, or by any series of transactions, by any person who is a party to, or concerned in, the arrangement or scheme;
and this subsection applies whether any such person obtains the gain for himself or for any other person.
- (3) Where this section applies, the whole of any such gain shall for all the purposes of the Corporation Tax Acts be treated—
- (a) as being income which arises when the gain is realised . . . ; and
- (b) subject to the following provisions of this section, as being income of the company by which the gain is realised.
- (3A) The gain treated as income shall be charged—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) to corporation tax as profits or gains under Case VI of Schedule D for the accounting period in which the gain is realised.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) For the purposes of this section, profits or gains shall not be treated as falling to be taken into account as a trading receipt by reason only that they are included in the computation required for the purposes of section 76(2).
- (4A) This section and section 56A shall not apply for the purposes of corporation tax except in relation to rights in existence before 1st April 1996.
- (4B) For the purposes of corporation tax, where any profits or gains arising from the disposal or exercise of a right in existence before 1st April 1996 are, or (if there were any) would be, chargeable under this section, nothing in Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall require any amount relating to that disposal, or to the exercise of that right, to be brought into account for the purposes of that Chapter.
- (4) For the purposes of this section—
- (a) land is disposed of if, by any one or more transactions, or by any arrangement or scheme, whether concerning the land or property deriving its value from the land, the property in the land, or control over the land, is effectually disposed of; and
- (b) references in subsection (2) above to the acquisition or development of property with the sole or main object of realising the gain from disposing of the land shall be construed accordingly.
- (5) For those purposes—
- (a) where, whether by a premature sale or otherwise, a person directly or indirectly transmits the opportunity of making a gain to another person, that other person’s gain is obtained for him by the first-mentioned person; and
- (b) any number of transactions may be regarded as constituting a single arrangement or scheme if a common purpose can be discerned in them, or if there is other sufficient evidence of a common purpose.
- (6) For the purposes of this section, such method of computing a gain shall be adopted as is just and reasonable in the circumstances, taking into account the value of what is obtained for disposing of the land, and allowing only such expenses as are attributable to the land disposed of; and in applying this subsection—
- (a) where a freehold is acquired and the reversion is retained on disposal, account may be taken of the way in which the profits under . . . Case I of Schedule D of a company dealing in land are computed in such a case; or
- (b) account may be taken of the adjustments to be made in computing such profits under . . . subsections (2) and (3) of section 99 above.
- In the application of this subsection to Scotland, “*freehold*” means the interest of the owner, and “*reversion*” means the interest of the landlord in property subject to a lease.
- (7) Subsection (2)(c) above shall not apply to so much of any gain as is fairly attributable to the period, if any, before the intention to develop the land was formed, and which would not fall under paragraph (a) or (b) of that subsection; and in applying this subsection account shall be taken of the treatment under . . . Case I of Schedule D of a company which appropriates land as trading stock.
- (8) If all or any part of the gain accruing to any person is derived from value, or an opportunity of realising a gain, provided directly or indirectly by another person which is a company, whether or not put at the disposal of the first-mentioned person, subsection (3)(b) above shall apply to the gain, or that part of it, with the substitution of that company for the person by whom the gain was realised.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) Where—
- (a) there is a disposal of shares in—
- (i) a company which holds land as trading stock; or
- (ii) a company which owns directly or indirectly 90 per cent. or more of the ordinary share capital of another company which holds land as trading stock; and
- (b) all the land so held is disposed of—
- (i) in the normal course of its trade by the company which held it, and
- (ii) so as to procure that all opportunity of profit in respect of the land arises to that company,
then this section shall not by virtue of subsection (2)(i) above apply to any gain to the holder of shares as being a gain on property deriving value from that land (but without prejudice to any liability under subsection (2)(ii) above).
- (11) Where a companywhich considers that paragraph (a) or (c) of subsection (2) above may apply as respects a gain of a capital nature which that company has obtained from the disposal of land, or which it would obtain from a proposed disposal of land, supplies to the inspector to whom it makes its return of income written particulars showing how the gain has arisen or would arise—
- (a) the inspector shall, within 30 days from his receipt of the particulars, notify that company whether or not he is satisfied that, in the circumstances as described in the particulars, the gain will not, or would not, be chargeable to tax on that company under this section; and
- (b) if the inspector notifies that company that he is so satisfied, the gain shall not be chargeable on that company under this section.
- (12) If the particulars given under this section with respect to the gain are not such as to make full and accurate disclosure of all facts and considerations relating thereto which are material to be known to the inspector, any notification given by the inspector under subsection (11) above shall be void.
- (13) In this section—
- (a) references to the land include references to all or any part of the land, and “*land*” includes buildings, and any estate or interest in land or buildings;
- (b) references to property deriving its value from land include—
- (i) any shareholding in a company, or any partnership interest, or any interest in settled property, deriving its value directly or indirectly from land, and
- (ii) any option, consent or embargo affecting the disposition of land;
and for the purposes of this section any question whether a person is connected with another shall be determined in accordance with section 839.
- (14) This section shall apply to all persons, whether resident in the United Kingdom or not, if all or any part of the land in question is situated in the United Kingdom.
#### Provisions supplementary to sections 775 and 776
##### 777
- (1) This section has effect to supplement section 776.
- (2) In applying section 776 and this section account shall be taken of any method, however indirect, by which—
- (a) any property or right is transferred or transmitted; or
- (b) the value of any property or right is enhanced or diminished;
and accordingly the occasion of the transfer or transmission of any property or right, however indirect, and the occasion when the value of any property or right is enhanced, may be an occasion when, under section 776, tax becomes chargeable.
- (3) Subsection (2) above applies in particular—
- (a) to sales, contracts and other transactions made otherwise than for full consideration or for more than full consideration; and
- (b) to any method by which any property or right, or the control of any property or right, is transferred or transmitted by assigning share capital or other rights in a company or any partnership or interest in settled property; and
- (c) to the creation of any option or consent or embargo affecting the disposition of any property or right, and to the consideration given for the option, or for the giving of the consent or the release of the embargo; and
- (d) to the disposal of any property or right on the winding up, dissolution or termination of any company, partnership or trust.
- (4) In ascertaining for the purposes of section 776 and this section the intentions of any person, the objects and powers of any company, partners or trustees, as set out in any memorandum, articles of association or other document, shall not be conclusive.
- (5) In order to ascertain whether and to what extent the value of any property or right is derived from any other property or right, value may be traced through any number of companies, partnerships and trusts, and the property held by any company, partnership or trust shall be attributed to the shareholders, partners or beneficiaries at each stage in such manner as is appropriate in the circumstances.
- (6) In applying section 776 and this section—
- (a) any expenditure or receipt or consideration or other amount may be apportioned by such method as is just and reasonable in the circumstances;
- (b) all such valuations shall be made as are appropriate to give effect to section 776.
- (7) For the purposes of section 776 and this section partners, or the trustees of settled property, or personal representatives, may be regarded as persons distinct from the individuals or other persons who are for the time being partners or trustees or personal representatives.
- (8) Where a company is assessed to corporation tax under section 776 in respect of consideration receivable by another person—
- (a) it shall be entitled to recover from that other person any part of that tax which it has paid; and
- (b) if any part of that tax remains unpaid at the expiration of six months from the date when it became due and payable, it shall be recoverable from that other person as though he were the company assessed, but without prejudice to the right to recover it from the company actually assessed;
and for the purposes of paragraph (a) above the Board or an inspector shall on request furnish a certificate specifying the amount of income in respect of which tax has been paid, and the amount of tax so paid; and the certificate shall be conclusive evidence of any facts stated in it.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) Section 776 has effect subject to Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) and to any other provision of the Tax Acts deeming income to belong to a particular person.
- (11) Where under section 776(2)(c) any company is charged to tax on the realisation of a gain, and the computation of the gain proceeded on the footing that the land or some other property was appropriated at any time as trading stock, that land or other property shall be treated on that footing also for the purposes of section 161 of the 1992 Act (property becoming or ceasing to be stock in trade).
- (12) Where under section 776(8) the company charged to corporation tax is not the person (“P”) by whom the gain was realised and the tax has been paid, then for the purposes of sections 37 and 39 of the 1992 Act (profits taxable as income excluded from tax on chargeable gains) P shall be regarded as having been charged to that tax.
- (13) For the purposes of section 776 of this Act and Chapter 3 of Part 13 of ITA 2007 and this section—
- “*capital*”, in relation to a gain, means that, apart from section 776, the gain does not fall to be included in any calculation of income for purposes of the Tax Acts;
- “*company*” includes any body corporate; and
- “*share*” includes stock;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information
##### 778
- (1) The Board or an inspector may by notice require any person to furnish them within such time as the Board or the inspector may direct (not being less than 30 days) with such particulars as the Board or the inspector think necessary for the purposes of section 776.
- (2) The particulars which a person must furnish under this section, if he is required by a notice from the Board or the inspector so to do, include particulars—
- (a) as to transactions or arrangements with respect to which he is or was acting on behalf of others;
- (b) as to transactions or arrangements which in the opinion of the Board or the inspector should properly be investigated for the purposes of section 776 notwithstanding that, in the opinion of the person to whom the notice is given, no liability to tax arises under that section; and
- (c) as to whether the person to whom the notice is given has taken or is taking any, and if so what, part in any, and if so what, transactions or arrangements of a description specified in the notice.
- (3) Notwithstanding anything in subsection (2) above, a solicitor—
- (a) shall not be deemed for the purposes of paragraph (c) of that subsection to have taken part in any transaction or arrangement by reason only that he has given professional advice to a client in connection with the transaction or arrangement, and
- (b) shall not, in relation to anything done by him on behalf of a client, be compellable under this section, except with the consent of his client, to do more than state that he is or was acting on behalf of a client, and give the name and address of his client.
#### Sale and lease-back: limitation on tax reliefs
##### 779
- (1) If land or any estate or interest in land is transferred from one person to another and—
- (a) as a result of a lease of the land or any part of the land granted at that time or subsequently by the transferee to the transferor, or
- (b) as a result of any other transaction or series of transactions affecting the land or any estate or interest in the land,
the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to pay any rent under a lease of the land or any part of the land, this section shall apply to all rent due under the lease from the transferor, or from any person who is associated with the transferor.
- (2) If—
- (a) land or any estate or interest in land is transferred from one person to another, and
- (b) as a result of any transaction or series of transactions affecting the land or any estate or interest in the land, the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to make any payment (other than rent under a lease) for which any relevant tax relief is available, being a payment by way of rentcharge on the land or any part of the land or a payment in any other way connected with the land,
then this section shall apply to all such payments under the rentcharge or other transaction due from the transferor, or from any person who is associated with the transferor.
- (3) The references in subsections (1) and (2) above to the transfer of an estate or interest in land include references to—
- (a) the granting of a lease or any other transaction involving the creation of a new estate or interest in the land;
- (b) the transfer of the lessee’s interest under a lease by surrender or forfeiture of the lease; and
- (c) any transaction or series of transactions affecting land or an estate or interest in land, such that some person is the owner, or one of the owners, before and after the carrying out of the transaction or transactions, but another person becomes or ceases to become one of the owners;
and in relation to any such transaction or series of transactions any person who is an owner before the carrying out of the transaction or transactions, and is not the sole owner thereafter, shall be regarded for the purposes of this section as a transferor.
- (4) A deduction by way of any relevant tax relief, being a deduction in respect of rent or of any other payment to which this section applies, shall not exceed the commercial rent for the period for which the rent or other payment is made of the land in respect of which that payment is made.
- (5) If—
- (a) under subsection (4) above part of a payment which would otherwise be allowable as a deduction by way of any relevant tax relief is not so allowable, and
- (b) one or more subsequent payments are made by the transferor, or a person who is associated with the transferor, under the lease or other transaction,
that part of the first-mentioned payment may be carried forward and treated for the purposes of any such deduction by way of tax relief as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.
- (6) For the purposes of subsection (4) above—
- (a) if more than one payment is made for the same period the payments shall be taken together;
- (b) if payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together;
- (c) the preceding references to payments include references to parts of payments which under subsection (5) above are treated as if made at a time subsequent to that at which they were made, and to the extent that a part of a payment so carried forward under that subsection is not so allowable as a deduction by way of tax relief, it may again be carried forward under that subsection;
- (d) so much of any payment as is in respect of services or the use of assets or rates usually borne by the tenant shall be excluded, and in determining the amount to be so excluded provisions in any lease or agreement fixing the payments or parts of payments which are in respect of services or the use of assets may be overridden.
- (7) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment was made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).
- (8) For the purposes of making a comparison under subsection (4) above between a payment consisting of rent under a lease (“the actual lease”), or such payments taken together, and the commercial rent of the land, “*commercial rent*” shall mean the rent which might be expected to be paid under a lease of the land negotiated in the open market at the time when the actual lease was created, being a lease which is of the same duration as the actual lease, which is, as respects liability for maintenance and repairs, subject to the terms and conditions of the actual lease and which provides for rent payable at uniform intervals and—
- (a) at a uniform rate, or
- (b) if the rent payable under the actual lease is rent at a progressive rate (and such that the amount of rent payable for any year is never less than the amount payable for any previous year), a rent which progresses by gradations proportionate to those provided by the actual lease.
- (9) For the purpose of making a comparison under subsection (4) above between a payment which does not consist of rent under a lease (or such a payment taken together with other payments) and the commercial rent of the land, “*commercial rent*” shall mean the rent which might be expected to be paid under a tenant’s repairing lease negotiated in the open market at the time when the transaction was effected under which the payment or payments became due, being—
- (a) where the period over which payments are to be made under that transaction is not less than 200 years, or the obligation to make such payments is perpetual, a lease for 200 years; and
- (b) where that period is less than 200 years, a lease which is of the same duration as that period.
- (10) In this section references to rent under a lease include references to
- (a) rent which the person entitled to the lease is under subsection (4), (5) or (6) of section 37 or under section 37A or under section 87 or 87A treated, for any purpose, as paying in respect of land comprised in the lease, and
- (b) expenses which the tenant under the lease is treated as incurring in respect of the land subject to the lease under sections 61 to 67 or 292 to 297 of ITTOIA 2005,
and such rent shall be treated for the purposes of this section as having been paid from day to day as it has become due and such expenses shall be treated for those purposes as having been paid as soon as they have been incurred.
- (11) For the purposes of this section the following persons shall be deemed to be associated with one another, that is—
- (a) the transferor in any such transaction as is described in subsection (1) or (2) above, and the transferor in another such transaction, if those two persons are acting in concert, or if the two transactions are in any way reciprocal, and any person who is an associate of either of those associated transferors;
- (b) any two or more bodies corporate participating in, or incorporated for the purposes of, a scheme for the reconstruction of any body or bodies corporate or for the amalgamation of any two or more bodies corporate;
- (c) any persons who are associates as defined in section 783(10).
- (12) In this section—
- “*asset*” means any description of property or rights other than land or an interest in land;
- “*lease*” includes an underlease, sublease or any tenancy or licence, and any agreement for a lease, underlease, sublease or tenancy or licence and, in the case of land outside the United Kingdom, any interest corresponding to a lease as so defined; and in relation to such land, expressions in this section relating to interests in land and their disposition shall be construed accordingly;
- “*rent*” includes any payment made under a lease; and
- “*tenant’s repairing lease*” means a lease where the lessee is under an obligation to maintain and repair the whole, or substantially the whole, of the premises comprised in the lease.
- (13) For the purposes of this section the following are deductions by way of relevant tax relief, that is to say—
- (a) a deduction in computing profits or gains chargeable under Schedule A . . . ;
- (aa) a deduction in calculating the profits of a UK property business;
- (b) a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax;
- (c) a deduction in computing profits or gains chargeable under Case VI of Schedule D, or in computing any loss for which relief is allowable under section . . . 396;
- (ca) a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 1016 of ITA 2007 applies, or in computing any loss for which relief is allowable under section 152 of ITA 2007;
- (d) a deduction under section 75 or 76;
- (e) a deduction from earnings allowed under section 336 of ITEPA 2003 (expenses) or allowable in computing losses in an employment for tax purposes;
- (f) a deduction allowable for tax purposes in computing profits or gains or losses arising from woodlands.
- (14) This section shall not apply if the transfer described in subsection (1) or (2) above was on or before 14th April 1964.
#### Sale and lease-back: taxation of consideration received
##### 780
- (1) If, in any case where a person (“the lessee”) who is a lessee of land under a lease having not more than 50 years to run (“the original lease”) is entitled in respect of the rent under the lease to a deduction by way of tax relief which is a relevant tax relief for the purposes of section 779—
- (a) the lessee assigns the original lease to another person, or surrenders it to his landlord, for a consideration which apart from this section would not be taxable otherwise than as capital in the hands of the lessee, and
- (b) there is granted or assigned to the lessee another lease (“the new lease”) of or including the whole or any part of the land which was the subject of the original lease for a term not exceeding 15 years;
then, subject to the following provisions of this section, the provisions of this Act providing for deductions or allowances by way of tax relief in respect of payments of rent shall apply in relation to the rent under the new lease, and for the purposes of the Tax Acts a proportion of the consideration received by the lessee shall be treated not as a capital receipt but in accordance with subsection (3) below.
- (2) For the purposes of this section—
- (a) if the aggregate of the rent payable under the new lease in respect of any rental period ending on a date falling before the 15th anniversary of the date on which the term of the new lease begins is greater than the aggregate of the rent payable under the new lease in respect of the period of equal duration beginning on the day following that date, then unless the term of the new lease would be treated as ending on an earlier date by virtue of paragraph (b) below, that term shall be treated as ending on that date;
- (b) if under the terms of the new lease—
- (i) the lessor of the lessee has power to determine the new lease at a time before the expiry of the term for which it was granted, or
- (ii) the lessee has power to vary his obligations under the new lease so as to reduce the rent which he would otherwise have to pay or in any other manner beneficial to him,
- (3) Subject to the following provisions of this section, the proportion of the consideration received by the lessee as mentioned in subsection (1) above, or of any instalment of that consideration, which for the purposes of the Tax Acts is to be treated not as a capital receipt but in accordance with this subsection shall be determined by the formula—
$$16-N15$where N is the term of the new lease expressed in years or, if that term is less than a year, where N is 1; and that proportion shall be treated for the purposes of the Tax Acts—$
- (a) as a receipt of a trade, profession or vocation, if the rent payable by the lessee under the new lease is allowable as a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax and if the consideration is received by the lessee in the course of that trade, profession or vocation; and
- (b) in any other case, as an amount chargeable to tax in accordance with subsection (3A).
- (3A) The amount shall be charged—
- (a) to income tax, or
- (b) to corporation tax as a profit or gain under Case VI of Schedule D.
- (3B) The income tax charged by virtue of subsection (3A)(a) above shall be charged on the full amount of the proportion of the consideration concerned arising in the year of assessment; and the person liable for any tax so charged is the lessee.
- (3C) An amount charged to income tax by virtue of subsection (3A)(a) above is treated for income tax purposes as an amount of income.
- (4) In any case where the property which is the subject of the new lease does not include the whole of the property which was the subject of the original lease, the consideration received by the lessee shall be treated for the purposes of subsection (3) above as reduced to that portion of the consideration which is reasonably attributable to such part of the property which was the subject of the original lease as consists of, or is included in, the property which is the subject of the new lease.
- (5) *Schedule* 2*shall have effect for the purposes of giving relief, on a claim being made in that behalf, from any increase in an individual’s liability to income tax which is attributable to any amount being treated, by virtue of subsection* (3)*above, as an income receipt for a single year of assessment rather than as a series of such receipts during the term of the new lease; and in the application of that Schedule by virtue of this subsection for the definitions of “chargeable sum” and “relevant period” there shall be substituted the following definitions*—
> - *“*chargeable sum*” means the amount in respect of which, by virtue of subsection* (3)*above, the claimant is chargeable to income tax for the year of assessment;*
> *“*relevant period*”, in relation to any chargeable sum, means the term of the new lease.*
- (6) Where by agreement with his landlord, the lessee varies the terms of the original lease in such a manner that, in return for such a consideration as is specified in subsection (1)(a) above, the lessee undertakes to pay, during a period ending not later than 15 years after the date on which the consideration, or if the consideration is paid in instalments, the last such instalment, is paid to the lessee, a rent greater than that payable under the original lease, he shall be treated for the purposes of this section—
- (a) as having surrendered the original lease for that consideration, and
- (b) as having been granted a new lease for a term not exceeding 15 years but otherwise on the terms of the original lease as so varied.
- (7) References in this section to the lessee (other than in subsection (1)(a) above) include references to a person who is a partner or associate of the lessee or an associate of a partner of the lessee; and for the purposes of this section the expression “*associate*” shall be construed in accordance with 783(10).
- (8) Subject to subsection (7) above, expressions used in this section have the meanings assigned to them by section 24, and in subsection (2)(a) above “*rental period*” means a period in respect of which a payment of rent falls to be made, and for the purposes of that subsection, in a case where the rental period is a quarter or a month, each such period shall be treated as of equal duration.
- (9) The preceding provisions of this section shall not apply if the lessee had, before 22nd June 1971, a right enforceable at law or in equity to the grant of the new lease, but in any case where, apart from this subsection, those provisions would apply, no part of the rent paid under the new lease shall be treated as a payment of capital, and the provisions of this Act providing for deductions or allowances by way of tax relief in respect of payments of rent shall apply accordingly.
#### Assets leased to traders and others
##### 781
- (1) Subject to section 782, where—
- (a) a deduction by way of tax relief which is one of the kinds listed in subsection (4) below is allowable in respect of a payment made under a lease of an asset of any description, and
- (b) before, at or after the time when the payment is made, either—
- (i) the person who made the payment has obtained or obtains a capital sum in respect of the lessee’s interest in the lease, or
- (ii) the lessor’s interest in the lease, or any other interest in the asset, has belonged to an associate of the person who made the payment, and that associate has obtained a capital sum in respect of that interest,
the person obtaining that sum shall be charged to tax (in the case of corporation tax, under Case VI of Schedule D) for the chargeable period in which the sum is obtained on an amount equal to the amount of the payment in respect of which tax relief is so allowed.
- (1A) An amount charged to income tax under subsection (1) above is treated for income tax purposes as an amount of income.
- (2) A person shall not be assessed to tax under subsection (1) above on any amount to the extent to which it exceeds the capital sum by reference to which he is so assessed.
- (3) Subsection (1) above shall not apply to payments under a lease created on or before 14th April 1964.
- (4) The kinds of deductions by way of tax relief to which subsection (1) above applies are as follows—
- (a) a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax;
- (ab) a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 1016 of ITA 2007 applies, or in computing any loss for which relief is allowable under section 152 of ITA 2007;
- (b) a deduction in computing profits or gains chargeable under Case VI of Schedule D, or in computing any loss for which relief is allowable under section . . . 396;
- (c) a deduction under section 75 or 76;
- (d) a deduction from earnings allowed under section 336 of ITEPA 2003 (expenses) or allowable in computing losses in an employment for tax purposes;
- (e) a deduction allowable for tax purposes in computing profits or gains or losses arising from woodlands.
- (5) Where—
- (a) the deduction by way of tax relief mentioned in subsection (1)(a) above is a deduction in computing, for income tax purposes, profits or gains or losses of a trade, profession or vocation, or arising from woodlands, and
- (b) any part of the payments made under the lease by the person obtaining the capital sum is a payment in respect of which a deduction is not allowed for the reason that the whole or any part of the period in which the payment would fall to be allowed is not a period on the profits of which income tax falls to be computed in respect of the trade, profession or vocation,
for the reference in subsection (2) above to the amount of the capital sum there shall be substituted a reference to that amount after deducting the amount of the payment in respect of which a deduction is not allowed for that reason.
- (6) So far as in respect of a capital sum any part of a payment allowed as a deduction by way of tax relief of a kind to which this section applies is taken into account in making an assessment under subsection (1) above, that part of the payment shall be left out of account in determining whether any and if so what amount should be assessed by reference to any other capital sum; and the order in which this subsection is applied shall be the order in which the capital sums are obtained.
- (7) There shall be made all such adjustments of tax, whether by way of making assessments or by repayment of tax, as are required after the making of any such payment as is described in subsection (1) above to give effect to the charge under that subsection in respect of a sum obtained before the making of the payment.
- (8) Notwithstanding anything in the Tax Acts limiting the time within which an assessment may be made or a claim for relief may be admitted any such adjustment may be made, by making an assessment or otherwise, at any time within the period specified in subsection (8A) below.
- (8A) The period mentioned in subsection (8) above is—
- (a) in the case of adjustments with respect to income tax, the period ending with the fifth anniversary of the 31st January next following the year of assessment in which the payment was made;
- (b) in the case of adjustments with respect to corporation tax, the period of six years beginning at the end of the accounting period in which the payment was made.
- (9) This section shall not apply if the capital sum obtained in respect of the lessee’s interest in a lease constituting a hire-purchase agreement for machinery or plant is a sum which is required to be brought into account as the whole or part of the disposal value of the machinery or plant under section 68 of the Capital Allowances Act.
#### Leased assets: special cases
##### 782
- (1) This section shall apply, and section 781 shall not apply, to payments—
- (a) which are allowable by way of deductions in computing the profits or losses of a trade, and
- (b) which are made under a lease of an asset which at any time before the creation of the lease was used for the purposes—
- (i) of that trade; or
- (ii) of another trade carried on by the person who at that time or later was carrying on the first-mentioned trade;
and when so used was owned by the person carrying on the trade in which it was being used.
- (1A) This section does not apply to a payment if or to the extent that, in the case of the lessee, it falls to be regarded in accordance with Chapter 6A of Part 2 of the Capital Allowances Act as a payment under a lease which is a long funding finance lease for the purposes of that Part.
- (2) Subject to the following provisions of this section, the deduction allowable in computing the profits or losses of the trade for the purposes of tax as respects any such payment shall not exceed the commercial rent of the asset for the period for which the payment was made.
- (3) If under subsection (2) above part of a payment which would otherwise be allowable as a deduction is not so allowable, and one or more subsequent payments are made by the same person under the same lease, that part of the first-mentioned payment may be carried forward and treated for the purposes of computing the profits or losses of the trade for the purposes of tax as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.
- (4) For the purposes of subsection (2) above—
- (a) if more than one payment is made for the same period the payments shall be taken together;
- (b) if the payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together;
- (c) the preceding references to payments include references to parts of payments which under subsection (3) above are treated as if made at a time subsequent to that at which they were made;
and to the extent that a part of a payment carried forward under subsection (3) above is not allowable as a deduction it may again be carried forward under that subsection.
- (5) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment is made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).
- (6) For the purpose of making a comparison under subsection (2) above between a payment, or payments taken together, and the commercial rent of the asset, “*commercial rent*” shall mean the rent which might at the relevant time be expected to be paid under a lease of the asset for the remainder of the anticipated normal working life of the asset, being a rent payable at uniform intervals and at a uniform rate which would afford a reasonable return for its market value at the relevant time, having regard to the terms and conditions of the lease; and in this subsection—
- “*anticipated normal working life*” means, in the case of any asset, the period which might be expected, when the asset is first put into use, to be going to elapse before it is finally put out of use as being unfit for further use, it being assumed that the asset is going to be used in the normal manner and to the normal extent, and is going to be so used throughout that period; and
- “*the relevant time*” means the time when the lease was created under which the payment was made with which the commercial rent is to be compared.
- (7) If the asset is used at the same time partly for the purposes of the trade and partly for other purposes the commercial rent as defined in subsection (6) above shall be determined by reference to what would be paid for such a partial use of the asset.
- (8) This section shall not apply in relation to payments made under a lease created on or before 14th April 1964.
- (9) In this section references to the person carrying on a trade are references to the person carrying on the trade for the time being, and where at any time a person succeeds to a trade which until that time was carried on by another person, and by virtue of section 18 of ITTOIA 2005 or section 337(1) above (companies beginning or ceasing to carry on trade) the trade is to be treated as discontinued, the trade shall, nonetheless, be treated as the same trade for the purposes of this section.
- (10) In this section references to a trade include references to a profession or vocation.
#### Leased assets: supplemental
##### 783
- (1) References in section 781 to a sum obtained in respect of the lessee’s interest in a lease of an asset, or in respect of any other interest in an asset include—
- (a) in the case of a lessee’s interest, references to sums representing the consideration in money or money’s worth obtained on a surrender of the rights to the lessor, or on an assignment of the lease, or on creating a sublease or any other interest out of the lease; and
- (b) references to any insurance moneys payable in respect of the asset, so far as payable to the owner of the interest in the asset.
- (2) Such references also include references to sums representing money or money’s worth obtained by the person entitled to the interest by a transaction or series of transactions disposing of the asset, or of an interest in the asset, and in particular transactions which comprise arrangements under which the rights of the lessee under a lease of the asset are merged in any way with the rights of the lessor, or with any other rights as respects the asset, so far as the money or money’s worth so obtained is attributable to the rights of the lessee under the lease.
- (3) References in section 781 to sums obtained in respect of any interest in an asset include references to money or money’s worth so obtained in any transaction (including a transaction of the kind described in subsection (1) or (2) above) by way of consideration received by a person who is an associate of the person entitled to the interest in the asset.
- (4) If an interest in the asset is disposed of by any person to a person who is his associate, the person disposing of the interest shall (unless in fact he obtains a greater sum) be treated for the purposes of section 781 as having obtained in respect of the interest—
- (a) the value of the interest in the open market; or
- (b) the value of the interest to the person to whom it is, in effect, transferred;
whichever is the greater.
- (5) For the purposes of subsections (3) and (4) above a disposition may be direct or indirect and may be effected by any such transaction as is described in subsection (2) above.
- (6) For the purposes of sections 781 and 784 and this section any sum obtained by any persons carrying on a trade, profession or vocation in partnership in respect of an interest in an asset which is and continues to be used for the purposes of the trade, profession or vocation shall be regarded as apportionable between them in the shares in which they are then entitled to the profits of the trade, profession or vocation.
- (7) Subject to subsection (6) above, for those purposes a sum obtained by persons jointly entitled to an interest in an asset shall be apportionable according to their respective interests in the rights.
- (8) For those purposes, any payment in respect of which a deduction is allowable by way of tax relief which is made by persons carrying on a trade, profession or vocation in partnership shall be apportioned in such manner as may be just.
- (9) Where under this section any sum or payment falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever period) of two or more persons, any question which arises as to the manner in which the sum or payment is to be apportioned shall be determined, for the purposes of tax of all those persons—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to all those persons, by those Commissioners unless all those persons agree that it shall be determined by the Special Commissioners;
- (b) in a case where different bodies of Commissioners have jurisdiction with respect to those persons, by such of those bodies as the Board may direct unless all those persons agree that it shall be determined by the Special Commissioners; and
- (c) in any other case, by the Special Commissioners;
and any such Commissioners shall determine the question in like manner as if it were an appeal, except that all those persons shall be entitled to appear and be heard by the Commissioners who are to make the determination or to make representations to them in writing.
- (10) For the purposes of this section and in construing the expressions “*associate*” and “*associated*” in section 781 and this section, the following persons shall be deemed to be associated with each other, that is to say—
- (a) any individual and that individual’s spouse or civil partner, and any relative, or spouse or civil partner of a relative, of that individual or that individual’s spouse or civil partner (“*relative*” meaning, for this purpose, brother, sister, ancestor or lineal descendant);
- (b) any person in his capacity of trustee of a settlement and any individual who in relation to the settlement is a settlor, and any person associated with that individual (“*settlement*” and “*settlor*” having, for this purpose, the meanings given by section 620 of ITTOIA 2005);
- (c) any person and a body of persons of which that person, or persons associated with him, or that person and persons associated with him, has or have control;
- (d) any two or more bodies of persons associated with the same person by virtue of paragraph (c) above;
- (e) in relation to a disposal by joint owners, the joint owners and any person associated with any of them.
- (11) In subsection (10) above “*body of persons*” includes a partnership and “*control*” has the meaning given by section 840.
#### Leased assets subject to hire-purchase agreements
##### 784
- (1) In the application of section 781 to a lease which constitutes a hire-purchase agreement, for the reference in subsection (2) of that section to the amount of the capital sum there shall, where that capital sum was obtained in respect of the lessee’s interest in the lease constituting the hire-purchase agreement, be substituted references to the amount of the capital sum (adjusted, if necessary, under subsection (5) of that section) after deducting any capital expenditure which was incurred by the person obtaining the capital sum in providing the lessee’s interest.
- (2) In subsection (1) above “*capital expenditure which was incurred by the person obtaining the capital sum in providing the lessee’s interest*” means—
- (a) so much of any payment made under the lease by the person obtaining the capital sum (or, where the capital sum was obtained by the personal representatives of a deceased person, so made by that deceased person) as is not a payment in respect of which a deduction is allowable by way of tax relief which is one of the kinds listed in subsection (4) of section 781, plus
- (b) where the lessee’s interest was assigned to the person obtaining the capital sum, any capital payment made by that person as consideration for the assignment.
- (3) If the amount to be deducted in pursuance of subsection (1) above exceeds the amount of the capital sum from which it is to be deducted, no charge shall arise under section 781(1) in respect of the capital sum.
- (4) If the capital sum represents the consideration for part only of the lessee’s interest in the lease which constitutes a hire-purchase agreement, the amount to be deducted under subsection (1) above shall be such proportion of the capital expenditure which is still unallowed as is reasonable having regard to the degree to which the capital expenditure has contributed to the value of what is disposed of in return for the capital sum.
- (5) If more than one capital sum is, or is to be regarded as, obtained by the same person in respect of the lessee’s interest in the lease which constitutes a hire-purchase agreement, then, so far as in respect of one of those capital sums any deduction is made in respect of capital expenditure in pursuance of subsection (1) above that capital expenditure shall be left out of account in applying subsections (1) and (3) above to any other such capital sum; and the order in which this subsection is applied shall be the order in which the capital sums are obtained.
- (6) In this section—
- “*hire-purchase agreement*” means an agreement, other than a conditional sale agreement, under which—
- (a) goods are bailed or, in Scotland, hired in return for periodical payments by the person to whom they are bailed or hired, and
- (b) the property in the goods will pass to that person if the terms of the agreement are complied with and one or more of the following occurs—
- (i) the exercise of an option to purchase by that person;
- (ii) the doing of any other specified act by any party to the agreement;
- (iii) the happening of any other specified event; and
#### Meaning of “asset”, “capital sum” and “lease” for purposes of sections 781 to 784
##### 785
- In sections 781 to 784—“*asset*” means any description of property or rights other than land or an interest in land;“*capital sum*” means any sum of money, or any money’s worth, except so far as it or any part of it is to be treated for the purposes of tax as a receipt to be taken into account in computing the profits or losses of a trade, profession or vocation, or profits or gains or losses arising from woodlands, or is, apart from section 781, chargeable to income tax under or by virtue of any provision to which section 1016 of ITA 2007 applies or to corporation tax under Case VI of Schedule D; and“*lease*”, in relation to an asset, means any kind of agreement or arrangement under which payments are made for the use of, or otherwise in respect of, an asset, and includes, in particular, any agreement or arrangement all or any of the payments under which represent instalments of, or payments towards, a purchase price.
#### Transactions associated with loans or credit
##### 786
- (1) This section applies as respects any transaction effected with reference to the lending of money or the giving of credit, or the varying of the terms on which money is lent or credit is given, or which is effected with a view to enabling or facilitating any such arrangement concerning the lending of money or the giving of credit.
- (2) Subsection (1) above has effect whether the transaction is effected between the lender or creditor and the borrower or debtor, or between either of them and a person connected with the other or between a person connected with one and a person connected with the other.
- (3) If the transaction provides for the payment of any relevant annual payment, the payment shall be treated for all the purposes of the Tax Acts as if it were a payment of annual interest.
- (3A) In subsection (3) “*relevant annual payment*” means a payment which is not interest but is—
- (a) an annuity or other annual payment falling within Part 5 of ITTOIA 2005 and chargeable to income tax otherwise than as relevant foreign income; or
- (b) an annuity or other annual payment chargeable to corporation tax under Case III of Schedule D.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) If under the transaction a person assigns, surrenders or otherwise agrees to waive or forego income arising from any property (without a sale or transfer of the property) then, without prejudice to the liability of any other person, he shall be chargeable—
- (a) to income tax, or
- (b) to corporation tax under Case VI of Schedule D,
on a sum equal to the amount of income assigned, surrendered, waived or foregone.
- (5ZA) But subsection (5) above does not apply if the person mentioned in that subsection is, as a result of section 774B or 774D (structured finance arrangements), chargeable to tax on the amount of income assigned, surrendered, waived or forgone.
- (5A) Income tax charged by virtue of subsection (5)(a) above shall be charged on the full amount of the income assigned, surrendered, waived or forgone in the year of assessment.
- (6) If credit is given for the purchase price of any property, and the rights attaching to the property are such that, during the subsistence of the debt, the purchaser’s rights to income from the property are suspended or restricted, he shall be treated for the purposes of subsection (5) above as if he had surrendered a right to income of an amount equivalent to the income which he has in effect foregone by obtaining the credit.
- (7) The amount of any income payable subject to deduction of income tax shall be taken for the purposes of subsection (5) above as the amount before deduction of tax.
- (8) References in this section to connected persons shall be construed in accordance with section 839.
#### Restriction of relief for payments of interest
##### 787
- (1) Relief shall not be given to any person under any provision of the Tax Acts in respect of any payment of interest if a scheme has been effected or arrangements have been made (whether before or after the time when the payment is made) such that the sole or main benefit that might be expected to accrue to that person from the transaction under which the interest is paid was the obtaining of a reduction in tax liability by means of any such relief.
- (1A) This section has effect in relation to Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) but taking the reference in subsection (1) above to giving relief to any person in respect of any payment of interest as including a reference to the bringing into account by any person in accordance with that Chapter of any debit in respect of interest (whether a payment or not); and other references in this section to relief shall be construed accordingly.
- (2) In this section “*relief*” means relief by way of deduction in computing profits or gains or deduction or set off against income or total profits.
- (3) Where the relief is claimed by virtue of section 403—
- (a) in respect of a deficit to which section 83 of the Finance Act 1996 applies (non-trading deficit on loan relationships), or
- (b) in respect of trading losses, in a case where in computing those losses debits in respect of loan relationships are treated under section 82(2)(b) of that Act as expenses of the trade which are deductible in computing the profits of the trade,
any question under this section as to what benefit might be expected to accrue from the transaction in question shall be determined by reference to the claimant company and the surrendering company taken together.
## PART XVIII — DOUBLE TAXATION RELIEF
### CHAPTER I — THE PRINCIPAL RELIEFS
#### Relief by agreement with other countries
##### 788
- (1) If Her Majesty by Order in Council declares that arrangements specified in the Order have been made in relation to any territory outside the United Kingdom with a view to affording relief from double taxation in relation to—
- (a) income tax,
- (b) corporation tax in respect of income or chargeable gains, and
- (c) any taxes of a similar character to those taxes imposed by the laws of that territory,
and that it is expedient that those arrangements should have effect, then those arrangements shall have effect in accordance with subsection (3) below.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have effect in relation to income tax and corporation tax in so far as they provide—
- (a) for relief from income tax, or from corporation tax in respect of income or chargeable gains; or
- (b) for charging the income arising from sources, or chargeable gains accruing on the disposal of assets, in the United Kingdom to persons not resident in the United Kingdom; or
- (c) for determining the income or chargeable gains to be attributed—
- (i) to persons not resident in the United Kingdom and their agencies, branches or establishments in the United Kingdom; or
- (ii) to persons resident in the United Kingdom who have special relationships with persons not so resident; or
- (d) for conferring on persons not resident in the United Kingdom the right to a tax credit under section 397(1) of ITTOIA 2005 in respect of qualifying distributions made to them by companies which are so resident.
- (4) The provisions of Chapter II of this Part shall apply where arrangements which have effect by virtue of this section provide that tax payable under the laws of the territory concerned shall be allowed as a credit against tax payable in the United Kingdom.
- (5) For the purposes of this section and, subject to section 795(3), Chapter II of this Part in its application to relief under this section, any amount of tax which would have been payable under the law of a territory outside the United Kingdom but for a relief to which this subsection applies given under the law of that territory shall be treated as having been payable; and references in this section and that Chapter to double taxation, to tax payable or chargeable, or to tax not chargeable directly or by deduction shall be construed accordingly.
- (6) Except in the case of a claim for an allowance by way of credit in accordance with Chapter II of this Part, a claim for relief under subsection (3)(a) above shall be made to the Board.
- (7) Where—
- (a) under any arrangements which have effect by virtue of this section, relief may be given, either in the United Kingdom or in the territory in relation to which the arrangements are made, in respect of any income or chargeable gains, and
- (b) it appears that the assessment to income tax or corporation tax made in respect of the income or chargeable gains is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given under the arrangements,
any such assessments may be made as are necessary to ensure that the total amount of the income or chargeable gains is assessed, and the proper credit, if any, is given in respect thereof, and, where the income is, or the chargeable gains are, entrusted to any person in the United Kingdom for payment, any such assessment may be made on the recipient of the income or gains, and, in the case of an assessment to corporation tax in respect of income, may be assessed under Case VI of Schedule D.
- (8) Any arrangements to which effect is given under this section may include provision for relief from tax for periods before the passing of this Act, or before the making of the arrangements, and provisions as to income or chargeable gains which is or are not subject to double taxation, and the preceding provisions of this section shall have effect accordingly.
- (9) Any Order in Council made under this section revoking an earlier such Order in Council may contain such transitional provisions as appear to Her Majesty to be necessary or expedient.
- (10) An Order under this section is not to be submitted to Her Majesty in Council unless a draft of the Order has been laid before and approved by a resolution of the House of Commons.
#### Arrangements made under old law
##### 789
- (1) Notwithstanding section 793(2), any arrangements made in relation to the profits tax under section 347 of the Income Tax Act 1952 or any earlier enactment corresponding to that section shall, except in so far as arrangements made after the passing of the Finance Act 1965 provide otherwise, have effect in relation to corporation tax and income and gains chargeable to corporation tax as they are expressed to have effect in relation to the profits tax and profits chargeable to the profits tax, with the substitution of accounting periods for chargeable accounting periods (and not as they had effect in relation to income tax).
- (2) In so far as any arrangements made before 30th March 1971 provide for the exemption of any income from surtax they shall have effect, unless otherwise modified by subsequent arrangements, as if they provided for that income —
- (a) to bear income tax at—
- (i) the savings rate, where that income is savings income;
- (ii) the dividend ordinary rate, where that income is dividend income; or
- (iii) the basic rate, in any other case; and
- (b) to be disregarded for the purpose of computing total income, except—
- (i) for the purpose of section 274 (limits on relief under sections 266 and 273); and
- (ii) for the purpose of calculating “*adjusted net income*” for the purposes of Chapter 1 of Part 7 of this Act (see section 256A) or Chapters 2 and 3 of Part 3 of ITA 2007 (see section 58 of that Act).
- (3) Any reference in the Tax Acts (including this Part) to arrangements under or by virtue of section 788 includes a reference to arrangements having effect by virtue of this section.
#### Unilateral relief
##### 790
- (1) To the extent appearing from the following provisions of this section, relief from income tax and corporation tax in respect of income and chargeable gains shall be given in respect of tax payable under the law of any territory outside the United Kingdom by allowing that tax as a credit against income tax or corporation tax, notwithstanding that there are not for the time being in force any arrangements under section 788 providing for such relief.
- (2) Relief under subsection (1) above is referred to in this Part as “*unilateral relief*”.
- (3) Unilateral relief shall be such relief as would fall to be given under Chapter II of this Part if arrangements in relation to the territory in question containing the provisions specified in subsections (4) to (10C) below were in force by virtue of section 788, but subject to any particular provision made with respect to unilateral relief in that Chapter; and any expression in that Chapter which imports a reference to relief under arrangements for the time being having effect by virtue of that section shall be deemed to import also a reference to unilateral relief.
- (4) Credit for tax paid under the law of the territory outside the United Kingdom and computed by reference to income arising or any chargeable gain accruing in that territory shall be allowed against any United Kingdom income tax or corporation tax computed by reference to that income or gain (profits from, or remuneration for, personal or professional services performed in that territory being deemed for this purpose to be income arising in that territory).
- (5) Subsection (4) above shall have effect subject to the following modifications, that is to say—
- (a) where the territory is the Isle of Man or any of the Channel Islands, the limitation to income or gains arising in the territory shall not apply;
- (b) where arrangements in relation to the territory are for the time being in force by virtue of section 788, credit for tax paid under the law of the territory shall not be allowed by virtue of subsection (4) above in the case of any income or gains if any credit for that tax is allowable under those arrangements in respect of that income or those gains; and
- (c) credit shall not be allowed by virtue of subsection (4) above for overseas tax on a dividend paid by a company resident in the territory unless—
- (i) the overseas tax is directly charged on the dividend, whether by charge to tax, deduction of tax at source or otherwise, and the whole of it represents tax which neither the company nor the recipient would have borne if the dividend had not been paid; or
- (ii) the dividend is paid to a company within subsection (6) below; or
- (iii) the dividend is paid to a company to which section 802(1) applies and is a dividend of the kind described in that subsection.
- (6) Where a dividend paid by a company resident in the territory is paid to a company falling within subsection (6A) below which either directly or indirectly controls, or is a subsidiary of a company which directly or indirectly controls—
- (a) not less than 10 per cent. of the voting power in the company paying the dividend; or
- (b) less than 10 per cent. of the voting power in the company paying the dividend if—
- (i) it has been reduced below that percentage on or after 1st April 1972; or
- (ii) it has been acquired on or after that date in exchange for voting power in another company in respect of which relief under this subsection by virtue of paragraph (a) above was due prior to the exchange;
and the company receiving the dividend shows that the conditions specified in subsection (7) below are satisfied;
any tax in respect of its profits paid under the law of the territory by the company paying the dividend shall be taken into account in considering whether any, and if so what, credit is to be allowed in respect of the dividend.
- (6A) A company falls within this subsection if—
- (a) it is resident in the United Kingdom; or
- (b) it is resident outside the United Kingdom but the dividend mentioned in subsection (6) above forms part of the profits of a permanent establishment of the company’s in the United Kingdom.
- (7) The conditions referred to in subsection (6)(b) above are as follows—
- (a) that the reduction below the 10 per cent. limit (and any further reduction) or, as the case may be, the exchange (and any reduction thereafter) could not have been prevented by any reasonable endeavours on the part of the company receiving the dividend and was due to a cause or causes not reasonably foreseeable by it when control of the relevant voting power was acquired; and
- (b) no reasonable endeavours on the part of that company could have restored or, as the case may be, increased the voting power to not less than 10 per cent.
- (8) In subsection (7) above references to the company receiving the dividend include references—
- (a) to any company of which it is a subsidiary within the meaning of section 792(2); and
- (b) where prior to the reduction or exchange the voting power in question was controlled otherwise than directly by the company receiving the dividend, to each other company relevant for determining whether that voting power was controlled as required by subsection (6)(a) above.
- (9) In subsection (7) above “*the relevant voting power*” means the voting power by virtue of which relief was due under subsection (6)(a) above prior to the reduction or exchange or, where control of the whole of that voting power was not acquired at the same time, that part of the voting power of which control was last acquired.
- (10) In any case in which relief in respect of a dividend is due by virtue of subsection (6)(b) above, there shall be taken into account, as if it were tax payable under the law of the territory in which the company paying the dividend is resident, any tax that would be so taken into account under section 801 if the company paying the dividend and the company receiving it were related to each other within the meaning of section 801(5).
- (10A) In any case where—
- (a) under the law of the territory outside the United Kingdom, an amount of tax (“*the spared tax*”) would, but for a relief, have been payable by a company resident in that territory (“*company A*”) in respect of any of its profits,
- (b) company A pays a dividend out of those profits to another company resident in that territory (“*company B*”),
- (c) company B, out of profits which consist of or include the whole or part of that dividend, pays a dividend to a company resident in the United Kingdom (“*company C*”), and
- (d) the circumstances are such that, had company B been resident in the United Kingdom, it would have been entitled, under arrangements made in relation to the territory outside the United Kingdom and having effect by virtue of section 788, to a relief to which subsection (5) of that section applies in respect of the spared tax,
subsection (10B) below shall apply.
- (10B) In any case falling within subsection (10A) above, the spared tax shall be taken into account for the purposes of—
- (a) the other provisions of this section, and
- (b) subject to section 795(3), Chapter II of this Part in its application to relief under this section in relation to the dividend paid to company C,
as if it had been payable and paid; and references in this section and that Chapter to double taxation, to tax payable or chargeable, or to tax not chargeable directly or by deduction shall be construed accordingly.
- (10C) Except as provided by subsection (10B) above, in relation to any dividend paid—
- (a) to a company resident in the United Kingdom,
- (b) by a company resident in the territory outside the United Kingdom,
credit by virtue of section 801 does not fall to be given by virtue of this section in respect of tax which would have been payable under the law of that or any other territory outside the United Kingdom but for a relief (notwithstanding any arrangements made in relation to that or any other territory outside the United Kingdom which have effect by virtue of section 788 and provide for a relief to which subsection (5) of that section applies).
- (11) Where—
- (a) unilateral relief may by given in respect of any income or chargeable gain, and
- (b) it appears that the assessment to income tax or corporation tax made in respect of the income or chargeable gain is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,
any such assessments may be made as are necessary to ensure that the total amount of the income or chargeable gain is assessed, and the proper credit, if any, is given in respect thereof, and, where the income is, or the chargeable gain is, entrusted to any person in the United Kingdom for payment, any such assessment may be made on the recipient of the income or gain, and, in the case of an assessment to corporation tax in respect of income, may be assessed under Case VI of Schedule D.
- (12) In this section and in Chapter II of this Part in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the United Kingdom include only references—
- (a) to taxes which are charged on income and which correspond to United Kingdom income tax, and
- (b) to taxes which are charged on income or chargeable gains and which correspond to United Kingdom corporation tax;
but for this purpose tax under the law of any such territory shall not be treated as not corresponding to income tax or corporation tax by reason only that it is payable under the law of a province, state or other part of a country, or is levied by or on behalf of a municipality or other local body.
#### Power to make regulations for carrying out section 788
##### 791
The Board may from time to time make regulations generally for carrying out the provisions of section 788 or any arrangements having effect thereunder, and may in particular by those regulations provide—
- (a) for securing that relief from taxation imposed by the laws of the territory to which any such arrangements relate does not enure for the benefit of persons not entitled to such relief; and
- (b) for authorising, in cases where tax deductible from any payment has, in order to comply with any such arrangements, not been deducted, and it is discovered that the arrangements did not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.
### CHAPTER II — RULES GOVERNING RELIEF BY WAY OF CREDIT
### General
#### Interpretation of credit code
##### 792
- (1) In this Chapter, except where the context otherwise requires—
- “*arrangements*” means any arrangements having effect by virtue of section 788;
- “*foreign tax*” means, in relation to any territory, arrangements in relation to which have effect by virtue of section 788, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements (other than special withholding tax within the meaning of Chapter 7 of Part 3 of the Finance Act 2004);
- “*the United Kingdom taxes*” means income tax and corporation tax;
- “*underlying tax*” means, in relation to any dividend, tax which is not chargeable in respect of that dividend directly or by deduction; and
- “*unilateral relief*” means relief under section 790.
- (2) For the purposes of this Chapter one company is a subsidiary of another if the other company controls, directly or indirectly, not less than 50 per cent. of the voting power in the first company.
- (3) Any reference in this Chapter to foreign tax shall be construed in relation to credit to be allowed under any arrangements as a reference only to tax chargeable under the laws of the territory in relation to which the arrangements were made.
#### Reduction of United Kingdom taxes by amount of credit due
##### 793
- (1) Subject to the provisions of this Chapter, where under any arrangements credit is to be allowed against any of the United Kingdom taxes chargeable in respect of any income or chargeable gain, the amount of the United Kingdom taxes so chargeable shall be reduced by the amount of the credit.
- (2) Nothing in subsection (1) above authorises the allowance of credit against any United Kingdom tax against which credit is not allowable under the arrangements.
- (3) Credit against income tax is given effect at Step 6 of the calculation in section 23 of ITA 2007.
#### Requirement as to residence
##### 794
- (1) Subject to subsection (2) below, credit shall not be allowed under any arrangements against any of the United Kingdom taxes for any chargeable period unless the person in respect of whose income or chargeable gains the United Kingdom tax is chargeable is resident in the United Kingdom for that period.
- (2) Credit may be allowed by way of unilateral relief—
- (a) for tax paid under the law of the Isle of Man or any of the Channel Islands, if the person in question is, for the chargeable period in question, resident either in the United Kingdom or in the Isle of Man or any of the Channel Islands, as the case may be;
- (b) for tax paid under the law of any territory and computed by reference to income from an office or employment the duties of which are performed wholly or mainly in that territory, against income tax on employment income and computed by reference to that income, if the person in question is for the year of assessment in question resident either in the United Kingdom or that territory; and
- (bb) for tax paid under the law of any territory outside the United Kingdom in respect of the income or chargeable gains of a branch or agency in the United Kingdom of a person who is not resident in the United Kingdom, where the following conditions are fulfilled, namely—
- (i) that the territory under whose law the tax was paid is not one in which the person is liable to tax by reason of domicile, residence or place of management; and
- (ii) that the amount of relief claimed does not exceed (or is by the claim expressly limited to) that which would have been available if the branch or agency had been a person resident in the United Kingdom and the income or gains in question had been income or gains of that person.
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Computation of income subject to foreign tax
##### 795
- (1) Where credit for foreign tax falls under any arrangements to be allowed in respect of any income and income tax is payable by reference to the amount received in the United Kingdom, the amount received shall be treated for the purposes of income tax as increased by —
- (a) the amount of the foreign tax in respect of the income, including in the case of a dividend any underlying tax which under the arrangements is to be taken into account in considering whether any and if so what credit is to be allowed in respect of the dividend , and
- (b) the amount of any special withholding tax levied in respect of the income.
- (2) Where credit for foreign tax falls under any arrangements to be allowed in respect of any income or gain and subsection (1) above does not apply, then, in computing the amount of the income or gain for the purposes of income tax or corporation tax—
- (a) no deduction shall be made for foreign tax or special withholding tax, whether in respect of the same or any other income or gain; and
- (b) the amount of the income shall, in the case of a dividend, be treated as increased by—
- (i) any underlying tax which, under the arrangements, is to be taken into account in considering whether any and if so what credit is to be allowed in respect of the dividend , and
- (ii) any underlying tax which, by virtue of section 799(1)(b) or section 799(1B)(b), does not fall to be so taken into account.
- (3) The amount of any income or gain shall not be treated as increased under this section by reference to any foreign tax which, although not payable, falls to be taken into account for the purposes of section 788(5).
- (3A) The amount of any income or gain shall not be increased under subsection (2)(b)(i) above by so much of any underlying tax—
- (a) as represents an increase under section 801(4B); or
- (b) as represents relievable underlying tax (within the meaning of sections 806A to 806J) arising in respect of another dividend and treated as underlying tax under those sections.
- (4) Subsections (2) and (3) above have effect for the purposes of corporation tax notwithstanding anything in —
- (a) section 80(5) of the Finance Act 1996 (matters to be brought into account in the case of loan relationships only under Chapter II of Part IV of that Act) ; or
- (b) paragraph 1(3) of Schedule 29 to the Finance Act 2002 (matters to be brought into account in respect of intangible fixed assets only under that Schedule).
- (5) In this section—
- “*certificate of deposit*” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable; and
- “*security*” has the same meaning as in section 132 of the 1992 Act.
#### Deep discount securities
##### 57
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign pensions
##### 58
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons chargeable
##### 59
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, in accordance with section 12 of ITTOIA 2005, income tax is charged . . . on the profits of markets or fairs, or on tolls, fisheries or any other annual or casual profits not distrainable, the owner or occupier or receiver of the profits thereof shall be answerable for the tax so charged, and may retain and deduct the same out of any such profits.
- (4) Subsection (3) above shall not apply for the purposes of corporation tax.
### CHAPTER II — INCOME TAX: BASIS OF ASSESSMENT ETC.
### Cases I and II
#### Assessment on preceding year basis
##### 60
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#### Special basis at commencement of trade, profession or vocation
##### 61
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Special basis for early years following commencement
##### 62
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Special basis on discontinuance
##### 63
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Cases III, IV and V
#### Case III assessments: general
##### 64
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#### Cases IV and V assessments: general
##### 65
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#### Special rules for fresh income
##### 66
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Special rules where source of income disposed of or yield ceases
##### 67
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Special rules where property etc. situated in Republic of Ireland
##### 68
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI
#### Assessment on current year basis unless otherwise directed
##### 69
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — CORPORATION TAX: BASIS OF ASSESSMENT ETC
#### Basis of assessment etc
##### 70
- (1) In accordance with sections 6 to 12 and 337 to 344, for the purposes of corporation tax for any accounting period income shall be computed under Cases I to VI of Schedule D on the full amount of the profits or gains or income arising in the period (whether or not received in or transmitted to the United Kingdom), without any other deduction than is authorised by the Corporation Tax Acts.
- (2) Where a company is chargeable to corporation tax in respect of a trade or vocation under Case V of Schedule D, the income from the trade or vocation shall be computed in accordance with the rules applicable to Case I of Schedule D.
- (3) Cases III and V of Schedule D shall for the purposes of corporation tax extend to companies not resident in the United Kingdom, so far as those companies are chargeable to tax on income of descriptions which, in the case of companies resident in the United Kingdom, fall within those Cases (but without prejudice to any provision of the Tax Acts specially exempting non-residents from tax on any particular description of income).
### CHAPTER IV — PROVISIONS SUPPLEMENTARY TO CHAPTERS II AND III
#### Computation of income tax where no profits in year of assessment
##### 71
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionments etc. for purposes of Cases I, II and VI
##### 72
- (1) Where in the case of any profits or gains chargeable to corporation tax under Case I, II or VI of Schedule D it is necessary in order to arrive for the purposes of . . . corporation tax at the profits or gains or losses of any . . . accounting period or other period, to divide and apportion to specific periods the profits or gains or losses for any period for which the accounts have been made up, or to aggregate any such profits, gains or losses or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.
- (2) Any apportionment under this section shall be made in proportion to the number of days in the respective periods.
#### Single assessments for purposes of Cases III, IV and V
##### 73
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### CHAPTER V — COMPUTATIONAL PROVISIONS
### Deductions
#### General rules as to deductions not allowable
##### 74
- (1) Subject to the provisions of the Corporation Tax Acts, in computing the amount of the profits to be charged to corporation tax under Case I or Case II of Schedule D, no sum shall be deducted in respect of—
- (a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade or profession;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the rent of the whole or any part of any dwelling-house or domestic offices, except any such part as is used for the purposes of the trade or profession, and where any such part is so used, the sum so deducted shall not, unless in any particular case it appears that having regard to all the circumstances some greater sum ought to be deducted, exceed two-thirds of the rent bona fide paid for that dwelling-house or those offices;
- (d) any sum expended for repairs of premises occupied, or for the supply, repairs or alterations of any implements, utensils or articles employed, for the purposes of the trade or profession, beyond the sum actually expended for those purposes;
- (e) any loss not connected with or arising out of the trade or profession;
- (f) any capital withdrawn from, or any sum employed or intended to be employed as capital in, the trade or profession, but so that this paragraph shall not be treated as disallowing the deduction of any interest;
- (g) any capital employed in improvements of premises occupied for the purposes of the trade or profession;
- (h) any interest which might have been made if any such sums as aforesaid had been laid out at interest;
- (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (k) any average loss beyond the actual amount of loss after adjustment;
- (l) any sum recoverable under an insurance or contract of indemnity;
- (m) any annuity or other annual payment (other than interest) payable out of the profits;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (p) any royalty or other sum paid in respect of the user of a patent;
- (q) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses of management: investment companies
##### 75
- (1) In computing for the purposes of corporation tax the total profits for an accounting period of a company with investment business (see section 130) a deduction is to be allowed for any expenses of management of the company’s investment business (see subsection (4) below) which are referable to that accounting period in accordance with section 75A.
That is subject to the following provisions of this section.
- (2) A deduction is not to be allowed under subsection (1) above for any expenses to the extent that those expenses are deductible in computing profits apart from this section.
- (3) Expenses of a capital nature are not expenses of management for the purposes of this section except to the extent that they fall to be treated as expenses of management for those purposes by virtue of—
- (a) subsection (7) below (capital allowances), or
- (b) any provision of the Tax Acts, other than this section.
- (4) For the purposes of this section, expenses of management are “expenses of management of the company’s investment business” to the extent that—
- (a) the expenses are in respect of so much of the company’s business as consists in the making of investments, and
- (b) the investments concerned are not held by the company for an unallowable purpose during the accounting period (see subsection (5) below),
and references in this section to the company’s investment business shall be construed accordingly.
- (5) For the purposes of subsection (4)(b) above, investments are held by a company for an unallowable purpose during an accounting period to the extent that they are held during the period—
- (a) for a purpose that is not a business or other commercial purpose of the company, or
- (b) for the purpose of activities in respect of which the company is not within the charge to corporation tax.
- (6) For the purposes of subsection (1) above, there shall be deducted from the amount that would, apart from this subsection, be deductible under that subsection the amount of any income derived from a source not charged to tax—
- (a) which the company has in the course of carrying on its investment business, and
- (b) which, in a case where the company is not resident in the United Kingdom,—
- (i) the company has in the course of carrying on that business through a permanent establishment in the United Kingdom, and
- (ii) is such property or rights as are mentioned in section 11(2A)(b),
but which is not franked investment income.
- (7) For the purposes of this section, there shall be added to a company’s expenses of management referable to any accounting period the amount of any allowances falling to be made to the company for that period by virtue of section 15(1)(g) of the Capital Allowances Act (plant and machinery allowances) so far as effect cannot be given to them under section 253(2) of that Act.
- (8) Subsection (9) below applies in any case where, in an accounting period of a company with investment business, the sum of—
- (a) the expenses of management deductible under subsection (1) above, and
- (b) any charges on income paid in the accounting period, to the extent that they are paid for the purposes of so much of the company’s business as consists in the making of investments,
exceeds the amount of the profits from which those expenses and charges are deductible.
- (9) In any such case—
- (a) the excess shall be carried forward to the succeeding accounting period; and
- (b) the amount so carried forward to the succeeding accounting period shall be treated for the purposes of this section (including any further application of this subsection) as if it were expenses of management deductible for that accounting period.
- (10) Any apportionment falling to be made for the purposes of this section shall be made on a just and reasonable basis.
#### Expenses of management: insurance companies
##### 76
- (1) In computing for the purposes of corporation tax the profits for any accounting period of a company—
- (a) which carries on life assurance business, and
- (b) which is not charged to tax in respect of that business under Case I of Schedule D,
section 75 is not to apply in computing the profits of that business, but a deduction for expenses payable (the “expenses deduction”) is to be allowed in accordance with the following provisions of this section.
See also subsection (14) below for the application of this section in relation to a company which carries on capital redemption business.
- (2) The expenses deduction is to be made from so much of the income and gains of the accounting period referable to basic life assurance and general annuity business as remains after any deduction falling to be made by virtue of paragraph 4(2) of Schedule 11 to the Finance Act 1996 (non-trading deficits on loan relationships).
- (3) For the purposes of this section “*expenses payable*” means expenses brought into account in line 12, 22 or 25 of Form 40 (the revenue account) in the periodical return of the company for a period of account, but does not include any of the amounts falling within subsection (4), (5) or (6) below.
- (4) The amounts falling within this subsection are the following—
- (a) reinsurance premiums,
- (b) refunds of premiums,
- (c) profit commissions and profit participations (however described),
- (d) expenses or other amounts payable, to the extent that the company’s purpose in incurring the liability to make the payment is not a business or other commercial purpose of the company.
For the purposes of paragraph (d) above, it is not one of the business or commercial purposes of a company to incur a liability to pay an amount of commission or other expenses which exceeds the amount which it could reasonably be expected to pay if the company were charged to tax under Case I of Schedule D in respect of its life assurance business.
- (5) The amounts falling within this subsection are any amounts payable in connection with a policy or contract to—
- (a) a policy holder or annuitant under the policy or contract (except where the policy holder is an insurance company),
- (b) any other person who is entitled to receive benefits under the policy or contract,
- (c) any person acting on behalf of a person falling within paragraph (a) or (b) above,
- (d) the personal representatives of a deceased person who fell within paragraphs (a) to (c) above.
- (6) The amounts falling within this subsection are expenses of a capital nature.
But this subsection does not apply in the case of an amount which, by virtue of any provision of the Tax Acts other than this section, falls to be treated for the purposes of this section as expenses payable which fall to be brought into account at Step 1 in subsection (7) below (the reference to Step 1 being express in the provision).
- (7) The amount of the expenses deduction for an accounting period is found by taking the following steps—
- *Step 1*
- Find so much of the expenses payable as are—attributable to basic life assurance and general annuity business (see subsection (8) below), andreferable to the accounting period (see subsection (9) below).
- *Step 2*
- Reduce each of the amounts found at Step 1 by excluding so much of the amount as is—deductible in computing income for the purposes of Schedule A,deductible by virtue of section 85(2B) of the Finance Act 1989, ordeductible by virtue of section 121(3) in computing income from the letting of rights to work minerals in the United Kingdom.
- *Step 3*
- Find the amounts (so far as not included at Step 1) which fall to be treated for the purposes of this section as expenses payable for the accounting period by virtue of any of the following provisions—
- section 432AB(3) (Schedule A loss or an overseas property business loss referable to basic life assurance and general annuity business);
- section 437(1A) (relief for income element of new annuities);
- section 587B(8)(b)(i) (relief for company carrying on life assurance business in relation to gifts of shares and securities);
- paragraph 16(1) of Schedule 7 to the Finance Act 1991 (transitional relief for old annuities);
- paragraph 4(4)(b) of Schedule 11 to the Finance Act 1996 (carried forward non-trading deficit on loan relationships produced by separate computation for basic life assurance and general annuity business);
- section 256(2)(a) of the Capital Allowances Act (capital allowances on plant and machinery used in the management of life assurance business);
- paragraph 23 of Schedule 22 to the Finance Act 2001 (150% relief in respect of the remediation expenditure on contaminated land owned by a company carrying on life assurance business and acquired to be a management asset);
- paragraph 13(2) of Schedule 12 to the Finance Act 2002 (125% of relevant expenditure on R&D in the case of a life assurance company);
- paragraph 23(2) of Schedule 13 to the Finance Act 2002 (150% of relevant expenditure on research into vaccines in the case of a life assurance company);
- paragraph 36(3) of Schedule 29 to the Finance Act 2002 (relief for non-trading loss on intangible fixed assets).
- *Step 4*
- Give effect to the provisions specified in Step 3 by adding together—so much of the amounts found at Step 1 as remains after making any reductions at Step 2, andthe amounts found at Step 3,
- and then deduct the amount of any reversal (wherever brought into account) of an expense included at Step 1 in a previous period,
- to give Subtotal 1.
- *Step 5*
- If the whole or any part of a loss arising to the company in respect of its life assurance business in the accounting period is set off under section 393A or 403(1)—find the amount (“amount L”) that is equal to so much of the loss as, in the aggregate, is so set off,find the sum (“amount S”) of the amounts by which any losses for that period under section 436 or 439B fall to be reduced under section 434A(2)(b),from amount L deduct amount S, to give the adjusted loss deduction,
- then reduce Subtotal 1 by deducting from it the adjusted loss deduction,
- to give Subtotal 2.
- *Step 6*
- Give effect to subsection (6) of section 86 of the Finance Act 1989 (spreading of acquisition expenses) by—finding the amount that is equal to six-sevenths of the adjusted amount of the acquisition expenses (within the meaning of that section) for the accounting period, anddeducting that amount from Subtotal 2,
- to give Subtotal 3.
- *Step 7*
- Add together the following amounts—Subtotal 3, andany amounts carried forward to the accounting period under subsection (12) or (13) below (unrelieved excesses from earlier accounting periods),
- to give Subtotal 4.
- *Step 8*
- Give effect to subsections (8) and (9) of section 86 of the Finance Act 1989 (fraction of adjusted amount of acquisition expenses for earlier accounting periods) by adding together—Subtotal 4, andany amounts which are to be relieved under this section by virtue of those subsections,
- to give the basic deduction.
- *Step 9*
- If—amount D1 (see subsection (10) below), exceedsamount R (see subsection (11) below),
- deduct an amount equal to the excess from the basic deduction.
- *Step 10: the amount of the expenses deduction*
- The amount of the expenses deduction is so much of the basic deduction (see Step 8) as remains after making any deduction required at Step 9.
- (8) For the purposes of Step 1, the expenses that are attributable to basic life assurance and general annuity business are the expenses which are attributable to that business in accordance with proper internal accounting practice.
In this subsection “*proper internal accounting practice*” means the practice of insurance companies in allocating all the expenses of the company to particular categories of business in accordance with any applicable requirements of—
- (a) generally accepted accounting practice, . . .
- (b) the Prudential Sourcebook (Insurers), or
- (c) the Insurance Prudential Sourcebook.
- (9) The following rules have effect for determining for the purposes of Step 1 the expenses that are referable to an accounting period.
*Rule A*
Where a period of account coincides with an accounting period, the expenses brought into account for the period of account are the expenses referable to the accounting period.
*Rule B*
Where—
- (a) two or more accounting periods fall within the same period of account, and
- (b) that period of account is longer than 12 months,
section 834(4) (apportionment on time basis) is to apply.
*Rule C*
In any other case where two or more accounting periods fall within the same period of account, the expenses referable to any of those accounting periods are the expenses that would have been referable to that accounting period if—
- (a) the accounting period had coincided with a period of account, and
- (b) a separate periodical return had been made for that period of account,
and section 834(4) (apportionment on time basis) is not to apply.
*Rule D*
Rules A to C are subject to any provision of the Corporation Tax Acts which provides for an amount to be treated as expenses payable for, or referable to, a particular period.
- (10) The amount D1 in Step 9 is the amount that would be the profits of the company’s life assurance business for the accounting period if—
- (a) computed in accordance with the provisions applicable to Case I of Schedule D, and
- (b) adjusted in respect of losses.
The adjustment in respect of losses is a deduction of the amount which, disregarding sections 434A(2) and 440B, would fall to be set off under section 393 against the company’s income for that period if the company had always been charged to tax under Case I of Schedule D in respect of its life assurance business.
- (11) The amount R in Step 9 (which may be a negative amount) is found for the accounting period by—
- (a) taking the company’s relevant income, and
- (b) deducting from it the relevant aggregate.
The “*relevant income*”is the sum of—
- (a) the income and gains referable by virtue of section 432A to the company’s basic life assurance and general annuity business;
- (b) distributions received by the company from companies resident in the United Kingdom which are referable by virtue of section 432A to its basic life assurance and general annuity business;
- (c) profits chargeable under Case VI of Schedule D under section 436, 439B or 441.
The “*relevant aggregate*”is the sum of—
- (a) the basic deduction (see Step 8);
- (b) any non-trading deficit on the company’s loan relationships which is produced for the period in relation to the company’s basic life assurance and general annuity business by a separate computation under paragraph 2 of Schedule 11 to the Finance Act 1996;
- (c) any amount which in pursuance of a claim under paragraph 4(3) of that Schedule is carried back to the period and (in accordance with paragraph 4(5) of that Schedule) applied in reducing profits of the company for that period.
- (12) Where for any accounting period—
- (a) the amount of the expenses deduction (see Step 10), exceeds
- (b) the amount from which that deduction is to be made (see subsection (2) above),
the excess is to be carried forward to the next accounting period and brought into account for that period in accordance with Step 7.
- (13) Subject to paragraph 4(11) to (13) of Schedule 11 to the Finance Act 1996, where for any accounting period—
- (a) the basic deduction (see Step 8), exceeds
- (b) the expenses deduction (see Step 10),
the excess is to be carried forward to the next accounting period and brought into account for that period in accordance with Step 7.
- (14) In this section any reference to—
- (a) life assurance business, or
- (b) basic life assurance and general annuity business,
includes a reference to capital redemption business.
- (15) In this section—
- “*capital redemption business*” means any capital redemption business, within the meaning of section 458, which is business to which that section applies;
- “*expenses payable*” has the meaning given by subsection (3) above;
- and other expressions have the same meaning as in Chapter 1 of Part 12.
#### Incidental costs of obtaining loan finance
##### 77
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Discounted bills of exchange
##### 78
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Contributions to local enterprise agencies
##### 79
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to an approved local enterprise agency, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or profession for the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the agency concerned or from any other person.
- (4) In this section “*approved local enterprise agency*” means a body approved by the Secretary of State for the purposes of this section; but he shall not so approve a body unless he is satisfied that—
- (a) its sole objective is the promotion or encouragement of industrial and commercial activity or enterprise in a particular area in the United Kingdom with particular reference to encouraging the formation and development of small businesses; or
- (b) one of its principal objectives is that set out in paragraph (a) above and it maintains or is about to maintain a fund separate from its other funds which is or is to be applied solely in pursuance of that objective;
and where the Secretary of State approves a body by virtue of paragraph (b) above, the approval shall specify the fund concerned and, in relation to a body so approved, any reference in this section to a contribution is a reference to a contribution which is made wholly to or for the purposes of that fund.
- (5) A body may be approved under subsection (4) above whether or not it is a body corporate or a body of trustees or any other association or organisation and whether or not it is described as a local enterprise agency.
- (6) A body may not be approved under subsection (4) above unless it is precluded, by virtue of any enactment, contractual obligation, memorandum or otherwise, from making any direct or indirect payment or transfer to any of its members, or to any person charged with the control and direction of its affairs, of any of its income or profit by way of dividend, gift, division, bonus or otherwise howsoever by way of profit.
- (7) For the purposes of subsection (6) above, the payment—
- (a) of reasonable remuneration for goods, labour or power supplied or for services rendered, or
- (b) of reasonable interest for money lent, or
- (c) of reasonable rent for any premises,
does not constitute a payment or transfer which is required to be so precluded.
- (8) Any approval given by the Secretary of State may be made conditional upon compliance with such requirements as to accounts, provision of information and other matters as he considers appropriate; and if it appears to the Secretary of State that—
- (a) an approved local enterprise agency is not complying with any such requirement, or
- (b) one or other of the conditions for his approval contained in subsection (4) above or the precondition for his approval in subsection (6) above has ceased to be fulfilled with respect to an approved local enterprise agency,
he shall by notice withdraw his approval from the body concerned with effect from such date as he may specify in the notice (which may be a date earlier than the date on which the notice is given).
- (9) In any case where—
- (a) a contribution has been made by a company to an approved local enterprise agency in respect of which relief has been given under subsection (1) above, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (10) Section 839 applies for the purposes of subsections (3) and (9) above.
- (11) This section applies to contributions made on or after 1st April 1982 . . . .
#### Expenses connected with foreign trades etc
##### 80
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Travel between trades etc
##### 81
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid to non-residents
##### 82
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Patent fees etc. and expenses
##### 83
Notwithstanding anything in section 74, in computing the profits of a trade for the purposes of corporation tax there may be deducted as expenses any fees paid or expenses incurred—
- (a) in obtaining for the purposes of the trade the grant of a patent, an extension of the term of a patent, the registration of a design or trade mark, an extension of the period for which the right in a registered design subsists or the renewal of registration of a trade mark, or
- (b) in connection with a rejected or abandoned application for a patent made for the purposes of the trade.
#### Payments for technical education
##### 84
- (1) This section applies where a company carrying on a trade or profession (“*the donor*”) makes a gift for the purposes of a designated educational establishment of—
- (a) an article manufactured, or of a class or description sold, by the donor in the course of its trade which qualifies as plant or machinery in the hands of the educational establishment; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this section, an article “*qualifies as plant or machinery in the hands of an educational establishment*” if, and only if, it is an article such that—
- (a) were the activities carried on by the educational establishment regarded as a trade carried on by a body of persons, and
- (b) had that body, at the time of the gift, incurred capital expenditure wholly and exclusively on the provision of an identical article for the purposes of those activities, and
- (c) had the identical article belonged to that body in consequence of the incurring of that expenditure,
the identical article would be regarded for the purposes of Part 2 of the Capital Allowances Act as plant or machinery provided by the body for the purposes of that trade.
- (3) Where this section applies—
- (a) if the gift is of an article falling within paragraph (a) of subsection (1) above, then, for corporation tax purposes, no amount shall be required to be brought into account as a trading receipt of the donor in consequence of its disposal of that article from trading stock; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
but this subsection shall not apply unless, within the period specified in subsection (3A) below, the donor makes a claim for relief under this subsection, specifying the article given and the name of the educational establishment in question.
- (3A) The period mentioned in subsection (3) above is the period of two years beginning at the end of the accounting period in which the gift is made.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In any case where—
- (a) relief is given under subsection (3) above or section 63(2) of the Capital Allowances Act in respect of the gift of an article made by the donor, and
- (b) any benefit received in any accounting period by the donor or any person connected with the donor is in any way attributable to the making of that gift,
the donor shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the donor is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) In this section “*designated educational establishment*” means any educational establishment designated, or of a category designated,—
- (a) as respects Great Britain, in regulations made by the Secretary of State; or
- (b) as respects Northern Ireland, in regulations made by the Department of Education for Northern Ireland;
and any such regulations may make different provision for different areas.
- (6) If any question arises as to whether a particular establishment falls within a category designated in regulations under subsection (5) above, the Board shall refer the question for decision—
- (a) in the case of an establishment in Great Britain, to the Secretary of State, or
- (b) in the case of an establishment in Northern Ireland, to the Department of Education for Northern Ireland.
- (7) The power of the Secretary of State to make regulations under subsection (5) above shall be exercisable by statutory instrument; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (8) Regulations made under subsection (5) above for Northern Ireland—
- (a) shall be a statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979; and
- (b) shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
- (9) Section 839 applies for the purposes of subsection (4) above.
#### Payments to trustees of approved profit sharing schemes
##### 85
- (1) Any sum expended in making a payment to the trustees of an approved profit sharing scheme by a company which is in relation to that scheme the grantor or a participating company—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade carried on by that company; or
- (b) if that company is a company with investment business, shall be treated as expenses of management deductible under section 75, or
- (c) if that company is one in relation to which section 76 applies, shall be treated as expenses payable for the purposes of that section,
if, and only if, one of the conditions in subsection (2) below is fulfilled.
- (2) The conditions referred to in subsection (1) above are—
- (a) that before the expiry of the relevant period the sum in question is applied by the trustees in the acquisition of shares for appropriation to individuals who are eligible to participate in the scheme by virtue of their being or having been employees or directors of the company making the payment; and
- (b) that the sum is necessary to meet the reasonable expenses of the trustees in administering the scheme.
- (3) For the purposes of subsection (2)(a) above “*the relevant period*” means the period of nine months beginning on the day following the end of the period of account in which the sum in question is charged as an expense of the company incurring the expenditure or such longer period as the Board may allow by notice given to that company.
- (4) For the purposes of this section, the trustees of an approved profit sharing scheme shall be taken to apply sums paid to them in the order in which the sums are received by them.
- (5) In this section—
- “*approved profit sharing scheme*” means a profit sharing scheme approved under Schedule 9; and
- “*the grantor*” and “*participating company*” have the meaning given by paragraph 1(3) and (4) of that Schedule.
#### Employees seconded to charities and educational establishments
##### 86
- (1) If a company (“*the employer*”) carrying on a trade, profession or business for the purposes of which it employs a person (“*the employee*”) makes available to a charity, on a basis which is expressed and intended to be of a temporary nature, the services of the employee then, notwithstanding anything in section 74, 75 or 76, any expenditure incurred by the employer which is attributable to the employment of that employee shall continue to be deductible in the manner and to the like extent as if, during the time that his services are so made available to the charity, they continued to be available for the purposes of the employer’s trade, business or profession.
- (2) In subsection (1) above—
- “*charity*” has the same meaning as in section 506;
- “*deductible*” means—deductible as an expense in computing the profits of the employer to be charged to corporation tax under Case I or II of Schedule D,deductible as expenses of management for the purposes of section 75, orfalling to be brought into account in accordance with section 76 as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section,as the case may be.
- (3) With respect to expenditure attributable to the employment of a person on or after 26th November 1986 . . . , this section shall have effect as if the references to a charity included references to any of the following bodies, that is to say—
- (a) in England and Wales, any body falling within subsection (4) below;
- (b) in Scotland, any body falling within subsection (5) below;
- (c) in Northern Ireland, any body falling within subsection (6) below; and
- (d) any other educational body which is for the time being approved for the purposes of this section by the Secretary of State or, in Northern Ireland, the Department of Education for Northern Ireland.
- (4) A body falls within this subsection if it is—
- (a) a local education authority;
- (b) an educational institution maintained or otherwise supported by such an authority (including a grant-maintained school or a grant-maintained special school within the meaning of the Education Act 1996);
- (c) an independent school, within the meaning of the Education Act 1996, whose registration under section 465 of that Act is final; or
- (d) an institution within the further education sector, or the higher education sector, within the meaning of the Further and Higher Education Act 1992.
- (5) A body falls within this subsection if it is—
- (a) an education authority;
- (b) an educational establishment managed by such an authority within the meaning of the Education (Scotland) Act 1980 (“*the 1980 Act*”);
- (c) a public or grant-aided school within the meaning of the 1980 Act;
- (d) a self-governing school within the meaning of the Self-Governing Schools etc. (Scotland) Act 1989;
- (e) an independent school within the meaning of the 1980 Act;
- (f) a central institution within the meaning of the 1980 Act;
- (g) an institution within the higher education sector within the meaning of section 56(2) of the Further and Higher Education (Scotland) Act 1992; or
- (h) a college of further education within the meaning of section 36(1) of that Act.
- (6) A body falls within this subsection if it is—
- (a) an education or library board within the meaning of the Education and Libraries (Northern Ireland) Order 1986;
- (b) a college of education or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or independent school within the meaning of that Order; or
- (c) an institution of further education within the meaning of the Further Education (Northern Ireland) Order 1997.
#### Taxable premiums etc
##### 87
- (1) This section applies where in relation to any land used in connection with a trade or profession—
- (a) any amount falls to be treated as a receipt of a Schedule A business by virtue of section 34 or 35, . . .
- (b) any amount would fall to be so treated but for the operation of section 37(2) or (3);
- (c) any amount falls to be treated as a receipt of a UK property business by virtue of any of sections 277 to 282 of ITTOIA 2005 (receipts in respect of lease premiums, sums payable instead of rent, for surrender of lease and for variation or waiver of term of lease and assignments), or
- (d) any amount would fall to be so treated but for the operation of the rule in section 288 of that Act (the additional calculation rule),
and that amount is referred to below and in section 87A as “*the amount chargeable*”.
- (2) Subject to subsections (3) to (8) below, where—
- (a) during any part of the relevant period the land in relation to which the amount chargeable arose is occupied by a company which is for the time being entitled to the lease as respects which it arose, and
- (b) that occupation is for the purposes of a trade or profession carried on by the company,
the company shall be treated, in computing the profits of the trade or profession chargeable to corporation tax under Case I or II of Schedule D, as paying in respect of that land rent for the period (in addition to any actual rent), becoming due from day to day, of an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole.
- (3) As respects any period during which a part only of the land in relation to which the amount chargeable arose is occupied as mentioned in subsection (2) above, that subsection shall apply as if the whole were so occupied, but the amount chargeable shall be treated as reduced by so much thereof as, on a just apportionment, is attributable to the remainder of the land.
- (4) Where a company, although not in occupation of the land or any part of the land, deals with the company's interest in the land or that part as property employed for the purposes of a trade or profession carried on by the company, subsections (2) and (3) above shall apply as if the land or part were occupied by the company for those purposes.
- (5) Where section 37(2) and (3) has effect in relation to a lease granted out of the interest referred to in subsection (4) above, subsections (5) and (6) of that section shall apply for modifying the operation of subsections (2) and (3) above as they apply for modifying the operation of subsection (4) of that section.
- (6) In computing profits chargeable under Case I or II of Schedule D for any accounting period, rent shall not by virtue of subsection (4) above be treated as paid by a company for any period in respect of land in so far as rent treated under section 37(4) as paid by the company for that period in respect of the land has in any previous accounting period been deducted, or falls in that accounting period to be deducted under Part II.
- (7) Where, in respect of expenditure on the acquisition of the company's interest in the land in relation to which the amount chargeable arose, a company has become entitled to an allowance under Part 5 of the Capital Allowances Act in respect of expenditure falling within section 403 (mineral asset expenditure) for any accounting period, then—
- (a) if the allowance is in respect of the whole of the expenditure, no deduction shall be allowed the company under this section for that or any subsequent accounting period; or
- (b) if the allowance is in respect of part only of the expenditure (“*the allowable part*”), a deduction allowed the company under this section for that or any subsequent accounting period shall be the fraction—
$$A-BA$of the amount which apart from this subsection would fall to be deducted, where—$
A is the whole of the expenditure, and
B is the allowable part of the expenditure;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where the amount chargeable arose under section 34(2) or under section 277 of ITTOIA 2005 by virtue of section 278 of that Act (amount treated as lease premium where work required) by reason of an obligation which included the carrying out of work in respect of which any capital allowance has fallen or will fall to be made, this section shall apply as if the obligation had not included the carrying out of that work and the amount chargeable had been calculated accordingly.
- (9) In this section “*the relevant period*” means—
- (a) where the amount chargeable arose under section 34, the period treated in computing that amount as the duration of the lease;
- (b) where the amount chargeable arose under section 35, the period treated in computing that amount as the duration of the lease remaining at the date of the assignment;
- (c) where the amount chargeable arose under Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease premiums etc.), its receipt period (within the meaning of that Chapter (see section 288(6)).
- (9A) In the application of this section and section 87A to Scotland—
- (a) the reference to a lease being granted out of the interest referred to in subsection (4) above is to the grant of a sublease of land subject to that interest, and
- (b) references to the lease so granted are to be construed as references to the sublease.
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments to Export Credit Guarantee Department
##### 88
Any sums paid by a company to the Export Credits Guarantee Department under an agreement entered into under arrangements made by the Secretary of State in pursuance of section 11 of the Export Guarantees and Overseas Investment Act 1978, or with a view to entering into such an agreement, shall be included—
- (a) in the sums to be deducted in computing for the purposes of Case I or Case II of Schedule D the profits of any trade or profession carried on by that company; or
- (b) if that company is a company with investment business, in the expenses of management that are deductible under section 75 in computing the company’s profits for the purpose of corporation tax;
whether or not they would fall to be so included apart from this section.
#### Debts proving irrecoverable after event treated as discontinuance
##### 89
- (1) This section applies if—
- (a) section 337(1) applies to treat a trade as discontinued by reason of any event, or
- (b) a person permanently ceases to carry on a trade or profession,
and a company carries on the trade or profession after that event or cessation.
- (2) In computing for corporation tax purposes the profits of the trade or profession in any period after the event or cessation, there may be deducted a sum equal to any amount proved during that period to be irrecoverable in respect of any debts—
- (a) which were credited in computing for tax purposes the profits for any period before the event or cessation, and
- (b) in respect of which the benefit was assigned to the company carrying on the trade or profession after the event or cessation.
- (3) Subsection (2) applies only so far as the total amount proved to be irrecoverable in respect of the debts exceeds any relevant deduction in respect of them in a computation for any period before the event or cessation.
- (4) In this section “*debt*” includes an obligation or liability that falls to be discharged otherwise than by the payment of money.
The references to a debt being irrecoverable shall be read accordingly.
- (5) For the purposes of this section “*relevant deduction*”, in relation to a debt, means a deduction made for tax purposes in respect of an impairment loss or release.
#### Additional payments to redundant employees
##### 90
- (1) Where a payment is made by way of addition to a redundancy payment or to the corresponding amount of any other employer’s payment and the additional payment would be—
- (a) allowable as a deduction in computing for the purposes of Schedule D the profits or losses of a trade or profession,
- (b) deductible under section 75 as expenses of management of a business, or
- (c) regarded as expenses payable for the purposes of section 76,
- (1A) To the extent that the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it shall not be so regarded for the purposes of that subsection (or of subsection (1) above so far as relating to that section).
- (2) Subsection (1) above applies to an additional payment only so far as it does not exceed three times the amount of the redundancy payment or of the corresponding amount of the other employer’s payment.
- (3) In this section references to the permanent discontinuance of a trade, profession or business include references to any occasion on which it is treated as permanently discontinued by virtue of section . . . 337(1).
- (4) In this section references to a redundancy payment or to the corresponding amount of an employer’s payment shall be construed as in sections 579 and 580.
#### Cemeteries
##### 91
- (1) In computing for corporation tax purposes the profits or losses for any period of a trade which consists of or includes the carrying on of a cemetery, there shall be allowed as a deduction—
- (a) any capital expenditure incurred by the company engaged in carrying on the trade in providing any land in the cemetery sold during that period for the purpose of interments, and
- (b) the appropriate fraction of the residue at the end of that period of the relevant capital expenditure.
- (2) Subject to subsection (3) below, the relevant capital expenditure is capital expenditure incurred for the purposes of the trade in question by the company engaged in carrying it on, being—
- (a) expenditure on any building or structure other than a dwelling-house, being a building or structure in the cemetery likely to have little or no value when the cemetery is full; and
- (b) expenditure incurred in providing land taken up by any such building or structure, and any other land in the cemetery not suitable or adaptable for use for interments and likely to have little or no value when the cemetery is full.
- (3) Relevant capital expenditure—
- (a) does not include expenditure incurred on buildings or structures which have been destroyed before the beginning of the first period to which subsection (1) above applies in the case of the trade in question; and
- (b) of other expenditure incurred before that time, includes only the fraction—
$$AA+B$where—$
A is the number of grave-spaces which at that time were or could have been made available in the cemetery for sale, and
B is the number already sold.
- (4) For the purposes of this section—
- (a) the residue of any expenditure at the end of a period is the amount incurred before that time which remains after deducting—
- (i) any amount allowed in respect of that expenditure under subsection (1)(b) above , or under section 170(2)(b) of ITTOIA 2005 (relief for income tax purposes) in computing for tax purposes the profits or losses of the trade for any previous period, and
- (ii) if, after the beginning of the first period to which subsection (1) above applies in the case of a trade and before the end of the period mentioned at the beginning of this subsection, any asset representing that expenditure is sold or destroyed, the net proceeds of sale or, as the case may be, any insurance money or other compensation of any description received by the company carrying on the trade in respect of the destruction and any money received by it for the remains of the asset; and
- (b) the appropriate fraction of the residue of any expenditure at the end of any period is—
$$AA+B$where—$
A is the number of grave-spaces in the cemetery sold in the period, and
B is the number of grave-spaces which at the end of the period are or could be made available in the cemetery for sale.
- (5) Where in any chargeable period there is a change in the persons engaged in carrying on a trade which consists of or includes the carrying on of a cemetery, any allowance to be made under this section to the company carrying on the trade after the change shall, whether or not it is to be assumed for other purposes that the trade was discontinued and a new trade set up and commenced, be computed—
- (a) as if the company had at all times been engaged in carrying on the trade;
- (b) as if everything done to or by any of its predecessors in carrying on the trade had been done to or by it; and
- (c) without regard to the price paid on any sale on the occasion of any such change.
- (6) No expenditure shall be taken into account—
- (a) under both paragraphs (a) and (b) of subsection (1) above, or
- (b) under both subsection (1)(a) above and section 170(2)(b) of ITTOIA 2005 or under both subsection (1)(b) above and section 170(2)(a) of ITTOIA 2005,
whether for the same or different periods.
- (7) This section shall apply in relation to a trade which consists of or includes the carrying on of a crematorium and, in connection therewith, the maintenance of memorial garden plots, as it applies in relation to a trade which consists of or includes the carrying on of a cemetery, but subject to the modifications that—
- (a) references to the cemetery or land in the cemetery shall be taken as references to the land which is devoted wholly to memorial garden plots, and
- (b) references to grave-spaces shall be taken as references to memorial garden plots, and
- (c) references to the sale or use of land for interments shall be taken as references to its sale or use for memorial garden plots.
- (8) In this section—
- (a) references to the sale of land include references to the sale of a right of interment in land, and to the appropriation of part of a memorial garden in return for a dedication fee or similar payment;
- (b) references to capital expenditure incurred in providing land shall be taken as references to the cost of purchase and to any capital expenditure incurred in levelling or draining it or otherwise rendering it suitable for the purposes of a cemetery or a memorial garden; and
- (c) the reference in subsection (4)(a)(ii) to subsection (1) above includes a reference to section 141 of the 1970 Act and section 22 of the Finance Act 1952 (which made similar provision to that made by this section).
- (9) Section 532 of the Capital Allowances Act (general rule excluding contributions) shall apply for the purposes of this section as it applies for the purposes of that Act.
### Treatment of regional development and other grants and debts released etc.
#### Regional development grants
##### 92
- (1) A regional development grant which, apart from this subsection, would be taken into account as a receipt in computing the profits of a trade, profession or vocation which are chargeable under Case I or II of Schedule D, shall not be taken into account as a receipt in computing those profits.
- (2) A regional development grant which is made to an investment company—
- (a) shall not be taken into account as a receipt in computing its profits under Case VI of Schedule D; and
- (b) shall not be deducted, by virtue of section 75(2), from the amount treated as expenses of management.
- (3) In this section “*regional development grant*” means a payment by way of grant under Part II of the Industrial Development Act 1982.
#### Other grants under Industrial Development Act 1982 etc
##### 93
- (1) A payment to which this section applies which is made to a company carrying on a trade the profits of which are chargeable to corporation tax under Case I of Schedule D shall be taken into account as a receipt in computing those profits; and any such payment which is made to a company with investment business shall be taken into account as a receipt in computing its profits under Case VI of Schedule D.
- (2) This section applies to any payment which would not, apart from this section, be taken into account as mentioned in subsection (1) above, being a payment by way of a grant under—
- (a) section 7 or 8 of the Industrial Development Act 1982 or section 7 or 8 of the Industry Act 1972; or
- (b) section 1 of the Industries Development Act (Northern Ireland) 1966 or section 4 of the Industries Development Act (Northern Ireland) 1971; or
- (c) any of Articles 7, 9 and 30 of the Industrial Development (Northern Ireland) Order 1982;
other than a grant designated as made towards the cost of specified capital expenditure or as made by way of compensation for the loss of capital assets and other than a grant falling within subsection (3) below.
- (3) A payment by way of grant which is made—
- (a) under Article 7 of the Order referred to in subsection (2)(c) above, and
- (b) in respect of a liability for corporation tax (including a liability which has already been met),
shall not be taken into account as mentioned in subsection (1) above, whether by virtue of this section or otherwise.
#### Debts deducted and subsequently released
##### 94
- (1) Where, in computing for corporation tax purposes the profits of a trade or profession, a deduction has been allowed for any debt incurred for the purposes of the trade or profession, then, if the whole or any part of the debt is thereafter released otherwise than as part of a statutory insolvency arrangement, the amount released shall be treated as a receipt of the trade or profession arising in the period in which the release is effected.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of dealer’s receipts on purchase by company of own shares
##### 95
- (1) Where a dealer—
- (a) receives a relevant distribution, that is to say—
- (i) any distribution which is made by a company resident in the United Kingdom (“*a UK distribution*”), or
- (ii) any payment which is representative of a UK distribution, or
- (b) makes any payment which is representative of a UK distribution,
the distribution or, as the case may be, the payment shall be taken into account in computing the profits of the dealer which are chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (1A) Accordingly, where a dealer receives a relevant distribution—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) section 208 shall not apply to that distribution; and
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) The application of subsection (1) above in relation to a payment made by a dealer is subject to paragraph 7A of Schedule 23A (manufactured payments under arrangements having an unallowable purpose).
- (2) For the purposes of this section a person is a dealer in relation to any . . . distribution if—
- (a) were there a sale by that person of the shares or stock in respect of which the distribution is made, and
- (b) the circumstances of that sale were such that the price would not fall to be treated as a . . . distribution,
the price would be taken into account in computing the profits of that person which are chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (2A) The reference in subsection (2) above to the profits of a person does not include the profits of that person in respect of insurance business or any category of insurance business.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Special provisions
#### Farming and market gardening: relief for fluctuating profits
##### 96
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of farm animals etc
##### 97
Schedule 5 shall have effect with respect to the treatment, in computing profits for the purposes of Case I of Schedule D, of animals and other living creatures kept for the purposes of farming or any other trade.
#### Tied premises
##### 98
- (1) This section applies for corporation tax purposes where a company (“*the trader*”)—
- (a) carries on a trade,
- (b) in the course of the trade supplies, or is concerned in the supply of, goods sold or used on premises occupied by a person other than the trader,
- (c) has an estate or interest in those premises, and
- (d) deals with that estate or interest as property employed for the purposes of the trade.
- (2) Where this section applies the receipts and expenses in connection with the premises that would otherwise fall to be brought into account in computing the profits of a Schedule A business carried on by the trader shall instead be brought into account in computing the profits of the trade.
- (3) Any necessary apportionment shall be made on a just and reasonable basis of receipts or expenses—
- (a) which do not relate only to the premises concerned, or
- (b) where the conditions in subsection (1) are met only in relation to part of the premises.
- (4) This section applies to premises outside the United Kingdom as if the premises were in the United Kingdom.
#### Dealers in land
##### 99
- (1) In computing for corporation tax purposes the profits of a trade of dealing in land, there shall be disregarded—
- (a) so much of the cost of woodlands in the United Kingdom purchased in the course of the trade as is attributable to trees or saleable underwood growing on the land; and
- (b) where any amount has been disregarded under paragraph (a) above and, on a subsequent sale of the woodlands in the course of the trade, all or any of the trees or underwood to which the amount disregarded was attributable are still growing on the land, so much of the price for the land as is equal to the amount so disregarded in respect of those trees or underwood.
- (2) In computing the profits of a trade of dealing in land, any trading receipt falling within subsection (1), (4) or (5) of section 34 or section 35 or 36 shall be treated as reduced by the amount on which corporation tax is chargeable by virtue of that section.
- (3) Where, on a claim being made under subsection (2)(b) of section 36, the amount on which corporation tax was chargeable by virtue of that section is treated as reduced, subsection (2) above shall be deemed to have applied to the amount as reduced, and any such adjustment of liability to corporation tax shall be made (for all relevant accounting periods) whether by means of an assessment or otherwise, as may be necessary, and may be so made at any time at which it could be made if it related only to corporation tax for the accounting period in which that claim is made.
- (4) Subsection (1) above shall not apply where the purchase mentioned in paragraph (a) of that subsection was made under a contract entered into before 1st May 1963.
### CHAPTER VI — DISCONTINUANCE . . .
### Valuation of trading stock etc.
#### Valuation of trading stock at discontinuance of trade
##### 100
- (1) In computing for any corporation tax purpose the profits of a trade which has been discontinued, any trading stock belonging to the trade at the discontinuance shall be valued as follows—
- (a) if—
- (i) the stock is sold or transferred for valuable consideration to a person who carries on, or intends to carry on, a trade in the United Kingdom, and
- (ii) the cost of the stock may be deducted by the purchaser as an expense in computing for any tax purpose the profits of that trade,
the value of the stock shall be taken to be the amount determined in accordance with subsections (1A) to (1C) below; and
- (b) if the stock does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.
- (1ZA) This section does not apply in relation to any trading stock if paragraph 1(2) of Schedule 28AA (provision not at arm’s length) has effect in relation to any provision made or imposed in relation to that stock and having effect in connection with the discontinuance of the trade.
- (1A) Subject to subsections (1B) and (1C) below and to paragraph 2 of Schedule 12 to the Finance Act 1988 (gilt-edged securities and other financial trading stock), the value of any trading stock falling to be valued under paragraph (a) of subsection (1) above shall be taken—
- (a) except where the person to whom it is sold or transferred is connected with the company which makes the sale or transfer, to be the amount (“the price actually received for it”) which is in fact realised on the sale or, as the case may be, which is in fact the value of the consideration given for the transfer; and
- (b) if that person and that company are connected with each other, to be what would have been the price actually received for it had the sale or transfer been a transaction between independent persons dealing at arm’s length.
- (1B) In a case falling within subsection (1)(a) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) stock sold in circumstances in which the amount realised on the sale would be taken to be an amount determined in accordance with paragraph 5 of Schedule 5 shall be taken to have the value so determined, instead of the value for which subsection (1A)(a) or (b) above provides.
- (1C) If—
- (a) trading stock is sold or transferred to a person in circumstances where paragraph (b) of subsection (1A) above would apply (apart from this subsection) for determining the value of the stock so sold or transferred,
- (b) the amount which would be taken in accordance with that paragraph to be the value of all of the stock sold or transferred to that person is more than the acquisition value of that stock and also more than the price actually received for it, and
- (c) both parties to the sale or transfer, by notice signed by them and sent to the inspector no later than two years after the end of the accounting period in which the trade is discontinued, elect that this subsection shall apply,
then the stock sold or transferred to that person shall be taken to have a value equal to whichever is the greater (taking all the stock so sold or transferred together) of its acquisition value and the price actually received for it or, in a case where they are the same, to either of them.
- (1D) In subsection (1C) above “*acquisition value*”, in relation to any trading stock, means the amount which, in computing for any corporation tax purposes the profits of the discontinued trade, would have been deductible as representing the acquisition value of that stock if—
- (a) the stock had, immediately before the discontinuance, been sold in the course of the trade for a price equal to whatever would be its value in accordance with subsection (1A)(b) above; and
- (b) the period for which those profits were to be computed began immediately before the sale.
- (1E) Where the value of the trading stock is determined in accordance with subsections (1A) to (1C) above, or sections 176 to 178 of ITTOIA 2005 or section 127 of that Act (by virtue of section 175(3)) (corresponding provisions for income tax purposes), the amount to be brought into account as the value of that stock in computing profits of the discontinued trade shall also be taken, for the purpose of making for corporation tax purposes any deduction in computing the profits of any trade carried on by the purchaser, to be the cost of that stock to the purchaser.
- (1F) For the purposes of this section two persons are connected with each other if—
- (a) they are connected with each other within the meaning of section 839;
- (b) one of them is a partnership and the other has a right to a share in the partnership;
- (c) one of them is a body corporate and the other has control over that body;
- (d) both of them are partnerships and some other person has a right to a share in each of them; or
- (e) both of them are bodies corporate or one of them is a partnership and the other is a body corporate and, in either case, some other person has control over both of them;
and in this subsection the references to a right to a share in a partnership are references to a right to a share of the assets or income of the partnership and “*control*” has the meaning given by section 840.
- (1G) In this section “*purchaser*”, in relation to a transfer otherwise than by sale, means the person to whom the transfer is made.
- (2) For the purposes of this section “*trading stock*”, in relation to any trade—
- (a) means property of any description, whether real or personal, being either—
- (i) property such as is sold in the ordinary course of the trade, or would be so sold if it were mature or if its manufacture, preparation or construction were complete; or
- (ii) materials such as are used in the manufacture, preparation or construction of any such property as is referred to in sub-paragraph (i) above; and
- (b) includes also any services, article or material which would, if the trade were a profession . . . , be treated, for the purposes of section 101, as work in progress of the profession . . . , and references to the sale or transfer of trading stock shall be construed accordingly.
- (3) Where trading stock falling to be valued under paragraph (a) of subsection (1) above is sold or transferred together with other assets, so much of the amount realised on the sale or, as the case may be, of the value of the consideration given for the transfer as on a just and reasonable apportionment is properly attributable to each asset shall be treated for the purposes of this section as the amount realised on the sale or, as the case may be, the value of the consideration given for the transfer, of that asset.
#### Valuation of work in progress at discontinuance of profession or vocation
##### 101
- (1) Where, in computing for any corporation tax purpose the profits of a profession . . . which has been discontinued, a valuation is taken of the work of the profession . . . in progress at the discontinuance, that work shall be valued as follows—
- (a) if—
- (i) the work is transferred for money or any other valuable consideration to a person who carries on, or intends to carry on, a profession . . . in the United Kingdom, and
- (ii) the cost of the work may be deducted by that person as an expense in computing for any tax purpose the profits of that profession . . . ,
the value of the work shall be taken to be the amount paid or other consideration given for the transfer; and
- (b) if the work does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which would have been paid for a transfer of the work on the date of the discontinuance as between parties at arm’s length.
- (2) Where a profession . . . is discontinued, and the company by which it was carried on immediately before the discontinuance so elects by notice sent to the inspector at any time within the period specified in subsection (2A) below—
- (a) the amount (if any) by which the value of the work in progress at the discontinuance (as ascertained under subsection (1) above) exceeds the actual cost of the work shall not be brought into account in computing the profits of the period immediately before the discontinuance; but
- (b) the amount by which any sums received for the transfer of the work exceed the actual cost of the work shall be included in the sums chargeable to tax by virtue of section 103 as if it were a sum to which that section applies received after the discontinuance.
- (2A) The period mentioned in subsection (2) above is—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . the period of two years beginning at the end of the accounting period in which the profession . . . is discontinued.
- (3) References in this section to work in progress at the discontinuance of a profession . . . shall be construed as references to—
- (a) any services performed in the ordinary course of the profession . . . , the performance of which was wholly or partly completed at the time of the discontinuance and for which it would be reasonable to expect that a charge would have been made on their completion if the profession . . . had not been discontinued; and
- (b) any article produced, and any such material as is used, in the performance of any such services,
and references in this section to the transfer of work in progress shall include references to the transfer of any benefits and rights which accrue, or might reasonably be expected to accrue, from the carrying out of the work.
#### Provisions supplementary to sections 100 and 101
##### 102
- (1) Any question arising under section 100(1)(a) or 101(1)(a) shall be determined as follows, for the purpose of computing for any tax purpose the profits of both the trades or, as the case may be, the professions . . . concerned—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to each of the persons whose trade or profession is one of those concerned, the question shall be determined by those Commissioners unless all parties concerned agree that it shall be determined by the Special Commissioners;
- (b) in any other case, the question shall be determined by the Special Commissioners; and
- (c) the General or Special Commissioners shall determine the question in like manner as an appeal.
- (2) Where, by virtue of section . . . 337(1), a trade or profession is treated as having been permanently discontinued for the purpose of computing corporation tax, it shall also be so treated for the purposes of sections 100 and 101. . . .
### Case VI charges on receipts
#### Receipts after discontinuance: earnings basis charge and related charge affecting conventional basis
##### 103
- (1) Where any trade, profession or vocation carried on wholly or partly in the United Kingdom the profits of which are chargeable to tax . . . has been permanently discontinued, corporation tax shall be charged under Case VI of Schedule D in respect of any sums to which this section applies which are received after the discontinuance.
- (2) Subject to subsection (3) below, this section applies to the following sums arising from the carrying on of the trade, profession or vocation during any period before the discontinuance (not being sums otherwise chargeable to tax)—
- (a) where the profits for that period were computed by reference to earnings, all such sums in so far as their value was not brought into account in computing the profits for any period before the discontinuance, and
- (b) where those profits were computed on a conventional basis (that is to say, were computed otherwise than by reference to earnings), any sums which, if those profits had been computed by reference to earnings, would not have been brought into the computation for any period before the discontinuance because the date on which they became due, or the date on which the amount due in respect thereof was ascertained, fell after the discontinuance.
- (3) This section does not apply to any of the following sums—
- (a) sums received by a company beneficially entitled thereto which is not resident in the United Kingdom, or by a person acting on its behalf, which represent income arising directly or indirectly from a country or territory outside the United Kingdom, or
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) sums realised by the transfer of trading stock belonging to a trade at the discontinuance of the trade, or by the transfer of the work of a profession or vocation in progress at its discontinuance.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where—
- (a) in computing for tax purposes the profits of a trade, profession or vocation a deduction has been allowed for any debt incurred for the purposes of the trade, profession or vocation, and
- (b) the whole or any part of that debt is thereafter released otherwise than as part of a statutory insolvency arrangement, and
- (c) the trade, profession or vocation has been permanently discontinued at or after the end of the period for which the deduction was allowed and before the release was effected,
subsections (1) to (3) above shall apply as if the amount released were a sum received after the discontinuance.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of this section the value of any sum received in payment of a debt shall be treated as not brought into account in the computation of the profits of a trade, profession or vocation to the extent that a deduction has been made for tax purposes in respect of an impairment loss or a release of liability.
#### Conventional basis: general charge on receipts after discontinuance or change of basis
##### 104
- (1) Where any trade, profession or vocation carried on wholly or partly in the United Kingdom the profits of which are chargeable to tax . . . has been permanently discontinued, and the profits for any period before the discontinuance were computed on a conventional basis, corporation tax shall be charged under Case VI of Schedule D in respect of any sums to which this subsection applies which are received on or after the discontinuance.
- (2) Subject to subsection (3) below, subsection (1) above applies to all sums arising from the carrying on of the trade, profession or vocation during any period before the discontinuance, not being sums otherwise chargeable to tax, in so far as the amount or value of the sums was not brought into account in computing the profits for any period before the discontinuance.
- (3) In subsection (2) above the reference to sums otherwise chargeable to tax includes any sums which (disregarding this section) are chargeable to corporation tax under section 103 or to which that section would have applied but for subsection (3)(a) . . . of that section.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) It is hereby declared that where work in progress at the discontinuance of a profession or vocation, or the responsibility for its completion, is transferred, the sums to which subsection (1) above applies include any sums received by way of consideration for the transfer, and any sums received by way of realisation by the transferee, on behalf of the transferor, of the work in progress transferred.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowable deductions
##### 105
- (1) In computing the charge to corporation tax in respect of sums received by any company which are chargeable to corporation tax by virtue of section 103 or 104(1) (including amounts treated as sums received by it by virtue of section 103(4)), there shall be deducted from the amount which, apart from this subsection, would be chargeable to corporation tax—
- (a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade, profession or vocation had not been discontinued, would have been deducted in computing for tax purposes the profits of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and
- (b) any capital allowance to which the person who carried on the trade, profession or vocation was entitled immediately before the discontinuance and to which effect has not been given by way of relief before the discontinuance.
- (2) No amount shall be deducted under subsection (1) above if that amount has been allowed under any other provision of the Tax Acts or by virtue of section 90(4) of the Finance Act 1995.
- (3) No amount shall be deducted more than once under subsection (1) above; and—
- (a) any expense or debit shall be apportioned between a sum chargeable under section 103 and a sum chargeable under section 104(1) in such manner as may be just;
- (b) as between sums chargeable, whether under section 103 or 104(1), for one accounting period and sums so charged for a subsequent accounting period, any deduction in respect of a loss or capital allowance shall be made against sums chargeable for the earlier accounting period;
- (c) subject to paragraph (b) above, as between sums chargeable for any accounting period under section 103 and sums so chargeable under section 104(1), any deduction in respect of a loss or capital allowance shall be made against the last-mentioned sums rather than the first-mentioned;
but, in the case of a loss which is to be allowed after the discontinuance, not so as to authorise its deduction from any sum chargeable for a accounting period preceding that in which the loss is incurred.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of charges where rights to payments transferred
##### 106
- (1) Subject to subsection (2) below, in the case of a transfer for value of the right to receive any sum to which section 103, 104(1) or 104(4) applies, any corporation tax chargeable by virtue of either of those sections shall be charged in respect of the amount or value of the consideration (or, in the case of a transfer otherwise than at arm’s length, in respect of the value of the right transferred as between parties at arm’s length), and references in this Chapter, except section 101(2), to sums received shall be construed accordingly.
- (2) Where a trade, profession or vocation is treated as permanently discontinued by reason of a change in the persons carrying it on, and the right to receive any sum to which section 103 or 104(1) applies is or was transferred at the time of the change to the company carrying on the trade, profession or vocation after the change, corporation tax shall not be charged by virtue of either of those sections, but any sum received by that company by virtue of the transfer shall be treated for corporation tax purposes as a receipt to be brought into the computation of the profits of the trade, profession or vocation in the period in which it is received.
### Reliefs
#### Treatment of receipts as earned income
##### 107
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Election for carry-back
##### 108
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge under section 104: relief for individuals born before 6th April 1917
##### 109
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Interpretation etc
##### 110
- (1) The following provisions have effect for the purposes of sections 103 to 109A.
- (1A) In the case of a trade carried on by a person other than a company or a profession or vocation within the charge to income tax carried on by any person, any reference to the permanent discontinuance of a trade, profession or vocation includes a reference to—
- (a) a person permanently ceasing to carry on a trade, profession or vocation, or
- (b) in relation to a trade or profession carried on by a person in partnership with other persons, the occurrence of an event treated under section 246(4) of ITTOIA 2005 (basic meaning of “*post-cessation receipt*”) as a person permanently ceasing to carry on a trade or profession.
- (1B) In the case of a trade carried on by a company, any reference to the permanent discontinuance of a trade includes a reference to the occurrence of an event treated under section 337(1) below as a discontinuance or treated under section 18 of ITTOIA 2005 (companies beginning or ceasing to carry on trade) as the company permanently ceasing to carry on the trade.
- (1C) In the case of a UK property business carried on by a person other than a company, any reference to the permanent discontinuance of a UK property business includes a reference to—
- (a) a person permanently ceasing to carry on a UK property business, or
- (b) in relation to a UK property business carried on by a person in partnership with other persons, the occurrence of an event treated under section 353(3) of ITTOIA 2005 (basic meaning of “post-cessation receipt”) as a person permanently ceasing to carry on a UK property business.
- (1D) In the case of a UK property business carried on by a company, any reference to the permanent discontinuance of a UK property business includes a reference to the occurrence of an event treated under section 362 of ITTOIA 2005 (companies beginning or ceasing to be within the charge to income tax) as the company permanently ceasing to carry on the business.
- (3) The profits of a trade, profession or vocation in any period shall be treated as computed by reference to earnings where all credits and liabilities accruing during that period as a consequence of its being carried on are brought into account in computing those profits for tax purposes, and not otherwise, and “earnings basis” shall be construed accordingly.
- (4) “*Conventional basis*” has the meaning given by section 103(2), so that profits are computed on a conventional basis if computed otherwise than by reference to earnings.
- (5) There is a change from a conventional basis to the earnings basis at the end of a period the profits of which were computed on a conventional basis if the profits of the next succeeding period are computed by reference to earnings; and, if the profits of two successive periods are computed on different conventional bases, a change of conventional basis occurs at the end of the earlier period.
- (6) In sections 103 and 104—
- (a) “*trading stock*” has the meaning given by section 100(2);
- (b) references to work in progress at the discontinuance of a profession or vocation, and to the transfer of work in progress, are to be construed in accordance with section 101(3); and
- (c) the reference to work in progress at the time of a change of basis is also to be construed in accordance with section 101(3), substituting therein for this purpose references to the change of basis for references to the discontinuance.
### CHAPTER VII — PARTNERSHIPS AND SUCCESSIONS
### General
#### Partnership assessments to income tax
##### 111
- (1) Where a trade or profession is carried on by persons in partnership, the partnership shall not, unless the contrary intention appears, be treated for corporation tax purposes as an entity which is separate and distinct from those persons.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partnerships controlled abroad
##### 112
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect, for income tax, of change in ownership of trade, profession or vocation
##### 113
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Partnerships involving companies
#### Special rules for computing profits and losses
##### 114
- (1) So long as a trade profession or business is carried on by persons in partnership, and any of those persons is a company, the profits and losses (including terminal losses) of the trade profession or business shall be computed for the purposes of corporation tax in like manner, and by reference to the like accounting periods, as if the partnership were a company and, subject to section 115(4), as if that company were resident in the United Kingdom, and without regard to any change in the persons carrying on the trade profession or business, except that—
- (a) references to distributions shall not apply; and
- (b) subject to section 116(5), no deduction or addition shall be made for charges on income, or for capital allowances and charges, nor in any accounting period for losses incurred in any other period nor for any expenditure to which section 401(1) applies; and
- (c) a change in the persons engaged in carrying on the trade profession or business shall be treated as the transfer of the trade profession or business to a different company if there continues to be a company so engaged after the change, but not a company that was so engaged before the change.
- (2) A company’s share in the profits or loss of any accounting period of the partnership, or in any matter excluded from the computation by subsection (1)(b) above, shall be determined according to the interests of the partners during that period, and corporation tax shall be chargeable as if that share derived from a trade profession or business carried on by the company alone in its corresponding accounting period or periods; and the company shall be assessed and charged to tax for its corresponding accounting period or periods accordingly.
- In this subsection “*corresponding accounting period or periods*” means the accounting period or periods of the company comprising or together comprising the accounting period of the partnership, and any necessary apportionment shall be made between corresponding accounting periods if more than one.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 114
##### 115
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) So long as a trade, profession or business is carried on by persons in partnership and any of those persons is a company which is not resident in the United Kingdom, section 114 shall have effect in relation to that company as if—
- (a) the reference in subsection (1) to a company resident in the United Kingdom were a reference to a company that is not so resident; and
- (b) in subsection (2), after “carried on” there were inserted “in the United Kingdom through a permanent establishment”.
- (5) Subsections (5A) and (5B) apply if—
- (a) a company resident in the United Kingdom (“*the resident partner*”) is a member of a partnership which resides outside the United Kingdom or which carries on any trade, profession or business the control and management of which is situated outside the United Kingdom, and
- (b) by virtue of any arrangements falling within section 788 (“*the arrangements*”) any of the income or capital gains of the partnership is relieved from corporation tax in the United Kingdom.
- (5A) The arrangements do not affect any liability to corporation tax in respect of the resident partner's share of any income or capital gains of the partnership (and section 114 has effect accordingly).
- (5B) If the resident partner's share of the income of the partnership consists of or includes a share in a qualifying distribution made by a company resident in the United Kingdom, the resident partner (and not the partnership) is, despite the arrangements, entitled to the share of the tax credit in respect of the distribution which corresponds to the partner's share of the distribution (and section 114 has effect accordingly).
- (5C) For the purposes of subsections (5) to (5B) the members of a partnership include any company which is entitled to a share of income or capital gains of the partnership.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) For the purposes of this section and section 114 “profits” shall not be taken as including chargeable gains.
#### Arrangements for transferring relief
##### 116
- (1) The provisions of subsection (2) below shall apply in relation to a company (“the partner company”) which is a member of a partnership carrying on a trade if arrangements are in existence (whether as part of the terms of the partnership or otherwise) whereby—
- (a) in respect of the whole or any part of the value of, or of any portion of, the partner company’s share in the profits or loss of any accounting period of the partnership, another member of the partnership or any person connected with another member of the partnership receives any payment or acquires or enjoys, directly or indirectly, any other benefit in money’s worth; or
- (b) in respect of the whole or any part of the cost of, or of any portion of, the partner company’s share in the loss of any accounting period of the partnership, the partner company or any person connected with that company receives any payment or acquires or enjoys, directly or indirectly, any other benefit in money’s worth, other than a payment in respect of group relief to the partner company by a company which is a member of the same group as the partner company for the purposes of group relief.
- (2) In any case where the provisions of this subsection apply in relation to the partner company—
- (a) the company’s share in the loss of the relevant accounting period of the partnership and its share in any charges on income, within the meaning of section 338, paid by the partnership in that accounting period shall not be available for set-off for the purposes of corporation tax except against its share in the profits of the trade carried on by the partnership; and
- (b) except in accordance with paragraph (a) above, no trading losses shall be available for set-off for the purposes of corporation tax against the company’s share in the profits of the relevant accounting period of the partnership; and
- (c) except in accordance with paragraphs (a) and (b) above, no amount which, apart from this subsection, would be available for relief against profits shall be available for set-off for the purposes of corporation tax against so much of the company’s total profits as consists of its share in the profits of the relevant accounting period of the partnership; and
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In subsection (2) above “*relevant accounting period of the partnership*” means any accounting period of the partnership in which any such arrangements as are specified in subsection (1) above are in existence or to which any such arrangements apply.
- (4) If a company is a member of a partnership and corporation tax in respect of any profits of the partnership is chargeable under Case VI of Schedule D, this section shall apply in relation to the company’s share in the profits or loss of the partnership as if—
- (a) the profits or loss to which the company’s share is attributable were the profits of, or the loss incurred in, a trade carried on by the partnership; and
- (b) any allowance to be given effect under Part 2 of the Capital Allowances Act in respect of a special leasing of plant or machinery were an allowance to be given effect in calculating the profits of that trade.
- (5) For the purposes of this section, subsection (2) of section 114 shall have effect for determining a company’s share in the profits or loss of any accounting period of a partnership as if, in subsection (1)(b) of that section, the words “ or for capital allowances and charges ” were omitted.
- (6) In this section “*arrangements*” means arrangements of any kind whether in writing or not.
- (7) Section 839 shall apply for the purposes of this section.
### Limited partners
#### Restriction on relief: individuals
##### 117
- (1) An amount which may be given . . . to an individual under section . . . 380 or 381 below . . . —
- (a) in respect of a loss sustained by him in a trade . . . in a relevant year of assessment;. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
may be given . . . otherwise than against income consisting of profits arising from the trade only to the extent that the amount given . . . or (as the case may be) the aggregate amount does not exceed the relevant sum.
- (2) In this section—
- “*limited partner*” means—a person who is carrying on a trade as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907;a person who is carrying on a trade as a general partner in a partnership, who is not entitled to take part in the management of the trade and who is entitled to have his liabilities, or his liabilities beyond a certain limit, for debts or obligations incurred for the purposes of the trade discharged or reimbursed by some other person; ora person who carries on a trade jointly with others and who, under the law of any territory outside the United Kingdom, is not entitled to take part in the management of the trade and is not liable beyond a certain limit for debts or obligations incurred for the purposes of the trade;
- “*relevant year of assessment*” means a year of assessment at any time during which the individual carried on the trade as a limited partner;
- “*the aggregate amount*” means the aggregate of any amounts given . . . to him at any time under section . . . 380 or 381 below . . . —in respect of a loss sustained by him in the trade . . . in a relevant year of assessment or a qualifying year of assessment within the meaning of section 118ZE; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .less the amount of any reclaimed relief at that time;
- “*the amount of any reclaimed relief*” at any time means the total of any amounts at that time which the individual has been treated as receiving under section 74 of the Finance Act 2005 (recovery of excess relief given under section 380 or 381) as a result of the application of that section of that Act to him in respect of losses sustained by him in the trade;
- “*the relevant sum*” means the amount of his contribution to the trade as at the appropriate time; and
- “*the appropriate time*” is the end of the relevant year of assessment in which the loss is sustained . . . or for which the allowance falls to be made (except that where he ceased to carry on the trade during that year of assessment it is the time when he so ceased).
- (3) A person’s contribution to a trade at any time is the aggregate of—
- (a) the amount which he has contributed to it as capital and has not, directly or indirectly, drawn out or received back (other than anything which he is or may be entitled so to draw out or receive back at any time when he carries on the trade as a limited partner or which he is or may be entitled to require another person to reimburse to him), and
- (b) the amount of any profits of the trade to which he is entitled but which he has not received in money or money’s worth.
- (4) To the extent that an allowance is taken into account in computing profits or losses in the year of the loss by virtue of section 383(1) it shall, for the purposes of this section, be treated as falling to be made in the year of the loss (and not the year of assessment for which the year of loss is the basis year).
- (5) This section is subject to provision made by regulations under section 118ZN (partners: meaning of “contribution to the trade”).
#### Restriction on relief: companies
##### 118
- (1) An amount which may be given . . . under section 338, 393A(1) or 403 below . . . —
- (a) in respect of a loss incurred by a company in a trade, or of charges paid by a company in connection with the carrying on of a trade, in a relevant accounting period; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
may be given . . . to that company (“the partner company”) otherwise than against profits arising from the trade, or to another company, only to the extent that the amount given . . . or (as the case may be) the aggregate amount does not exceed the relevant sum.
- (2) In this section—
- “*relevant accounting period*” means an accounting period of the partner company at any time during which it carried on the trade as a limited partner (within the meaning of section 117(2));
- “*the aggregate amount*” means the aggregate of any amounts given . . . to the partner company or another company at any time under section 338, 393A(1) or 403 below . . . —in respect of a loss incurred by the partner company in the trade, or of charges paid by it in connection with carrying it on, in any relevant accounting period; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*the relevant sum*” means the amount of the partner company’s contribution (within the meaning of section 117(3)) to the trade as at the appropriate time; and
- “*the appropriate time*” is the end of the relevant accounting period in which the loss is incurred or the charges paid or for which the allowance falls to be made (except that where the partner company ceased to carry on the trade during that accounting period it is the time when it so ceased).
### CHAPTER VIII — MISCELLANEOUS AND SUPPLEMENTAL
#### Rent etc. payable in connection with mines, quarries and similar concerns
##### 119
- (1) Where rent is payable in respect of any land or easement, and either—
- (a) the land or easement is used, occupied or enjoyed in connection with any of the concerns specified in section 55(2); or
- (b) the lease or other agreement under which the rent is payable provides for the recoupment of the rent by way of reduction of royalties or payments of a similar nature in the event of the land or easement being so used, occupied or enjoyed,
the rent shall, subject to section 122 and section 201 of the 1992 Act, be charged to corporation tax under Schedule D, . . . .
- (2) Where the rent is rendered in produce of the concern, it shall, . . . , be charged under Case III of Schedule D, and the value of the produce so rendered shall be taken to be the amount of the profits or income arising therefrom.
- (3) For the purposes of this section—
- “*easement*” includes any right, privilege or benefit in, over or derived from land; and
- “*rent*” includes a rent service, rentcharge, fee farm rent . . . or other rent, toll, duty, royalty or annual or periodical payment in the nature of rent, whether payable in money or money’s worth or otherwise.
#### Rent etc. payable in respect of electric line wayleaves
##### 120
- (1) Subject to subsection (1A) below, where rent is payable in respect of any easement enjoyed in the United Kingdom in connection with any electric, telegraphic or telephonic wire or cable (not being such an easement as is mentioned in section 119(1)), the rent shall be charged to corporation tax under Schedule D . . . .
- (1A) If—
- (a) the profits and gains arising to any person for any accounting period include both rent in respect of any such easement as is mentioned in subsection (1) above and amounts which are charged to corporation tax under Schedule A, and
- (b) some or all of the land to which the easement relates is included in the land by reference to which the amounts charged under Schedule A arise,
then, for that period, that rent shall be charged to corporation tax under Schedule A, instead of being charged under Schedule D.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section—
- (a) “*easement*” and “*rent*” have the same meanings as in section 119;
- (b) the reference to easements enjoyed in connection with any electric, telegraphic or telephonic wire or cable includes (without prejudice to the generality of that expression) references to easements enjoyed in connection with any pole or pylon supporting any such wire or cable, or with any apparatus (including any transformer) used in connection with any such wire or cable; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Management expenses of owner of mineral rights
##### 121
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) In computing for the purposes of corporation tax the income of a company for any accounting period from the letting of rights to work minerals in the United Kingdom, there may be deducted any sums disbursed by the company wholly, exclusively and necessarily as expenses of management or supervision of those minerals in that period.
#### Relief in respect of mineral royalties
##### 122
- (1) Subject to the following provisions of this section, a company resident in the United Kingdom which in any accounting period is entitled to receive any mineral royalties under a mineral lease or agreement shall be treated—
- (a) . . . for the purposes of corporation tax on profits exclusive of chargeable gains, as if the total of the mineral royalties receivable by it under that lease or agreement in that . . . period and any management expenses available for set-off against those royalties in that . . . period were each reduced by one-half; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and this section shall have effect notwithstanding any provision of section 119(1) making the whole of certain kinds of mineral royalties chargeable to tax under Schedule D . . . .
- (2) For the purposes of subsection (1)(a) above, “*management expenses available for set-off*” against royalties means—
- (a) where section 121 applies in respect of the royalties, any sum . . . deductible from those royalties under subsection (3) of that section in computing the income of a company for the purposes of corporation tax; and
- (b) if the royalties are chargeable to tax under Schedule A, any sums deductible under Part II as payments made in respect of management of the property concerned;
and if neither paragraph (a) nor paragraph (b) above applies, the reference in subsection (1)(a) above to management expenses available for set-off shall be disregarded.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section references to mineral royalties refer only to royalties receivable on or after 6th April 1970, and the expression “*mineral royalties*” means so much of any rents, tolls, royalties and other periodical payments in the nature of rent payable under a mineral lease or agreement as relates to the winning and working of minerals; and the Board may by regulations—
- (a) provide whether, and to what extent, payments made under a mineral lease or agreement and relating both to the winning and working of minerals and to other matters are to be treated as mineral royalties; and
- (b) provide for treating the whole of such payments as mineral royalties in cases where the extent to which they relate to matters other than the winning and working of minerals is small.
- (6) In this section—
- “*minerals*” means all minerals and substances in or under land which are ordinarily worked for removal by underground or surface working but excluding water, peat, top-soil and vegetation; and
- “*mineral lease or agreement*” means—a lease, profit à prendre, licence or other agreement conferring a right to win and work minerals in the United Kingdom;a contract for the sale, or a conveyance, of minerals in or under land in the United Kingdom; anda grant of a right under section 1 of the Mines (Working Facilities and Support) Act 1966, other than an ancillary right within the meaning of that Act.
- (7) In the application of this section to Northern Ireland—
- (a) references to mineral royalties include references to periodical payments—
- (i) of compensation under section 29 or 35 of the Mineral Development Act (Northern Ireland) 1969 (“the 1969 Act”) or under section 4 of the Petroleum (Production) Act (Northern Ireland) 1964 (“the 1964 Act”); and
- (ii) made as mentioned in section 37 of the 1969 Act or under section 55(4)(b) of that Act or under section 11 of the 1964 Act (payments in respect of minerals to persons entitled to a share of royalties under section 13(3) of the Irish Land Act 1903); and
- (b) in its application to any such payments as are mentioned in paragraph (a) above, references to the mineral lease or agreement under which mineral royalties are payable shall be construed as references to the enactment under which the payments are made.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign dividends
##### 123
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on quoted Eurobonds
##### 124
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annual payments for non-taxable consideration
##### 125
- (1) Any payment to which this subsection applies shall be made without deduction of income tax and shall not be allowed as a deduction in computing the income or total income of the person by whom it is made . . . .
- (2) Subject to the following provisions of this section, subsection (1) above applies to any payment which—
- (a) is not interest but is—
- (i) an annuity or other annual payment charged with income tax under Part 5 of ITTOIA 2005 otherwise than as relevant foreign income; or
- (ii) an annuity or other annual payment charged with corporation tax under Case III of Schedule D; and
- (b) is made under a liability incurred for consideration in money or money's worth all or any of which—
- (i) consists of, or of the right to receive, a dividend, or
- (ii) is not required to be brought into account in computing for the purposes of income tax or corporation tax the income of the person making the payment.
- (3) Subsection (1) above does not apply to—
- (a) any payment which in the hands of the recipient is income falling within section 627(1) or (2)(a) of ITTOIA 2005;
- (b) any payment made to an individual under a liability incurred in consideration of his surrendering, assigning or releasing an interest in settled property to or in favour of a person having a subsequent interest;
- (c) any annuity granted in the ordinary course of a business of granting annuities; or
- (d) any annuity charged on an interest in settled property and granted at any time before 30th March 1977 by an individual to a company whose business at that time consisted wholly or mainly in the acquisition of interests in settled property or which was at that time carrying on life assurance business in the United Kingdom.
- (4) In the application of this section to Scotland the references in subsection (3) above to settled property shall be construed as references to property held in trust.
- (5) Subsection (1) above applies to a payment made after 5th April 1988 irrespective of when the liability to make it was incurred.
#### Treasury securities issued at a discount
##### 126
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Enterprise allowance
##### 127
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commodity and financial futures etc.: losses and gains
##### 128
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of corporation tax, any gain arising to any company in the course of dealing in financial futures or in qualifying options, which apart from this subsection would constitute profits or gains chargeable to tax under Schedule D otherwise than as the profits of a trade, shall not be chargeable to tax under Case V or VI of Schedule D.
- (3) In this section “*commodity or financial futures*” and “*qualifying options*” have the same meaning as in section 143 of the 1992 Act, and the reference to a gain arising in the course of dealing in commodity or financial futures includes any gain which is regarded as arising in the course of such dealing by virtue of subsection (3) of that section.
#### Stock lending
##### 129
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “investment company” for purposes of Part IV
##### 130
In this Part of this Act —
- “*company with investment business*” means any company whose business consists wholly or partly in the making of investments;
- “*investment company*”, means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, but includes any savings bank or other bank for savings except any which, for the purposes of the Trustee Savings Bank Act 1985, is a successor or a further successor to a trustee savings bank.
## PART V — PROVISIONS RELATING TO THE SCHEDULE E CHARGE
### CHAPTER I — SUPPLEMENTARY CHARGING PROVISIONS OF GENERAL APPLICATION
### Miscellaneous provisions
#### Chargeable emoluments
##### 131
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Place of performance, and meaning of emoluments received in the U.K
##### 132
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Voluntary pensions
##### 133
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Workers supplied by agencies
##### 134
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Shareholdings, loans etc.
#### Gains by directors and employees from share options
##### 135
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 135
##### 136
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payment of tax under section 135 by instalments
##### 137
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Share acquisitions by directors and employees
##### 138
- (1) *Subject to section* 185*and the following provisions of this section, where a person has acquired or acquires shares or an interest in shares in a body corporate in pursuance of a right conferred on him or opportunity offered to him as a director or employee of that or any other body corporate, and not in pursuance of an offer to the public*—
- (a) *if the market value of the shares at the end of the period mentioned in subsection* (9)*below exceeds their market value at the time of the acquisition, he shall be chargeable to tax under Schedule E for the year of assessment in which that period ends on an amount equal, except as provided by subsection* (8)*below, to the excess* (*or, if his interest is less than the full beneficial ownership, such part of that amount as corresponds to his interest*);
- (b) *if he receives, by virtue of his ownership of or interest in the shares, any benefit not received by the majority of persons who*—
- (i) *hold shares forming part of the ordinary share capital of the same body corporate; and*
- (ii) *have acquired the shares otherwise than as mentioned above*;
*and the benefit is not otherwise chargeable to income tax, he shall be chargeable to tax under the employment income Parts of ITEPA 2003 for the year of assessment in which he receives the benefit on an amount equal to the value of the benefit*;*and any amount chargeable under this subsection shall be treated as earned income, whether or not it would otherwise fall to be so treated.*
- (2) *Subsection* (1)*above does not apply if the acquisition*—
- (a) *was made in pursuance of arrangements under which employees of a body corporate receive as part of their emoluments shares or interests in shares in that body or in a body controlling it to an extent determined in advance by reference to the profits of either body; and*
- (b) *where the arrangements were made or modified after* 22*nd March* 1973,*was of shares or an interest in shares which satisfy the conditions set out in subsection* (4)(a)*below and the arrangements satisfy the condition set out in subsection* (4)(b)*below.*
- (3) *Subsection* (1)(a)*above does not apply if*—
- (a) *the acquisition was an acquisition of shares in a body and either of the following conditions was satisfied immediately after the acquisition, namely*—
- (i) *that the shares were not subject to such restrictions as are specified in subsection* (6)*below, and were not exchangeable for shares subject to such restrictions, and the majority of the available shares of the same class was acquired otherwise than as mentioned in subsection* (1)*above; or*
- (ii) *that the shares were not subject to such restrictions as are specified in paragraph* (a)*or* (b)*of subsection* (6)*below and were not exchangeable for shares subject to such restrictions, and the majority of the available shares of the same class was acquired by persons who were or had been employees or directors of, or of a body controlled by, that body and who were together able as holders of the shares to control that body; or*
- (b) *the acquisition was an acquisition after* 5*th**April* 1984*of an interest in shares which consists of units in an authorised unit trust and*—
- (i) *prior to the acquisition the unit trust was approved by the Board for the purposes of this section and, at the time of the acquisition, continues to be so approved, and*
- (ii) *the condition set out in subsection* (7)*below is fulfilled with respect to the body corporate* (*in that subsection referred to as “the relevant company”*)*directorship of or employment by which gave rise to the right or opportunity by virtue of which the acquisition was made; or*
- (c) *the acquisition took place before* 6*th April* 1981.
- (4) *The conditions referred to in subsection* (2)(b)*above are as follows*—
- (a) *that the shares*—
- (i) *are not subject to such restrictions as will or may result in the person acquiring the shares or an interest in the shares obtaining a benefit through an increase, subsequent to the acquisition, of the value or the value to him of the shares or interest; and*
- (ii) *cannot* (*whether by one transaction or a series of transactions*)*be exchanged for or converted into shares which are subject to such restrictions; and*
- (iii) *are either shares of a class quoted on a recognised stock exchange or are shares in a company which is not under the control of another company;*
- (b) *that the arrangements allow every full-time employee of the company concerned who*—
- (i) *has been a full-time employee of that company for a continuous period of not less than five years, and*
- (ii) *is chargeable to tax in respect of his employment under section 15 or 21 of ITEPA 2003 (earnings of employee resident and ordinarily resident in the UK), and*
- (iii) *is not less than* 25*years old,*
*to acquire shares or interests in shares of the same class on similar terms.*
- (5) *For the purposes of subsection* (3)(a)*above*—
- (a) *shares in a body are available shares if they are not held by or for the benefit of an associated company of that body; and*
- (b) *shares are exchangeable for other shares if* (*whether by one transaction or a series of transactions*)*they can be exchanged for or converted into the other shares.*
- (6) *The restrictions referred to in subsection* (3)(a)*above are*—
- (a) *restrictions not attaching to all shares of the same class; or*
- (b) *restrictions ceasing or liable to cease at some time after the acquisition; or*
- (c) *restrictions depending on the shares being or ceasing to be held by directors or employees of any body corporate* (*other than such restrictions imposed by a company’s articles of association as require shares to be disposed of on ceasing to be so held*).
- (7) *The condition referred to in subsection* (3)(b)*above is fulfilled with respect to the relevant company if, for no continuous period of one month or more, throughout which any director or employee of the relevant company either*—
- (a) *has, by virtue of his office or employment, any such right or opportunity as is referred to in subsection* (1)*above to acquire units in the unit trust, or*
- (b) *retains any beneficial interest in any units in the unit trust which he acquired in pursuance of such a right or opportunity,*
*do investments in the relevant company and in any other company in relation to which the relevant company is an associated company make up more than* 10*per cent. by value of the investments subject to the trusts of the unit trust.*
- (8) *The amount on which or on part of which the person making the acquisition is chargeable to tax under subsection* (1)(a)*above* (*“the chargeable amount”*)*shall, in the following cases, be reduced as follows, that is to say*—
- (a) *where, in accordance with the terms on which the acquisition of the shares was made, the consideration for the acquisition is subsequently increased, the chargeable amount shall be reduced by an amount equal to the increase; and*
- (b) *where, in accordance with those terms, the shares are subsequently disposed of for a consideration which is less than their market value at the time of the disposal, the chargeable amount shall be reduced so as to be equal to the excess of that consideration over the market value of the shares at the time of the acquisition*;
*and similarly where the interest acquired is less than the full beneficial ownership, and such assessments, alterations of assessments or repayments of tax shall be made as may be necessary to give effect to the reduction.*
- (9) *The period referred to in subsection* (1)(a)*above is a period ending at the earliest of the following times*—
- (a) *the expiration of seven years from the acquisition of the shares or interest in the shares*;
- (b) *the time when the person making the acquisition ceases to have any beneficial interest in the shares*;
- (c) *in relation only to a person who acquires shares, the time when by reason of their ceasing to be subject to such restrictions as are specified in subsection* (6)*above either of the conditions in subsection* (3)(a)*above would be satisfied in relation to the shares if they had been acquired at that time*;
*and for the purposes of subsection* (1)(a)*and paragraph* (b)*above a person whose beneficial interest in shares is reduced shall be treated as ceasing to have an interest in such part of the shares as is proportionate to the reduction.*
- (10) *Subsection* (11)*below applies where*—
- (a) *a person has acquired shares or an interest in shares as mentioned in subsection* (1)*above* (*and the shares which he acquires or in which he acquires an interest are in sub-paragraphs* (b)*and* (c)*and subsection* (11)*below referred to as “the original shares”*);*and*
- (b) *the circumstances of his acquisition of the original shares are such that the application of subsection* (1)(a)*above is not excluded; and*
- (c) *after* 18*th March* 1986*by virtue of his holding of the original shares or the interest in them he acquires* (*whether or not for consideration*)*additional shares or an interest in additional shares* (*and the shares which he so acquires or in which he so acquires an interest are in subsection* (11)*below referred to as “the additional shares”*).
- (11) *Where this subsection applies*—
- (a) *the additional shares or, as the case may be, the interest in them shall be treated as having been acquired as mentioned in subsection* (1)*above and in circumstances falling within subsection* (10)(b)*above and, for the purposes of subsection* (9)(a)*above, as having been acquired at the same time as the original shares or the interest in them;*
- (b) *for the purposes of subsections* (1)(a)*and* (8)*above, the additional shares and the original shares shall be treated as one holding of shares and the market value of the shares comprised in that holding at any time shall be determined accordingly (the market value of the original shares at the time of acquisition being attributed proportionately to all the shares in the holding); and*
- (c) *for the purposes of those subsections, any consideration given for the acquisition of the additional shares or the interest in them shall be taken to be an increase falling within subsection* (8)(a)*above in the consideration for the original shares or the interest in them.*
- (12) *Subsection* (1)(b)*above does not apply where the benefit is received by virtue of a person’s ownership of or of an interest in shares which were acquired before* 6*th April* 1972.
#### Provisions supplementary to section 138
##### 139
- (1) *Where*—
- (a) *a director or employee of a body corporate acquires shares in pursuance of an opportunity to acquire shares of that class offered to directors and employees of the body in their capacity as such* (*“the discount offer”*);*and*
- (b) *the discount offer is made in conjunction with an offer to the public* (*“the main offer”*)*under which shares of the same class may be acquired on the same terms, except that a discount in price is offered to directors and employees; and*
- (c) *the director or employee is chargeable to tax under Schedule E on an amount equal to the discount in the price of the shares acquired by him; and*
- (d) *at least* 75*per cent. of the aggregate number of shares of the class in question which are acquired in pursuance of the discount offer and the main offer taken together are shares acquired in pursuance of the main offer,*
*he shall be treated for the purposes of section* 138(1)*as acquiring the shares in pursuance of an offer to the public.*
- (2) *Where a director or employee acquires an interest in shares, subsection* (1)*above shall apply as if the references in that subsection to the acquisition of shares were references to the acquisition of an interest in shares.*
- (3) *For the purposes of section* 138*and this section, where a person acquires any shares or an interest in shares in a body corporate in pursuance of a right conferred on him or opportunity offered to him as a person connected with a director or employee of that or any other body corporate, the shares or interest shall be deemed to be acquired by the director or employee, and section* 32A(4)*of the* 1979*Act shall apply with the necessary modifications; and where that person receives a benefit as mentioned in section* 138(1)(b)*the benefit shall be deemed to be received by the director or employee.*
- (4) *For the purposes of section* 138,*a person who disposes of shares or an interest in shares otherwise than by a bargain at arm’s length with a person who is not connected with him shall be deemed not to cease to have a beneficial interest in the shares.*
- (5) *Where in any year of assessment a person acquires shares or an interest in shares as mentioned in section* 138(1) (*disregarding subsections* (1)*and* (2)*above*),*the body from which the shares are or the interest is acquired shall deliver to the inspector within* 30*days of the end of that year particulars in writing of the shares and the acquisition.*
- (6) *The Board may by notice require the managers or trustees of any unit trust scheme which is an authorised unit trust approved by the Board for the purposes of section* 138*to furnish to the Board within such time as they may direct* (*but not being less than* 30*days*)*such information as the Board think necessary for the purposes of enabling them to determine*—
- (a) *whether the condition in subsection* (7)*of that section is being or has at any time been fulfilled; and*
- (b) *the liability to tax of any unit holder whose rights were acquired as mentioned in subsection* (1)*of that section.*
- (7) *Subject to subsection* (9)*below, in determining for the purposes of section* 138 (*including any valuation made for those purposes*)*whether shares which, or interests in which, have been acquired or are or are to be acquired by any person are subject to any restrictions, there shall be regarded as a restriction attaching to the shares any contract, agreement, arrangement or condition by which his freedom to dispose of the shares or any interest in them or to exercise any right conferred by them is restricted or by which such a disposal or exercise may result in any disadvantages to him or a person connected with him, except where the restriction is imposed as a condition of a loan which is not a related loan as defined by subsection* (8)*below.*
- (8) *A loan made to any person is a related loan for the purposes of subsection* (7)*above if*—
- (a) *it is made, arranged, guaranteed or in any way facilitated by*—
- (i) *the body corporate of which he is a director or employee, or*
- (ii) *an associated company of that body, or*
- (iii) *if that body or an associated company of it is a close company, any person having a material interest in the close company; or*
- (b) *it is made to a person connected with another person and would have been such a loan if it had been made to that other person;*
*but a loan made by the body corporate, associated company or person mentioned in paragraph* (a)*above is not a related loan if that body, company or person carries on a business of making personal loans and the loan is made in the ordinary course of that business.*
- (9) *For the purposes of section* 138(3)(a),*shares acquired by any person shall not, by virtue of subsection* (7)*above, be regarded as subject to any restriction by reason only of any contract, agreement, arrangement or condition providing for the disposal of the shares, when that person ceases to hold the office or employment by virtue of which he acquired the shares, to a person nominated in accordance with the contract, agreement, arrangement or condition if he is required to dispose of them at a price not exceeding their market value.*
- (10) *Any reference in subsection* (7)*above to a contract, agreement, arrangement or condition does not include a reference to so much of any contract, agreement, arrangement or condition as contains provisions similar in purpose and effect to any of the provisions of the Model Rules set out in the Model Code for Securities Transactions by Directors of Listed Companies issued by the Stock Exchange in November* 1984.
- (11) *In section* 138*and this section*—
- *“associated company” has the meaning given by section* 416;
- *“control” has the meaning given by section* 840;
- *“*director*” includes a person who is to be a director*;
- *“*employee*” includes a person who is to be an employee*;
- *“*full-time*”, in relation to an employee, means required to devote substantially the whole of his time to service as an employee*;
- *“*shares*” includes stock and securities and references to an interest in any shares include references to the proceeds of sale of part of the shares; and*
- *“*units*”, in relation to an authorised unit trust, means an entitlement to a share in the investments subject to that trust.*
- (12) *For the purposes of section* 138*and this section, section* 168(11)*shall apply for determining whether a person has a material interest in a company, but with the omission of the words following* “ 417(3) ”.
- (13) *If, on a person ceasing to have a beneficial interest in any shares, he acquires, after* 18*th March* 1986,*other shares or an interest in other shares and the circumstances are such that, for the purposes of sections* 78*to* 81*of the* 1979*Act* (*reorganisations etc.*)*the shares in which he ceases to have a beneficial interest constitute original shares and the other shares constitute a new holding*—
- (a) *section* 78*of that Act* (*which equates the original shares with the new holding*)*shall apply for the purposes of this section and section* 138;
- (b) *if any such consideration is given for the new holding as is mentioned in section* 79(1)*of that Act, it shall be treated for the purposes of this section and section* 138*as an increase falling within section* 138(8)(a)*in the consideration for the shares; and*
- (c) *if any such consideration is received for the disposal of the original shares as is mentioned in section* 79(2)*of the* 1979*Act*—
- (i) *the consideration shall be apportioned among the shares comprised in the new holding, and*
- (ii) *the amount which, apart from this paragraph, would at any subsequent time be the market value of any of those shares shall be taken to be increased by the amount of the consideration apportioned to them*;
*and in paragraphs* (a)*to* (c)*above “the original shares” shall be construed in accordance with sections* 78*to* 81*of the* 1979*Act.*
- (14) *In any case where section* 138(1)*applies and the acquisition was an acquisition of units in an authorised unit trust*—
- (a) *any reference in section* 138(1)(a), (8)*or* (9)*or subsection* (4)*above or section*120(4)*of the* 1992*Act to shares shall be construed as references to units; and*
- (b) *any reference in those provisions to an interest in shares shall be omitted* .
#### Further interpretation of sections 135 to 139
##### 140
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### Vouchers etc.
#### Non-cash vouchers
##### 141
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#### Credit-tokens
##### 142
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#### Cash vouchers taxable under P.A.Y.E
##### 143
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#### Supplementary provisions
##### 144
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### Living accommodation
#### Living accommodation provided for employee
##### 145
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#### Additional charge in respect of certain living accommodation
##### 146
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#### Occupation of Chevening House
##### 147
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### Payments on retirement, sick pay etc.
#### Payments on retirement or removal from office or employment
##### 148
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#### Sick pay
##### 149
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#### Job release scheme allowances, maternity pay and statutory sick pay
##### 150
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#### Income support etc
##### 151
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#### Notification of amount taxable under section 151
##### 152
- (1) A benefit officer may by notice notify a person who is taxable in respect of any unemployment benefit , Jobseeker’s allowance or income support of the amount on which he is taxable and any such notification shall state the date on which it is issued and shall inform the person to whom it is given that he may object to the notification by notice given within 60 days after the date of issue of the notification.
- (2) Where—
- (a) no objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below); or
- (b) an objection is made but is withdrawn by the objector by notice,
that amount shall not be questioned in any appeal against any assessment in respect of income including that amount.
- (3) Where—
- (a) an objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below), and
- (b) the benefit officer and the objector come to an agreement that the amount notified should be varied in a particular manner, and
- (c) the officer confirms the agreement to vary in writing,
then, subject to subsection (4) below, that amount as so varied shall not be questioned in any appeal against any assessment in respect of income including that amount.
- (4) Subsection (3) above shall not apply if, within 60 days from the date when the agreement was come to, the objector gives notice to the benefit officer that he wishes to repudiate or resile from the agreement.
- (5) An objection to a notification may be made later than 60 days after the date of the issue of the notification if, on an application for the purpose—
- (a) a benefit officer is satisfied that there was a reasonable excuse for not objecting within that time, and
- (b) the objection was made thereafter without unreasonable delay, and
- (c) the officer gives consent in writing;
and if the officer is not so satisfied he shall refer the application for determination—
- (i) by the General Commissioners for the division in which the objector ordinarily resides or,
- (ii) in a case where an appeal has been made against an assessment in respect of income including the amount in question, the General Commissioners or the Special Commissioners having jurisdiction in that appeal.
- (6) Where a benefit officer has notified an amount to a person under subsection (1) above, he may by another notice notify the person of an alteration in the amount previously notified and, if he does so, the original notification shall be cancelled and this section shall apply to such a subsequent notification as it applies to the original notification.
- (7) In this section “*benefit officer*” means the appropriate officer, in Great Britain, of the Department for Work and Pensions, or, in Northern Ireland, of the Department of Health and Social Services.
### CHAPTER II — EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS
### Expenses
#### Payments in respect of expenses
##### 153
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### Benefits in kind
#### General charging provision
##### 154
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#### Exceptions from the general charge
##### 155
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#### Cash equivalents of benefits charged under section 154
##### 156
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#### Cars available for private use
##### 157
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#### Car fuel
##### 158
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#### Pooled cars
##### 159
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#### Beneficial loan arrangements
##### 160
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#### Exceptions from section 160
##### 161
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#### Employee shareholdings
##### 162
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#### Expenses connected with living accommodation
##### 163
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#### Director’s tax paid by employer
##### 164
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#### Scholarships
##### 165
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### General supplementary provisions
#### Notice of nil liability under this Chapter
##### 166
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#### Meaning of “director’s or higher-paid employment”
##### 167
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#### Other interpretative provisions
##### 168
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### CHAPTER III — PROFIT-RELATED PAY
### Preliminary
#### Interpretation
##### 169
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#### Taxation of profit-related pay
##### 170
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### The relief
#### Relief from tax
##### 171
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#### Exceptions from tax
##### 172
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### Registration
#### Persons who may apply for registration
##### 173
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#### Excluded employments
##### 174
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#### Applications for registration
##### 175
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#### Registration
##### 176
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#### Change of scheme employer
##### 177
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#### Cancellation of registration
##### 178
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### Administration
#### Recovery of tax from scheme employer
##### 179
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#### Annual returns etc
##### 180
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#### Other information
##### 181
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#### Appeals
##### 182
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### Supplementary
#### Partnerships
##### 183
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#### Independent accountants
##### 184
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### CHAPTER IV — OTHER EXEMPTIONS AND RELIEFS
### Share option and profit sharing schemes
#### Approved share option schemes
##### 185
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#### Approved profit sharing schemes
##### 186
- (1) The provisions of this section apply where, after 5th April 1979 and before 1st January 2003, the trustees of an approved profit sharing scheme appropriate shares—
- (a) which have previously been acquired by the trustees, and
- (b) as to which the conditions in Part II of Schedule 9 are fulfilled,
to an individual who participates in the scheme (“the participant”).
- (2) Notwithstanding that, by virtue of such an appropriation of shares as is mentioned in subsection (1) above, the beneficial interest in the shares passes to the participant to whom they are appropriated—
- (a) the value of the shares at the time of the appropriation shall be treated as not being income of his chargeable to tax under Schedule E; and
- (b) he shall not be chargeable to income tax under that Schedule by virtue of section 78 or 79 of the Finance Act 1988 in respect of the shares or by virtue of section 162 in any case where the shares are appropriated to him at an undervalue within the meaning of that section.
- (3) Subject to the provisions of this section and paragraph 4 of Schedule 10, if, in respect of or by reference to any of a participant’s shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money’s worth (“a capital receipt”), . . . the appropriate percentage (determined as at the time the trustees become or the participant becomes so entitled) of so much of the amount or value of the receipt as exceeds the appropriate allowance for that year, as determined under subsection (12) below counts as employment income of the participant for the year of assessment in which the entitlement arises.
- (4) If the trustees dispose of any of a participant’s shares at any time before the release date or, if it is earlier, the date of the participant’s death, then, subject to subsections (6) and (7) below, . . . the appropriate percentage of the locked-in value of the shares at the time of the disposal counts as employment income of the participant for the year of assessment in which the disposal takes place.
- (5) Subject to paragraphs 5 and 6(6) of Schedule 10, the locked-in value of a participant’s shares at any time is—
- (a) if prior to that time he has become entitled to a capital receipt (within the meaning of subsection (3) above) which is referable to those shares and—
- (i) an amount calculated by reference to that capital receipt counts as his employment income by virtue of subsection (3) above, or
- (ii) if the entitlement to the capital receipt arose before 6th April 2003, he was chargeable to income tax by virtue of that subsection (as it had effect before that date) in respect of that capital receipt,
the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and
- (b) in any other case, their initial market value.
- (6) Subject to subsection (7) below, if, on a disposal of shares falling within subsection (4) above, the proceeds of the disposal are less than the locked-in value of the shares at the time of the disposal, subsection (4) above shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal.
- (7) If, at any time prior to the disposal of any of a participant’s shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (8) below, subsections (4) and (6) above shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant’s shares held by the trustees at that time.
- (8) For the purposes of subsection (7) above—
- (a) no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and
- (b) in relation to a particular disposal the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals;
and any reference in subsection (7) or paragraph (a) above to the rights arising under a rights issue is a reference to rights conferred in respect of a participant’s shares, being rights to be allotted, on payment, other shares or securities or rights of any description in the same company.
- (9) If at any time the participant’s beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of the relevant provisions as having been disposed of at that time by the trustees for (subject to subsection (10) below) the like consideration as was obtained for the disposal of the beneficial interest; and for the purposes of this subsection there is no disposal of the participant’s beneficial interest if and at the time when—
- (a) in England and Wales or Northern Ireland, that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of law, or
- (b) in Scotland, that interest becomes vested in a judicial factor, in a trustee on the participant’s sequestrated estate or in a trustee for the benefit of the participant’s creditors.
- (10) If—
- (a) a disposal of shares falling within subsection (4) above is a transfer to which paragraph 2(2)(c) of Schedule 9 applies, or
- (b) any other disposal falling within that subsection is not at arm’s length,
- (c) a disposal of shares falling within that subsection is one which is treated as taking place by virtue of subsection (9) above and takes place within the period of retention,
then for the purposes of the relevant provisions the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal.
- (11) Where the trustees of an approved scheme acquire any shares as to which the requirements of Part II of Schedule 9 are fulfilled and, within the period of 18 months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme, section 686 shall not apply to income consisting of dividends on those shares received by the trustees; and, for the purpose of determining whether any shares are appropriated within that period, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time.
- (12) For the purposes of subsection (3) above, “*the appropriate allowance*”, in relation to any year of assessment, means a sum which, subject to a maximum of £60, is the product of multiplying £20 by 1 plus the number of years which fall within the period of three years immediately preceding the year in question and in which shares were appropriated to the participant under the scheme; and if in any year (and before the release date) the trustees become or the participant becomes entitled, in respect of or by reference to any of his shares, to more than one capital receipt, the receipts shall be set against the appropriate allowance for that year in the order in which they are received.
- (13) Schedule 10 shall have effect with respect to profit sharing schemes.
#### Interpretation of sections 185 and 186 and Schedules 9 and 10
##### 187
- (1) In sections 185 and 186, this section and Schedules 9 and 10 “*the relevant provisions*” means those sections (including this section) and Schedules.
- (2) For the purposes of the relevant provisions, except where the context otherwise requires—
- “*appropriate percentage*” shall be construed in accordance with paragraph 3 of Schedule 10;
- “*approved*”, in relation to a scheme, means approved under Schedule 9;
- “*associated company*” has the same meaning as in section 416, except that, for the purposes of paragraph 23 of Schedule 9, subsection (1) of that section shall have effect with the omission of the words “ or at any time within one year previously ”;
- “*bonus date*” has the meaning given by paragraph 17 of Schedule 9;
- “*capital receipt*” means money or money’s worth to which the trustees of or a participant in a profit sharing scheme become or becomes entitled as mentioned in section 186(3), but subject to paragraph 4 of Schedule 10;
- “*certified contractual savings scheme*” has the meaning given by section 326;
- “*control*” has the same meaning as in section 840;
- “*grantor*”, in relation to any scheme, means the company which has established the scheme;
- “*group scheme*” and, in relation to such a scheme, “*participating company*” have the meanings given by paragraph 1(3) and (4) of Schedule 9;
- “*initial market value*”, in relation to shares in a profit sharing scheme, has the meaning given by paragraph 30(4) of Schedule 9;
- “*locked-in value*”, in relation to any shares, shall be construed in accordance with section 186(5);
- “*market value*” has the same meaning as in Part VIII of the 1992 Act;
- “*new holding*” has the meaning given by section 126(1)(b) of the 1992 Act;
- “*participant*”, in relation to a profit sharing scheme, means an individual to whom the trustees of the scheme have appropriated shares;
- “*participant’s shares*”, in relation to a participant in a profit sharing scheme, means, subject to paragraph 5(4) of Schedule 10, shares which have been appropriated to the participant by the trustees;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*period of retention*” has the meaning given by paragraph 2 of Schedule 10;
- “*release date*”, in relation to any of the shares of a participant in a profit sharing scheme, means the third anniversary of the date on which they were appropriated to him;
- “*relevant amount*”, in relation to a participant in a profit sharing scheme, means an amount which is not less than £3,000 and not more than £8,000 but which, subject to that, is 10 per cent. of his salary (determined under subsection (5) below) for the year of assessment in question or the preceding year of assessment, whichever is the greater;
- “*relevant requirements*” has the meaning given by paragraph 1 of Schedule 9;
- “*savings-related share option scheme*” has the meaning given by paragraph 1 of Schedule 9;
- “*scheme*” means a savings-related share option scheme, a share option scheme which is not a savings-related share option scheme or a profit sharing scheme, as the context may require;
- “*shares*” includes stock;
- “*specified age*”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;
- “*the trustees*”, in relation to an approved profit sharing scheme or the shares of a participant in such a scheme, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 30 of Schedule 9; and
- “*just instrument*”, in relation to an approved profit sharing scheme, means the instrument referred to in paragraph 30(1)(c) of Schedule 9.
- (3) For the purposes of the application of the relevant provisions in relation to any share option scheme or profit sharing scheme, a person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—
- (a) is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the ordinary share capital of the company, or
- (b) where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the assets which would then be available for distribution among the participators.
- In this subsection “*associate*” has the meaning given by section 417(3) and (4) and “*participator*” has the meaning given by section 417(1).
- (4) Subsection (3) above shall have effect subject to the provisions of Part VI of Schedule 9.
- (5) For the purposes of subsection (2) above, a participant’s salary for a year of assessment means such of the emoluments of the office or employment by virtue of which he is entitled to participate in a profit sharing scheme as are liable to be paid in that year under deduction of tax pursuant to section 203 after deducting therefrom amounts included by virtue of Chapter II of this Part.
- (6) Section 839 shall apply for the purposes of the relevant provisions.
- (7) For the purposes of the relevant provisions a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company’s ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital.
- (8) Where the disposal referred to in section 186(4) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of the relevant provisions—
- (a) the initial market value and the locked-in value of each of those shares, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Any of the relevant provisions with respect to—
- (a) the order in which any of a participant’s shares are to be treated as disposed of for the purposes of those provisions, or
- (b) the shares in relation to which an event is to be treated as occurring for any such purpose,
shall have effect in relation to a profit sharing scheme notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.
- (10) In the relevant provisions “*workers’ cooperative*” means a registered industrial and provident society, within the meaning of section 486, which is a cooperative society and the rules of which include provisions which secure—
- (a) that the only persons who may be members of it are those who are employed by, or by a subsidiary of, the society and those who are the trustees of its profit sharing scheme; and
- (b) that, subject to any provision about qualifications for membership which is from time to time made by the members of the society by reference to age, length of service or other factors of any description, all such persons may be members of the society;
and in this subsection “*cooperative society*” has the same meaning as in section 1 of the Industrial and Provident Societies Act 1965 or, as the case may be, the Industrial and Provident Societies Act (Northern Ireland) 1969.
### Retirement benefits etc.
#### Exemptions from section 148
##### 188
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lump sum benefits on retirement
##### 189
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments to Members of Parliament, Representatives to the European Parliament and others
##### 190
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job release scheme allowances not to be treated as income
##### 191
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Foreign emoluments and earnings, pensions and certain travel facilities
#### Relief from tax for foreign emoluments
##### 192
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign earnings and travel expenses
##### 193
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other foreign travel expenses
##### 194
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Travel expenses of employees not domiciled in the United Kingdom
##### 195
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign pensions
##### 196
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leave travel facilities for the armed forces
##### 197
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Other expenses, subscriptions etc.
#### Relief for necessary expenses
##### 198
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses necessarily incurred and defrayed from official emoluments
##### 199
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses of Members of Parliament
##### 200
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Fees and subscriptions to professional bodies, learned societies etc
##### 201
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Donations to charity: payroll deduction scheme
##### 202
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — ASSESSMENT, COLLECTION, RECOVERY AND APPEALS
#### Pay as you earn
##### 203
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### P.A.Y.E repayments
##### 204
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Assessments unnecessary in certain circumstances
##### 205
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Additional provision for certain assessments
##### 206
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disputes as to domicile or ordinary residence
##### 207
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VI — COMPANY DISTRIBUTIONS, TAX CREDITS ETC
### CHAPTER I — TAXATION OF COMPANY DISTRIBUTIONS
#### U.K. company distributions not generally chargeable to corporation tax
##### 208
Except as otherwise provided by the Corporation Tax Acts, corporation tax shall not be chargeable on dividends and other distributions of a company resident in the United Kingdom, nor shall any such dividends or distributions be taken into account in computing income for corporation tax.
### CHAPTER II — MATTERS WHICH ARE DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS
#### Meaning of “distribution”
##### 209
- (1) The following provisions of this Chapter, together with section 418, shall, subject to any express exceptions, have effect with respect to the meaning of “distribution” and for determining the persons to whom certain distributions are to be treated as made, but references in the Corporation Tax Acts to distributions of a company shall not apply to distributions made in respect of share capital in a winding up.
- (2) In the Corporation Tax Acts “*distribution*”, in relation to any company, means—
- (a) any dividend paid by the company, including a capital dividend;
- (b) subject to subsections (5) and (6) below, any other distribution out of assets of the company (whether in cash or otherwise) in respect of shares in the company, except so much of the distribution, if any, as represents repayment of capital on the shares or is, when it is made, equal in amount or value to any new consideration received by the company for the distribution;
- (c) subject to section 230, any redeemable share capital or any security issued by the company in respect of shares in or securities of the company otherwise than wholly for new consideration, or such part of any redeemable share capital or any security so issued as is not properly referable to new consideration;
- (d) any interest or other distribution out of assets of the company in respect of securities of the company, where they are securities under which the consideration given by the company for the use of the principal thereby secured represents more than a reasonable commercial return for the use of that principal, except so much, if any, of any such distribution as represents that principal and so much as represents a reasonable commercial return for the use of that principal;
- (da) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) any interest or other distribution out of assets of the company in respect of securities of the company (except so much, if any, of any such distribution as represents the principal thereby secured and except so much of any distribution as falls within paragraph (d) . . . above), where the securities are—
- (i) securities issued as mentioned in paragraph (c) above, but excluding securities issued before 6th April 1965 in respect of shares and securities issued before 6th April 1972 in respect of securities; or
- (ii) securities convertible directly or indirectly into shares in the company or securities issued after 5th April 1972 and carrying any right to receive shares in or securities of the company, not being (in either case) securities listed on a recognised stock exchange nor issued on terms which are reasonably comparable with the terms of issue of securities so listed; or
- (iii) securities under which the consideration given by the company for the use of the principal secured is to any extent dependent on the results of the company’s business or any part of it; or
- (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (vi) securities which are connected with shares in the company, and for this purpose securities are so connected if, in consequence of the nature of the rights attaching to the securities or shares and in particular of any terms or conditions attaching to the right to transfer the shares or securities, it is necessary or advantageous for a person who has, or disposes of or acquires, any of the securities also to have, or to dispose of or to acquire, a proportionate holding of the shares or;
- (vii) equity notes issued by the company (“*the issuing company*”) and held by a company which is associated with the issuing company or is a funded company;
- (f) any such amount as is required to be treated as a distribution by subsection (4) below or section 210.
- (3) Without prejudice to section 254(11), no amount shall be regarded for the purposes of subsection (2)(d). . . and (e) above as representing the principal secured by a security issued after 5th April 1972 in so far as it exceeds any new consideration which has been received by the company for the issue of the security.
- (3A) Where any security of a company is issued at a premium representing new consideration—
- (a) the references in subsection (2)(d). . . and (e) above to so much of any distribution as represents, or is an amount representing, the principal secured by a security shall be construed, in relation to a distribution in respect of the security issued at a premium, as references to the aggregate of—
- (i) so much of the distribution as represents, or is an amount representing, that principal, and
- (ii) so much of it as represents, or is an amount representing, the premium;
- (b) the reference in subsection (2)(d) above to so much of any distribution as represents a reasonable commercial return for the use of the principal secured by a security shall be construed, in relation to a distribution in respect of the security issued at a premium, as a reference to the aggregate of—
- (i) so much of the distribution as represents a reasonable commercial return for the use of that principal, and
- (ii) so much of it as (when regard is had to the extent to which distributions represent the premium) represents a reasonable commercial return for the use of the premium.
- (3AA) If, in the case of any security issued by a company, the amount of new consideration received by the company for the issue of the security exceeds the amount of the principal secured by the security—
- (a) the amount of the principal so secured shall be treated for the purposes of paragraph (d) of subsection (2) above as increased to the amount of the new consideration so received; and
- (b) subsection (3A) above, so far as relating to that paragraph, shall not have effect in relation to the security;
but this subsection is subject to sections 209A and 209B.
- (3B) For the purposes of subsection (2)(e)(iii) above the consideration given by the company for the use of the principal secured shall not be treated as being to any extent dependent on the results of the company’s business or any part of it by reason only of the fact that the terms of the security provide—
- (a) for the consideration to be reduced in the event of the results improving, or
- (b) for the consideration to be increased in the event of the results deteriorating.
- (4) Where on a transfer of assets or liabilities by a company to its members or to a company by its members, the amount or value of the benefit received by a member (taken according to its market value) exceeds the amount or value (so taken) of any new consideration given by him, the company shall, subject to subsections (5) and (6) below, be treated as making a distribution to him of an amount equal to the difference.
- (5) Subsection (4) above shall not apply where the company and the member receiving the benefit are both resident in the United Kingdom and either the former is a subsidiary of the latter or both are subsidiaries of a third company also so resident; and any amount which would apart from this subsection be a distribution shall not constitute a distribution by virtue of subsection (2)(b) above.
- (6) No transfer of assets (other than cash) or of liabilities between one company and another shall constitute, or be treated as giving rise to, a distribution by virtue of subsection (2)(b) or (4) above if they are companies—
- (a) both of which are resident in the United Kingdom and neither of which is a 51 per cent. subsidiary of a company not so resident; and
- (b) which, neither at the time of the transfer nor as a result of it, are under common control.
- (7) The question whether one body corporate is a subsidiary of another for the purpose of subsection (5) above shall be determined as a question whether it is a 51 per cent. subsidiary of that other, except that that other shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate, if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.
- (8) For the purposes of subsection (2)(c) above—
- (a) the value of any redeemable share capital shall be taken to be the amount of the share capital together with any premium payable on redemption, or in a winding up, or in any other circumstances; and
- (b) the value of any security shall be taken to be the amount of the principal thereby secured (including any premium payable at maturity or in a winding up, or in any other circumstances);
and in determining the amount of the distribution constituted by the issue of any redeemable share capital or any security, the capital or security shall be taken at that value.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of subsection (2)(e)(vii) above a security is an equity note if as regards the whole of the principal or as regards any part of it—
- (a) the security’s terms contain no particular date by which it is to be redeemed,
- (b) under the security’s terms the date for redemption, or the latest date for redemption, falls after the expiry of the permitted period,
- (c) under the security’s terms redemption is to occur after the expiry of the permitted period if a particular event occurs and the event is one which (judged at the time of the security’s issue) is certain or likely to occur, or
- (d) the issuing company can secure that there is no particular date by which the security is to be redeemed or that the date for redemption falls after the expiry of the permitted period;
and the permitted period is the period of 50 years beginning with the date of the security’s issue.
- (10) For the purposes of subsection (2)(e)(vii) above and subsection (11) below a company is associated with the issuing company if—
- (a) the issuing company is a 75 per cent. subsidiary of the other company,
- (b) the other company is a 75 per cent. subsidiary of the issuing company, or
- (c) both are 75 per cent. subsidiaries of a third company.
- (11) For the purposes of subsection (2)(e)(vii) above a company is a funded company if there are arrangements involving the company being put in funds (directly or indirectly) by the issuing company or a company associated with the issuing company.
#### Bonus issue following repayment of share capital
##### 210
- (1) Where a company—
- (a) repays any share capital or has done so at any time after 6th April 1965, and
- (b) at or after the time of that repayment issues any share capital as paid up otherwise than by the receipt of new consideration,
the amount so paid up shall, except as provided by any provision of the Corporation Tax Acts, be treated as a distribution made in respect of the shares on which it is paid up, except in so far as that amount exceeds the amount or aggregate amount of share capital so repaid less any amounts previously so paid up and treated by virtue of this subsection as distributions.
- (2) Subsection (1) above shall not apply where the repaid share capital consists of fully paid preference shares—
- (a) if those shares existed as issued and fully paid preference shares on 6th April 1965 and throughout the period from that date until the repayment those shares continued to be fully paid preference shares, or
- (b) if those shares were issued after 6th April 1965 as fully paid preference shares wholly for new consideration not derived from ordinary shares and throughout the period from their issue until the repayment those shares continued to be fully paid preference shares.
- (3) Except in relation to a company within paragraph D of section 704, subsection (1) above shall not apply if the issue of share capital mentioned in paragraph (b) of that subsection—
- (a) is of share capital other than redeemable share capital; and
- (b) takes place after 5th April 1973 and more than ten years after the repayment of share capital mentioned in paragraph (a) of that subsection.
- (4) In this section—
- “*ordinary shares*” means shares other than preference shares;
- “*preference shares*” means shares—which do not carry any right to dividends other than dividends at a rate per cent. of the nominal value of the shares which is fixed, andwhich carry rights in respect of dividends and capital which are comparable with those general for fixed-dividend shares listed in the Official List of the Stock Exchange; and
- “*new consideration not derived from ordinary shares*” means new consideration other than consideration—consisting of the surrender, transfer or cancellation of ordinary shares of the company or any other company or consisting of the variation of rights in ordinary shares of the company or any other company, orderived from a repayment of share capital paid in respect of ordinary shares of the company or of any other company.
#### Matters to be treated or not to be treated as repayments of share capital
##### 211
- (1) Where—
- (a) a company issues any share capital as paid up otherwise than by the receipt of new consideration, or has done so after 6th April 1965; and
- (b) any amount so paid up does not fall to be treated as a qualifying distribution or, where the issue took place before 6th April 1973, did not fall to be treated as a distribution;
then, except as otherwise provided by any provision of the Corporation Tax Acts, for the purposes of sections 209 and 210, distributions afterwards made by the company in respect of shares representing that share capital shall not be treated as repayments of share capital, except to the extent to which those distributions, together with any relevant distributions previously so made, exceed the amounts so paid up (then or previously) on such shares after 6th April 1965 and not falling to be treated as qualifying distributions or, where the share capital was issued before 6th April 1973, as distributions.
- (2) Except in relation to a company within paragraph D of section 704, subsection (1) above shall not prevent a distribution being treated as a repayment of share capital if it is made—
- (a) more than ten years after the issue of share capital mentioned in paragraph (a) of that subsection; and
- (b) in respect of share capital other than redeemable share capital.
- (3) In subsection (1) above “*relevant distribution*” means so much of any distribution made in respect of shares representing the relevant share capital as apart from that subsection would be treated as a repayment of share capital, but by virtue of that subsection cannot be so treated.
- (4) For the purposes of subsection (1) above all shares of the same class shall be treated as representing the same share capital, and where shares are issued in respect of other shares, or are directly or indirectly converted into or exchanged for other shares, all such shares shall be treated as representing the same share capital.
- (5) Where share capital is issued at a premium representing new consideration, the amount of the premium is to be treated as forming part of that share capital for the purpose of determining under this Chapter whether any distribution made in respect of shares representing the share capital is to be treated as a repayment of share capital.
- (6) Subsection (5) above shall not have effect in relation to any part of the premium after that part has been applied in paying up share capital.
- (7) Subject to subsection (5) above, premiums paid on redemption of share capital are not to be treated as repayments of capital.
### CHAPTER III — MATTERS WHICH ARE NOT DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS
### Payments of interest
#### Interest etc. paid in respect of certain securities
##### 212
- (1) Any interest or other distribution—
- (a) which is paid out of the assets of a company (“the borrower”) to another company which is within the charge to corporation tax; and
- (b) which is so paid in respect of securities of the borrower which fall within . . . any of sub-paragraphs (i) to (iii) and (vi) and (vii) of paragraph (e) of section 209(2); and
- (c) which does not fall within paragraph (d) of section 209(2),
shall not be a distribution for the purposes of the Corporation Tax Acts unless the application of this subsection is excluded by subsection (2) or (3) below.
- (2) Subsection (1) above does not apply in the case of any interest or other distribution which is paid in respect of a security of the borrower falling within section 209(2)(e)(iii) if—
- (a) the principal secured does not exceed £100,000; and
- (b) the borrower is under an obligation to repay the principal and interest before the expiry of the period of five years beginning on the date on which the principal was paid to the borrower; and
- (c) that obligation either was entered into before 9th March 1982 or was entered into before 1st July 1982 pursuant to negotiations which were in progress on 9th March 1982; and
- (d) where the period for repayment of either principal or interest is extended after 8th March 1982 (but paragraph (b) above still applies), the interest or other distribution is paid within the period which was applicable immediately before that date;
and for the purposes of paragraph (c) above negotiations shall not be regarded as having been in progress on 9th March 1982 unless, before that date, the borrower had applied to the lender for a loan and had supplied the lender with any documents required by him to support the application.
- (3) . . . Subsection (1) above does not apply in a case where the company to which the interest or other distribution is paid is entitled under any enactment, other than section 208, to an exemption from tax in respect of that interest or distribution . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Demergers
#### Exempt distributions
##### 213
- (1) The provisions of this section and sections 214 to 218 have effect for facilitating certain transactions whereby trading activities carried on by a single company or group are divided so as to be carried on by two or more companies not belonging to the same group or by two or more independent groups.
- (2) References in the Corporation Tax Acts to distributions of a company shall not apply to any distribution—
- (a) which falls within subsection (3) below, and
- (b) in respect of which the conditions specified in subsections (4) to (12) below are satisfied;
and any such distribution is referred to in this section as an “exempt distribution”.
- (3) The following distributions fall within this subsection—
- (a) a distribution consisting of the transfer to all or any of its members by a company (“the distributing company”) of shares in one or more companies which are its 75 per cent. subsidiaries;
- (b) a distribution consisting of the transfer by a company (“the distributing company”) to one or more other companies (“the transferee company or companies”) of—
- (i) a trade or trades; or
- (ii) shares in one or more companies which are 75 per cent. subsidiaries of the distributing company,
and the issue of shares by the transferee company or companies to all or any of the members of the distributing company;
and in this section and sections 214 to 217 references to a relevant company are to the distributing company, to each subsidiary whose shares are transferred as mentioned in paragraph (a) or (b) (ii) above and to each transferee company mentioned in paragraph (b) above.
- (4) Each relevant company must be resident in the United Kingdom at the time of the distribution.
- (5) The distributing company must at the time of the distribution be either a trading company or a member of a trading group and each subsidiary whose shares are transferred as mentioned in subsection (3)(a) or (b)(ii) above must at that time be either a trading company or the holding company of a trading group.
- (6) In a case within subsection (3)(a) above—
- (a) the shares must not be redeemable, must constitute the whole or substantially the whole of the distributing company’s holding of the ordinary share capital of the subsidiary and must confer the whole or substantially the whole of the distributing company’s voting rights in the subsidiary; and
- (b) subject to subsections (7) and (12)(b) below, the distributing company must after the distribution be either a trading company or the holding company of a trading group.
- (7) Subsection (6)(b) above does not apply if the transfer relates to two or more 75 per cent. subsidiaries of the distributing company and that company is dissolved without there having been after the distribution any net assets of the company available for distribution in a winding up or otherwise.
- (8) In a case within subsection (3)(b) above—
- (a) if a trade is transferred the distributing company must either not retain any interest or retain only a minor interest in that trade;
- (b) if shares in a subsidiary are transferred those shares must constitute the whole or substantially the whole of the distributing company’s holding of the ordinary share capital of the subsidiary and must confer the whole or substantially the whole of the distributing company’s voting rights in the subsidiary;
- (c) the only or main activity of the transferee company or each transferee company after the distribution must be the carrying on of the trade or the holding of the shares transferred to it;
- (d) the shares issued by the transferee company or each transferee company must not be redeemable, must constitute the whole or substantially the whole of its issued ordinary share capital and must confer the whole or substantially the whole of the voting rights in that company; and
- (e) subject to subsections (9) and (12)(b) below, the distributing company must after the distribution be either a trading company or the holding company of a trading group.
- (9) Subsection (8)(e) above does not apply if there are two or more transferee companies each of which has a trade or shares in a separate 75 per cent. subsidiary of the distributing company transferred to it and the distributing company is dissolved without there having been after the distribution any net assets of the company available for distribution in a winding up or otherwise.
- (10) The distribution must be made wholly or mainly for the purpose of benefiting some or all of the trading activities which before the distribution are carried on by a single company or group and after the distribution will be carried on by two or more companies or groups.
- (11) The distribution must not form part of a scheme or arrangements the main purpose or one of the main purposes of which is—
- (a) the avoidance of tax (including stamp duty or stamp duty land tax); or
- (b) without prejudice to paragraph (a) above, the making of a chargeable payment, as defined by section 214, or what would be such a payment if any of the companies mentioned in that section were an unquoted company; or
- (c) the acquisition by any person or persons other than members of the distributing company of control of that company, of any other relevant company or of any company which belongs to the same group as any such company; or
- (d) the cessation of a trade or its sale after the distribution.
- In paragraph (c) above “*group*” means a company which has one or more 51 per cent. subsidiaries together with that or those subsidiaries.
- (12) Where the distributing company is a 75 per cent. subsidiary of another company—
- (a) the group (or, if more than one, the largest group) to which the distributing company belongs at the time of the distribution must be a trading group;
- (b) subsections (6)(b) and (8)(e) above shall not apply; and
- (c) the distribution must be followed by one or more other distributions falling within subsection (3)(a) or (b)(ii) above which satisfy the conditions of this section and result in members of the holding company of the group (or, if more than one, the largest group) to which the distributing company belonged at the time of the distribution becoming members of—
- (i) the transferee company or each transferee company to which a trade was transferred by the distributing company; or
- (ii) the subsidiary or each subsidiary whose shares were transferred by the distributing company; or
- (iii) a company (other than that holding company) of which the company or companies mentioned in sub-paragraph (i) or (ii) above are 75 per cent. subsidiaries.
#### Chargeable payments connected with exempt distributions
##### 214
- (1) If within five years after the making of an exempt distribution there is a chargeable payment—
- (a) the amount or value of the payment shall be treated as income . . . ;
- (ab) that income shall be chargeable to tax;
- (b) unless the payment is a transfer of money’s worth, sections 349(1) and 350 shall apply to the payment as if it were an annual sum payable otherwise than out of profits or gains charged to income tax;
- (c) the payment shall be regarded as a distribution for the purposes of section 337A(1) ; and
- (d) the payment shall not (if it otherwise would) be treated as a repayment of capital for the purposes of section 210 or 211.
- (1A) Income tax chargeable by virtue of subsection (1) shall be charged on the full amount or value of the payment made in the year of assessment; and the person liable for any tax so charged is the person receiving or entitled to the payment.
- (1B) Corporation tax chargeable by virtue of subsection (1) shall be charged under Case VI of Schedule D.
- (2) In this section “*a chargeable payment*” means any payment made otherwise than for bona fide commercial reasons or forming part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax (including stamp duty or stamp duty land tax), being a payment which—
- (a) a company concerned in an exempt distribution makes directly or indirectly to a member of that company or of any other company concerned in that distribution; and
- (b) is made in connection with, or with any transaction affecting, the shares in that or any such company; and
- (c) is not a distribution or exempt distribution or made to another company which belongs to the same group as the company making the payment.
- (3) Where a company concerned in an exempt distribution is an unquoted company subsection (2)(a) above shall have effect as if any reference to the making of a payment by, or to a member of, a company concerned in the exempt distribution included a reference to the making of a payment by or to any other person in pursuance of a scheme or arrangements made with the unquoted company or, if the unquoted company is—
- (a) under the control of five or fewer persons; and
- (b) not under the control of (and only of) a company which is not itself under the control of five or fewer persons,
with any of the persons mentioned in paragraph (a) above.
- (4) References in this section to a company concerned in an exempt distribution are to any relevant company and to any other company which was connected with any such company for the whole or any part of the period beginning with the exempt distribution and ending with the making of the payment which is in question under this section.
- (5) For the purposes of subsection (4) above and this subsection a company shall be deemed to have been connected in the period referred to in that subsection with each company to which a company connected with it was connected in that period.
- (6) References in this section to a payment include references to a transfer of money’s worth including the assumption of a liability.
#### Advance clearance by Board of distributions and payments
##### 215
- (1) A distribution shall be treated as an exempt distribution in any case in which, before the distribution is made, the Board have, on the application of the distributing company, notified that company that the Board are satisfied that it will be such a distribution.
- (2) A payment shall not be treated as a chargeable payment in any case in which, before the payment is made, the Board have, on the application of the person intending to make it, notified him that they are satisfied that it will be made for bona fide commercial reasons and will not form part of any scheme or arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax (including stamp duty or stamp duty land tax).
- (3) A company which becomes or ceases to be connected with another company may make an application under subsection (2) above as respects any payments that may be made by it at any time after becoming or ceasing to be so connected (whether or not there is any present intention to make any payments); and where a notification is given by the Board on such an application no payment to which the notification relates shall be treated as a chargeable payment by reason only of the company being or having been connected with the other company.
- (4) References in subsections (2) and (3) above to a payment shall be construed as in section 214.
- (5) Any application under this section shall be in writing and shall contain particulars of the relevant transactions and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purposes of enabling the Board to make their decision; and if any such notice is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.
- (6) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of the notice being complied with.
- (7) If the Board notify the applicant that they are not satisfied as mentioned in subsection (1) or (2) above or do not notify their decision to the applicant within the time required by subsection (6) above, the applicant may within 30 days of the notification or of that time require the Board to transmit the application, together with any notice given and further particulars furnished under subsection (5) above, to the Special Commissioners; and in that event any notification by the Special Commissioners shall have effect for the purposes of this section as if it were a notification by the Board.
- (8) If any particulars furnished under this section do not fully and accurately disclose all facts and circumstances material for the decision of the Board or the Special Commissioners, any resulting notification that the Board or Commissioners are satisfied as mentioned in subsection (1) or (2) above shall be void.
#### Returns
##### 216
- (1) Where a company makes an exempt distribution it shall within 30 days after the distribution make a return to the inspector giving particulars of the distribution and of the circumstances by reason of which it is exempt.
- (2) Where within five years after the making of an exempt distribution a person makes a chargeable payment which consists of a transfer of money’s worth, he shall within 30 days after the transfer make a return to the inspector giving particulars—
- (a) of the transaction effecting the transfer;
- (b) of the name and address of the recipient or each recipient and the value of what is transferred to him or each of them; and
- (c) if the transfer is accompanied by a chargeable payment consisting of a payment of money, of that payment.
- (3) Subject to subsection (4) below, where within five years after the making of an exempt distribution a person makes a payment or a transfer of money’s worth which would be a chargeable payment but for the fact that it is made for bona fide commercial reasons and does not form part of any such scheme or arrangements as are mentioned in section 214(2), that person shall within 30 days after making the payment or transfer make a return to the inspector giving particulars—
- (a) in the case of a transfer, of the transaction by which it is effected;
- (b) of the name and address of the recipient or each recipient and the amount of the payment made, or the value of what is transferred, to him or each of them; and
- (c) of the circumstances by reason of which the payment or transfer is not a chargeable payment.
- (4) Subsection (3) above does not apply where the payment or transfer is one in relation to which a notification under section 215(3) has effect.
#### Information
##### 217
- (1) Where a distribution falling within section 213(3) has been made and the inspector has reason to believe that it may form part of any such scheme or arrangements as are mentioned in section 213(11), he may by notice require any relevant company or any person controlling any such company to furnish him within such time, not being less than 30 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which the company or that person has or can reasonably obtain, any such scheme or arrangements exist or have existed;
- (b) such other information as the inspector may reasonably require for the purposes of section 213(11) and the company or that person has or can reasonably obtain.
- (2) If the inspector has reason to believe that a person has not delivered an account or made a return which he is required to deliver or make by virtue of section 214(1)(b) or 216(2) or (3) in respect of any payment or transfer, he may by notice require that person to furnish him within such time, not being less than 30 days, as may be specified in the notice with such information relating to the payment or transfer as he may reasonably require for the purposes of section 214.
- (3) If the inspector has reason to believe that a payment or transfer has been made within five years after the making of an exempt distribution and that the payment or transfer is a chargeable payment by reason of the existence of any such scheme or arrangements as are mentioned in section 214(3), he may by notice require the person making the payment or transfer or, if that person is a company, any person controlling it to furnish him within such time, not being less than 30 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which that person has, or can reasonably obtain, any such scheme or arrangements exist or have existed;
- (b) such other information as the inspector may reasonably require for the purposes of section 214 and that person has or can reasonably obtain.
- (4) Any recipient of a chargeable payment and any person on whose behalf such a payment is received shall, if so required by the inspector, state whether the payment received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
#### Interpretation of sections 213 to 217
##### 218
- (1) In sections 213 to 217—
- “*chargeable payment*” has the meaning given by section 214(2);
- “*control*” shall be construed in accordance with section 416(2) to (6);
- “*distributing company*” has the meaning given by section 213(3);
- “*exempt distribution*” has the meaning given by section 213(2);
- “*group*”, except in section 213(11)(c), means a company which has one or more 75 per cent. subsidiaries together with that or those subsidiaries;
- “*holding company*” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
- “member”, where the reference is to a member of a company, does not, except in section 214(2)(a), include a person who is a member otherwise than by virtue of holding shares forming part of the company’s ordinary share capital;
- “*relevant company*” has the meaning given by section 213(3);
- “*shares*” includes stock;
- “*trade*”, except in subsection (3) below, does not include dealing in shares, securities, land, trades or commodity futures and “*trading activities*” shall be construed accordingly;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- “*trading group*” means a group the business of whose members, taken together, consists wholly or mainly in the carrying on of a trade or trades; and
- “*unquoted company*” means a company which does not satisfy the condition that its shares or some class thereof (disregarding debenture or loan stock, preferred shares or preferred stock) are listed in the Official List of the Stock Exchange and are dealt in on the Stock Exchange regularly or from time to time, so however that this definition does not apply to a company under the control of (and only of) one or more companies to which this definition does not apply.
- (2) In determining for the purposes of section 213(3) to (9) whether a company whose shares are transferred by the distributing company is a 75 per cent. subsidiary of the distributing company there shall be disregarded any share capital of the first-mentioned company which is owned indirectly by the distributing company.
- (3) In determining for the purposes of sections 213 to 217 whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner of—
- (a) any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) any share capital which it owns indirectly and which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt.
- (4) Section 839 applies for the purposes of sections 213 to 217.
### Purchase of own shares
#### Purchase by unquoted trading company of own shares
##### 219
- (1) References in the Corporation Tax Acts to distributions of a company shall not include references to a payment made by a company on the redemption, repayment or purchase of its own shares if the company is an unquoted trading company or the unquoted holding company of a trading group and either—
- (a) the redemption, repayment or purchase is made wholly or mainly for the purpose of benefiting a trade carried on by the company or by any of its 75 per cent. subsidiaries, and does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is—
- (i) to enable the owner of the shares to participate in the profits of the company without receiving a dividend, or
- (ii) the avoidance of tax; and
the conditions specified in sections 220 to 224, so far as applicable, are satisfied in relation to the owner of the shares; or
- (b) the whole or substantially the whole of the payment (apart from any sum applied in paying capital gains tax charged on the redemption, repayment or purchase) is applied by the person to whom it is made in discharging a liability of his for inheritance tax charged on a death and is so applied within the period of two years after the death;
and in sections 220 to 224—
- “*the purchase*” means the redemption, repayment or purchase referred to in subsection (1)(a) above; and
- “*the vendor*” means the owner of the shares at the time it is made.
- (2) Where, apart from this subsection, a payment falls within subsection (1)(b) above, subsection (1) above shall not apply to the extent that the liability in question could without undue hardship have been discharged otherwise than through the redemption, repayment or purchase of shares in the company or another unquoted company which is a trading company or the holding company of a trading group.
#### Conditions as to residence and period of ownership
##### 220
- (1) The vendor must be resident and ordinarily resident in the United Kingdom in the year of assessment in which the purchase is made and if the shares are held through a nominee the nominee must also be so resident and ordinarily resident.
- (2) The residence and ordinary residence of trustees shall be determined for the purposes of this section as they are determined under section 69 of the 1992 Act for the purposes of that Act.
- (3) The residence and ordinary residence of personal representatives shall be taken for the purposes of this section to be the same as the residence and ordinary residence of the deceased immediately before his death.
- (4) The references in this section to a person’s ordinary residence shall be disregarded in the case of a company.
- (5) The shares must have been owned by the vendor throughout the period of five years ending with the date of the purchase.
- (6) If at any time during that period the shares were transferred to the vendor by a person who was then his spouse or civil partner living with him then, unless that person is alive at the date of the purchase but is no longer the vendor’s spouse or civil partner living with him, any period during which the shares were owned by that person shall be treated for the purposes of subsection (5) above as a period of ownership by the vendor.
- (7) Where the vendor became entitled to the shares under the will or on the intestacy of a previous owner or is the personal representative of a previous owner—
- (a) any period during which the shares were owned by the previous owner or his personal representatives shall be treated for the purposes of subsection (5) above as a period of ownership by the vendor, and
- (b) that subsection shall have effect as if it referred to three years instead of five.
- (8) In determining whether the condition in subsection (5) above is satisfied in a case where the vendor acquired shares of the same class at different times—
- (a) shares acquired earlier shall be taken into account before shares acquired later, and
- (b) any previous disposal by him of shares of that class shall be assumed to be a disposal of shares acquired later rather than of shares acquired earlier.
- (9) If for the purposes of capital gains tax the time when shares were acquired would be determined under any provision of Chapter II of Part IV of the 1992 Act (reorganisation of share capital, conversion of securities, etc.) then, unless the shares were allotted for payment or were comprised in share capital to which section 249 applies, it shall be determined in the same way for the purposes of this section.
#### Reduction of vendor’s interest as shareholder
##### 221
- (1) If immediately after the purchase the vendor owns shares in the company, then, subject to section 224, the vendor’s interest as a shareholder must be substantially reduced.
- (2) If immediately after the purchase any associate of the vendor owns shares in the company then, subject to section 224, the combined interests as shareholders of the vendor and his associates must be substantially reduced.
- (3) The question whether the combined interests as shareholders of the vendor and his associates are substantially reduced shall be determined in the same way as is (under the following subsections) the question whether a vendor’s interest as a shareholder is substantially reduced, except that the vendor shall be assumed to have the interests of his associates as well as his own.
- (4) Subject to subsection (5) below, the vendor’s interest as a shareholder shall be taken to be substantially reduced if and only if the total nominal value of the shares owned by him immediately after the purchase, expressed as a fraction of the issued share capital of the company at that time, does not exceed 75 per cent. of the corresponding fraction immediately before the purchase.
- (5) The vendor’s interest as a shareholder shall not be taken to be substantially reduced where—
- (a) he would, if the company distributed all its profits available for distribution immediately after the purchase, be entitled to a share of those profits, and
- (b) that share, expressed as a fraction of the total of those profits, exceeds 75 per cent. of the corresponding fraction immediately before the purchase.
- (6) In determining for the purposes of subsection (5) above the division of profits among the persons entitled to them, a person entitled to periodic distributions calculated by reference to fixed rates or amounts shall be regarded as entitled to a distribution of the amount or maximum amount to which he would be entitled for a year.
- (7) In subsection (5) above “*profits available for distribution*” has the same meaning as it has for the purposes of Part VIII of the Companies Act 1985, except that for the purposes of that subsection the amount of the profits available for distribution (whether immediately before or immediately after the purchase) shall be treated as increased—
- (a) in the case of every company, by £100, and
- (b) in the case of a company from which any person is entitled to periodic distributions of the kind mentioned in subsection (6) above, by a further amount equal to that required to make the distribution to which he is entitled in accordance with that subsection;
and where the aggregate of the sums payable by the company on the purchase and on any contemporaneous redemption, repayment or purchase of other shares of the company exceeds the amount of the profits available for distribution immediately before the purchase, that amount shall be treated as further increased by an amount equal to the excess.
- (8) References in this section to entitlement are, except in the case of trustees and personal representatives, references to beneficial entitlement.
#### Conditions applicable where purchasing company is member of group
##### 222
- (1) Subject to section 224, where the company making the purchase is immediately before the purchase a member of a group and—
- (a) immediately after the purchase the vendor owns shares in one or more other members of the group (whether or not he then owns shares in the company making the purchase), or
- (b) immediately after the purchase the vendor owns shares in the company making the purchase and immediately before the purchase he owned shares in one or more other members of the group,
the vendor’s interest as a shareholder in the group must be substantially reduced.
- (2) In subsections (5) to (7) below “*relevant company*” means the company making the purchase and any other member of the group in which the vendor owns shares immediately before or immediately after the purchase, but subject to subsection (4) below.
- (3) Subject to section 224, where the company making the purchase is immediately before the purchase a member of a group and at that time an associate of the vendor owns shares in any member of the group, the combined interests as shareholders in the group of the vendor and his associates must be substantially reduced.
- (4) The question whether the combined interests as shareholders in the group of the vendor and his associates are substantially reduced shall be determined in the same way as is (under the following subsections) the question whether a vendor’s interest as a shareholder in a group is substantially reduced, except that the vendor shall be assumed to have the interests of his associates as well as his own (and references in subsections (5) to (7) below to a relevant company shall be construed accordingly).
- (5) The vendor’s interest as a shareholder in the group shall be ascertained by—
- (a) expressing the total nominal value of the shares owned by him in each relevant company as a fraction of the issued share capital of the company,
- (b) adding together the fractions so obtained, and
- (c) dividing the result by the number of relevant companies (including any in which he owns no shares).
- (6) Subject to subsection (7) below, the vendor’s interest as a shareholder in the group shall be taken to be substantially reduced if and only if it does not exceed 75 per cent. of the corresponding interest immediately before the purchase.
- (7) The vendor’s interest as a shareholder in the group shall not be taken to be substantially reduced if—
- (a) he would, if every member of the group distributed all its profits available for distribution immediately after the purchase (including any profits received by it on a distribution by another member), be entitled to a share of the profits of one or more of them, and
- (b) that share, or the aggregate of those shares, expressed as a fraction of the aggregate of the profits available for distribution of every member of the group which is—
- (i) a relevant company, or
- (ii) a 51 per cent. subsidiary of a relevant company,
exceeds 75 per cent. of the corresponding fraction immediately before the purchase.
- (8) Subsections (6) and (7) of section 221 shall apply for the purposes of subsection (7) above as they apply for the purposes of subsection (5) of that section.
- (9) Subject to the following subsections, in this section “*group*” means a company which has one or more 51 per cent. subsidiaries, but is not itself a 51 per cent. subsidiary of any other company, together with those subsidiaries.
- (10) Where the whole or a significant part of the business carried on by an unquoted company (“the successor company”) was previously carried on by—
- (a) the company making the purchase, or
- (b) a company which is (apart from this subsection) a member of a group to which the company making the purchase belongs, the successor company and any company of which it is a 51 per cent. subsidiary shall be treated as being a member of the same group as the company making the purchase (whether or not, apart from this subsection, the company making the purchase is a member of a group).
- (11) Subsection (10) above shall not apply if the successor company first carried on the business there referred to more than three years before the time of the purchase.
- (12) For the purposes of this section a company which has ceased to be a 51 per cent. subsidiary of another company before the time of the purchase shall be treated as continuing to be such a subsidiary if at that time there exist arrangements under which it could again become such a subsidiary.
#### Other conditions
##### 223
- (1) Subject to section 224, the vendor must not immediately after the purchase be connected with the company making the purchase or with any company which is a member of the same group as that company.
- In this subsection “*group*” has the same meaning as it has for the purposes of section 222.
- (2) Subject to section 224, the purchase must not be part of a scheme or arrangement which is designed or likely to result in the vendor or any associate of his having interests in any company such that, if he had those interests immediately after the purchase, any of the conditions in sections 221 and 222 and subsection (1) above could not be satisfied.
- (3) A transaction occurring within one year after the purchase shall be deemed for the purposes of subsection (2) above to be part of a scheme or arrangement of which the purchase is also part.
#### Relaxation of conditions in certain cases
##### 224
Where—
- (a) any of the conditions in sections 221 to 223 which are applicable are not satisfied in relation to the vendor, but
- (b) he proposed or agreed to the purchase in order that the condition in section 221(2) or 222(3) could be satisfied in respect of the redemption, repayment or purchase of shares owned by a person of whom he is an associate,
then, to the extent that that result is produced by virtue of the purchase, section 219(1)(a) shall have effect as if the conditions in sections 221 to 223 were satisfied in relation to the vendor.
#### Advance clearance of payments by Board
##### 225
- (1) A payment made by a company on the redemption, repayment or purchase of its own shares shall be deemed—
- (a) to be one to which section 219 applies if, before it is made, the Board have on the application of the company notified the company that they are satisfied that the section will apply; and
- (b) to be one to which section 219 does not apply if, before it is made, the Board have on the application of the company notified the company that they are satisfied that the section will not apply.
- (2) An application under this section shall be in writing and shall contain particulars of the relevant transactions; and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purpose of enabling the Board to make their decision.
- (3) If a notice under subsection (2) above is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.
- (4) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (2) above, within 30 days of the notice being complied with.
- (5) If particulars furnished under this section do not fully and accurately disclose all facts and circumstances material for the decision of the Board, any resulting notification by the Board shall be void.
#### Returns and information
##### 226
- (1) A company which treats a payment made by it as one to which section 219 applies shall within 60 days after making the payment make a return to the inspector giving particulars of the payment and of the circumstances by reason of which that section is regarded as applying to it.
- (2) Where a company treats a payment made by it as one to which section 219(1)(a) applies, any person connected with the company who knows of any such scheme or arrangement affecting the payment as is mentioned in section 223(2) shall, within 60 days after he first knows of both the payment and the scheme or arrangement, give a notice to the inspector containing particulars of the scheme or arrangement.
- (3) Where the inspector has reason to believe that a payment treated by the company making it as one to which section 219(1)(a) applies may form part of a scheme or arrangement of the kind referred to therein or in section 223(2), he may by notice require the company or any person who is connected with the company to furnish him within such time, not being less than 60 days, as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to information which the company or that person has or can reasonably obtain, any such scheme or arrangement exists or has existed, and
- (b) such other information as the inspector may reasonably require for the purposes of the provision in question and the company or that person has or can reasonably obtain.
- (4) The recipient of a payment treated by the company making it as one to which section 219 applies, and any person on whose behalf such a payment is received, shall if so required by the inspector state whether the payment received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
#### Associated persons
##### 227
- (1) Any question whether a person is an associate of another in relation to a company shall be determined for the purposes of sections 219 to 226 and 228 in accordance with the following provisions of this section.
- (2) A husband and wife living together , or civil partners of each other living together, are associates of one another, a person under the age of 18 is an associate of his parents, and his parents are his associates.
- (3) A person connected with a company is an associate of the company and of any company controlled by it, and the company and any company controlled by it are his associates.
- (4) Where a person connected with one company has control of another company, the second company is an associate of the first.
- (5) Where shares in a company are held by the trustees of a settlement then in relation to that company, but subject to subsection (8) below, the trustees are associates of—
- (a) any person who directly or indirectly provided property to the trustees or has made a reciprocal arrangement for another to do so,
- (b) any person who is, by virtue of subsection (2) above, an associate of a person within paragraph (a) above, and
- (c) any person who is or may become beneficially entitled to a significant interest in the shares;
and any such person is an associate of the trustees.
- (6) Where shares in a company are comprised in the estate of a deceased person, then in relation to that company the deceased’s personal representatives are associates of any person who is or may become beneficially entitled to a significant interest in the shares, and any such person is an associate of the personal representatives.
- (7) Where one person is accustomed to act on the directions of another in relation to the affairs of a company, then in relation to that company the two persons are associates of one another.
- (8) Subsection (5) above shall not apply to shares held on trusts which—
- (a) relate exclusively to a registered pension scheme, or
- (b) are exclusively for the benefit of the employees, or the employees and directors, of the company referred to in that subsection or of companies in a group to which that company belongs, or their dependants (and are not wholly or mainly for the benefit of directors or their relatives);
and for the purposes of this subsection “*group*” means a company which has one or more 51 per cent. subsidiaries, together with those subsidiaries.
- (9) For the purposes of subsections (5) and (6) above a person’s interest is significant if its value exceeds 5 per cent. of the value of all the the settled property or, as the case may be, comprised in the estate concerned, excluding any property in which he is not and cannot become beneficially entitled to an interest.
#### Connected persons
##### 228
- (1) Any question whether a person is connected with a company shall be determined for the purposes of sections 219 to 227 in accordance with the following provisions of this section.
- (2) A person is connected with a company if he directly or indirectly possesses or is entitled to acquire more than 30 per cent. of—
- (a) the issued ordinary share capital of the company, or
- (b) the loan capital and issued share capital of the company, or
- (c) the voting power in the company.
- (3) Where a person—
- (a) acquired or became entitled to acquire loan capital of a company in the ordinary course of a business carried on by him, being a business which includes the lending of money, and
- (b) takes no part in the management or conduct of the company,
his interest in that loan capital shall be disregarded for the purposes of subsection (2) above.
- (4) A person is connected with a company if he directly or indirectly possesses or is entitled to acquire such rights as would, in the event of the winding up of the company or in any other circumstances, entitle him to receive more than 30 per cent. of the assets of the company which would then be available for distribution to equity holders of the company; and for the purposes of this subsection—
- (a) the persons who are equity holders of the company, and
- (b) the percentage of the assets of the company to which a person would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18, taking references in paragraph 3 to the first company as references to an equity holder and references to a winding up as including references to any other circumstances in which assets of the company are available for distribution to its equity holders.
- (5) A person is connected with a company if he has control of it.
- (6) References in this section to the loan capital of a company are references to any debt incurred by the company—
- (a) for any money borrowed or capital assets acquired by the company, or
- (b) for any right to receive income created in favour of the company, or
- (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium thereon).
- (7) For the purposes of this section a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire.
- (8) For the purposes of this section a person shall be assumed to have the rights or powers of his associates as well as his own.
#### Other interpretative provisions
##### 229
- (1) In sections 219 to 228—
- “*control*” has the meaning given by section 840;
- “*holding company*” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
- “*personal representatives*” means persons responsible for administering the estate of a deceased person;
- “*quoted company*” means a company whose shares (or any class of whose shares) are listed in the official list of a stock exchange;
- “*shares*” includes stock;
- “*trade*” does not include dealing in shares, securities, land or futures and “*trading activities*” shall be construed accordingly;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- “*trading group*” means a group the business of whose members, taken together, consists wholly or mainly of the carrying on of a trade or trades, and for this purpose “*group*” means a company which has one or more 75 per cent. subsidiaries together with those subsidiaries; and
- “*unquoted company*” means a company which is neither a quoted company nor a 51 per cent. subsidiary of a quoted company.
- (2) References in sections 219 to 228 to the owner of shares are references to the beneficial owner except where the shares are settled property or are comprised in the estate of a deceased person, and in such a case are references to the trustees of the settlement or, as the case may be, to the deceased’s personal representatives.
- (3) References in sections 219 to 228 to a payment made by a company include references to anything else that is, or would but for section 219 be, a distribution.
### Stock dividends
#### Stock dividends: distributions
##### 230
Any share capital to which section 249 applies and which is issued by a company . . . in a case where section 410(2), (3) or (4) of ITTOIA 2005 applies—
- (a) shall, notwithstanding section 209(2)(c), not constitute a distribution within the meaning of section 209(2); and
- (b) for purposes of sections 210 and 211 shall not be treated as issued “as paid up otherwise than by the receipt of new consideration”.
### CHAPTER IV — TAX CREDITS
#### Tax credits for certain recipients of qualifying distributions
##### 231
- (1) Subject to sections 231AA and 231AB of this Actand section 219(4B) of the Finance Act 1994,for corporation tax purposes where a company resident in the United Kingdom makes a qualifying distribution and the person receiving the distribution is another such company . . . , the recipient of the distribution shall be entitled to a tax credit equal to such proportion of the amount or value of the distribution as corresponds to the tax credit fraction in force when the distribution is made.
- (1A) The tax credit fraction is one-ninth.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a distribution mentioned in subsection (1) above is, or falls to be treated as, or under any provision of the Tax Acts is deemed to be, the income of a person other than the recipient, that person shall be treated for the purposes of this section as receiving the distribution (and accordingly the question whether that person is entitled to a tax credit in respect of it shall be determined by reference to where that person, and not the actual recipient, is resident);*and where any such distribution is income of a United Kingdom trust the trustees shall be entitled to a tax credit in respect of it if no other person falls to be treated for the purposes of this section as receiving the distribution*.
- (5) *In subsection* (4)*above “*United Kingdom trust*” means a trust administered under the law of any part of the United Kingdom, not being a trust the general administration of which is ordinarily carried on outside the United Kingdom and the trustees, or a majority of the trustees, of which are resident or ordinarily resident outside the United Kingdom*.
#### Tax credits for non-U.K. residents
##### 232
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions
##### 233
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information relating to distributions
##### 234
- (1) Without prejudice to section 234A. . . , a company which makes a qualifying distribution shall, if the recipient so requests in writing, furnish to him a statement in writing showing the amount or value of the distribution and (whether or not the recipient is a person entitled to a tax credit in respect of the distribution) the amount of the tax credit to which a recipient who is such a person is entitled in respect of that distribution.
- (2) The duty imposed by subsection (1) above shall be enforceable at the suit or instance of the person requesting the information.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where a company makes a distribution which is not a qualifying distribution it shall make a return to the inspector—
- (a) within 14 days from the end of the accounting period in which the distribution is made; or
- (b) if the distribution is made on a date not falling in an accounting period, within 14 days from that date.
- (6) A return under subsection (5) above shall contain—
- (a) particulars of the transaction giving rise to the distribution; and
- (b) the name and address of the person, or each of the persons, receiving the distribution, and the amount or value of the distribution received by him or by each of them.
- (7) Where it is not in the circumstances apparent whether a transaction gives rise to a distribution in respect of which a return is required to be made under subsection (5) above, the company shall—
- (a) within the time within which such a return would be required to be made if the transaction did give rise to such a distribution, make a return to the inspector containing particulars of the transaction in question; and
- (b) if required by a notice served on the company by the inspector, furnish him within the time specified in the notice with such further information in relation to the transaction as he may reasonably require.
- (8) If it appears to the inspector that particulars of any transaction ought to have been and have not been included in a return under subsection (5) or (7) above, he may by a notice served on the company require the company to furnish him within the time specified in the notice with such information relating thereto as he may reasonably require.
- (9) Any power which the inspector may exercise under paragraphs 2 to 4 of Schedule 12 to the Finance Act 1989 for the purposes of the relevant provisions (as defined in paragraph 1 of that Schedule) may be exercised by him for the purposes of subsections (5) to (8) above.
#### Distributions of exempt funds etc
##### 235
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 235
##### 236
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of reliefs in respect of bonus issues
##### 237
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — ADVANCE CORPORATION TAX AND FRANKED INVESTMENT INCOME
#### Interpretation of terms and collection of ACT
##### 238
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of ACT against liability to corporation tax
##### 239
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of company’s surplus ACT against subsidiary’s liability to corporation tax
##### 240
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Calculation of ACT where company receives franked investment income
##### 241
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of losses etc. against surplus of franked investment income
##### 242
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of loss brought forward, or terminal loss
##### 243
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further provisions relating to claims under section 242 or 243
##### 244
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Calculation etc. of ACT on change of ownership of company
##### 245
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge of ACT at previous rate until new rate fixed, and changes of rate
##### 246
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER VI — MISCELLANEOUS AND SUPPLEMENTAL
### Group income
#### Dividends etc. paid by one member of a group to another
##### 247
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 247
##### 248
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Stock dividends
#### Stock dividends treated as income
##### 249
- (1) Subject to subsections (8) and (9) below, this section applies (and accordingly section 230 above and section 410 of ITTOIA 2005 apply) to any of the following share capital, that is to say—
- (a) any share capital issued by a company resident in the United Kingdom in consequence of the exercise by any person of an option conferred on him to receive in respect of shares in the company (whether the last-mentioned shares were issued before or after the coming into force of this section) either a dividend in cash or additional share capital; and
- (b) any bonus share capital issued by a company so resident in respect of any shares in the company of a relevant class (whether the last-mentioned shares were issued before or after the coming into force of this section).
- (2) For the purposes of subsection (1)(b) above a class of shares is a relevant class if—
- (a) shares of that class carry the right to receive bonus share capital in the company of the same or a different class; and
- (b) that right is conferred by the terms on which shares of that class were originally issued or by those terms as subsequently extended or otherwise varied.
- (3) Where a company issues any share capital in a case in which two or more persons are entitled thereto, the following provisions of this section*and paragraph* 12(1)*to* (3)*of Schedule* 19 shall have effect as if the company had issued to each of those persons separately a part of that share capital proportionate to his interest therein on the due date of issue.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where, in a case within section 410(2), (3) or (4) of ITTOIA 2005, the share capital in question is issued in respect of shares in the company issued before 6th April 1975 which confer on the holder a right to convert or exchange them into or for shares of a different class, this section shall not apply to so much (if any) of any bonus share capital issued by the company after 5th April 1976 in connection with an exercise of that right as would have been issued if that right had been exercised so as to effect the conversion or exchange of the shares on the earliest possible date after 5th April 1975; . . . .
- (9) Where any bonus share capital falling within subsection (1)(b) above is after 5th April 1975 converted into or exchanged for shares in the company in question of a different class, then—
- (a) this section shall not apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of that bonus share capital; but
- (b) section 230(a) and (b) shall apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of so much of that bonus share capital as caused income to be treated as arising to an individual as a result of section 410(2) of ITTOIA 2005 on the due date of issue (or would have done so if the case had been one in which an individual was beneficially entitled to that share capital).
#### Returns
##### 250
- (1) A company shall for each of its accounting periods make, in accordance with this section, returns to the inspector of all share capital to which section 249 applies (“relevant share capital”) and which was issued by it in that period.
- (2) A return shall be made for—
- (a) each complete quarter falling within the accounting period, that is to say, each of the periods of three months ending with 31st March, 30th June, 30th September or 31st December which falls within that period;
- (b) each part of the accounting period which is not a complete quarter and ends on the first (or only), or begins immediately after the last (or only), of those dates which falls within the accounting period;
- (c) if none of those dates falls within the accounting period, the whole accounting period.
- (3) A return for any period for which a return is required to be made under this section (a “return period”) shall be made within 30 days from the end of that period.
- (4) No return need be made under this section by a company for any period in which it has issued no relevant share capital.
- (5) The return made by a company for any return period shall state—
- (a) the date on which any relevant share capital issued by it in the period was issued and, if different, the date on which the company was first required to issue it;
- (b) particulars of the terms on which any such share capital so issued by it was issued; and
- (c) what is, in relation to any such share capital so issued, the cash equivalent of the share capital in accordance with section 412 of ITTOIA 2005.
- (6) If it appears to the inspector that a company ought to have, but has not, made a return for any return period, he may (notwithstanding subsection (4) above) by notice require the company to make a return for that period within such time (not being less than 30 days) as may be specified in the notice; and a return required to be made under this subsection shall, if such be the case, state that no relevant share capital was issued in the period in question.
- (7) As regards any share capital included in a return made under this section by a company, the inspector may by notice require the company to furnish him within such time (not being less than 30 days) as may be specified in the notice with such further information relating thereto as he may reasonably require for the purposes of sections 230 and 249, this section and section 251 . . . of this Act or Chapter 5 of Part 4 of ITTOIA 2005.
#### Interpretation of sections 249 and 250
##### 251
- (1) For the purposes of sections 249 and 250 —
- (a) “*bonus share capital*”, in relation to a company, means share capital issued by the company otherwise than wholly for new consideration or such part of any share capital so issued as is not properly referable to new consideration;
- (b) “*due date of issue*”, in relation to any share capital issued by a company, means the earliest date on which the company was required to issue that share capital;
- (c) an option to receive either a dividend in cash or additional share capital is conferred on a person not only where he is required to choose one or the other, but also where he is offered the one subject to a right, however expressed, to choose the other instead, and a person’s abandonment of, or failure to exercise, such a right is to be treated as an exercise of the option;
and in section 254 the definition of “*security*” (in subsection (1)) and subsections (5) and (11) shall not apply.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Rectification of excessive set-off etc. of ACT or tax credit
##### 252
- (1) If an inspector discovers that—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any set-off or payment of tax credit,
ought not to have been made, or is or has become excessive, the inspector may make any such assessments as may in his judgment be required for recovering any tax that ought to have been paid or any payment of tax credit that ought not to have been made and generally for securing that the resulting liabilities to tax (including interest on unpaid tax) of the persons concerned are what they would have been if only such set-offs or payments had been made as ought to have been made.
- (2) In any case where—
- (a) interest has been paid under section 826 on a payment of tax credit; and
- (b) interest ought not to have been paid on that payment, either at all or to any extent,
an assessment under this section may be made for recovering any interest that ought not to have been paid.
- (3) Where—
- (a) an assessment is made under this section to recover tax credit paid to a company in respect of franked investment income received by the company in an accounting period; and
- (b) more than one payment of tax credit has been made in respect of that period,
any sum recovered shall as far as possible be treated as relating to a payment of tax credit made later rather than to a payment made earlier.
- (4) Subsections (2) and (3) above shall have effect in relation to payments of tax credit claimed in respect of accounting periods ending after such day as may be appointed for the purpose of those subsections by order made by the Treasury, not being earlier than 31st March 1992.
- (5) The Management Act shall apply to any assessment under this section for recovering a payment of tax credit or interest on such a payment as if it were an assessment to income tax for the year of assessment, or in the case of a company, corporation tax for the accounting period, in respect of which the payment was claimed, and as if that payment represented a loss of tax to the Crown; and any sum charged by any such assessment shall, subject to any appeal against the assessment, be due within 14 days after the issue of the notice of assessment.
#### Power to modify or replace section 234(5) to (9) and Schedule 13
##### 253
- (1) The Board may by regulations—
- (a) modify, supplement or replace any of the provisions of subsections (5) to (9) of section 234 for the purpose of requiring companies resident in the United Kingdom to make returns and give information to the inspector in respect of distributions made by them, whether before or after the passing of this Act, which are not qualifying distributions;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and references in this Act and in any other enactment to section 234(5) to (9) . . . shall be construed as including references to any such regulations.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Regulations under this section may—
- (a) make different provision for different descriptions of companies and for different circumstances and may authorise the Board, where in their opinion there are special circumstances justifying it, to make special arrangements as respects . . . the repayment of income tax borne by a company or the payment to a company of amounts in respect of any tax credit to which it is entitled;
- (b) include such transitional and other supplemental provisions as appear to the Board to be expedient or necessary.
- (4) The Board shall not make any regulations under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.
#### Interpretation of Part VI
##### 254
- (1) In this Part, except where the context otherwise requires—
- “*new consideration*” means, subject to subsections (5) and (6) below, consideration not provided directly or indirectly out of the assets of the company, and in particular does not include amounts retained by the company by way of capitalising a distribution;
- “*security*” includes securities not creating or evidencing a charge on assets, and interest paid by a company on money advanced without the issue of a security for the advance, or other consideration given by a company for the use of money so advanced, shall be treated as if paid or given in respect of a security issued for the advance by the company;
- “*share*” includes stock, and any other interest of a member in a company;
and in this section “*a 90 per cent. group*” means a company and all of its 90 per cent. subsidiaries.
- (2) In this Part, the expressions “*in respect of shares in the company*” and “*in respect of securities of the company*”, in relation to a company which is a member of a 90 per cent. group, mean respectively in respect of shares in that company or any other company in the group and in respect of securities of that company or any other company in the group.
- (3) Without prejudice to section 209(2)(b) as extended by subsection (2) above, in relation to a company which is a member of a 90 per cent. group, “*distribution*” includes anything distributed out of assets of the company (whether in cash or otherwise) in respect of shares in or securities of another company in the group.
- (4) Nothing in subsections (2) and (3) above shall require a company to be treated as making a distribution to any other company which is in the same group and is resident in the United Kingdom.
- (5) Where share capital has been issued at a premium representing new consideration, any part of that premium afterwards applied in paying up share capital shall be treated as new consideration also for that share capital, except in so far as the premium has been taken into account under section 211(5) so as to enable a distribution to be treated as a repayment of share capital.
- (6) Subject to subsection (7) below, no consideration derived from the value of any share capital or security of a company, or from voting or other rights in a company, shall be regarded for the purposes of this Part as new consideration received by the company unless the consideration consists of—
- (a) money or value received from the company as a qualifying distribution;
- (b) money received from the company as a payment which for those purposes constitutes a repayment of that share capital or of the principal secured by the security; or
- (c) the giving up of the right to the share capital or security on its cancellation, extinguishment or acquisition by the company.
- (7) No amount shall be regarded as new consideration by virtue of subsection (6)(b) or (c) above in so far as it exceeds any new consideration received by the company for the issue of the share capital or security in question or, in the case of share capital which constituted a qualifying distribution on issue, the nominal value of that share capital.
- (8) Where two or more companies enter into arrangements to make distributions to each other’s members, all parties concerned (however many) may for the purposes of this Part be treated as if anything done by any one of those companies had been done by any of the others.
- (9) A distribution shall be treated under this Part as made, or consideration as provided, out of assets of a company if the cost falls on the company.
- (10) References in this Part to issuing share capital as paid up apply also to the paying up of any issued share capital.
- (11) Where securities are issued at a price less than the amount repayable on them, and are not listed on a recognised stock exchange, the principal secured shall not be taken for the purposes of this Part to exceed the issue price, unless the securities are issued on terms reasonably comparable with the terms of issue of securities so listed.
- (12) For the purposes of this Part a thing is to be regarded as done in respect of a share if it is done to a person as being the holder of the share, or as having at a particular time been the holder, or is done in pursuance of a right granted or offer made in respect of a share; and anything done in respect of shares by reference to share holdings at a particular time is to be regarded as done to the then holders of the shares or the personal representatives of any share holder then dead.
#### “Gross rate” and “gross amount” of distributions to include ACT
##### 255
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VII — GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
### CHAPTER I — PERSONAL RELIEFS
### The reliefs
#### General
##### 256
- (1) An individual who makes a claim in that behalf or, in the case of relief under section 266, who satisfies the conditions of that section, shall be entitled to such relief as is specified in sections 257 to 274, subject however to the provisions of sections 275 to 278 and 287 and 288.
- (2) Where under any provision of this Chapter the relief to which a person is entitled for any year of assessment consists in an income tax reduction calculated by reference to a specified amount, the effect of that relief shall be that the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from that provision less whichever is the smaller of—
- (a) the amount equal to 10 per cent. of the specified amount; and
- (b) the amount which reduces his liability to nil.
- (3) In determining for the purposes of subsection (2) above the amount of income tax to which a person would be liable apart from any provision providing for an income tax reduction, no account shall be taken—
- (a) where that provision is section 257AA, of any income tax reduction under any of the other provisions of this Chapter;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or
- (c) whatever that provision—
- (i) of any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or
- (ii) of any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
#### Personal relief
##### 257
- (1) The claimant shall be entitled to a deduction from his total income of £3,005,.
- (2) If the claimant . . . is at any time within the year of assessment of the age of 65 or upwards, he shall be entitled to a deduction from his total income of £3,670 (instead of the deduction provided for by subsection (1) above).
- (3) If the claimant . . . is at any time within the year of assessment of the age of 75 or upwards, he shall be entitled to a deduction from his total income of £3,820 (instead of the deduction provided for by subsection (1) or (2) above).
- (4) For the purposes of subsections (2) and (3) above a person who would have been of or over a specified age within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (5) In relation to a claimant whose total income for the year of assessment exceeds £12,300, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by one half of the excess (but not so as to reduce those amounts below that specified in subsection (1) above).]
#### Widower’s or widow’s housekeeper
##### 258
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Additional relief in respect of children
##### 259
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of relief under section 259
##### 260
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims under sections 258 and 259 for year of marriage
##### 261
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Widows' bereavement allowance
##### 262
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dependent relatives
##### 263
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claimant depending on services of a son or daughter
##### 264
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for blind persons
##### 265
- (1) If the claimant . . . is a registered blind person for the whole or any part of the year of assessment, he shall be entitled to a deduction of £1,280 from his total income.
- (1A) Section 257C (indexation) shall have effect (using the rounding up rule in subsection (1)(b) of that section) for the application of this section for the year 1998-99 and any subsequent year of assessment as it has effect for the application of sections 257 and 257A.
- (2) Where—
- (a) a person entitled to relief under subsection (1) above is a person whose spouse or civil partner is living with him for the whole of any part of the year of assessment, but
- (b) the amount which he is entitled to deduct from his total income by virtue of that subsection exceeds what is left of his total income after all other deductions have been made from it,
his spouse or civil partner shall be entitled to a deduction from . . . total income of an amount equal to the excess.
- (3) In determining for the purposes of subsection (2)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) under . . . section 289 or
- (c) on account of any payments to which section 192 of the Finance Act 2004 applies,or
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Subsections (2) and (3) above shall not apply for a year of assessment unless the person entitled to relief under subsection (1) has given to the inspector written notice that they are to apply; and any such notice—
- (a) shall be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (6) A notice given under subsection (5) above in relation to a year of assessment by a spouse or civil partner shall have effect also as a notice under section 257BB(2).
- (7) In this section “*registered blind person*” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.
#### Life assurance premiums
##### 266
- (1) Subject to the provisions of this section, section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an individual who pays any such premium as is specified in subsection (2) below or makes a payment falling within subsection (7) below shall (without making any claim) be entitled to relief under this section.
- (2) The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—
- (a) the payments are made to —
- (i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or
- (ii) a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;
- (iv) in the case of a deferred annuity, the National Debt Commissioners; and
- (b) the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse or civil partner; and
- (c) the insurance or contract was made by him or his spouse or civil partner.
- (3) Subject to subsections (7), (10) and (11) below, no relief under this section shall be given—
- (a) except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;
- (b) in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;
- (c) in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984, except where the relief relates to part only of any such payment as falls within subsection (6) below;
- (d) in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.
- (4) Subject to subsections (6) to (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.
- (5) Subject to the provisions of Schedule 14—
- (a) an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to 12.5 per cent. of the payment; and
- (b) the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.
- (6) Where—
- (a) a person is entitled to relief under this section in respect of part only of a payment made to a friendly society; and
- (b) the insurance or contract was made by the society in the course of tax exempt life or endowment business (as defined in section 466(2)), and
- (c) the insurance or contract is not excluded by subsection (6A) below,
subsection (4) above shall not apply with respect to that relief but there shall be deducted from his total income an amount equal to one-half of that part of the payment.
- (6A) For the purposes of subsection (6)(c) above, an insurance or contract is excluded by this subsection if it is made on or after 1st September 1996 and affords provision for sickness or other infirmity (whether bodily or mental), unless—
- (a) it also affords assurance for a gross sum independent of sickness or other infirmity;
- (b) not less than 60 per cent. of the amount of the premiums is attributable to the provision afforded during sickness or other infirmity; and
- (c) there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
- (7) Where a person makes a payment to a trade union as defined in section 28(1) of the Trade Union and Labour Relations Act 1974, and part of that payment is attributable to the provision of superannuation, life insurance or funeral benefits, he shall be entitled to relief under this section in respect of that part of the payment, but—
- (a) subsection (4) above shall not apply; and
- (b) there shall be deducted from his total income an amount equal to one-half of that part of the payment.
- (8) Where the individual is not resident in the United Kingdom but is entitled to relief by virtue of section 278(2), subsection (4) above shall not apply but (subject to section 278(3)) the like relief shall be given to him under paragraph 6 of Schedule 14.
- (9) Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the spouseor civil partner of such a member as if the individual were so resident.
- (10) Subsection (3)(b) above shall not apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.
- (11) Subsection (3)(a) and (d) above shall not affect premiums payable—
- (a) under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the spouse, civil partner, widow, widower , surviving civil partner or children or other dependants of any such employee or person, or
- (b) under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.
- (12) Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.
- (13) In this section and Schedule 14, “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).
- (14) In subsection (2)(a)—
- “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
- “member of the society” has the same meaning as in Lloyd’s Act 1982 .
#### Qualifying policies
##### 267
Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.
#### Early conversion or surrender of life policies
##### 268
- (1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy;
- (b) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and
- (c) the conversion of the policy into a paid-up or partly paid-up policy;
the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—
- (a) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and
- (b) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a) above.
- (3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say—
- (a) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;
- (b) if it is the conversion of the policy into a partly paid-up policy, the surrender value at the time of the conversion, of so much of the policy as is paid up; and
- (c) if it is the falling due of a sum, that sum.
- (4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—
- (a) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and
- (b) if the earlier event was such an event as is mentioned in paragraph (a) or (c) of subsection (3) above, as if the surrender value of the policy were increased by the amount which, under that paragraph, limited or might have limited the sum payable under this section in respect of the earlier event.
- (5) For the purposes of this section the appropriate percentage, in relation to any event, is the percentage equal to the following fraction of the percentage found by doubling that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happened, that is to say—
- (a) if the event happens in the first two of the four years mentioned in subsection (1) above, three-sixths;
- (b) if it happens in the third of those years, two-sixths; and
- (c) if it happens in the last of those years, one-sixth;
and the complementary percentage, in relation to any event, is 100 per cent. less the appropriate percentage.
- (6) Where the annual amount of the premiums payable under a policy of life insurance is at any time increased (whether under the policy or by any contract made after its issue) so as to exceed by more than 25 per cent.—
- (a) if the insurance was made on or before 26th March 1974, the annual amount as at that date, or
- (b) in the case of any other insurance, the first annual amount so payable,
the additional rights attributable to the excess shall be treated for the purposes of this section as conferred by a new policy issued in respect of an insurance made at that time, and the excess shall be treated as premiums payable under the new policy.
- (7) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy of life insurance issued in connection with a registered pension scheme;
and in relation to a policy of life insurance issued in respect of an insurance made before 27th March 1974 applies only in accordance with subsection (6) above.
#### Surrender etc. of policies after four years
##### 269
- (1) Where a policy of life insurance to which this section applies has been issued and, in the fifth or any later year from the making of the insurance in respect of which it was issued, either of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy; and
- (b) the falling due (otherwise than on death or maturity) of a sum payable in pursuance of a right conferred by the policy to participate in profits;
then, if either of those events has happened before, the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender, or, as the case may be, out of the sum falling due, a sum determined in accordance with the following provisions of this section.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the applicable percentage of the lower of the following—
- (a) the total of the premiums which are payable in that year under the policy; and
- (b) the sums payable by reason of the surrender or, as the case may be, the sum falling due;
and the percentage to be applied for this purpose shall be a percentage equal to that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happens.
- (3) Where, after a sum has become payable under subsection (1) above, and within the same year from the making of the insurance, another such event happens as is mentioned therein, the sums payable under that subsection in respect of both or all of the events shall not exceed the applicable percentage of the total mentioned in subsection (2)(a) above.
- (4) Where, on the happening of an event in the fifth or any later year from the making of the insurance, any sum is payable under subsection (1) of section 268 as applied by subsection (6) of that section as well as under subsection (1) above, subsection (2) above shall apply as if the sums or sum mentioned in paragraph (b) thereof were reduced by the sum payable under that section.
- (5) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy issued in the course of an industrial insurance business; or
- (c) it was issued in respect of an insurance made before 27th March 1974.
#### Provisions supplementary to sections 268 and 269
##### 270
- (1) Where on the happening of an event in relation to a policy of life insurance a sum is payable under section 268 or 269, relief under section 266 in respect of the relevant premiums paid under the policy shall be reduced by the sum so payable or, as the case may be, by so much of the sum as does not exceed the amount of that relief (or as does not exceed so much of that amount as remains after any previous reduction under this section).
- (2) For the purposes of this section the relevant premiums are—
- (a) in relation to a sum payable under section 268, the premiums payable under the policy up to the happening of the event by reason of which the sum is payable; and
- (b) in relation to a sum payable under section 269, the premiums payable in the year (from the making of the insurance) in which the event happens by reason of which the sum is payable.
- (3) Where the relevant premiums are payable in more than one year of assessment the reduction in relief under this section shall, so far as possible, reduce relief for an earlier year of assessment before reducing relief for a later one.
- (4) Any sum paid under section 268 or 269 by reason of any event shall be treated—
- (a) as between the parties, as received by the person by whom the premiums under the policy were paid; and
- (b) for the purposes of section 266, as a sum paid by that person in satisfaction of his liability resulting from the reduction of relief under this section;
and where that sum exceeds that liability he shall be entitled, on a claim made by him not later than six years after the end of the year of assessment in which the event happens, to repayment of the excess.
#### Deemed surrender in cases of certain loans
##### 271
- (1) Where—
- (a) by virtue of section 465 of ITTOIA 2005 a gain arising in connection with a policy . . . would be treated as forming part of an individual’s total income; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 . . .; and
- (c) any sum is at any time after the making of the insurance . . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy . . .;
then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy . . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).
- (2) Subsection (1) above does not apply—
- (a) in relation to a policy if—
- (i) it is a qualifying policy; and
- (ii) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection of sums payable under sections 268 and 269
##### 272
- (1) Any body by whom a policy to which section 268 or 269 applies has been issued shall, within 30 days of the end of each period of 12 months ending with 31st March in every year, make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.
- (2) Any sum which is to be included in a return made under subsection (1) above shall be due at the time by which the return is to be made and shall be paid without being demanded.
- (3) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made, it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.
- (4) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this section; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this section shall be treated as having been payable when it would have been payable had it been included in a return under subsection (1) above.
- (5) Where, on an appeal against an assessment made in pursuance of this section, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.
- (6) Where a body has paid a sum which is payable under section 268 or 269 it shall give within 30 days to the person by whom the sum is, under section 270(4), treated as received a statement specifying that sum and showing how it has been arrived at.
- (7) The Board or an inspector may, by notice served on the body by whom a policy to which section 268 or 269 applies has been issued, require the body, within such time, not being less than 30 days, as may be specified in the notice—
- (a) to furnish such particulars; or
- (b) to make available for inspection by an officer authorised by the Board such books and other documents in the possession or under the control of the body;
as the Board or officer may reasonably require for the purposes of those sections or this section.
#### Payments securing widows' and children’s annuities
##### 273
- (1) Subject to subsection (2) below, section 274 of this Act and sections 192 to 194 of the Finance Act 2004, if the claimant is, under any Act of Parliament or under any terms and conditions of employment, liable to the payment of any sum, or to the deduction from any salary or stipend of any sum, for the purpose of securing a deferred annuity to a widow or widower or surviving civil partner of the claimant or provision for the claimant’s children after the claimant dies, the claimant shall be entitled to a deduction from the amount of income tax on which he or she is chargeable equal to income tax at the basic rate on the amount of the sum which he or she has paid or which has been deducted from his or her salary or stipend.
- (2) No deduction may be made under this section in respect of any contribution paid by any person under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
#### Limits on relief under sections 266 and 273
##### 274
- (1) The aggregate of the premiums or other sums in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.
- (2) The aggregate of the relief given under sections 266 and 273 in respect of premiums or sums payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at the appropriate rate on £100.
- (3) In subsection (2) above “*the appropriate rate*”—
- (a) in relation to premiums to which section 266 applies, means 12.5 per cent.;
- (b) in relation to other payments, means the basic rate of income tax.
- (4) War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.
### Supplemental
#### Meaning of “relative”
##### 275
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect on relief of charges on income
##### 276
- (1) Where any of the claimant’s income is income the income tax on which (at the basic rate) he is entitled to charge against any other person, or to deduct, retain or satisfy out of any payment, he shall not be entitled to relief under this Chapter in respect of that income, except to the extent, if any, that the relief would exceed tax at the basic rate on that income.
- (1A) In subsection (1) above the references to relief under this Chapter do not include references to relief consisting in such an income tax reduction as is mentioned in section 256(2).
- (2) Notwithstanding subsection (1) above, relief under section 273 may be given to the extent that the deduction from tax provided for by that section can be made from so much of the income tax with which the claimant is chargeable as exceeds what would be the amount of that tax if all income tax were chargeable at the basic rate to the exclusion of any other rate.
#### Partners
##### 277
- (1) . . . The following persons having joint interests, that is to say—
- (a) coparceners, joint tenants, or tenants in common of the profits of any property, and
- (b) joint tenants, or tenants of land or tenements in partnership, being in the actual and joint occupation thereof in partnership, who are entitled to the profits thereof in shares, . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
may claim any relief under this Chapter according to their respective shares and interests, and any such claims which are proved may be dealt with in the same manner as in the case of several interests.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Non-residents
##### 278
- (1) Subject to the provisions of this section, no relief under this Chapter shall be given in the case of any individual who is not resident in the United Kingdom.
- (2) *Subject to subsection* (3)*below*, subsection (1) above shall not apply in the case of any individual who . . . —
- (a) is a Commonwealth citizen or an EEA national; or
- (b) is a person who is or who has been employed in the service of the Crown, or who is employed in the service of any missionary society or in the service of any territory under Her Majesty’s protection; or
- (c) is resident in the Isle of Man or the Channel Islands; or
- (d) has previously resided within the United Kingdom, and is resident abroad for the sake of his or her health, or the health of a member of his or her family resident with him or her; or
- (e) is a widow whose late husband , a widower whose late wife or a surviving civil partner whose late civil partner, was in the service of the Crown.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) *No relief under this Chapter shall be given so as to reduce the amount of the income tax payable by the individual below the amount which results from applying the fraction*—
$$AB$*to the amount which would have been payable by him by way of income tax if the tax were chargeable on his total income from all sources (including income which is not subject to income tax charged in the United Kingdom) where*—$
A*is the amount of his income subject to income tax charged in the United Kingdom; and*
B*is the amount of his total income*.
- (4) *Subsection* (3)*above shall have effect as if the amount of any relief to which an individual is entitled under section* 266(4)*were an amount by which his liability to income tax is reduced*.
- (5) *For the purposes of subsection* (3)*above as it applies to an individual whose income includes income eligible for double taxation relief*—
- (a) *in computing the amount of the income tax payable by the individual, the tax chargeable in respect of the income eligible for double taxation relief shall be disregarded;*
- (b) *in computing the amount of his income subject to income tax charged in the United Kingdom, the income eligible for double taxation relief shall be disregarded; and*
- (c) *in computing his total income from all sources, including income which is not subject to income tax charged in the United Kingdom, income eligible for double taxation relief shall be included, and the income tax which would be chargeable on that total income shall be computed without regard to the double taxation relief available in respect of the income eligible for double taxation relief;*
*and, accordingly, where this subsection applies, the amount of the tax chargeable in respect of the income eligible for double taxation relief shall not be affected by subsections* (2)*and* (3)*above*.
- (6) *Subsection* (5)*shall not operate so as to make the tax payable by an individual for a year of assessment higher than it would have been if the double taxation relief had not been available*.
- (7) *In subsection* (5)*above “*income eligible for double taxation relief*” means any dividends, interest, royalties or other profits which are chargeable to income tax but in respect of which relief (other than credit) is available under an Order in Council under section* 788*so as to limit the rate of income tax so chargeable (but not so as to confer an exemption and make it income which is not subject to income tax charged in the United Kingdom)*.
- (8) Any claim which an individual is entitled to make by virtue of subsection (2) above shall be made to the Board.
- (9) In this section “*EEA national*” means a national of any State, other than the United Kingdom, which is a Contracting Party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992, as adjusted by the Protocol signed at Brussels on 17th March 1993.
### CHAPTER II — TAXATION OF INCOME OF SPOUSES AND CIVIL PARTNERS
### General rules
#### Aggregation of wife’s income with husband's
##### 279
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of reliefs
##### 280
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax repayments to wives
##### 281
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Construction of references to married women living with their husbands
##### 282
Individuals who are married to, or are civil partners of, each other shall be treated for income tax purposes as living together unless—
- (a) they are separated under an order of a court of competent jurisdiction, or by deed of separation, or
- (b) they are in fact separated in such circumstances that the separation is likely to be permanent..
### Separate assessments
#### Option for separate assessment
##### 283
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect of separate assessment on personal reliefs
##### 284
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection from wife of tax assessed on husband but attributable to her income
##### 285
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Right of husband to disclaim liability for tax on deceased wife’s income
##### 286
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Separate taxation
#### Separate taxation of wife’s earnings
##### 287
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Elections under section 287
##### 288
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — ENTERPRISE INVESTMENT SCHEME
#### The relief
##### 289
- (1) For the purposes of this Chapter, an individual is eligible for relief, subject to the following provisions of this Chapter, if—
- (a) eligible shares in a qualifying company for which he has subscribed . . . are issued to him and, under section 291, he qualifies for relief in respect of those shares,
- (aza) he subscribed for the shares (other than any of them which are bonus shares) wholly in cash,
- (aa) at the time when they are issued the shares (other than any of them which are bonus shares) are fully paid up,
- (b) the shares (other than any of them which are bonus shares) are issued in order to raise money for the purpose of a qualifying business activity,
- (ba) the requirements of subsection (1A) below are satisfied in relation to the company,. . .
- (c) at least 80 per cent. of the money raised by the issue of—
- (i) the shares, and
- (ii) all other eligible shares (if any) in the company of the same class which are issued on the same day,
is employed wholly for the purpose of the activity mentioned in paragraph (b) above not later than the time mentioned in subsection (3) below, and
- (d) all of the money so raised is employed wholly for that purpose not later than 12 months after that time.
- (1A) The requirements of this subsection are satisfied in relation to the qualifying company if at no time in the relevant period is any of the following, namely—
- (a) the relevant qualifying trade,
- (b) relevant preparation work (if any), and
- (c) relevant research and development (if any),
being carried on by a person other than the qualifying company or a qualifying 90% subsidiary of that company.
- (1B) In a case where relevant preparation work is carried on by the qualifying company or a qualifying 90% subsidiary of that company, there is to be disregarded, for the purpose of determining whether the requirements of subsection (1A) above are satisfied in relation to the qualifying company, the carrying on of the relevant qualifying trade by a company other than—
- (a) the qualifying company, or
- (b) a subsidiary of that company,
at any time in the relevant period before the qualifying company or any qualifying 90% subsidiary of that company carries on that trade.
- (1C) The requirements of subsection (1A) above are not to be regarded as failing to be satisfied in relation to the qualifying company if—
- (a) by reason only of anything done as a consequence of the qualifying company or any other company being in administration or receivership, or
- (b) by reason only of the qualifying company or any other company being wound up or dissolved without winding up,
the relevant qualifying trade ceases to be carried on in the relevant period by the qualifying company or any qualifying 90% subsidiary of that company and is subsequently carried on in that period by a person who is not at any time in the period of restriction connected with the qualifying company.
- (1D) Subsection (1C) above applies only if (as the case may be)—
- (a) the entry into administration or receivership and everything done as a consequence of the company concerned being in administration or receivership, or
- (b) the winding up or dissolution,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (1E) In this section—
- “*relevant preparation work*” means preparations falling within subsection (2)(a)(ii) below which are the subject of the qualifying business activity mentioned in subsection (1) above,
- “*the relevant qualifying trade*” means the qualifying trade which is the subject of that qualifying business activity,
- “*relevant research and development*” means—research and development falling within subsection (2)(b) below which is the subject of that qualifying business activity, andany other preparations for the carrying on of the qualifying trade which is the subject of that activity.
- (2) In this Chapter “*qualifying business activity*”, in relation to a company, means—
- (a) the company or any qualifying 90% subsidiary of that company—
- (i) carrying on a qualifying trade which, on the date the shares are issued, the company or any such subsidiary is carrying on, or
- (ii) preparing to carry on, or carrying on, a qualifying trade which, on that date, is intended to be carried on wholly or mainly in the United Kingdom by the company or any such subsidiary and which is begun to be carried on by the company or any such subsidiary within two years after that date,
but only if, at any time in the relevant period when the qualifying trade is so carried on, it is carried on wholly or mainly in the United Kingdom, or
- (b) the company or any qualifying 90% subsidiary of that company carrying on research and development—
- (i) which, on the date the shares are issued, the company or any such subsidiary is carrying on or which the company or any such subsidiary begins to carry on immediately afterwards, and
- (ii) from which it is intended that a qualifying trade which the company or any such subsidiary will carry on wholly or mainly in the United Kingdom will be derived,
but only if, at any time in the relevant period when the research and development or the qualifying trade derived from it is carried on, it is carried on wholly or mainly in the United Kingdom.. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The time referred to in subsection (1)(c) above is—
- (a) the end of the period of twelve months beginning with the issue of the eligible shares, or
- (b) in the case of money raised only for the purpose referred to in subsection (2)(a) above, the end of that period or, if later, the end of the period of twelve months beginning when the company or a qualifying 90% subsidiary of that company begins to carry on the qualifying trade,
and for the purposes of this Chapter, the conditions in subsection (1)(c) and (d) above do not fail to be satisfied by reason only of the fact that an amount of money which is not significant is employed for another purpose.
- (3A) In determining—
- (a) for the purposes of subsection (2)(a)(ii) or (3)(b) above when a qualifying trade is begun to be carried on by a qualifying 90% subsidiary of a company, or
- (b) for the purposes of subsection (2)(b)(i) above when research and development is begun to be carried on by such a subsidiary of a company,
there shall be disregarded any carrying on of the trade or, as the case may be, the research and development by it before it became such a subsidiary of the company.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) An individual is not eligible for relief in respect of any shares unless the shares are subscribed for, and issued, for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (7) In this Chapter “*eligible shares*” means new ordinary shares which, throughout the period—
- (a) beginning with the issue of the shares, and
- (b) ending immediately before the termination date relating to those shares,
carry no present or future preferential right to dividends or to a company’s assets on its winding up and no present or future . . . right to be redeemed.
- (8) Section 312(1A)(b) applies to determine the relevant period for the purposes of this section.
- (8A) Shares are not fully paid up for the purposes of subsection (1)(aa) above if there is any undertaking to pay cash to any person at a future date in respect of the acquisition of the shares.
- (9) For the purposes of this Chapter, a company (“the relevant subsidiary”) is a qualifying 90% subsidiary of another company (“the holding company”) if the following conditions are met—
- (a) the holding company possesses not less than 90% of the issued share capital of, and not less than 90% of the voting power in, the relevant subsidiary;
- (b) the holding company would—
- (i) in the event of a winding up of the relevant subsidiary, or
- (ii) in any other circumstances,
be beneficially entitled to receive not less than 90% of the assets of the relevant subsidiary which would then be available for distribution to the equity holders of the subsidiary;
- (c) the holding company is beneficially entitled to not less than 90% of any profits of the relevant subsidiary which are available for distribution to the equity holders of the subsidiary;
- (d) no person other than the holding company has control of the relevant subsidiary within the meaning of section 840; and
- (e) no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) above would cease to be met.
- (10) Subsections (3), (3A) and (4) of section 308 apply in relation to the conditions in subsection (9) above as they apply in relation to the conditions in subsection (2) of that section, but with the following modifications.
- (11) Those modifications are—
- (a) that references in subsections (3), (3A) and (4) of that section to the subsidiary are to be read as references to the relevant subsidiary, and
- (b) that subsection (4) of that section is to be read as if the words the holding company were substituted for the words “the qualifying company or (as the case may be) by another subsidiary”.
- (12) For the purposes of subsection (9) above—
- (a) the persons who are equity holders of the relevant subsidiary, and
- (b) the percentage of the assets of the relevant subsidiary to which an equity holder would be entitled,
are to be determined in accordance with paragraphs 1 and 3 of Schedule 18.
- (13) But in making that determination—
- (a) references in paragraph 3 of Schedule 18 to the first company are to be read as references to an equity holder, and
- (b) references in that paragraph to a winding up are to be read as including references to any other circumstances in which assets of the relevant subsidiary are available for distribution to its equity holders.
#### Minimum and maximum subscriptions
##### 290
- (1) Subject to section 311(3), the relief shall not be given in respect of any amount subscribed by an individual for eligible shares issued to him by any company in any year of assessment unless the amount or total amount subscribed by him for the eligible shares issued to him by the company in that year is £500 or more.
- (2) An individual shall not be eligible for relief in any year of assessment in respect of any amount subscribed for eligible shares exceeding £400,000 (whether the shares are issued in that or a subsequent year).
#### Individuals qualifying for relief
##### 291
- (1) An individual qualifies for relief in respect of eligible shares in a company (referred to in this section and sections 291A and 291B as the “*issuing company*”) if—
- (a) he subscribes for the shares on his own behalf, and
- (b) subject to section 291A(4), he is not at any time in the period—
- (i) beginning two years before the issue of the shares, and
- (ii) ending immediately before the termination date relating to those shares,
connected with the company (whether before or after its incorporation).
- (2) For the purposes of this section . . . , an individual is connected with the issuing company if he, or an associate of his, is—
- (a) an employee of, or of a partner of, the issuing company or any subsidiary,
- (b) a partner of the issuing company or any subsidiary, or
- (c) subject to section 291A, a director of, or of a company which is a partner of, the issuing company or any subsidiary,
or if he, or an associate of his, is so connected by virtue of section 291B.
- (3) In subsection (2) above “*subsidiary*”, in relation to the issuing company, means a company which at any time in the relevant period is a 51 per cent subsidiary of the issuing company, whether or not it is such a subsidiary while the individual concerned or his associate is such an employee, partner or director as is mentioned in that subsection.
- (4) For the purposes of subsections (2) and (3) above and section 291A, in the case of a person who is both a director and an employee of a company—
- (a) references (however expressed) to him in his capacity as a director of the company include him in his capacity as an employee of the company, but
- (b) (apart from that) he is not to be treated as an employee of the company.
- (5) Section 312(1A)(a) applies to determine the relevant period for the purposes of this section and sections 291A and 291B.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Parallel trades
##### 292
- (1) An individual is not eligible for relief in respect of any shares in a company if, at the date mentioned in subsection (2) below—
- (a) he is one of a group of persons—
- (i) who control the company; or
- (ii) to whom belongs an interest amounting in the aggregate to more than a half share in the trade carried on by the company;
- (b) he is also an individual, or one of a group of persons—
- (i) controlling another company; or
- (ii) to whom belongs an interest amounting in the aggregate to more than a half share in another trade; and
- (c) the trade carried on by the company, or a substantial part of it—
- (i) is concerned with the same or similar types of property or parts thereof or provides the same or similar services or facilities; and
- (ii) serves substantially the same or similar outlets or markets;
as the other trade or (as the case may be) the trade carried on by the other company.
- (2) The date mentioned in subsection (1) above is—
- (a) the date on which the shares are issued; or
- (b) if later, the date on which the company begins to carry on the trade.
- (3) For the purposes of subsection (1) above—
- (a) the persons to whom a trade belongs, and (where a trade belongs to two or more persons) their respective shares in that trade, shall be determined in accordance with section 344(1)(a) and (b), (2) and (3); and
- (b) any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person.
- (4) For the purposes of this section—
- (a) references to a company’s trade include references to the trade of any company which is a 51 per cent. subsidiary of that company on the date referred to in subsection (2) above; and
- (b) “*trade*” in the expressions “*another trade*”, “*other trade*” and “*trade carried on by the other company*” includes any business, profession or vocation.
- (5) This section shall not apply where the shares mentioned in subsection (1) above are issued on or after 29th November 1994.
#### Qualifying companies
##### 293
- (1) Subject to section 294, a company is a qualifying company (whether it is resident in the United Kingdom or elsewhere) if it complies with the requirements of this section.
- (1A) At the beginning of the relevant period, the company must be—
- (a) an unquoted company, and
- (b) a company to which subsection (1B) below does not apply.
- (1B) This subsection applies to a company—
- (a) if arrangements are in existence for it to cease to be an unquoted company; or
- (b) if—
- (i) arrangements are in existence for it to become a subsidiary of another company (“*the new company*”) by virtue of an exchange of shares, or shares and securities, in relation to which section 304A (certain exchanges resulting in acquisition of share capital by new company) applies, and
- (ii) arrangements have been made with a view to the new company ceasing to be an unquoted company.
- (2) The company must, throughout the relevant period, . . . be—
- (a) a company which exists wholly for the purpose of carrying on one or more qualifying trades or which so exists apart from purposes capable of having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities, or
- (aa) the parent company of a trading group.
- (3) In this section “*qualifying subsidiary*”, in relation to a company, means a subsidiary of a kind which that company may hold by virtue of section 308.
- (3A) For the purposes of this section a company is the parent company of a trading group if—
- (a) it has one or more subsidiaries;
- (b) each of its subsidiaries is a qualifying subsidiary of the company; and
- (c) the requirements of subsection (3B) below are fulfilled by what would be the business of the company and its subsidiaries if all the activities, taken together, of the company and its subsidiaries were regarded as one business.
- (3B) A business fulfils the requirements of this subsection if neither the business nor a substantial part of it consists in, or in either of, the following, that is to say—
- (a) activities falling within section 297(2)(a) to (g) but not within subsection (3C) below; and
- (b) activities (other than research and development . . .) carried on otherwise than in the course of a trade.
- (3C) The activities falling within this subsection are—
- (a) the receiving of royalties or licence fees in circumstances where the requirements mentioned in paragraphs (a) and (b) of section 297(4) or (5) are the requirement mentioned in section 297(4) is satisfied in relation to the company receiving them;
- (b) the letting of ships, other than offshore installations or pleasure craft, on charter in circumstances where the requirements mentioned in paragraphs (a) to (d) of section 297(6) are satisfied in relation to the company so letting them.
- (3D) Activities of a company or of any of its subsidiaries shall be disregarded for the purposes of subsections (3A) to (3C) above to the extent that they consist in—
- (a) the holding of shares in or securities of, or the making of loans to, one or more of the company’s subsidiaries; or
- (b) the holding and managing of property used by the company or any of its subsidiaries for the purposes of—
- (i) research and development from which it is intended that a qualifying trade to be carried on by the company or any of its subsidiaries will be derived; or
- (ii) one or more qualifying trades so carried on.
- (3E) Activities of a subsidiary of a company shall also be disregarded for the purposes of subsections (3A) to (3C) above to the extent that they consist in—
- (a) the making of loans to the company; or
- (b) in the case of a mainly trading subsidiary, activities carried on otherwise than in pursuance of its main purpose.
- (3F) For the purposes of subsection (3E) above—
- (a) “*mainly trading subsidiary*” means a subsidiary which, apart from purposes capable of having no significant effect (other than in relation to incidental matters) on the extent of its activities, exists wholly for the purpose of carrying on one or more qualifying trades; and
- (b) that purpose shall be taken to be its main purpose.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) A company . . . shall not be regarded as ceasing to comply with subsection (2) above by reason only of anything done as a consequence of the company, or any of its subsidiaries, being in administration or receivership.
This subsection has effect subject to subsection (4B) and subsection (5) below.
- (4B) Subsection (4A) applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company concerned being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (5) Without prejudice to the generality of subsection (2) above, but subject to subsection (6) below, a company ceases to comply with that subsection if before the end of the relevant period a resolution is passed, or an order is made, for the winding up of the company or any of its subsidiaries (or, in the case of a winding up otherwise than under the Insolvency Act 1986 or the Companies (Northern Ireland) Order 1986, any other act is done for the like purpose) or the company or any of its subsidiaries is dissolved without winding up.
- (6) A company shall not be regarded as ceasing to comply with subsection (2) above if it does so by reason only of the company or any of its subsidiaries being wound up or dissolved without winding up and—
- (a) . . . the winding up or dissolution is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6ZA) The company must not at any time in the relevant period have a property managing subsidiary which is not a qualifying 90% subsidiary of the company.
- (6ZB) “*Property managing subsidiary*” means a subsidiary of the company whose business consists wholly or mainly in the holding or managing of land or any property deriving its value from land.
- (6ZC) In subsection (6ZB) above, “*land*” and “*property deriving its value from land*” have the same meaning as in section 776.
- (6A) The value of the relevant assets—
- (a) must not exceed £7 million immediately before the issue of the eligible shares; and
- (b) must not exceed £8 million immediately afterwards.
- (6B) Subject to subsection (6C) below, the reference in subsection (6A) above to the value of the relevant assets is a reference—
- (a) in relation to a time when the company did not have any qualifying subsidiaries, to the value of the gross assets of the company at that time; and
- (b) in relation to any other time, to the aggregate value at that time of the gross assets of all the companies in the company’s group.
- (6C) For the purposes of subsection (6B) above assets of any member of the company’s group that consist in rights against, or in shares in or securities of, another member of the group shall be disregarded.
- (6D) In subsections (6B) and (6C) above references, in relation to any time, to the company’s group are references to the company and its qualifying subsidiaries at that time.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Subject to section 304A, the company must not at any time in the relevant period—
- (a) control (whether on its own or together with any person connected with it) any company which is not a qualifying subsidiary, or
- (b) be—
- (i) a 51% subsidiary of another company, or
- (ii) under the control of another company (or of another company and any other person connected with that other company), without being a 51% subsidiary of that other company,
and no arrangements must be in existence at any time in that period by virtue of which the company could fall within paragraph (a) or (b) above (whether during that period or otherwise).
- (8AA) In subsection (8)(b) above “*control*” has the meaning given by section 840.
- (8A) Section 312(1A)(b) applies to determine the relevant period for the purposes of this section and sections 294, 295 and 296.
- (8B) In arriving at the relevant period for the purposes of sections 294 to 296 any time falling on or after 29th November 1994 shall be ignored; and subsection (8A) above shall have effect subject to the preceding provisions of this subsection.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies with interests in land
##### 294
- (1) Subject to section 296, a company is not a qualifying company in relation to any shares if at any time during the relevant period—
- (a) the value of the interests in land held by the company at that time; or
- (b) where lower, the value of the interests in land which were held by the company immediately after the issue of the shares (adjusted in accordance with section 295);
is greater than half the value of the company’s assets as a whole.
- (2) For the purposes of this section, the value of the interests in land held by a company on any date shall be arrived at by first aggregating the market value on that date of each of those interests and then deducting—
- (a) the amount of any debts of the company which are secured on any of those interests (including any debt secured by a floating charge on property which comprises any of those interests);
- (b) the amount of any unsecured debts of the company which do not fall due for payment before the expiry of the period of 12 months beginning with that date; and
- (c) the amount paid up in respect of those shares of the company (if any) which carry a present or future preferential right to the company’s assets on its winding up.
- (3) For the purposes of this section, the value of a company’s assets as a whole shall be arrived at by first aggregating the market value of each of those assets and then deducting the amount of the debts and liabilities of the company.
- (4) For the purposes of subsection (3) above, the amount paid up in respect of those shares of a company (if any) which carry a present or future preferential right to the company’s assets on its winding up shall be treated as a debt of the company, but otherwise a company’s share capital, share premium account and reserves shall not be treated for those purposes as debts or liabilities of the company.
- (5) In this section “*interest in land*” means any estate or interest in land, any right in or over land or affecting the use or disposition of land, and any right to obtain such an estate, interest or right from another which is conditional on that other’s ability to grant the estate, interest or right in question, except that it does not include—
- (a) the interest of a creditor (other than a creditor in respect of a rentcharge) whose debt is secured by way of a mortgage, an agreement for a mortgage or a charge of any kind over land; or
- (b) in Scotland, the interest of a creditor in a charge or security of any kind over land.
- (5A) For the purposes of this section, the value of an interest in any building or other land shall be adjusted by deducting the market value of any machinery or plant which is so installed or otherwise fixed in or to the building or other land as to become, in law, part of it.
- (6) In arriving at the value of any interest in land for the purposes of this section—
- (a) it shall be assumed that there is no source of mineral deposits in the land of a kind which it would be practicable to exploit by extracting them from underground otherwise than by means of opencast mining or quarrying; and
- (b) any borehole on the land shall be disregarded if it was made in the course of oil exploration.
- (7) Where a company is a member of a partnership which holds any interest in land—
- (a) that interest shall, for the purposes of this section and sections 295 and 296, be treated as an interest in land held by the company; but
- (b) its value at any time shall, for those purposes, be taken to be such fraction of its value (apart from this subsection) as is equal to the fraction of the assets of the partnership to which the company would be entitled if the partnership were dissolved at that time.
- (8) Where a qualifying company has one or more subsidiaries, the company and its subsidiaries (“*the group*”) shall be treated as a single company for the purposes of this section and sections 295 and 296; but any debt owed by, or liability of, one member of the group to another shall be disregarded for those purposes.
- (9) The Treasury may by order amend subsection (1) above by substituting a different fraction for the fraction for the time being specified there.
#### Valuation of interests in land for purposes of section 294(1)(b)
##### 295
- (1) For the purposes of section 294(1)(b), the value of the interests in land held by a company immediately after the issue of the shares in question (“*the original interests*”) shall be adjusted by—
- (a) adding—
- (i) the cost of any interests in land subsequently acquired by the company (“*the later interests*”); and
- (ii) any expenditure (whenever payable) incurred by the company wholly and exclusively in enhancing the value of any of the original or later interests;
- (b) deducting any consideration received by the company on the disposal of any of the original or later interests or on the grant by the company of any interest in land out of any of those interests;
- (c) deducting any consideration otherwise derived by the company from its ownership of any of the original or later interests.
- (2) Any sum which is received by a company by way of rent, or which is attributable to the use of any premises by the company, shall be disregarded for the purposes of subsection (1)(c) above.
- (3) For the purposes of this section—
- (a) the cost of an interest in land acquired by a company shall be taken to be the amount or value of the consideration given by the company, or on its behalf, wholly and exclusively for the acquisition of the interest;
- (b) consideration shall be brought into account without any discount for the postponement of the right to receive any part of it; and
- (c) the grant of an interest in land out of any of the original interests shall be treated as a disposal of the original interest in question.
- (4) Where—
- (a) the interest of a company as lessee under a lease (“*the lease*”) falls to be valued at any time for the purposes of section 294 or the cost of acquiring that interest falls to be calculated for the purposes of this section; and
- (b) the aggregate amount of the rent payable by the lessee under the lease before the end of the relevant period exceeds that which would be so payable under a lease of the premises at a full market rent (but otherwise on the same terms and conditions as the lease);
the value of the company’s interest at that time shall be calculated on the assumption that the aggregate amount payable as mentioned in paragraph (b) above is a nominal amount and, where the interest was acquired after the issue of the shares in question, it shall be assumed that the company paid the appropriate premium when acquiring the interest.
- (5) In determining, for the purposes of this section, the consideration for the disposal or acquisition of an interest in land, no account shall be taken in the first instance of any contingent liability assumed by the company or by any other person.
- (6) If it is subsequently shown to the satisfaction of the Board that a contingent liability which was not taken into account in determining the consideration for a disposal or acquisition has become enforceable and is being or had been enforced, such adjustment, whether by way of a further assessment or the discharge or repayment of tax or otherwise, shall be made as is required in consequence.
- (7) Where the relief obtainable under subsection (6) above requires a discharge or repayment of tax, it shall be given on a claim to the Board and such a claim may be made at any time.
#### Section 294 disapplied where amounts raised total £50,000 or less
##### 296
- (1) Where a company raises any amount through the issue of eligible shares, section 294—
- (a) shall not have effect to deny relief in relation to those shares if the aggregate of that amount and of all other amounts (if any) so raised within the period of 12 months ending with the date of that issue does not exceed £50,000; and
- (b) where that aggregate exceeds £50,000, shall have effect to deny relief only in relation to the excess.
- (2) Where—
- (a) at any time within the relevant period, the company in question or any of its subsidiaries carries on any trade or part of a trade in partnership, or as a party to a joint venture, with one or more other persons; and
- (b) that other person, or at least one of those other persons, is a company;
each reference to £50,000 in subsection (1)(a) and (b) above shall have effect as if it were a reference to—
$$£50,0001+A$where A is the total number of companies (apart from the company in question or any of its subsidiaries) which are members of any such partnership or parties to any such joint venture during the relevant period.$
- (3) Where section 294, as read with this section, requires a restriction to be placed on the relief given on claims in respect of shares issued to two or more individuals, the available relief shall be divided between them in proportion to the amounts which have been respectively subscribed by them for the shares to which their claims relate and which would, apart from the restrictions, be eligible for the relief.
- (4) A claimant who is dissatisfied with the manner in which the available relief is divided under this section between him and any other claimant or claimants may apply to the appropriate Commissioners who shall, after giving the other claimant or claimants an opportunity to appear and be heard or to make representations in writing, determine the question for all the claimants in the same way as an appeal.
- (5) In this section “*the appropriate Commissioners*” means—
- (a) in a case where the same body of General Commissioners has jurisdiction with respect to all the claimants, those Commissioners, unless all the claimants agree that the question should be determined by the Special Commissioners;
- (b) in a case where different bodies of General Commissioners have jurisdiction with respect to the claimants, such of those bodies as the Board may direct, unless all the claimants agree that the question should be determined by the Special Commissioners;
- (c) in any other case, the Special Commissioners.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trades
##### 297
- (1) . . . A trade is a qualifying trade if it complies with the requirements of this section.
- (2) Subject to subsection (9) below, the trade must not at any time in the relevant period consist of one or more of the following activities if that activity amounts, or those activities when taken together amount, to a substantial part of the trade—
- (a) dealing in land, in commodities or futures or in shares, securities or other financial instruments;
- (b) dealing in goods otherwise than in the course of an ordinary trade of wholesale or retail distribution;
- (c) banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) leasing (including letting ships on charter or other assets on hire) or receiving royalties or licence fees;
- (f) providing legal or accountancy services;
- (fa) property development;
- (fb) farming or market gardening;
- (fc) holding, managing or occupying woodlands, any other forestry activities or timber production;
- (fd) operating or managing hotels or comparable establishments or managing property used as an hotel or comparable establishment;
- (fe) operating or managing nursing homes or residential care homes, or managing property used as a nursing home or residential care home;
- (g) providing services or facilities for any trade carried on by another person (other than a company of which the company providing the services or facilities is the subsidiary) which consists to any substantial extent of activities within any of paragraphs (a) to (fe) above and in which a controlling interest is held by a person who also has a controlling interest in the trade carried on by the company;
- (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) For the purposes of subsection (2)(b) above—
- (a) a trade of wholesale distribution is one in which the goods are offered for sale and sold to persons for resale by them, or for processing and resale by them, to members of the general public for their use or consumption;
- (b) a trade of retail distribution is one in which the goods are offered for sale and sold to members of the general public for their use or consumption;
- (c) a trade is not an ordinary trade of wholesale or retail distribution if—
- (i) it consists to a substantial extent of dealing in goods of a kind which are collected or held as an investment or of that activity and any other activity of a kind falling within subsection (2)(a) to (g) above, taken together; and
- (ii) a substantial proportion of those goods are held by the company for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value; and
- (d) in determining whether a trade is an ordinary trade of wholesale or retail distribution regard shall be had to the extent to which it has the following features, that is to say—
- (i) the goods are bought by the trader in quantities larger than those in which he sells them;
- (ii) the goods are bought and sold by the trader in different markets;
- (iii) the trader employs staff and incurs expenses in the trade in addition to the cost of the goods and, in the case of a trade carried on by a company, in addition to any remuneration paid to any person connected with it;
- (iv) there are purchases or sales from or to persons who are connected with the trader;
- (v) purchases are matched with forward sales or vice versa;
- (vi) the goods are held by the trader for longer than is normal for goods of the kind in question;
- (vii) the trade is carried on otherwise than at a place or places commonly used for wholesale or retail trade;
- (viii) the trader does not take physical possession of the goods;
those features in sub-paragraphs (i) to (iii) being regarded as indications that the trade is such an ordinary trade and those in sub-paragraphs (iv) to (viii) being regarded as indications of the contrary.
- (3A) For the purposes of this Chapter the activities of a person shall not be taken to fall within paragraph (fd) or (fe) of subsection (2) above except where that person has an estate or interest in, or is in occupation of, the hotels or comparable establishments or, as the case may be, the nursing homes or residential care homes.
- (4) A trade shall not be treated as failing to comply with this section by reason only that at some time in the relevant period it consists to a substantial extent in the receiving of royalties or licence fees if the royalties and licence fees (or all but for a part that is not a substantial part in terms of value) are attributable to the exploitation of relevant intangible assets.
- (5) For this purpose an intangible asset is a “*relevant intangible asset*” if the whole or greater part (in terms of value) of it has been created—
- (a) by the company carrying on the trade, or
- (b) by a company which at all times during which it created the intangible asset was—
- (i) the parent company of the company carrying on the trade, or
- (ii) a qualifying subsidiary of that parent company.
- (5A) For the purposes of subsection (5) above—
- (a) in the case of an intangible asset that is intellectual property, references to the creation of the asset by a company are to its creation in circumstances in which the right to exploit it vests in the company (whether alone or jointly with others);
- (b) “*parent company*” means a company that—
- (i) has one or more 51% subsidiaries, but
- (ii) is not itself a 51% subsidiary of another company; and
- (c) a subsidiary of the parent company referred to in subsection (5)(b) above is a “qualifying subsidiary" of that company if it is a subsidiary of a kind which the parent company may hold by virtue of section 308.
For the purposes of paragraph (c) above, section 308 shall have effect as if the references in that section to the qualifying company were to that parent company.
- (5B) For the purposes of subsections (4) to (5A) above “*intangible asset*” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accounting practice.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5C) In subsection (5A)(a) above “*intellectual property*” means—
- (a) any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right; and
- (b) any rights under the law of a country or territory outside the United Kingdom which correspond or are similar to those falling within paragraph (a) above.
- (6) A trade shall not be treated as failing to comply with this section by reason only of its consisting of letting ships, other than offshore installations or pleasure craft, on charter if—
- (a) every ship let on charter by the company carrying on the trade is beneficially owned by the company;
- (b) every ship beneficially owned by the company is registered in the United Kingdom; and
- (c) throughout the relevant period the company is solely responsible for arranging the marketing of the services of its ships; and
- (d) the conditions mentioned in subsection (7) below are satisfied in relation to every letting on charter by the company;
but where any of the requirements mentioned in paragraphs (a) to (d) above are not satisfied in relation to any lettings of such ships, the trade shall not thereby be treated as failing to comply with this section if those lettings and any other activity of a kind falling within subsection (2)(a) to (g) above do not, when taken together, amount to a substantial part of the trade.
- (7) The conditions are that—
- (a) the letting is for a period not exceeding 12 months and no provision is made at any time (whether in the lease or otherwise) for extending it beyond that period otherwise than at the option of the lessee;
- (b) during the period of the letting there is no provision in force (whether made in the lease or otherwise) for the grant of a new letting to end, otherwise than at the option of the lessee, more than 12 months after that provision is made;
- (c) the letting is by way of a bargain made at arm’s length between the company and a person who is not connected with it;
- (d) under the terms of the charter the company is responsible as principal—
- (i) for taking, throughout the period of the charter, management decisions in relation to the ship, other than those of a kind generally regarded by persons engaged in trade of the kind in question as matters of husbandry; and
- (ii) for defraying all expenses in connection with the ship throughout that period, or substantially all such expenses, other than those directly incidental to a particular voyage or to the employment of the ship during that period; and
- (e) no arrangements exist by virtue of which a person other than the company may be appointed to be responsible for the matters mentioned in paragraph (d) above on behalf of the company;
but this subsection shall have effect, in relation to any letting between the company in question and its subsidiary, or between it and another company of which it is a subsidiary or between it and a company which is a subsidiary of the same company of which it is a subsidiary, as if paragraph (c) were omitted.
- (8) The trade must, during the relevant period, be conducted on a commercial basis and with a view to the realisation of profits.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 293 and 297
##### 298
- (1) For the purposes of section 297 a person has a controlling interest in a trade—
- (a) in the case of a trade carried on by a company, if—
- (i) he controls the company;
- (ii) the company is a close company and he or an associate of his is a director of the company and the beneficial owner of, or able directly or through the medium of other companies or by any other indirect means to control, more than 30 per cent. of the ordinary share capital of the company; or
- (iii) not less than half of the trade could in accordance with section 344(2) be regarded as belonging to him;
- (b) in any other case, if he is entitled to not less than half of the assets used for, or the income arising from, the trade.
- (2) For the purposes of subsection (1) above, there shall be attributed to any person any rights or powers of any other person who is an associate of his.
- (3) References in this section and section 297 to a trade shall be construed without regard to so much of the definition of “*trade*” in section 832(1) as relates to adventures or concerns in the nature of trade; but the foregoing provisions do not affect the construction of references in section 297(2)(g) or subsection (1) above to a trade carried on by a person other than the company and those references shall be construed as including a reference to any business, profession or vocation.
- (4) The Treasury may by order amend sections 293 and 297 and this section in such manner as they consider expedient.
- (5) In section 297—
- “*film*” means an original master negative of a film, an original master film disc or an original master film tape;
- “*nursing home*” means any establishment which exists wholly or mainly for the provision of nursing care for persons suffering from sickness, injury or infirmity or for women who are pregnant or have given birth to children;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*pleasure craft*” means any ship of a kind primarily used for sport or recreation;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*property development*” means the development of land—by a company which has, or at any time has had, an interest in the land, andwith the sole or main object of realising a gain from the disposal of an interest in the land when it is developed;
- “*residential care home*” means any establishment which exists wholly or mainly for the provision of residential accommodation, together with board and personal care, for persons in need of personal care by reason of old age, mental or physical disabilities, past or present dependence on alcohol or drugs or any past illnesses or past or present mental disorders; and
- “*sound recording*” means, in relation to a film, its sound track, original master audio disc or, as the case may be, original master audio tape,
and section 312(1A)(b) shall apply to determine the relevant period for the purposes of that section.
- (5A) References in this section, in relation to an hotel, to a comparable establishment are references to a guest house, hostel or other establishment the main purpose of maintaining which is the provision of facilities for overnight accommodation (whether with or without catering services).
- (5B) Subject to subsection (5C) below, the reference in subsection (5) above to an interest in land is a reference to—
- (a) any estate, interest or right in or over land, including any right affecting the use or disposition of land; or
- (b) any right to obtain such an estate, interest or right from another which is conditional on the other’s ability to grant the estate, interest or right.
- (5C) References in this section to an interest in land do not include references to—
- (a) the interest of a creditor (other than a creditor in respect of a rentcharge) whose debt is secured by way of mortgage, an agreement for a mortgage or a charge of any kind over land; or
- (b) in the case of land in Scotland, the interest of a creditor in a charge or security of any kind over land.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal of shares
##### 299
- (1) Subject to section 304(1), where an individual makes, before the end of the relevant period, any disposal of eligible shares to which relief is attributable, then—
- (a) if the disposal is made otherwise than by way of a bargain made at arm’s length, the relief attributable to those shares shall be withdrawn, and
- (b) in the case of any disposal made by way of a bargain made at arm’s length—
- (i) if, apart from this subsection, the relief attributable to those shares is greater than the amount mentioned in subsection (2) below, it shall be reduced by that amount, and
- (ii) if sub-paragraph (i) above does not apply, the relief attributable to those shares shall be withdrawn.
- (2) The amount referred to in subsection (1) above is an amount equal to tax at the lower rate for the year of assessment for which the relief was given on the amount or value of the consideration which the individual receives for the shares.
- (3) Where, in relation to any issue of eligible shares held by any individual, the disposal referred to in subsection (1) above is a disposal of part of the issue, that subsection shall apply to the relief that was attributable to that part.
- (4) Where an individual’s liability to income tax has been reduced in any year of assessment under section 289A in respect of any issue of eligible shares issued in that year (or treated by section 289B(5) as so issued) and the amount of the reduction (“A”) is less than the amount (“B”) which is equal to tax at the lower rate for that year on the amount subscribed for the issue, subsection (2) above shall have effect as if the amount or value referred to in that subsection were reduced by multiplying it by the fraction—
$AB$
- (5) Where an option, the exercise of which would bind the grantor to purchase any shares, is granted to an individual during the relevant period, any relief attributable to the shares to which the option relates shall be withdrawn.
- (5A) The shares to which such an option relates shall be taken to be those which, if—
- (a) the option were exercised immediately after the grant, and
- (b) any shares in the company acquired by the individual after the grant were disposed of immediately after being acquired,
would be treated for the purposes of this section as disposed of in pursuance of the option.
- (6) Where shares of any class in a company have been acquired by an individual on different days, any disposal by him of shares of that class shall be treated for the purposes of this section as relating to those acquired on an earlier day rather than to those acquired on a later day.
- (6A) Where shares of any class in a company have been acquired by an individual on the same day, any of those shares disposed of by him shall be treated for the purposes of this section as disposed of in the following order, namely—
- (a) first any to which neither relief under this Chapter nor deferral relief is attributable;
- (b) next any to which deferral relief, but not relief under this Chapter, is attributable;
- (c) next any to which relief under this Chapter, but not deferral relief, is attributable; and
- (d) finally any to which both relief under this Chapter and deferral relief are attributable;
and in this subsection and subsection (6C) below “*deferral relief*” has the same meaning as in Schedule 5B to the 1992 Act.
- (6B) Any shares falling within paragraph (c) or (d) of subsection (6A) above which are treated by section 289B(5) as issued on an earlier day shall be treated as disposed of before any other shares falling within that paragraph.
- (6C) The following, namely—
- (a) any shares to which relief under this Chapter is attributable and which were transferred to an individual as mentioned in section 304, and
- (b) any shares to which deferral relief, but not relief under this Chapter, is attributable and which were acquired by an individual on a disposal to which section 58 of the 1992 Act applies,
shall be treated for the purposes of subsections (6) and (6A) above as acquired by him on the day on which they were issued.
- (6D) In a case to which section 127 of the 1992 Act applies (whether or not by virtue of section 135(3) of that Act) (including a case where that section applies by virtue of any enactment relating to chargeable gains), shares comprised in the new holding shall be treated for the purposes of subsections (6) and (6A) above as acquired when the original shares were acquired.
In this subsection “*new holding*” and “*original shares*”shall be construed in accordance with sections 126, 127, 135 and 136 of the 1992 Act have the same meaning as in section 127 of the 1992 Act (or, as the case may be, that section as applied by virtue of the enactment concerned).
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this section—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) references to a disposal of shares include references to the grant of an option the exercise of which would bind the grantor to sell the shares, and
- (c) section 312(1A)(a) applies to determine the relevant period.
#### Value received from company
##### 300
- (1) Subsection (1A) below applies where an individual who subscribes for eligible shares in a company receives any value (other than insignificant value) from the company at any time in the period of restriction.
- (1A) Where any relief is attributable to those shares, then (unless the amount of the relief has already been reduced on account of the value received)—
- (a) if it is greater than the amount mentioned in subsection (1B) below, it shall be reduced by that amount, and
- (b) if paragraph (a) above does not apply, the relief shall be withdrawn.
- (1AA) This section is subject to section 300A.
- (1B) The amount referred to in subsection (1A) above is an amount equal to tax at the lower rate for the year of assessment for which the relief was given on the amount of the value received; and section 299(4) above applies for the purposes of this subsection as it applies for the purposes of subsection (2) of that section.
- (1BA) Where—
- (a) an individual subscribes for two or more issues of eligible shares in a company, being issues comprising shares in respect of which the individual obtains relief, and
- (b) the individual receives any value from the company at any time in the periods of restriction relating to the shares comprised in two or more of those issues,
this section has effect in relation to the shares comprised in each of the issues referred to in paragraph (b) above as if the amount of the value received were reduced by multiplying it by the fraction specified in subsection (1BB) below.
- (1BB) The fraction is—
$$AB$where—A is the amount subscribed by the individual for the eligible shares comprised in the issue in question, andB is the aggregate of that amount and the corresponding amount or amounts for eligible shares comprised in the other issue or issues.$
- (1BC) Where—
- (a) an individual who subscribes for eligible shares in a company receives value (“*the relevant receipt*”) from the company during the period of restriction,
- (b) the individual has received from the company one or more receipts of insignificant value at a time or times—
- (i) during that period, but
- (ii) not later than the time of the relevant receipt, and
- (c) the aggregate amount of the value of the receipts within paragraphs (a) and (b) above is not an amount of insignificant value,
the individual shall be treated for the purposes of this Chapter as if the relevant receipt had been a receipt of an amount of value equal to the aggregate amount.
For this purpose a receipt does not fall within paragraph (b) above if it has previously been aggregated under this subsection.
- (1C) Any reference in subsection (1), (1BA) or (1BC) above to the receipt of value (however expressed) from a company includes a reference to the receipt of value from a person who at any time in the relevant period is connected with the company, whether or not he is so connected at the time when the individual concerned receives the value from him; and other references to the company in this section and section 301 shall be read accordingly.
- (1D) Notwithstanding anything in subsection (2) below, for the purposes of this section an individual is not to be treated as receiving value from a company by reason only of the payment to him, or any associate of his, of any remuneration for services rendered to the company as a director if the remuneration is reasonable remuneration.
- (1E) Section 291(4) applies for the purposes of subsection (1D) above as it applies for the purposes of section 291A, and the reference in subsection (1D) above to the payment of remuneration includes the provision of any benefit or facility
- (2) For the purposes of this section an individual receives value from the company if the company—
- (a) repays, redeems or repurchases any of its share capital or securities which belong to the individual or makes any payment to him for giving up his right to any of the company’s share capital or any security on its cancellation or extinguishment;
- (b) repays, in pursuance of any arrangements for or in connection with the acquisition of the shares in respect of which the relief is claimed, any debt owed to the individual other than a debt which was incurred by the company—
- (a) on or after the date of issue of those shares; and
- (b) otherwise than in consideration of the extinguishment of a debt incurred before that date;
- (c) makes to the individual any payment for giving up his right to any debt (other than a debt in respect of a payment of the kind mentioned in section 291A(3)(a) or (f) or an ordinary trade debt) on its extinguishment;
- (d) releases or waives any liability of the individual to the company or discharges, or undertakes to discharge, any liability of his to a third person;
- (e) makes a loan or advance to the individual which has not been repaid in full before the issue of the shares in respect of which relief is claimed;
- (f) provides a benefit or facility for the individual;
- (g) transfers an asset to the individual for no consideration or for consideration less than its market value or acquires an asset from him for consideration exceeding its market value; or
- (h) makes to him any other payment except a payment of the kind mentioned in any of the paragraphs of section 291A(3) or a payment in discharge of an ordinary trade debt.
- (3) For the purposes of this section an individual also receives value from the company if he receives in respect of ordinary shares held by him any payment or asset in a winding up or in connection with a dissolution of the company, being a winding up or dissolution falling within section 293(6).
- (4) The value received by an individual is—
- (a) in a case within paragraph (a), (b) or (c) of subsection (2) above, the amount received by the individual or, if greater, the market value of the shares, securities or debt in question;
- (b) in a case within paragraph (d) of that subsection, the amount of the liability;
- (c) in a case within paragraph (e) of that subsection, the amount of the loan or advance reduced by the amount of any repayment made before the issue of the shares in respect of which relief is claimed;
- (d) in a case within paragraph (f) of that subsection, the cost to the company of providing the benefit or facility less any consideration given for it by the individual;
- (e) in a case within paragraph (g) of that subsection, the difference between the market value of the asset and the consideration (if any) given for it;
- (f) in a case within paragraph (h) of that subsection, the amount of the payment; and
- (g) in a case within subsection (3) above, the amount of the payment or, as the case may be, the market value of the asset.
- (5) For the purposes of this section an individual also receives value from the company if any person who would, for the purposes of section 291, be treated as connected with the company—
- (a) purchases any of its share capital or securities which belong to the individual; or
- (b) makes any payment to him for giving up any right in relation to any of the company’s share capital or securities;
and the value received by the individual is the amount received by the individual or, if greater, the market value of the shares or securities in question.
- (6) Where by reason of an individual’s disposal of shares in a company any relief attributable to those shares is withdrawn or reduced under section 299, the individual shall not be treated for the purposes of this section as receiving value from the company in respect of the disposal.
#### Provisions supplementary to section 300
##### 301
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) For the purposes of section 300(2)(d) a company shall be treated as having released or waived a liability if the liability is not discharged within 12 months of the time when it ought to have been discharged.
- (4) For the purposes of section 300(2)(e) there shall be treated as if it were a loan made by the company to the individual—
- (a) the amount of any debt (other than an ordinary trade debt) incurred by the individual to the company; and
- (b) the amount of any debt due from the individual to a third person which has been assigned to the company.
- (4A) For the purposes of this section and sections 300 and 300A, an individual who acquires any eligible shares on such a transfer as is mentioned in section 304 shall be treated as if he subscribed for those shares.
- (5) In this section and sections 300 and 300A, “*an ordinary trade debt*” means any debt for goods or services supplied in the ordinary course of a trade or business where any credit given does not exceed six months and is not longer than that normally given to the customers of the person carrying on the trade or business.
- (6) In this section and section 300—
- (a) any reference to a payment or transfer to an individual includes a reference to a payment or transfer made to him indirectly or to his order or for his benefit; and
- (b) any reference to an individual includes a reference to an associate of his and any reference to the company includes a reference to any person connected with the company.
- (6A) Section 312(1A)(a) applies to determine the relevant period for the purposes of section 300.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Replacement capital
##### 302
- (1) Any relief attributable to any shares in a company held by an individual shall be withdrawn if—
- (a) at any time in the relevant period, the company or any subsidiary—
- (i) begins to carry on as its trade or as part of its trade a trade which was previously carried on at any time in that period otherwise than by the company or any subsidiary, or
- (ii) acquires the whole, or a greater part, of the assets used for the purposes of a trade previously so carried on, and
- (b) subsection (2) below applies in relation to that individual
- (2) This subsection applies in relation to an individual where—
- (a) any person or group of persons to whom an interest amounting in the aggregate to more than a half share in the trade (as previously carried on) belonged, at any time in the relevant period, is or are a person or group of persons to whom such an interest in the trade carried on by the company belongs or has, at any such time, belonged; or
- (b) any person or group of persons who control or, at any such time, have controlled the company is or are a person or group of persons who, at any such time, controlled another company which previously carried on the trade;
and the individual is that person or one of those persons.
- (3) Any relief attributable to any shares in a company held by an individual shall be withdrawn if—
- (a) the company comes to acquire all of the issued share capital of another company, at any time in the relevant period; and
- (b) any person or group of persons who control or have, at any such time, controlled the company is or are a person or group of persons who, at any such time, controlled that other company;
and that individual is that person or one of those persons.
- (4) For the purposes of subsection (2) above—
- (a) the persons to whom a trade belongs and, where a trade belongs to two or more persons, their respective shares in that trade shall be determined in accordance with section 344(1)(a) and (b), (2) and (3); and
- (b) any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person.
- (4A) In determining whether any relief attributable to any shares in a company (the “*issuing company*”) held by a person who—
- (a) is a director of, or of a company which is a partner of, the issuing company or any subsidiary, and
- (b) is in receipt of, or entitled to receive, remuneration as such a director falling within section 291A(5)(a),
is to be withdrawn, the second reference in paragraph (b) of each of subsections (2) and (3) above and, so far as relating to those paragraphs, in subsection (1)(a)(i) above to any time in the relevant period shall be read as a reference to any time before the end of the relevant period.
- (4B) Section 291(4) applies for the purposes of subsection (4A) above as it applies for the purposes of section 291A, and in subsection (4A) above “*remuneration*” includes any benefit or facility.
- (5) In this section—
- “*subsidiary*” means a company which would be a subsidiary if the relevant period for the purposes of section 308 were the period referred to in section 312(1A)(a); and
- “*trade*” includes any business, profession or vocation, and references to a trade previously carried on include references to part of such a trade;
and section 312(1A)(a) applies to determine the relevant period for the purposes of this section.
#### Value received by persons other than claimants
##### 303
- (1) Where, in the case of an issue of eligible shares in a company, any relief is attributable to any shares comprised in the issue which are held by an individual, subsection (1A) below shall apply if at any time in the period of restriction the company or any subsidiary—
- (a) repays, redeems or repurchases any of its share capital which belongs to any member other than that individual or a person who falls within subsection (1B) below, or
- (b) makes any payment to any such member for giving up his right to any of the share capital of the company or subsidiary on its cancellation or extinguishment.
- (1A) The relief—
- (a) if it is greater than the amount mentioned in subsection (1C) below, shall be reduced by that amount, and
- (b) if paragraph (a) above does not apply, shall be withdrawn.
- (1AA) This section is subject to sections 303AA and 303A.
- (1B) A person falls within this subsection if the repayment, redemption, repurchase or payment in question—
- (a) causes any relief attributable to his shares in the company to be withdrawn or reduced by virtue of section 299 or 300(2)(a), or
- (b) gives rise to a qualifying chargeable event (within the meaning of paragraph 14(4) of Schedule 5B to the 1992 Act) in respect of him ; or
- (c) causes any investment relief attributable to shares held by that person (within the meaning of Schedule 15 to the Finance Act 2000) to be withdrawn or reduced by virtue of paragraph 46 (disposal of shares) or 49(1)(a) (repayment etc. of share capital or securities) of that Schedule;
or it would have the effect mentioned in paragraph (a), (b) or (c) above were it not a receipt of insignificant value for the purposes of section 300 above, paragraph 13 of Schedule 5B to the 1992 Act or paragraph 47 of the Finance Act 2000, as the case may be.
- (1C) The amount referred to in subsection (1A) above is an amount equal to tax at the lower rate for the year of assessment for which the relief was given—
- (a) where subsection (1) above does not apply in the case of any other individual, on the amount received by the member;
- (b) where that subsection also applies in the case of one or more other individuals, on the appropriate fraction of that amount;
and subsection (4) of section 299 applies for the purposes of this subsection as it applies for the purposes of subsection (2) of that section.
- (1D) In subsection (1C) above “*the appropriate fraction*” is—
$$AB$where—A is the amount subscribed by the individual for eligible shares which are comprised in the issue and to which relief is or, but for subsection (1A)(b) above, would be attributable;B is the aggregate of that amount and the amount or amounts subscribed by the other individual or individuals for such shares.$
- (2) Where the repayment, redemption, repurchase or payment mentioned in subsection (1) above falls within the applicable periods for two or more issues of eligible shares in the company, subsection (1A) above shall have effect in relation to each of those issues as if the amount receivable by the member were reduced by multiplying it by the fraction—
$$CD$where—C is the amount subscribed by individuals for eligible shares which are comprised in the issue and to which relief is or, but for subsection (1A)(b) above, would be attributable;D is the aggregate of that amount and the corresponding amount or amounts for the other issue or issues.$
- (2A) For the purposes of subsection (2) above “*the applicable period*” for an issue of eligible shares is—
- (a) if the shares were issued before 6th April 2000, the period beginning two years before the issue of the shares and ending immediately before the fifth anniversary of the issue date,
- (b) if the shares were issued on or after 6th April 2000 but before 7th March 2001, the period beginning two years before the issue of the shares and ending immediately before the termination date relating to those shares,
- (c) in any other case, the period of restriction for the issue.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Where—
- (a) a company issues share capital (“*the original shares*”) of nominal value equal to the authorised minimum (within the meaning of the Companies Act 1985) for the purposes of complying with the requirements of section 117 of that Act (public company not to do business unless requirements as to share capital complied with); and
- (b) after the registrar of companies has issued the company with a certificate under section 117, it issues eligible shares;
subsection (1) above shall not apply in relation to any redemption of any of the original shares within 12 months of the date on which those shares were issued.
- (9A) References in this section and sections 303AA and 303A to a subsidiary of a company are references to a company which at any time in the relevant period is a 51 per cent. subsidiary of the first mentioned company, whether or not it is such a subsidiary at the time of the repayment, redemption, repurchase or payment in question . . . .
- (9B) Section 312(1A)(a) applies to determine the relevant period for the purposes of this section.
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Husband and wife
##### 304
- (1) Section 299(1) shall not apply to a disposal of shares to which an amount of relief is attributable made by an individual to his spouse or civil partner at a time when they are living together.
- (2) Where such shares issued to one of them (“*the transferor*”) are transferred to the other (“*the transferee*”) by a transaction inter vivos to which that section does not apply, this Chapter shall have effect, in relation to any subsequent disposal or other event, as if—
- (a) the transferee were the person who had subscribed for the shares,
- (b) the transferee’s liability to income tax had been reduced under section 289A in respect of those shares for the same year of assessment as that for which the transferor’s liability was so reduced and, accordingly, that amount of relief had continued to be attributable to the shares notwithstanding the transfer.
- (3) Any assessment for reducing or withdrawing the relief by reason of any such disposal or other event shall be made on the transferee.
- (4) Subsections (6) to (6D) of section 299 shall apply for the purposes of this section as they apply for the purposes of that section.
#### Reorganisation of share capital
##### 305
- (1) Subsection (2) below applies where—
- (a) there is by virtue of any allotment in the relevant period, being such an allotment for payment as is mentioned in section 126(2)(a) of the 1992 Act, a reorganisation affecting ordinary shares,
- (b) immediately before the reorganisation an amount of relief (“*X*”) is attributable to the shares, and
- (c) both—
- (i) the amount subscribed for the shares (“*Z*”), and
- (ii) the market value of the shares immediately before the reorganisation,
exceed the market value of the shares immediately after the reorganisation.
- (2) Where this subsection applies, the relief attributable to the shares shall be reduced by the following amount—
$$XxYZ$where “*Y*” is whichever is the smaller of the amounts by which Z, and the market value of the shares immediately before the reorganisation, exceed the market value of the shares immediately after the reorganisation.$
- (3) Subsection (2) above also applies where—
- (a) an individual, who at any time in the relevant period has received, or become entitled to receive, in respect of any ordinary shares in a company, a provisional allotment of shares in or debentures of the company, disposes of his rights, and
- (b) that subsection would have applied if he had not disposed of the rights but the allotment had been made to him by virtue of those rights.
- (4) Section 312(1A)(a) applies to determine the relevant period for the purposes of this section
- (5) Subsection (2) above shall not apply where the reorganisation occurs on or after 29th November 1994.
- (6) Subsection (2) above shall not apply by virtue of subsection (3) above where the rights are disposed of on or after 29th November 1994.
#### Claims
##### 306
- (1) A claim for relief in respect of eligible shares issued by a company in any year of assessment (or treated by section 289B(5) as so issued) shall be made—
- (a) not earlier than the time the requirement in section 289A(6) is first satisfied; and
- (b) not later than the fifth anniversary of the 31st January next following that year of assessment.
- (2) No claim for relief in respect of eligible shares in a company may be made unless the person making the claim has received from the company a certificate issued by the company in such form as the Board may direct and certifying that , except so far as they fall to be satisfied by that person, the conditions for the relief are satisfied in relation to those shares.
- (3) Before issuing a certificate for the purposes of subsection (2) above a company shall furnish the inspector with a statement to the effect that, except so far as they fall to be satisfied by the persons to whom eligible shares comprised in the share issue have been issued, the conditions for the relief—
- (a) are satisfied in relation to that issue; and
- (b) have been so satisfied at all times since the beginning of the relevant period.
- (3A) A company may not furnish an inspector with a statement in respect of any shares issued in any year of assessment—
- (a) later than two years after the end of that year of assessment, or
- (b) if the period of four months referred to in subsection (1)(a) above ended after the end of that year, later than two years after the end of that period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
- (4) No certificate shall be issued for the purposes of subsection (2) above without the authority of the inspector; but where the company, or a person connected with the company, has given notice to the inspector under section 310(2) or paragraph 16(2) or (4) of Schedule 5B to the 1992 Act, the authority must be given or renewed after the receipt of the notice.
- (5) Any statement under subsection (3) above shall be in such form as the Board may direct and shall contain—
- (a) such additional information as the Board may reasonably require, including in particular information relating to the persons who have requested the issue of certificates under subsection (2) above;
- (b) a declaration that the statement is correct to the best of the company’s knowledge and belief; and
- (c) such other declarations as the Board may reasonably require.
- (6) Where a company has issued a certificate for the purposes of subsection (2) above, or furnished a statement under subsection (3) above and—
- (a) the certificate or statement is made fraudulently or negligently; or
- (b) the certificate was issued in contravention of subsection (4) above;
the company shall be liable to a penalty not exceeding £3,000.
- (7) For the purposes of regulations made under PAYE regulations no regard shall be had to the relief unless a claim for it has been duly made and admitted.
- (8) No application shall be made under section 55(3) or (4) of the Management Act (application for postponement of payment of tax pending appeal) on the ground that the applicant is eligible for the relief unless a claim for the relief has been duly made by him.
- (9) For the purposes of section 86 of the Management Act (interest on overdue tax), tax charged by an assessment—
- (a) shall be regarded as due and payable notwithstanding that relief from the tax (whether by discharge or repayment) is subsequently given on a claim for the relief; but
- (b) shall, unless paid earlier or due and payable later, be regarded as paid on the date of the making of the claim on which the relief is given;
and section 91 of that Act (effect on interest of reliefs) shall not apply in consequence of any discharge or repayment for giving effect to the relief.
- (10) For the purposes of the provisions of the Management Act relating to appeals against decisions on claims, the refusal of the inspector to authorise the issue of a certificate under subsection (2) above shall be taken to be a decision refusing a claim made by the company.
- (11) Section 312(1A)(b) applies to determine the relevant period for the purposes of this section.
#### Withdrawal of relief
##### 307
- (1) Where any relief has been given which is subsequently found not to have been due, it shall be withdrawn by the making of an assessment to income tax for the year of assessment for which the relief was given . . . .
- (1A) Relief may not be withdrawn, in relation to shares issued by a company on any date, on the ground that the company is not a qualifying company or that the requirements of section 289(1)(b), (ba), (c) or (d) are not met unless—
- (a) the company has given notice under section 310 or paragraph 16(2) or (4) of Schedule 5B to the 1992 Act, or
- (b) an inspector has given notice to the company stating that, by reason of that ground, the whole or any part of the relief given to individuals to whom the shares were issued on that date was not, in his opinion, due.
- (1B) The giving of notice by an inspector under subsection (1A) above shall be taken, for the purposes of the provisions of the Management Act relating to appeals against decisions on claims, to be a decision refusing a claim made by the company.
- (1C) Where any issue has been determined on an appeal brought by virtue of paragraph 1A(6) of Schedule 5B to the 1992 Act (appeal against notice that shares never have been, or have ceased to be, eligible shares), the determination shall be conclusive for the purposes of any appeal brought by virtue of subsection (1B) above on which that issue arises.
- (2) Subject to subsections (3) to (7) below, no assessment for withdrawing relief may be made, and no notice may be given under subsection (1A) above, more than six years after the end of the year of assessment—
- (a) in which the time mentioned in section 289(3) falls, or
- (b) in which the event by reason of which the claimant ceases to be eligible for relief occurs,
whichever is the later
- (3) No assessment for withdrawing relief in respect of shares issued to any person shall be made by reason of any event occurring after his death.
- (4) Where a person has, by a disposal or disposals to which section 299(1)(b) applies, disposed of all the eligible shares issued to him by a company, no assessment for withdrawing relief in respect of any of those shares shall be made by reason of any subsequent event unless it occurs at a time when he is connected with the company within the meaning of section 291.
- (5) Subsection (2) above is without prejudice to section 36 of the Management Act (fraudulent or negligent conduct).
- (6) In its application to an assessment made by virtue of this section, section 86 of the Management Act (interest on overdue tax) shall have effect as if the relevant date were—
- (a) in the case of relief withdrawn by virtue of section 289(6)or 299B(1)—
- (i) so far as effect has been given to the relief in accordance with PAYE regulations, 5th April in the year of assessment in which effect was so given;
- (ii) so far as effect has not been so given, the date on which the relief was granted.
- (aa) in the case of relief withdrawn by virtue of section 289(1)(c) or (d), the date on which the relief was granted
- (b) in the case of relief withdrawn by virtue of section 289(1)(ba), 291, 293, 297, 302, 303(1) or 305 in consequence of any event after the grant of the relief, the date of that event;
- (c) in the case of relief withdrawn by virtue of section 299(1) in consequence of a disposal after the grant of the relief, the date of the disposal;
- (cca) in the case of relief withdrawn by virtue of section 299(5), the date on which the option was granted
- (ca) in the case of relief withdrawn by virtue of section 299A in consequence of the making of any loan after the grant of the relief, the date of the making of the loan;
- (d) in the case of relief withdrawn by virtue of section 300 in consequence of a receipt of value after the grant of the relief, the date of the receipt.
- (7) For the purposes of subsection (6) above the date on which the relief is granted is the date on which a repayment of tax for giving effect to the relief was made or, if there was no such repayment, the date on which the inspector issued a notice to the claimant showing the amount of tax payable after giving effect to the relief.
- (8A) References in this section to the withdrawal of relief include its reduction
- (8) Where a company has ceased to be a qualifying company in consequence of the operation of section 294, subsection (6) above shall apply as if the relief was withdrawn in consequence of an event which occurred at the time when the company so ceased to be a qualifying company.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application to subsidiaries
##### 308
- (1) A qualifying company may, in the relevant period, have one or more subsidiaries if—
- (a) the conditions mentioned in subsection (2) below are satisfied in respect of the subsidiary or, as the case may be, each subsidiary . . . ; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) The conditions referred to are—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ca) that more than 50 per cent. of the ordinary share capital of the subsidiary is owned directly or indirectly by the qualifying company;
- (d) that no person other than the qualifying company or another of its subsidiaries has control of the subsidiary within the meaning of section 840; and
- (e) that no arrangements are in existence by virtue of which either of the conditions in paragraphs (ca) and (d) above would cease to be satisfied.
- (3) The conditions shall not be regarded as ceasing to be satisfied by reason only of the subsidiary or any other company being wound up, or dissolved without winding up, if—
- (a) . . . the winding up or dissolution is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) The conditions shall not be regarded as ceasing to be satisfied by reason only of anything done as a consequence of the subsidiary or any other company being in administration or receivership if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company concerned being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (4) The conditions shall not be regarded as ceasing to be satisfied by reason only of arrangements being in existence for the disposal by the qualifying company or (as the case may be) by another subsidiary, . . . of all its interest in the subsidiary if . . . the disposal is to be for bona fide commercial reasons and is not to be part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) Section 312(1A)(b) applies to determine the relevant period for the purposes of this section.
- (5B) Subsections (2) to (10) of section 838 apply for the purposes of subsection (2)(ca) above as they apply for the purposes of subsection (1) of that section.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further provisions as to subsidiaries
##### 309
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 310
- (1) Where an event occurs by reason of which any relief given to an individual falls to be withdrawn by virtue of sections 291, 299, 299A or 300, or would fall to be withdrawn under section 300 were it not for the application of section 300A, the individual shall within 60 days of his coming to know of the event give a notice to the inspector containing particulars of the event.
- (2) Where an event occurs by reason of which any relief in respect of any shares in a company falls to be withdrawn by virtue of section 289(1)(ba), (c) or (d), 293, 300, 302 or 303 , or would fall to be withdrawn under section 300 were it not for the application of section 300A,—
- (a) the company; and
- (b) any person connected with the company who has knowledge of that matter;
shall within 60 days of the event or, in the case of a person within paragraph (b) above, of his coming to know of it, give a notice to the inspector containing particulars of the event . . . .
- (2A) Where—
- (a) a person is required to give notice under subsection (1) or (2) above of an event by reason of which any relief in respect of any shares in a company—
- (i) falls to be withdrawn under section 300, or
- (ii) would fall to be so withdrawn were it not for the application of section 300A, and
- (b) that person has knowledge of the replacement value received (or expected to be received) from the original recipient by the original supplier by reason of a qualifying receipt,
the notice shall include particulars of that receipt of the replacement value (or expected receipt).
In this subsection “*the replacement value*”, “*the original recipient*”, “*the original supplier*” and “*qualifying receipt*” shall be construed in accordance with section 300A.
- (3) Where—
- (a) a company has issued a certificate under section 306(2) in respect of any eligible shares in the company; and
- (b) it appears to the company, or to any person connected with the company who has knowledge of the matter, that section 294 may have effect to deny relief in respect of those shares;
the company or (as the case may be) that person or (where it so appears to each of them) both the company and that person shall give notice to the inspector setting out the particulars of the case.
- (4) If the inspector has reason to believe—
- (a) that a person has not given a notice which he is required to give under subsection (1) or (2) above in respect of any event, or under subsection (3) above in respect of any particular case , or
- (b) that a person has given or received value (within the meaning of section 300(2) or (5)) which, but for the fact that the amount given or received was an amount of insignificant value (within the meaning of section 301A(2)), would have triggered a requirement to give a notice under subsection (1) or (2) above, or
- (c) that a person has made or received any repayment (within the meaning of section 303AA(2)) which, but for the fact that it falls to be disregarded for the purposes of section 303(1) by virtue of section 303AA(1), would have triggered a requirement to give a notice under subsection (2) above,
the inspector may by notice require that person to furnish him within such time (not being less than 60 days) as may be specified in the notice with such information relating to the event or case as the inspector may reasonably require for the purposes of this Chapter.
- (5) Where relief is claimed in respect of shares in a company and the inspector has reason to believe that it may not be due by reason of any such arrangement or scheme as is mentioned in section 289(1D), (6) or (9)(e), 289A(8)(b) or (8A), 291B(5), 293(4B), (6) or (8), 299B(1)or 308(2)(e), (3), (3A) or (4), he may by notice require any person concerned to furnish him within such time (not being less than 60 days) as may be specified in the notice with—
- (a) a declaration in writing stating whether or not, according to the information which that person has or can reasonably obtain, any such arrangement or scheme exists or has existed;
- (b) such other information as the inspector may reasonably require for the purposes of the provision in question and as that person has or can reasonably obtain.
- (6) For the purposes of subsection (5) above the persons who are persons concerned are—
- (a) in relation to section 289(6) or 293(4B) or (6), the claimant, the company and any person controlling the company;
- (aa) in relation to section 289(1D), 289A(8)(b) or (8A) or 308(3), (3A) or (4), the claimant, the company, any other company in question and any person controlling the company or any other company in question;
- (b) in relation to section 291B(5), the claimant;
- (c) in relation to section 289(9)(e), 293(8) or 308(2)(e), the company and any person controlling the company; and
- (d) in relation to section 299B(1), the claimant, the company and any person connected with the company;
and for those purposes references in this subsection to the claimant include references to any person to whom the claimant appears to have made a transfer such as is mentioned in section 304(1) of any of the shares in question.
- (6A) The references in subsections (5) and (6) above to subsections (3), (3A) and (4) of section 308 are to be read as including those provisions as applied by section 289(10) and (11).
- (7) Where relief has been given in respect of shares in a company—
- (a) any person who receives from the company any payment or asset which may constitute value received (by him or another) for the purposes of sections 300 and 303(3); and
- (b) any person on whose behalf such a payment or asset is received,
shall, if so required by the inspector, state whether the payment or asset received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
- (8) Where relief has been claimed in respect of shares in a company, any person who holds or has held shares in the company and any person on whose behalf any such shares are or were held shall, if so required by the inspector, state whether the shares which are or were held by him or on his behalf are or were held on behalf of any person other than himself and, if so, the name and address of that person.
- (9) No obligation as to secrecy imposed by statute or otherwise shall preclude the inspector from disclosing to a company that relief has been given or claimed in respect of a particular number or proportion of its shares.
- (9A) References in this section to withdrawal of relief include its reduction.
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Nominees, bare trustees and approved investment funds
##### 311
- (1) Shares subscribed for, issued to, held by or disposed of for an individual by a nominee shall be treated for the purposes of this Chapter as subscribed for, issued to, held by or disposed of by that individual.
- (2) Where eligible shares are held on a bare trust for two or more beneficiaries, this Chapter shall have effect (with the necessary modifications) as if—
- (a) each beneficiary had subscribed as an individual for all of those shares; and
- (b) the amount subscribed by each beneficiary was equal to the total amount subscribed on the issue of those shares divided by the number of beneficiaries.
- (2A) Subsection (2B) below applies where an individual claims relief in respect of eligible shares in a company and—
- (a) the shares have been issued to the managers of an approved fund as nominee for the individual;
- (b) the fund has closed, that is to say, no further investments in the fund are to be accepted; and
- (c) the amounts which the managers have, as nominee for the individual, subscribed for eligible shares issued within six months after the closing of the fund represent not less than 90 per cent. of his investment in the fund;
and in this section “*the managers of an approved fund*” means the person or persons having the management of an investment fund approved for the purposes of this section by the Board.
- (2B) In any case where this subsection applies, sections 289A and 289B shall have effect as if—
- (a) any reference to the year of assessment or other period in which the shares are issued were a reference to the year of assessment or other period in which the fund closes; and
- (b) any reference to the time of the issue of the shares, or the time of the subscription for the shares, were a reference to the time of the closing of the fund.
- (3) Section 290(1) shall not apply where the amount is subscribed as nominee for an individual by the managers of an approved fund.
- (4) Where an individual claims relief in respect of eligible shares in a company which have been issued to the managers of an approved fund as nominee for that individual, section 306(2) shall apply—
- (a) as if it required the certificate referred to in that section to be issued by the company to the managers; and
- (b) as if it provided that no claim for relief may be made unless the person making the claim has received from the managers a certificate issued by the managers, in such form as the Board may authorise, certifying that the managers hold certificates issued to them by the companies concerned, for the purposes of sections 306(2), in respect of the holdings of eligible shares shown on the managers’ certificate.
- (5) The managers of an approved fund may be required by a notice given to them by an inspector or other officer of the Board to deliver to the officer, within the time limited by the notice, a return of the holdings of eligible shares shown on certificates issued by them in accordance with subsection (4) above in the year of assessment to which the return relates.
- (6) Section 306(6) shall not apply in relation to any certificate issued by the managers of an approved fund for the purposes of subsection (4) above.
#### Interpretation of Chapter III
##### 312
- (1) In this Chapter—
- “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable;
- “*associate*” has the meaning given in subsections (3) and (4) of section 417 except that in those subsections “relative” shall not include a brother or sister;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*bonus shares*” means shares which are issued otherwise than for payment (whether in cash or otherwise);
- “*control*”, except in sections 289(9),291B(4) , 293(8)(b) and 308(2), shall be construed in accordance with section 416(2) to (6);
- “*debenture*” has the meaning given by section 744 of the Companies Act 1985;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*director*” shall be construed in accordance with section 417(5);
- “*eligible for relief*” has the meaning given by section 289(1),
- “*eligible shares*” has the meaning given by section 289(7),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*ordinary shares*” means shares forming part of a company’s ordinary share capital;
- “*the period of restriction*”, in relation to any eligible shares issued by a company, means the period—beginning one year before the shares are issued, andending immediately before the termination date relating to the shares;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 'relief’ means relief under this Chapter;
- “*research and development*” has the meaning given by section 837A;
- “*qualifying 90% subsidiary*”, in relation to any company, is to be construed in accordance with section 289(9) to (13);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*subsidiary*”, in relation to any company (except in the expression “51 per cent. subsidiary” or where otherwise defined), means a subsidiary of that company of a kind which that company may hold under section 308,
- “*51 per cent. subsidiary*”, in relation to any company, means (except in the case of references to a company which is a 51 per cent. subsidiary on a particular date or at a particular time) a company which is a 51 per cent. subsidiary of that company at any time in the relevant period (applying subsection (1A)(a) below),
- “*termination date*” in relation to any eligible shares issued by a company, means the third anniversary of the issue date or if—the money raised by the issue was raised wholly or mainly for the purpose of a qualifying business activity falling within section 289(2)(a) (company meeting trading activities requirement by reason of the company or a qualifying 90% subsidiary of the company carrying on or preparing to carry on a qualifying trade), andneither the company nor any of its qualifying 90% subsidiaries had begun to carry on the trade in question on the issue date,the third anniversary of the date on which the company or any qualifying 90% subsidiary of the company begins to carry on that trade; and
- “*unquoted company*” means a company none of whose shares, stocks, debentures or other securities are marketed to the general public,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) In any provision of this Chapter “*relevant period*”, in relation to any eligible shares issued by a company, means whichever of the following periods is applied for the purposes of that provision—
- (a) the period beginning either—
- (i) with the incorporation of the company, or
- (ii) if the company was incorporated more than two years before the date on which the shares were issued, two years before that date,
and ending immediately before the termination date relating to the shares, and
- (b) the period beginning with the issue of the shares and ending immediately before the termination date relating to them.
- (1ZA) In determining, for the purposes of the definition of “termination date” in subsection (1) above, when a qualifying trade is begun to be carried on by a qualifying 90% subsidiary of a company there shall be disregarded any carrying on of the trade by it before it became such a subsidiary of the company.
- (1B) For the purposes of the definition of “*unquoted company*” in subsection (1) above, shares, stocks, debentures or other securities are marketed to the general public if they are—
- (a) listed on a recognised stock exchange,
- (b) listed on a designated exchange in a country outside the United Kingdom, or
- (c) . . . dealt in outside the United Kingdom by such means as may be designated.
- (1C) In subsection (1B) above “*designated*” means designated by an order made by the Board for the purposes of that subsection; and an order made for the purposes of paragraph (b) of that subsection may designate an exchange by name, or by reference to any class or description of exchanges, including a class or description framed by reference to any authority or approval given in a country outside the United Kingdom.
- (1D) Section 828(1) does not apply to an order made for the purposes of subsection (1B) above.
- (1E) Where a company is an unquoted company at the time when any shares are issued (“the relevant time”), it shall not be treated for the purposes of this Chapter as ceasing to be an unquoted company in relation to those shares at any subsequent time by reason only that any shares, stocks, debentures or other securities of the company are at that time—
- (a) listed on a stock exchange that is a recognised stock exchange by virtue of an order made under section 841, or
- (b) listed on an exchange, or dealt in by any means, designated by an order made for the purposes of subsection (1B) above,
if the order was made after the relevant time.
- (2) Section 839 applies for the purposes of this Chapter other than section 291, section 291A(1), (4) and (5) and section 291B.
- (2A) References in this Chapter to a company being in administration or receivership shall be construed as follows—
- (a) references to a company being “in administration” are to a company being in administration within the meaning of Schedule B1 to the Insolvency Act 1986, or to there being in force in relation to it—
- (i) an administration order under Part III of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom;
- (b) references to a company being “*in receivership*” are to there being in force in relation to it—
- (i) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter I or II of Part III of the Insolvency Act 1986 or Part IV of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom.
- (3) References in this Chapter to a disposal of shares include references to a disposal of an interest or right in or over the shares and an individual shall be treated for the purposes of this Chapter as disposing of any shares which he is treated by virtue of section 136 of the 1992 Act as exchanging for other shares.
- (4) In this Chapter—
- (a) references in any provision to the reduction of any relief attributable to any shares include a reference—
- (i) to the reduction of the relief to nil, and
- (ii) where no relief has yet been given, to the reduction of the amount which apart from that provision would be the relief, and
- (b) references to the withdrawal of any relief, in respect of any shares, are to the withdrawal of the relief attributable to those shares or, in a case where no relief has yet been given, to ceasing to be eligible for relief in respect of those shares.
- (4A) In this Chapter references (however expressed) to an issue of eligible shares in any company are to any eligible shares in the company that are of the same class and are issued on the same day.
- (4B) For the purposes of this Chapter shares in a company shall not be treated as being of the same class unless they would be so treated if dealt with on the Stock Exchange.
- (5) For the purposes of this Chapter, the market value at any time of any asset shall be taken to be the price which it might reasonably be expected to fetch on a sale at that time in the open market free from any interest or right which exists by way of security in or over it.
- (6) References in this Chapter to relief given to an individual in respect of eligible shares, and to the withdrawal of such relief, include respectively references to relief given to him in respect of those shares at any time after he has disposed of them and references to the withdrawal of such relief at any such time.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — SPECIAL PROVISIONS
#### Taxation of consideration for certain restrictive undertakings
##### 313
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Divers and diving supervisors
##### 314
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Wounds and disability pensions
##### 315
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances, bounties and gratuities
##### 316
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Victoria Cross and other awards
##### 317
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other pensions in respect of death due to war service etc
##### 318
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Crown servants: foreign service allowance
##### 319
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commonwealth Agents-General and official agents etc
##### 320
- (1) An Agent-General who is resident in the United Kingdom shall be entitled to the same immunity from income tax as that to which the head of a mission so resident is entitled under the Diplomatic Privileges Act 1964.
- (2) Any person having or exercising any employment to which this subsection applies (not being a person employed in any trade, business or other undertaking carried on for the purposes of profit) shall be entitled to the same immunity from income tax as that to which a member of the staff of a mission is entitled under the Diplomatic Privileges Act 1964.
- (3) The employments to which subsection (2) above applies are the employment in the United Kingdom as—
- (a) a member of the personal staff of any Agent-General; or
- (b) an official agent for, or for any state or province of, any of the countries for the time being mentioned in Schedule 3 to the British Nationality Act 1981 or the Republic of Ireland; or
- (c) an official agent for any self-governing colony,
of a person certified by the High Commissioner of the country in question or, as the case may be, by the Agent-General for the state, province or self-governing colony in question to be ordinarily resident outside the United Kingdom and to be resident in the United Kingdom solely for the purpose of the performance of his duties as such member or official agent.
- (4) In this section—
- “*Agent-General*” means the Agent-General for any state or province of a country within subsection (3)(b) above or for any self-governing colony;
- “*High Commissioner*” includes the head of the mission of a country within subsection (3)(b) above by whatever name called;
- “*mission*” has the same meaning as in the Diplomatic Privileges Act 1964, and references to the head of a mission and a member of the staff of a mission shall be construed in accordance with that Act;
- “*self-governing colony*” means any colony certified by a Secretary of State to be a self-governing colony.
#### Consuls and other official agents
##### 321
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consular officers and employees
##### 322
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Visiting forces
##### 323
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) A period during which a member of a visiting force to whom section 303(1) of ITEPA 2003 (exemption for earnings of visiting forces etc.) applies is in the United Kingdom by reason solely of his being a member of that force shall not be treated for the purposes of income tax either as a period of residence in the United Kingdom or as creating a change of his residence or domicile.
- (3) Subsection (2) above shall not affect the operation of section 278 in relation to any person for any year of assessment.
- (4) In subsection (2) above references to a visiting force shall apply to a civilian component of such a force as they apply to the force itself; and that subsection shall be construed as one with the Part 1 ofVisiting Forces Act 1952, but so that, for the purposes of this section, references to a designated country shall be substituted in that Act for references to a country to which a provision of that Act applies.
- (5) For the purpose of conferring on persons attached to any designated allied headquarters the like benefits as are conferred by subsection (2) above on members of a visiting force or civilian component, any members of the armed forces of a designated country shall, while attached to any such headquarters, be deemed to constitute a visiting force of that country, and there shall be a corresponding extension of the class of persons who may be treated as members of a civilian component of such a visiting force.
- (6) In the case of persons of any category for the time being agreed between Her Majesty’s government in the United Kingdom and the other members of the North Atlantic Council—
- (a) employment by a designated allied headquarters shall be treated for the purposes of subsection (2) above as if it were service as a member of a visiting force of a designated country; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this section—
- “*allied headquarters*” means any international military headquarters established under the North Atlantic Treaty, and
- “*designated*” means designated for the purpose in question by or under any Order in Council made for giving effect to any international agreement.
#### Designated international organisations
##### 324
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#### Interest on deposits with National Savings Bank
##### 325
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest etc. under contractual savings schemes
##### 326
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disabled person’s vehicle maintenance grant
##### 327
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funds in court
##### 328
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on damages for personal injuries
##### 329
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Compensation for National-Socialist persecution
##### 330
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scholarship income
##### 331
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenditure and houses of ministers of religion
##### 332
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Personal equity plans
##### 333
Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans.
### CHAPTER V — RESIDENCE OF INDIVIDUALS
#### Commonwealth citizens and others temporarily abroad
##### 334
- Every Commonwealth citizen or citizen of the Republic of Ireland—shall, if his ordinary residence has been in the United Kingdom, be assessed and charged to income tax notwithstanding that at the time the assessment or charge is made he may have left the United Kingdom, if he has so left the United Kingdom for the purpose only of occasional residence abroad, andshall be charged as a person actually residing in the United Kingdom upon the whole amount of his profits or gains, whether they arise from property in the United Kingdom or elsewhere, or from any allowance, annuity or stipend, or from any trade, profession, employment or vocation in the United Kingdom or elsewhere.
#### Residence of persons working abroad
##### 335
- (1) Where—
- (a) a person works full-time in one or more of the following, that is to say, a trade, profession, vocation, office or employment; and
- (b) no part of the trade, profession or vocation is carried on in the United Kingdom and all the duties of the office or employment are performed outside the United Kingdom;
the question whether he is resident in the United Kingdom shall be decided without regard to any place of abode maintained in the United Kingdom for his use.
- (2) Where an office or employment is in substance one of which the duties fall in the year of assessment to be performed outside the United Kingdom there shall be treated for the purposes of this section as so performed any duties performed in the United Kingdom the performance of which is merely incidental to the performance of the other duties outside the United Kingdom.
#### Temporary residents in the United Kingdom
##### 336
- (1) A person shall not be charged to income tax under a charge to which subsection (1A) applies as a person residing in the United Kingdom, in respect of profits or gains received in respect of possessions or securities out of the United Kingdom, if—
- (a) he is in the United Kingdom for some temporary purpose only and not with any view or intent of establishing his residence there, and
- (b) he has not actually resided in the United Kingdom at one time or several times for a period equal in the whole to six months in any year of assessment,
but if any such person resides in the United Kingdom for such a period he shall be so chargeable for that year.
- (1A) This subsection applies to—
- (a) any charge under ITTOIA 2005 on relevant foreign income,
- (b) the charge under Part 9 of ITEPA 2003 (pension income) in respect of—
- (i) income to which section 573, 609, 610, 611 or 629 of that Act applies,
- (ia) an annuity under . . . a registered pension scheme that fell within paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004, or
- (ii) any annual payment to which section 633 of that Act applies which is made by or on behalf of a person who is outside the United Kingdom, . . .
- (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the charge under Part 10 of ITEPA 2003 (social security income) in respect of benefits to which section 678 of that Act applies (foreign benefits).
- (2) For the purposes of determining taxable earnings from an employment under Chapters 4 and 5 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 (employment income: charge to tax), a person who is in the United Kingdom for some temporary purpose only and not with the intention of establishing his residence there shall not be treated as resident in the United Kingdom if he has not in the aggregate spent at least six months in the United Kingdom in the year of assessment, but shall be treated as resident there if he has.
- (3) The question whether—
- (a) a person falls within subsection (1)(a) above, or
- (b) for the purposes of subsection (2) above a person is in the United Kingdom for some temporary purpose only and not with the intention of establishing his residence there,
shall be decided without regard to any living accommodation available in the United Kingdom for his use.
## PART VIII — TAXATION OF INCOME AND CHARGEABLE GAINS OF COMPANIES
### Taxation of income
#### Companies beginning or ceasing to carry on a trade
##### 337
- (1) Where a company begins or ceases—
- (a) to carry on a trade, or
- (b) to be within the charge to corporation tax in respect of a trade,
the company’s income shall be computed for the purposes of corporation tax as if that were the commencement or, as the case may be, the discontinuance of the trade, whether or not the trade is in fact commenced or discontinued.
- (2) Subsection (1) applies to a Schedule A business or overseas property business (within the meaning given by section 70A(4)) as it applies to a trade.
#### Allowance of charges on income and capital
##### 338
- (1) Charges on income are allowed as deductions from a company’s total profits in computing the corporation tax chargeable for an accounting period.
- (2) They are deducted from the company’s total profits for the period as reduced by any other relief from tax other than group relief.
- (3) The amount of the deduction is limited to the amount that reduces the company’s total profits for the period to nil.
- (4) Except as otherwise provided, a deduction is allowed only in respect of payments made by the company in the accounting period concerned.
- (5) The above provisions are subject to any express exceptions in the Corporation Tax Acts.
#### Charges on income: donations to charity
##### 339
- (1) A qualifying donation is a payment made by a company to a charity, other than—
- (a) a payment which, by reason of any provision of the Taxes Acts (within the meaning of the Management Act) except section 209(4), is to be regarded as a distribution (but see subsections (1A) and (1B) below); and
- (b) a payment which is deductible in computing profits or any description of profits for purposes of corporation tax.
- (1A) In determining whether a payment is to be regarded as a distribution for the purposes of subsection (1)(a) above, the words in section 209(5) from “; and any amount” to the end are to be disregarded.
- (1B) A payment (other than a dividend) made by a company which is wholly owned by a charity is not to be regarded as a distribution for the purposes of subsection (1)(a) above.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) A payment made by a company is not a qualifying donation if—
- (a) it is made subject to a condition as to repayment, or
- (b) the company or a connected person receives a benefit in consequence of making it and either the relevant value in relation to the payment exceeds the limit imposed by subsection (3DA) below or the amount to be taken into account for the purposes of this paragraph in relation to the payment exceeds £250.
- (3C) For the purposes of subsections (3B) above and (3D) below, the relevant value in relation to a payment to a charity is—
- (a) where there is one benefit received in consequence of making it which is received by the company or a connected person, the value of that benefit;
- (b) where there is more than one benefit received in consequence of making it which is received by the company or a connected person, the aggregate value of all the benefits received in consequence of making it which are received by the company or a connected person.
- (3D) The amount to be taken into account for the purposes of subsection (3B)(b) above in relation to a payment to a charity is an amount equal to the aggregate of—
- (a) the relevant value in relation to the payment, and
- (b) the relevant value in relation to each payment already made to the charity by the company in the accounting period in which the payment is made which is a qualifying donation within the meaning of this section.
- (3DA) The limit imposed by this subsection is—
- (a) where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;
- (b) where the amount of the payment exceeds £100 but does not exceed £1,000, £25;
- (c) where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.
- (3DB) Where a benefit received in consequence of making a payment—
- (a) consists of the right to receive benefits at intervals over a period of less than twelve months;
- (b) relates to a period of less than twelve months; or
- (c) is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
- (3DC) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
- (3DD) Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by—
- (a) in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;
- (b) in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above.
- (3E) A payment made by a company is not a qualifying donation if it is conditional on, or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the company or a connected person.
- (3F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3G) A payment made by a company is not a qualifying donation if the company is itself a charity.
- (4) Where a company gives a sum of money to a charity, the gift shall in the hands of the charity be treated for the purposes of this Act as if it were an annual payment.
- (5) *In any accounting period of a company, the maximum amount allowable under section* 338*by virtue of subsection* (2)(b)*of that section in respect of qualifying donations made by the company shall be a sum equal to* 3*per cent. of the dividends paid on the company’s ordinary share capital in that accounting period* .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7AA) Where—
- (a) a qualifying donation to a charity is made by a company which is wholly owned by a charity, and
- (b) the company makes a claim for the donation, or any part of it, to be deemed for the purposes of section 338 to be a charge on income paid in an accounting period falling wholly or partly within the period of nine months ending with the date of the making of the donation,
the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow.
- (7AB) For the purposes of this section a company is wholly owned by a charity if it is either—
- (a) a company with an ordinary share capital every part of which is owned by a charity (whether or not the same charity); or
- (b) a company limited by guarantee in whose case every person who—
- (i) is beneficially entitled to participate in the divisible profits of the company, or
- (ii) will be beneficially entitled to share in any net assets of the company available for distribution on its winding up,
is or must be a charity or a company wholly owned by a charity.
- (7AC) For the purposes of subsection (7AB) above ordinary share capital of a company shall be taken to be owned by a charity if there is a charity which—
- (a) within the meaning of section 838 directly or indirectly owns that share capital; or
- (b) would be taken so to own that share capital if references in that section to a body corporate included references to a charity which is not a body corporate.
- (7A) In subsections (3B) to (3E) above references to a connected person are to a person connected with—
- (a) the company, or
- (b) a person connected with the company;
and section 839 applies for the purposes of this subsection.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of this section “charity” includes each of the bodies mentioned in section 507, and . . . any Association of a description specified in section 508, but, subject to that, in this section “charity” has the same meaning as in section 506.
#### Charges on income: interest payable to non-residents
##### 340
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments of interest etc. between related companies
##### 341
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax on company in liquidation
##### 342
- (1) In this section references to a company’s final year are references to the financial year in which the affairs of the company are completely wound up, and references to a company’s penultimate year are references to the last financial year preceding its final year.
- (2) Subject to subsection (3) or (3A) below—
- (a) corporation tax shall be charged on the profits of the company arising in the winding-up in its final year at the rate of corporation tax fixed or proposed for the penultimate year; but
- (b) where the corporation tax charged on the company’s income included in those profits falls to be calculated or reduced in accordance with section 13, it shall be so calculated or reduced in accordance with such rate or fraction fixed or proposed for the penultimate year as is applicable under that section.
- (3) If, before the affairs of the company are completely wound up, any of the rates or fractions mentioned in subsection (2) above has been fixed or proposed for the final year, that subsection shall have effect in relation to that rate or fraction as if for the references to the penultimate year there were substituted references to the final year.
- (3A) If, in the case of the company’s final accounting period, the income (if any) which consists of interest received or receivable by the company under section 826 does not exceed £2,000, that income shall not be subject to corporation tax.
In this subsection “*the company’s final accounting period*” means the accounting period of the company which, in accordance with section 12(7), ends by reason of the completion of the winding up.
- (4) An assessment on the company’s profits for an accounting period which falls after the commencement of the winding-up shall not be invalid because made before the end of the accounting period.
- (5) In making an assessment after the commencement of the winding-up of the company but before the date when its affairs are completely wound up, the liquidator may act on an assumption as to when that date will fall, so far as it governs section 12(7).
- (6) The assumption of the wrong date shall not alter the company’s final and penultimate year, and, if the right date is later, an accounting period shall end on the date assumed, and a new accounting period shall begin and section 12(7) shall thereafter apply as if the winding-up had commenced with the beginning of that new accounting period.
- (7) References in this section to a rate or fraction fixed or proposed are references to a rate or fraction fixed by an Act passed before the completion of the winding-up or, if not so fixed, proposed by a Budget resolution (and without regard to any subsequent Act); except that if a rate or fraction so fixed is proposed to be altered by a Budget resolution any such reference to it is a reference to it as proposed to be so altered.
- In this subsection “*Budget resolution*” means a resolution of the House of Commons for fixing any such rate or fraction as is mentioned in this section.
- (8) Where the winding-up commenced before the company’s final year, paragraphs (a) and (b) of subsection (2) (but not subsection (3)) above shall apply in relation to the company’s profits arising at any time in its penultimate year.
- (9) Any assessment made by virtue of section 8(4) shall be subject to any such adjustment by discharge or repayment of tax or by a further assessment as may be required to give effect to this section.
#### Company reconstructions without a change of ownership
##### 343
- (1) Where, on a company (“*the predecessor*”) ceasing to carry on a trade, another company (“*the successor*”) begins to carry it on, and—
- (a) on or at any time within two years after that event the trade or an interest amounting to not less than a three-fourths share in it belongs to the same persons as the trade or such an interest belonged to at some time within a year before that event; and
- (b) the trade is not, within the period taken for the comparison under paragraph (a) above, carried on otherwise than by a company which is within the charge to tax in respect of it;
then the Corporation Tax Acts shall have effect subject to subsections (2) to (6) below.
- (2) The trade shall not be treated as permanently discontinued nor a new trade as set up and commenced for the purpose of the allowances and charges provided for by the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act); but—
- (a) there shall be made to or on the successor in accordance with those Acts all such allowances and charges as would, if the predecessor had continued to carry on the trade, have fallen to be made to or on it; and
- (b) the amount of any such allowance or charge shall be computed as if—
- (i) the successor had been carrying on the trade since the predecessor began to do so, and
- (ii) everything done to or by the predecessor had been done to or by the successor (but so that no sale or transfer which on the transfer of the trade is made to the successor by the predecessor of any assets in use for the purpose of the trade shall be treated as giving rise to any such allowance or charge).
- (3) . . ., subject to subsection (4) below and to any claim made by the predecessor under section 393A(1), the successor shall be entitled to relief under section 393(1), as for a loss sustained by the successor in carrying on the trade, for any amount for which the predecessor would have been entitled to . . . relief if it had continued to carry on the trade.
- (4) Where the amount of relevant liabilities exceeds the value of relevant assets, the successor shall be entitled to relief by virtue of subsection (3) above only if, and only to the extent that, the amount of that excess is less than the amount mentioned in that subsection.
- (4A) Subsection (2A) of section 393A shall not apply to any loss which (but for this subsection) would fall within subsection (2B) of that section by virtue of the predecessor’s ceasing to carry on the trade, and subsection (7) of that section shall not apply for the computation of any such loss.
- (5) Any securities, within the meaning of section 731, which at the time when the predecessor ceases to carry on the trade form part of the trading stock belonging to the trade shall be treated for the purposes of that section as having been sold at that time in the open market by the predecessor and as having been purchased at that time in the open market by the successor.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Where the successor ceases to carry on the trade within the period taken for the comparison under subsection (1)(a) above and on its doing so a third company begins to carry on the trade, . . ., subsections (2) to (5) above shall apply both in relation to that event (together with the new predecessor and successor) and to the earlier event (together with the original predecessor and successor), but so that—
- (a) in relation to the earlier event “successor” shall include the successor at either event; and
- (b) in relation to the later event “predecessor” shall include the predecessor at either event;
and if the conditions of this subsection are thereafter again satisfied, it shall apply again in like manner.
- (8) Where, on a company ceasing to carry on a trade, another company begins to carry on the activities of the trade as part of its trade, then that part of the trade carried on by the successor shall be treated for the purposes of this section as a separate trade, if the effect of so treating it is that subsection (1) or (7) above has effect on that event in relation to that separate trade; and where, on a company ceasing to carry on part of a trade, another company begins to carry on the activities of that part as its trade or part of its trade, the predecessor shall for purposes of this section be treated as having carried on that part of its trade as a separate trade if the effect of so treating it is that subsection (1) or (7) above has effect on that event in relation to that separate trade.
- (9) Where under subsection (8) above any activities of a company’s trade fall, on the company ceasing or beginning to carry them on, to be treated as a separate trade, such apportionments of receipts, expenses, assets or liabilities shall be made as may be just.
- (10) Where, by virtue of subsection (9) above, any item falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever period) of two or more companies, any question which arises as to the manner in which the item is to be apportioned shall be determined, for the purposes of the tax of all those companies—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to all those companies, by those Commissioners, unless all the companies agree that it shall be determined by the Special Commissioners;
- (b) in a case where different bodies of Commissioners have jurisdiction with respect to those companies, by such of those bodies as the Board may direct, unless all the companies agree that it shall be determined by the Special Commissioners; and
- (c) in any other case, by the Special Commissioners,
and any such Commissioners shall determine the question in like manner as if it were an appeal except that all those companies shall be entitled to appear and be heard by the Commissioners who are to make the determination or to make representations to them in writing.
- (11) Any relief obtainable under this section by way of discharge or repayment of tax shall be given on the making of a claim.
- (12) In the application of this section to any case in relation to which subsection (4) above does not apply—
- (a) subsection (9) above shall have effect with the substitution for the words following “separate trade” of the words “ any necessary apportionment shall be made of receipts or expenses ”; and
- (b) subsection (10) above shall have effect with the substitution for “item” of “ sum ”.
#### Company reconstructions: supplemental
##### 344
- (1) For the purposes of section 343—
- (a) a trade carried on by two or more persons shall be treated as belonging to them in the shares in which they are entitled to the profits of the trade;
- (b) a trade or interest in a trade belonging to any person as trustee (otherwise than for charitable or public purposes) shall be treated as belonging to the persons for the time being entitled to the income under the trust; and
- (c) a trade or interest in a trade belonging to a company shall, where the result of so doing is that subsection (1) or (7) of section 343 has effect in relation to an event, be treated in any of the ways permitted by subsection (2) below.
- (2) For the purposes of section 343, a trade or interest in a trade which belongs to a company engaged in carrying it on may be regarded—
- (a) as belonging to the persons owning the ordinary share capital of the company and as belonging to them in proportion to the amount of their holdings of that capital, or
- (b) in the case of a company which is a subsidiary company, as belonging to a company which is its parent company, or as belonging to the persons owning the ordinary share capital of that parent company, and as belonging to them in proportion to the amount of their holdings of that capital,
and any ordinary share capital owned by a company may, if any person or body of persons has the power to secure by means of the holding of shares or the possession of voting power in or in relation to any company, or by virtue of any power conferred by the articles of association or other document regulating any company, that the affairs of the company owning the share capital are conducted in accordance with his or their wishes, be regarded as owned by the person or body of persons having that power.
- (3) For the purposes of subsection (2) above—
- (a) references to ownership shall be construed as references to beneficial ownership;
- (b) a company shall be deemed to be a subsidiary of another company if and so long as not less than three-quarters of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies;
- (c) the amount of ordinary share capital of one company owned by a second company through another company or other companies, or partly directly and partly through another company or other companies, shall be determined in accordance with section 838(5) to (10); and
- (d) where any company is a subsidiary of another company, that other company shall be considered as its parent company unless both are subsidiaries of a third company.
- (4) In determining, for the purposes of section 343, whether or to what extent a trade belongs at different times to the same persons, persons who are relatives of one another and the persons from time to time entitled to the income under any trust shall respectively be treated as a single person, and for this purpose “*relative*” means husband, wife, civil partner, ancestor, lineal descendant, brother or sister.
- (5) For the purposes of section 343(4), relevant assets are—
- (a) assets which were vested in the predecessor immediately before it ceased to carry on the trade, which were not transferred to the successor and which, in a case where the predecessor was the predecessor on a previous application of section 343, were not by virtue of subsection (9) of that section apportioned to a trade carried on by the company which was the successor on that application; and
- (b) consideration given to the predecessor by the successor in respect of the change of company carrying on the trade;
and for the purposes of paragraph (b) above the assumption by the successor of any liabilities of the predecessor shall not be treated as the giving of consideration to the predecessor by the successor.
- (6) For the purposes of section 343(4), relevant liabilities are liabilities which were outstanding and vested in the predecessor immediately before it ceased to carry on the trade, which were not transferred to the successor and which, in a case where the predecessor was the predecessor on a previous application of section 343, were not by virtue of subsection (9) of that section apportioned to a trade carried on by the company which was the successor on that application; but a liability representing the predecessor’s share capital, share premium account, reserves or relevant loan stock is not a relevant liability.
- (7) For the purposes of section 343(4)—
- (a) the value of assets (other than money) shall be taken to be the price which they might reasonably be expected to have fetched on a sale in the open market immediately before the predecessor ceased to carry on the trade; and
- (b) the amount of liabilities shall be taken to be their amount at that time.
- (8) Where the predecessor transferred a liability to the successor but the creditor concerned agreed to accept settlement of part of the liability as settlement of the whole, the liability shall be treated for the purposes of subsection (6) above as not having been transferred to the successor except as to that part.
- (9) A liability representing the predecessor’s share capital, share premium account, reserves or relevant loan stock shall, for the purposes of subsection (6) above, be treated as not doing so if, in the period of one year ending with the day on which the predecessor ceased to carry on the trade, the liability arose on a conversion of a liability not representing its share capital, share premium account, reserves or relevant loan stock.
- (10) Where a liability of the predecessor representing its relevant loan stock is not a relevant liability for the purposes of section 343(4) but is secured on an asset of the predecessor not transferred to the successor, the value of the asset shall, for the purposes of section 343(4), be reduced by an amount equal to the amount of the liability.
- (11) In this section “*relevant loan stock*” means any loan stock or similar security (whether secured or unsecured) except any in the case of which subsection (12) below applies.
- (12) This subsection applies where, at the time the liability giving rise to the loan stock or other security was incurred, the person who was the creditor was carrying on a trade of lending money.
### Chargeable gains
#### Computation of chargeable gains
##### 345
#### Capital distribution of chargeable gains: recovery of tax from shareholder
##### 346
#### Tax on one member of group recoverable from another member
##### 347
## PART IX — ANNUAL PAYMENTS AND INTEREST
### Annual payments
#### Payments out of profits or gains brought into charge to income tax: deduction of tax
##### 348
- (1) Subject to any provision to the contrary in the Income Tax Acts, where any annuity or other annual payment to which this subsection applies is payable wholly out of profits or gains brought into charge to income tax—
- (a) the whole of the profits or gains shall be assessed and charged with income tax on the person liable to the annuity or other annual payment, without distinguishing the annuity or other annual payment; and
- (b) the person liable to make the payment, whether out of the profits or gains charged with income tax or out of any annual payment liable to deduction, or from which a deduction has been made, shall be entitled on making the payment to deduct and retain out of it a sum representing the amount of income tax thereon; and
- (c) the person to whom the payment is made shall allow the deduction on receipt of the residue of the payment, and the person making the deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid; and
- (d) the deduction shall be treated as income tax paid by the person to whom the payment is made.
- (1A) Subsection (1) applies to any annuity or other annual payment, not being interest—
- (a) which is charged with tax under Case III of Schedule D,
- (aa) which—
- (i) is charged with tax under Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments), Chapter 10 of that Part (distributions from unauthorised unit trusts), section 579 of that Act (royalties etc. from intellectual property), Chapter 4 of Part 5 of that Act (certain telecommunication rights: non-trading income) or Chapter 7 of Part 5 of that Act (annual payments not otherwise charged), and
- (ii) is not relevant foreign income,
- (b) which is charged with tax under Part 9 of ITEPA 2003 (pension income) because section 579A of that Act applies to it because it is an annuity under an annuity contract that is a registered pension scheme, or
- (c) which arises from a source in the United Kingdom and is charged with tax under Part 9 of ITEPA 2003 because section 609, 610 or 611 of that Act applies to it (certain employment-related annuities).
- (2) Subject to any provision to the contrary in the Income Tax Acts, where—
- (a) any royalty or other sum paid in respect of the user of a patent; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
is paid wholly out of profits or gains brought into charge to income tax, the person making the payment shall be entitled on making the payment to deduct and retain out of it a sum representing the amount of the income tax thereon.
- (3) This section does not apply to . . . any payment to which section 687 applies . . . or to any payment which is a qualifying donation for the purposes of section 25 of the Finance Act 1990.
- (4) For the purposes of this section and section 349(1), the following income shall be treated as not brought into charge to income tax—
- (a) income on which income tax is treated as paid under section 399(2) or 400(2) of ITTOIA 2005 (distributions from UK resident companies etc. on which there is no tax credit),
- (b) income on which an individual is liable to income tax as a result of section 413(2) of that Act or trustees are so liable as a result of section 413(3) of that Act (stock dividend income),
- (c) income on which any person is liable to income tax under Chapter 6 of Part 4 of that Act (release of loan to participator in close company),
- (d) income on which an individual is liable to income tax as a result of section 465 of that Act or trustees are so liable as a result of section 467 of that Act (gains from contracts for life insurance etc.), being income to which section 530 of that Act applies (income tax treated as paid etc.), and
- (e) income which is included in the aggregate income of an estate as a result of section 664(2)(c), (d) or (e) of that Act (income arising to personal representatives and corresponding to income within paragraph (b), (c) or (d)).
#### Payments not out of profits or gains brought into charge to income tax, and annual interest
##### 349
- (1) Where—
- (a) any annuity or other annual payment to which this paragraph applies; or
- (b) any royalty or other sum paid in respect of the user of a patent;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
is not payable or not wholly payable out of profits or gains brought into charge to income tax, the person by or through whom any payment thereof is made shall, on making the payment, deduct out of it a sum representing the amount of income tax thereon .
- (1A) Paragraph (a) of subsection (1) applies to any annuity or other annual payment, not being interest—
- (a) which is charged with tax under Case III of Schedule D,
- (aa) which—
- (i) is charged with tax under Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments), Chapter 10 of that Part (distributions from unauthorised unit trusts), section 579 of that Act (royalties etc. from intellectual property), Chapter 4 of Part 5 of that Act (certain telecommunication rights: non-trading income) or Chapter 7 of Part 5 of that Act (annual payments not otherwise charged), and
- (ii) is not relevant foreign income,
- (b) which is charged with tax under Part 9 of ITEPA 2003 (pension income) because section 579A of that Act applies to it because it is an annuity under an annuity contract that is a registered pension scheme, or
- (c) which arises from a source in the United Kingdom and is charged with tax under Part 9 of ITEPA 2003 because section 609, 610 or 611 of that Act applies to it.
- (1B) Subsection (1) does not apply to any payment to which section 687 applies . . . or to any payment which is a qualifying donation (within the meaning of section 339) or a qualifying donation for the purposes of section 25 of the Finance Act 1990.
- (2) Subject to subsection (3) below and to any other provision to the contrary in the Income Tax Acts, where any yearly interest of money which falls within Chapter 2 of Part 4 of ITTOIA 2005 (interest) (excluding anything specially exempted from income tax and discounts treated as interest by section 381 of that Act) or which is chargeable to corporation tax under Case III of Schedule D (as that Schedule has effect apart from the modification made for the purposes of corporation tax by section 18(3A)) is paid—
- (a) otherwise than in a fiduciary or representative capacity, by a company (other than a building society) or local authority; or
- (b) by or on behalf of a partnership of which a company is a member; or
- (c) by any person to another person whose usual place of abode is outside the United Kingdom;
the person by or through whom the payment is made shall, on making the payment, deduct out of it a sum representing the amount of income tax thereon for the year in which the payment is made.
- (3) Subsection (2) above does not apply—
- (za) to interest chargeable to income tax as relevant foreign income; or
- (a) to interest payable in the United Kingdom on an advance from a bank carrying on a bona fide banking business on an advance from a bank, if at the time when the interest is paid the person beneficially entitled to the interest is within the charge to corporation tax as respects the interest; or
- (b) to interest paid by a bank in the ordinary course of its business; or
- (ba) to interest paid on deposits with the National Savings Bank; or
- (c) to any payment of interest on a quoted Eurobond; or
- (d) to any payment to which section 369*or* 479(1) applies; or
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) to any payment in respect of which a liability to deduct income tax is imposed by section 480A(1); or
- (g) to any payment in respect of which a liability to deduct income tax would be imposed by section 480A(1) if conditions prescribed by regulations under section 480B were not fulfilled; or
- (h) to any payment in respect of which a liability to deduct income tax would, but for section 481(5)(k), be imposed by section 480A(1); or
- (i) in the case of a person who is authorised for the purposes of the Financial Services and Markets Act 2000 and whose business consists wholly or mainly of dealing in financial instruments as principal, to interest paid by that person in the ordinary course of his business; or
- (j) to interest paid by a recognised clearing house or recognised investment exchange carrying on business as provider of a central counterparty clearing service, in the ordinary course of that business, on margin or other collateral deposited with it by users of the service; or
- (k) to interest treated by virtue of section 730A(2)(a) or (b) (repos) as paid by a recognised clearing house or recognised investment exchange in respect of contracts made by it as provider of a central counterparty clearing service.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) In this section “*bank*” has the meaning given by section 840A.
- (3AB) An order under section 840A(1)(d) designating an organisation as a bank for the purposes of paragraph (a) of subsection (3) above may provide that that paragraph shall apply to the organisation as if the words from “if” to the end were omitted.
- (3A) Subject to subsection (3B) below and to any other provision to the contrary in the Income Tax Acts, where—
- (a) any dividend or interest is paid in respect of a security issued by a building society other than a qualifying certificate of deposit and other than a qualifying deposit right, and
- (b) the security was listed, or capable of being listed, on a recognised stock exchange at the time the dividend or interest became payable,
the person by or through whom the payment is made shall, on making the payment, deduct out of it a sum representing the amount of income tax thereon for the year in which the payment is made.
- (3B) Subsection (3A) above does not apply to any payment of interest on a quoted Eurobond.
- (3C) Subject to any provision to the contrary in the Income Tax Acts, where any UK public revenue dividend is paid, the person by or through whom the payment is made shall, on making the payment, deduct out of it a sum representing the amount of income tax on it for the year in which the payment is made.
- (4) In this section —
- “*certificate of deposit*” means a document falling within the definition of that expression in section 56(5) above or section 552(2) of ITTOIA 2005;
- “*dividend*” has the same meaning as in section 477A,
- “*qualifying certificate of deposit*” means a certificate of deposit . . . under which , or uncertificated eligible debt security units under which—the amount payable by the issuing society, exclusive of interest, is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made), andthe obligation of the society to pay that amount arises after a period of not more than five years beginning with the date on which the deposit is made; and
- “*qualifying deposit right*” means a right to receive an amount (with or without interest) in pursuance of a deposit of money, where—the right subsists under an arrangement falling within section 56A above or is an uncertificated right, as defined in section 552(2) of ITTOIA 2005,no certificate of deposit . . . has been issued , and no uncertificated eligible debt security units have been issued, in respect of the right at the time the dividend or interest concerned is paid, andthe conditions set out in paragraphs (a) and (b) in the definition of “qualifying certificate of deposit” apply; and
- “*quoted Eurobond*” means any security that—is issued by a company,is listed on a recognised stock exchange, andcarries a right to interest;
- “*security*” includes share;
- “*uncertificated eligible debt security units*” has the same meaning as in section 552(2) of ITTOIA 2005;
- “*UK public revenue dividend*” means any income from securities which is paid out of the public revenue of the United Kingdom or Northern Ireland, but does not include interest on local authority stock.
- (5) For the purposes of subsection (3)(i) above, a financial instrument includes—
- (a) any money,
- (b) any shares or securities,
- (c) an option, future or contract for differences if, but only if, its underlying subject-matter is (or is primarily) a financial instrument, or financial instruments, and
- (d) an instrument the underlying subject-matter of which is (or is primarily) creditworthiness.
- (6) “*central counterparty clearing service*” means the service provided by a clearing house or investment exchange to the parties to a transaction where there are contracts between each of the parties and the clearing house or investment exchange (in place of, or as an alternative to, a contract directly between the parties);
“*recognised clearing house*” and “*recognised investment exchange*” have the same meaning as in the Financial Services and Markets Act 2000 (see section 285 of that Act);
for the purposes of subsection (5) above, the “*underlying*” subject-matter of an instrument the effect of which depends on an index or factor is the matter by reference to which the index or factor is determined.
- (7) This section is subject to section 101 of the Finance Act 2004 (payment of royalties without deduction at source).
#### Charge to tax where payments made under section 349
##### 350
- (1) Where any payment within section 349 is made by or through any person, that person shall forthwith deliver to the inspector an account of the payment, and shall be assessable and chargeable with income tax at the applicable rate on the payment, or on so much thereof as is not made out of profits or gains brought into charge to income tax.
- (1A) In subsection (1) above “*the applicable rate*” means the rate which is applicable to the payment under section 4 (or, where the payment is one to which subsection (1) of section 349E applies, the rate referred to in that subsection).
- (2) In section 349(1) any reference to a payment or sum as being not payable, or not wholly payable, out of profits or gains brought into charge to income tax shall be construed as a reference to it as being payable wholly or in part out of a source other than profits or gains brought into charge; and any such reference elsewhere in the Tax Acts shall be construed accordingly.
- (3) All the provisions of the Income Tax Acts relating to persons who are to be chargeable with income tax, to income tax assessments, and to the collection and recovery of income tax, shall, so far as they are applicable, apply to the charge, assessment, collection and recovery of income tax under this section.
- (4) Section 349 and this section have effect subject to the provisions of Schedule 16 which has effect for the purpose of regulating the time and manner in which companies resident in the United Kingdom—
- (a) are to account for and pay income tax in respect of payments from which tax is deductible under section 349, and
- (b) are to be repaid income tax in respect of payments received by them;
and for that purpose the Board may by regulations modify, supplement or replace any of the provisions of Schedule 16; and references in this Act and in any other enactment to any of those provisions shall be construed as including references to any such regulations.
- (5) Without prejudice to the generality of subsection (4) above, regulations under that subsection may, in relation to income tax for which a company is liable to account, modify any provision of Parts II to VI of the Management Act or apply any such provision with or without modifications.
- (6) Regulations under this section may—
- (a) make different provision for different descriptions of companies and for different circumstances and may authorise the Board, where in their opinion there are special circumstances justifying it, to make special arrangements as respects income tax for which a company is liable to account or the repayment of income tax borne by a company;
- (b) include such transitional and other supplemental provisions as appear to the Board to be expedient or necessary.
- (7) The Board shall not make any regulations under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.
#### Small maintenance payments
##### 351
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certificates of deduction of tax
##### 352
- (1) A person making any payment which is subject to deduction of income tax by virtue of section 339, 348, 349 or 687 shall, if the recipient so requests in writing, furnish him with a statement in writing showing the gross amount of the payment, the amount of tax deducted, and the actual amount paid.
- (2) The duty imposed by subsection (1) above shall be enforceable at the suit or instance of the person requesting the statement.
### Relief for payments of interest (excluding MIRAS)
#### General provision
##### 353
- (1) Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to sections 359 to 368 of this Act and section 52 of ITTOIA 2005) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of sections 359 to 365.
- (1A) Where a person is entitled for any year of assessment to relief under this section in respect of any amount of interest which—
- (a) is eligible for that relief by virtue of section . . . 365,. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
that relief shall consist in an income tax reduction for that year calculated by reference to that amount.
- (1B) Where a person is entitled for any year of assessment to relief under this section in respect of any amount of interest which—
- (a) is eligible for that relief otherwise than by virtue of section . . . 365, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
that relief shall consist (subject to section 237(5)(b)) in a deduction or set-off of that amount from or against that person’s income for that year.
- (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1E) Where any person is entitled for any year of assessment to relief under this section in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in subsection (1B) above, that amount of interest shall be apportioned between the cases to which each of those subsections applies without regard to what parts of the total amount borrowed remain outstanding but according to . . . —
- (a) the proportions of the total amount borrowed which were applied for different purposes; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and subsection (1A) or (1B) above shall apply accordingly in relation to the interest apportioned to the case to which that subsection applies.
- (1F) Where any person is entitled under this section for any year of assessment to an income tax reduction calculated by reference to an amount of interest, the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from this section less whichever is the smaller of—
- (a) the amount equal to the applicable percentage of that amount of interest; and
- (b) the amount which reduces his liability to nil.
- (1G) In subsection (1F) above “*the applicable percentage*” means 23 per cent.
- (1H) In determining for the purposes of subsection (1F) above the amount of income tax to which a person would be liable apart from any income tax reduction under this section, no account shall be taken of—
- (a) any income tax reduction under Chapter I of Part VII or section 347B;
- (b) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or
- (c) any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.
- (2) This section does not apply to a payment of relevant loan interest to which section 369 applies.
- (3) Relief under this section shall not be given in respect of—
- (a) interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or
- (b) where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans to buy land etc
##### 354
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Matters excluded from section 354
##### 355
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job-related accommodation
##### 356
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limit on amount of loan eligible for relief by virtue of section 354
##### 357
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where borrower deceased
##### 358
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy machinery or plant
##### 359
- (1) Where an individual is a member of a partnership which, under section 264 of the Capital Allowances Act, is entitled to a capital allowance or liable to a balancing charge for any period of account in respect of plant or machinery belonging to the individual, any interest paid by him in that period of account on a loan to defray money applied as capital expenditure on the provision of that plant or machinery is eligible for relief under section 353, except interest falling due and payable more than three years after the end of the period of account in which the debt was incurred.
- (2) Where the machinery or plant is in use partly for the purposes of the trade, profession or vocation carried on by the partnership and partly for other purposes, such part only of the interest is eligible for relief under section 353 as is just and reasonable to attribute to the purposes of the trade, profession or vocation, having regard to all the relevant circumstances and, in particular, to the extent of the use for those other purposes.
- (3) Where the holder of an office or employment—
- (a) is under Part 2 of the Capital Allowances Act entitled to a capital allowance or liable to a balancing charge, (or would be so entitled or liable but for some contribution made by the employer), for any year of assessment in respect of plant or machinery belonging to him and in use for the purposes of the office or employment; and
- (b) pays interest in that year on a loan to defray money applied as capital expenditure on the provision of that plant or machinery;
the interest so paid is eligible for relief under section 353 unless it is interest falling due and payable more than three years after the end of the year of assessment in which the debt was incurred.
- (4) Where the machinery or plant is in use partly for the purposes of the office or employment and partly for other purposes, such part only of the interest is eligible for relief under section 353 as it is just and reasonable to attribute to the purposes of the office or employment, having regard to all the relevant circumstances and, in particular, to the extent of the use for those other purposes.
#### Loan to buy interest in close company
##### 360
- (1) Subject to the following provisions of this section and sections 361 to 364, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
- (a) in acquiring any part of the ordinary share capital of a close company complying with section 13A(2); or
- (b) in lending money to such a close company which is used wholly and exclusively for the purposes of the business of the company or of any associated company of it which is a close company satisfying any of those conditions; or
- (c) in paying off another loan interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and either the conditions stated in subsection (2) below or those stated in subsection (3) below are satisfied.
- (2) The conditions first referred to in subsection (1) above are—
- (a) that, when the interest is paid, the company continues to comply with section 13A(2) and the individual has a material interest in the company; and
- (b) that he shows that in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1); and
- (c) that, if the company exists wholly or mainly for the purpose of holding investments or other property, no property held by the company is used as a residence by the individual;
but the condition in paragraph (c) above shall not apply in a case where the individual has worked for the greater part of his time in the actual management or conduct of the business of the company, or of an associated company of the company.
- (3) The conditions secondly referred to in subsection (1) above are—
- (a) that, when the interest is paid, the company continues to comply with section 13A(2) and the individual holds any part of the ordinary share capital of the company; and
- (b) that in the period from the application of the proceeds of the loan to the payment of the interest the individual has worked for the greater part of his time in the actual management or conduct of the company or of an associated company of the company; and
- (c) that he shows in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1).
- (3A) Interest shall not be eligible for relief under section 353 by virtue of paragraph (a) of subsection (1) above in respect of shares acquired on or after 14th March 1989 if at any time the person by whom they are acquired, or that person’s spouse or civil partner, makes a claim for relief in respect of them under Chapter III of Part VII or makes a claim in respect of them under Schedule 5B to the 1992 Act.
- (4) Subject to section 360A, in this section expressions to which a meaning is assigned by Part XI have that meaning.
#### Loan to buy interest in co-operative or employee-controlled company
##### 361
- (1) Subject to the following provisions of this section and sections 363 and 364, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
- (a) in acquiring a share or shares in a body which is a co-operative as defined by section 363(5); or
- (b) in lending money to any such body which is used wholly and exclusively for the purposes of the business of that body or of a subsidiary of that body; or
- (c) in paying off another loan interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if it was free of interest, that it carried interest);
and the conditions in subsection (2) below are satisfied.
- (2) The conditions referred to in subsection (1) above are—
- (a) that the loan was made after 10th March 1981;
- (b) that, when the interest is paid, the body continues to be a co-operative; and
- (c) that in the period from the application of the proceeds of the loan to the payment of the interest the individual has worked for the greater part of his time as an employee of the body or of a subsidiary of the body; and
- (d) that he shows that in that period he has not recovered any capital from the body apart from any taken into account under section 363(1).
- (3) Subject to sections 362 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
- (a) in acquiring any part of the ordinary share capital of an employee-controlled company; or
- (b) in paying off another loan, interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if it was free of interest, that it carried interest);
and the conditions stated in subsection (4) below are satisfied.
- (4) The conditions referred to in subsection (3) above are that—
- (a) the company is, throughout the period beginning with the date on which the shares are acquired and ending with the date on which the interest is paid—
- (i) an unquoted company resident in the United Kingdom and not resident elsewhere; and
- (ii) a trading company or the holding company of a trading group;
- (b) the shares are acquired before, or not later than 12 months after, the date on which the company first becomes an employee-controlled company;
- (c) during the year of assessment in which the interest is paid the company either—
- (i) first becomes an employee-controlled company; or
- (ii) is such a company throughout a period of at least nine months;
- (d) the individual or his spouse is a full-time employee of the company throughout the period beginning with the date on which the proceeds of the loan are applied and ending with the date on which the interest is paid or, if at that date he has ceased to be such an employee, ending with whichever is the later of—
- (i) the date on which he ceased to be such an employee;
- (ii) the date 12 months before the payment of the interest; and
- (e) the individual shows that in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1).
- (5) For the purposes of this section a company is employee-controlled at any time when more than 50 per cent.—
- (a) of the issued ordinary share capital of the company, and
- (b) of the voting power in the company,
is beneficially owned by persons who, or whose spouses, are full-time employees of the company.
- (6) Where an individual owns beneficially, or he and his spouse together own beneficially, more than 10 per cent. of the issued ordinary share capital of, or voting power in, a company, the excess shall be treated for the purposes of subsection (5) above as being owned by an individual who is neither a full-time employee of the company nor the spouse of such an employee.
- (7) Where an individual and his spouse are both full-time employees of the company, subsection (6) above shall apply in relation to them with the omission of the words “or he and his spouse together own beneficially”.
- (8) In this section—
- “*full-time employee*”, in relation to a company, means a person who works for the greater part of his time as an employee or director of the company or of a 51 per cent. subsidiary of the company;
- “*holding company*” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- “*trading group*” means a group the business of whose members taken together consists wholly or mainly of the carrying on of a trade or trades, and for this purpose “*group*” means a company which has one or more 75 per cent. subsidiaries together with those subsidiaries; and
- “*unquoted company*” means a company none of whose shares are listed in the Official List of the Stock Exchange.
#### Loan to buy into partnership
##### 362
- (1) Subject to sections 363 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
- (a) in purchasing a share in a partnership; or
- (b) in contributing money to a partnership by way of capital or premium, or in advancing money to a partnership, where the money contributed or advanced is used wholly for the purposes of the trade, profession or vocation carried on by the partnership; or
- (c) in paying off another loan interest on which would have been eligible for relief under that section had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and the conditions stated in subsection (2) below are satisfied.
- (2) The conditions referred to in subsection (1) above are—
- (a) that, throughout the period from the application of the proceeds of the loan until the interest was paid, the individual has been a member of the partnership otherwise than—
- (i) as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907, or
- (ii) as a member of an investment LLP; and
- (b) that he shows that in that period he has not recovered any capital from the partnership, apart from any amount taken into account under section 363(1).
#### Provisions supplementary to sections 360 to 362
##### 363
- (1) If at any time after the application of the proceeds of the loan the individual has recovered any amount of capital from the close company, co-operative, employee-controlled company or partnership without using that amount in repayment of the loan, he shall be treated for the purposes of sections 353, 360, 361 and 362 as if he had at that time repaid that amount out of the loan, so that out of the interest otherwise eligible for relief (or, where section 367(4) applies, out of the proportion so eligible) and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered.
- (2) The individual shall be treated as having recovered an amount of capital from the close company, co-operative, employee-controlled company or partnership if—
- (a) he receives consideration of that amount or value for the sale, exchange or assignment of any part of the ordinary share capital of the company or of his share or shares in the co-operative or of his interest in the partnership, or of any consideration of that amount or value by way of repayment of any part of that ordinary share capital or of his share or shares in the co-operative; or
- (b) the close company, co-operative, employee-controlled company or partnership repays that amount of a loan or advance from him or the partnership returns that amount of capital to him; or
- (c) he receives consideration of that amount or value for assigning any debt due to him from the close company, co-operative, employee-controlled company or partnership;
and where a sale or assignment is not a bargain made at arm’s length, the sale or assignment shall be deemed to be for a consideration of an amount equal to the market value of what is disposed of.
- (3) In the application of this section to Scotland for the word “assignment” wherever it occurs there shall be substituted the word “ assignation ”.
- (4) Section 360, or, as the case may be, 361(2) or (4) or 362(2) and subsections (1) to (3) above, shall apply to a loan within section 360(1)(c), 361(1)(c) or (3)(b) or 362(1)(c) as if it, and any loan it replaces, were one loan, and so that—
- (a) references to the application of the proceeds of the loan were references to the application of the proceeds of the original loan; and
- (b) any restriction under subsection (1) above which applies to any loan which has been replaced shall apply to the loan which replaces it.
- (5) In this section and sections 361 and 362—
- “*co-operative*” means a common ownership enterprise or a co-operative enterprise as defined in section 2 of the Industrial Common Ownership Act 1976; and
- “*subsidiary*” has the same meaning as for the purposes of section 2 of that Act.
#### Loan to pay inheritance tax
##### 364
- (1) Interest is eligible for relief under section 353 if it is interest on a loan to the personal representatives of a deceased person, the proceeds of which are applied—
- (a) in paying, before the grant of representation or confirmation, capital transfer tax or inheritance tax payable on the delivery of the personal representatives’ account and attributable to the value of personal property to which the deceased was beneficially entitled immediately before his death and which vests in the personal representatives or would vest in them if the property were situated in the United Kingdom; or
- (b) in paying off another loan interest on which would have been eligible for that relief by virtue of this section if the loan had not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and the interest is paid in respect of a period ending within one year from the making of the loan within paragraph (a) above.
- (2) If or to the extent that any relief in respect of interest eligible for it under subsection (1) above cannot be given against income of the year in which the interest is paid because of an insufficiency of income in that year, it may instead be given against income of the preceding year of assessment, and so on; and if or to the extent that it cannot be so given it may instead be given against income of the year following that in which the interest is paid, and so on.
- (3) Sufficient evidence of the amount of capital transfer tax or inheritance tax paid as mentioned in subsection (1)(a) above and of any statements relevant to its computation may be given by the production of a document purporting to be a certificate from the Board.
- (4) For the purposes of subsections (1) to (3) above—
- (a) references to capital transfer tax or inheritance tax include any interest payable on that tax; and
- (b) references to interest in respect of a period ending within a given time apply whether or not interest continues to run after that time.
#### Loan to buy life annuity
##### 365
- (1) Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied—
- (aa) that the loan was made before 9th March 1999;
- (a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“*the annuitants*”) who include the person to whom the loan was made;
- (b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years;
- (c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
- (d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants used the land on which it was secured as his only or main residence immediately before 9th March 1999 .
- (1AA) Where—
- (a) a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and
- (b) the offer was either in writing or evidenced by a note or memorandum made by the lender before that date,
the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date.
- (1AB) Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“*the new loan*”) if—
- (a) the new loan was made on or after the day on which the Finance Act 1999 was passed;
- (b) the new loan was made as part of a scheme (“*the scheme*”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“*the old loan*”); and
- (c) the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.
- (1AC) If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.
- (1AD) In subsection (1AC) above “*the remaining part*” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan.
- (1A) The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if—
- (a) the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and
- (b) the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest.
- (1B) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case.
- (2) Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants.
- (3) If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the sum of £30,000; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to that sum the same proportion as the interest payable by him bears to the interest payable by both or all of them.
#### Information
##### 366
- (1) A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing—
- (a) the date when the debt was incurred;
- (b) the amount of the debt when incurred;
- (c) the interest paid in the year of assessment for which the claim is made (or, in the case of relief by virtue of section . . . 364(2), the year of assessment for which the claim would be made but for an insufficiency of income); and
- (d) the name and address of the debtor.
- (2) Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request.
- (3) Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority.
#### Provisions supplementary to sections 354 to 366
##### 367
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Sections . . . 360 to 364 do not apply to a loan unless it is made—
- (a) in connection with the application of money, and
- (b) on the occasion of, or within what is in the circumstances a reasonable time from, the application of the money;
and those sections do not apply to a loan the proceeds of which are applied for some other purpose before being applied as mentioned in those sections.
- (3) For the purposes of sections 359 to 364, the giving of credit for any money due from the purchaser under any sale shall be treated as the making of a loan to defray money applied by him in making the purchase.
- (4) Where part only of a debt fulfils the conditions required under sections 359 to 364 for interest on the debt to be eligible for relief under section 353, such proportion of the interest shall be treated as eligible for relief under that section as is equal to the portion of the debt fulfilling those conditions at the time of the application of the money in question.
- (5) In section 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year.
#### Exclusion of double relief etc
##### 368
- (1) Interest in respect of which relief is given under section 353 shall not be allowable as a deduction for any purpose of the Income Tax Acts except so far as it is so allowable in accordance with subsection (1B) of that section.
- (2) Relief shall not be given under section 353 against income chargeable to corporation tax, and shall not be given against any other income of a company, except where both of the following conditions are satisfied, that is to say—
- (a) that the company is not resident in the United Kingdom; and
- (b) that the interest cannot be taken into account in computing corporation tax chargeable on the company.
- (3) Where interest on any debt or liability is taken into account in the computation of profits or losses of any trade, profession or vocation, or of any UK property business or overseas property business, no relief shall be given under section 353—
- (a) in respect of the payment of that interest; or
- (b) in respect of interest on the same debt or liability which is paid in any year of assessment for which that computation is relevant.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of subsection (3) above, all interest capable of being taken into account in such a computation as is mentioned in that subsection which is payable by any person on money advanced to him on current account, whether advanced on one or more accounts or by the same or separate banks or other persons, shall be treated as interest payable on the same debt.
- (6) Any reference in subsection (3) above to an amount taken into account is a reference to an amount taken into account in an assessment which has been finally determined.
### Mortgage interest relief at source
#### Mortgage interest payable under deduction of tax
##### 369
- (1) If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to the applicable percentage thereof.
- (1A) In subsection (1) above “*the applicable percentage*” means 23 per cent..
- (2) Where a sum is deducted under subsection (1) above from a payment of relevant loan interest—
- (a) the person to whom the payment is made shall allow the deduction on receipt of the residue;
- (b) the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and
- (c) the sum deducted shall be treated as income tax paid by the person to whom the payment is made.
- (3) The following payments, that is to say—
- (a) payments of relevant loan interest to which this section applies, and
- (b) payments which would be such payments but for section 373(5),
shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection.
- (6) Any person by whom a payment of relevant loan interest to which this section applies is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates.
- (7) The following provisions of the Management Act, namely—
- (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act;
- (b) section 30 (tax repaid in error etc.) apart from subsection (1B) ,
- (c) section 86 (interest), and
- (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.
- (8) In the application of section 86 of the Management Act by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment (“the relevant year of assessment”) under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—
- (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (6) above has made a relevant interim claim; and
- (b) in any other case, is the later of the following dates, that is to say—
- (i) 1st January in the relevant year of assessment; or
- (ii) the date of the making of the payment by the Board which gives rise to the assessment.
- (9) In this section—
- “*financial year*”, in relation to any person, means a financial year of that person for the purposes of the relevant regulations;
- “*interim claim*” means an interim claim within the meaning of the relevant regulations;
- “*relevant interim claim*” means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person’s financial year, an interim claim made for a period falling wholly or partly within that financial year; and
- “*the relevant regulations*” means regulations made under section 378(3) for the purposes of subsection (6) above.
#### Relevant loan interest
##### 370
- (1) Subject to this section and sections 373 to 376, in this Part “*relevant loan interest*” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) . . . below applies.
- (2) Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2) and any other provision applying to interest falling to be treated as relevant loan interest—
- (a) it is interest falling within section . . . 365; and
- (b) apart (where applicable) from section . . . 365(3), the whole of the interest would be eligible for relief under section 353;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In determining whether subsection (2) above applies to any interest, section 365 shall have effect as if the words “or the Republic of Ireland” were omitted.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Second loans
##### 371
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Home improvement loans
##### 372
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans in excess of the qualifying maximum, and joint borrowers
##### 373
- (1) The provisions of this section have effect in relation to a loan where, by virtue of . . . section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “*limited loan*”.
- (2) None of the interest on a limited loan is relevant loan interest unless—
- (a) the loan is made on or after 6th April 1987; or
- (b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled . . . only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest.
- (6) Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless—
- (a) each of the persons to whom the loan was made is a qualifying borrower; and
- (b) in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with section 370 and this section.
- (7) In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
#### Conditions for application of section 369
##### 374
- (1) Section 369 does not apply to any relevant loan interest unless—
- (a) in the case of a loan of a description specified by regulations for the purposes of this paragraph, the borrower or, in the case of joint borrowers, each of them has given notice to the lender in the prescribed form certifying—
- (i) that he is a qualifying borrower; and
- (ii) that the interest is relevant loan interest; and
- (iii) such other matters as may be prescribed; or
- (b) the Board have given notice to the lender and the borrower that the interest may be paid under deduction of tax; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) the loan to which the interest relates is of a description specified by regulations for the purposes of this paragraph and was made—
- (i) if sub-paragraph (2) of paragraph 2 of Schedule 7 to the Finance Act 1982 applied to interest on the loan which became due on or after a date earlier than 6th April 1983, being a date specified by the Board in pursuance of sub-paragraph (5) of that paragraph, before that earlier date; or
- (ii) if the qualifying lender is a building society or a local authority, before 1st April 1983; or
- (iii) if sub-paragraphs (i) and (ii) above do not apply and the interest falls within section 370(2), before 6th April 1983.
- (2) Where notice has been given as mentioned in paragraph (a) or (b) of subsection (1) above, section 369 applies to any relevant loan interest to which the notice relates and which becomes due on or after the relevant date, as defined by subsection (3) below; and in a case falling within paragraph . . . (d) of subsection (1) above, section 369 applies to the relevant loan interest referred to in that paragraph.
- (3) In subsection (2) above “*the relevant date*” means—
- (a) in the case of a notice under subsection (1)(a) above, the date the notice is given, and
- (b) in the case of a notice under subsection (1)(b) above, a date specified in the notice as being the relevant date (which may be earlier than the date so specified as the date from which the interest may be paid under deduction of tax).
#### Interest ceasing to be relevant loan interest, etc
##### 375
- (1) If at any time—
- (a) the interest on a loan ceases to be relevant loan interest; or
- (b) a person making payments of relevant loan interest ceases to be a qualifying borrower;
the borrower shall give notice of the fact to the lender.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and
- (aa) as respects which any of the conditions mentioned in section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made.
- (4A) If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.
- (5) If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters.
- (6) Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower.
- (7) Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower.
- (8) In any case where—
- (a) section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and
- (b) the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and
- (c) a payment of that interest was made on or after the relevant date but not under deduction of tax,
regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date.
- (8A) In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—
- (a) provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and
- (b) make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.
- (8B) Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying borrowers and qualifying lenders
##### 376
- (1) Subject to subsection (2) below, an individual is a qualifying borrower with respect to the interest on any loan.
- (2) In relation to interest paid at a time when the borrower or the borrower’s husband or wife holds an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act), the borrower is not a qualifying borrower.
- (3) In subsection (2) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
- (4) The following bodies are qualifying lenders:—
- (a) a building society;
- (b) a local authority;
- (c) the Bank of England;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance;
- (f) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) a development corporation within the meaning of the New Towns Act 1981 or the New Towns (Scotland) Act 1968;
- (j) the Commission for the New Towns;
- (k) the Housing Corporation;
- (ka) the Secretary of State if the loan is made by him under section 79 of the Housing Associations Act 1985;
- (l) the Northern Ireland Housing Executive;
- (m) the Scottish Special Housing Association;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) the Church of England Pensions Board;
- (p) any body which is for the time being registered under section 376A.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variation of terms of repayment of certain loans
##### 377
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary regulations
##### 378
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The Board may by regulations make provision—
- (a) for the purposes of any provision of sections 369 to 376A which relates to any matter or thing to be specified by or done in accordance with regulations;
- (b) for the application of those sections in relation to loan interest paid by personal representatives and trustees;
- (c) with respect to the furnishing of information by borrowers or lenders, including, in the case of lenders, the inspection of books, documents and other records on behalf of the Board;
- (d) for, and with respect to, appeals to the General Commissioners or the Special Commissioners against the refusal of the Board to issue a notice under section 374(1)(b) or the issue of a notice under section 375(6) or (7); and
- (e) generally for giving effect to sections 369 to 376A.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 369 to 378
##### 379
In sections 369 to 378—
- “contracts of general insurance” means contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contracts of long-term insurance” means contracts which fall within Part II of that Schedule;
- “*prescribed*” . . . means prescribed by the Board;
- “*qualifying borrower*” has the meaning given by section 376(1) to (3);
- “*qualifying lender*” has the meaning given by section 376(4) . . . ;
- “*regulations*” . . . means regulations made by the Board under section 378;
- “*relevant loan interest*” has the meaning given by section 370(1);
- “*separated*” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent.
## PART X — LOSS RELIEF AND GROUP RELIEF
### CHAPTER I — LOSS RELIEF: INCOME TAX
### Trade etc. losses
#### Set-off against general income
##### 380
- (1) Where in any year of assessment any person sustains a loss in any trade, profession, vocation or employment carried on by him either solely or in partnership, he may, by notice given within twelve months from the 31st January next following that year, make a claim for relief from income tax on—
- (a) so much of his income for that year as is equal to the amount of the loss or, where it is less than that amount, the whole of that income; or
- (b) so much of his income for the last preceding year as is equal to that amount or, where it is less than that amount, the whole of that income;
but relief shall not be given for the loss or the same part of the loss both under paragraph (a) and under paragraph (b) above.
- (2) Any relief claimed under paragraph (a) of subsection (1) above in respect of any income shall be given in priority to any relief claimed in respect of that income under paragraph (b) of that subsection.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This section applies in relation to losses sustained in the occupation of woodlands in respect of which a person has elected under paragraph 4 of Schedule 6 to the Finance Act 1988 to be charged to income tax under Schedule D as it applies in relation to losses sustained in a trade.
#### Further relief for individuals for losses in early years of trade
##### 381
- (1) Where an individual carrying on a trade sustains a loss in the trade in—
- (a) the year of assessment in which it is first carried on by him; or
- (b) any of the next three years of assessment;
he may, by notice given on or before the first anniversary of the 31st January next following the year of assessment in which the loss is sustained, make a claim for relief under this section.
- (2) Subject to section 492 and this section, relief shall be given under subsection (1) above from income tax on so much of the claimant’s income as is equal to the amount of the loss or, where it is less than that amount, the whole of that income, being income for the three years of assessment last preceding that in which the loss is sustained, taking income for an earlier year before income for a later year.
- (3) Relief shall not be given for the same loss or the same portion of a loss both under subsection (1) above and under any other provision of the Income Tax Acts.
- (4) Relief shall not be given under subsection (1) above in respect of a loss sustained in any period unless . . . the trade was carried on throughout that period on a commercial basis and in such a way that profits in the trade (or, where the carrying on of the trade forms part of a larger undertaking, in the undertaking as a whole) could reasonably be expected to be realised in that period or within a reasonable time thereafter.
- (5) Relief shall not be given under subsection (1) above in respect of a loss sustained by an individual in a trade if—
- (a) at the time when it is first carried on by him he is married to , or a civil partner of, another individual with whom he is living together and who has previously carried on the trade; and
- (b) the loss is sustained in a year of assessment later than the third year of assessment after that in which the trade was first carried on by the other individual.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) This section applies, with the necessary modifications, in relation to a profession or vocation as it applies in relation to a trade.
#### Provisions supplementary to sections 380 and 381
##### 382
- (1) *A claim for relief under section* 380*or* 381*may require that the relief be given only by reference to the income of the person sustaining the loss, without extending to the income of that person’s wife or husband.*
- (2) *Subject to any requirement under subsection* (1)*above, relief under section* 380*or* 381*shall be given in respect of a loss sustained by any person by treating the loss as reducing first his income of the corresponding class, then his other income, then the income of the corresponding class of that person’s wife or husband, then the other income of the wife or husband*.
- For the purposes of this subsection “*income of the corresponding class*” means earned or unearned income according as income arising during the same period as the loss to the person sustaining it from profits or gains of the same trade, profession, vocation or employment would have been that person’s earned or unearned income.
- (3) Subject to subsection (4) below, for the purposes of sections 380 and 381, the amount of a loss sustained in a trade, profession or vocation shall be computed in like manner and in respect of the same period as the profits arising from the trade, profession or vocation are computed . . . .
- (4) An amount of a loss which, apart from this subsection, would fall to be included in the computations for two successive years of assessment shall not be included in the computation for the second of those years.
#### Extension of right of set-off to capital allowances
##### 383
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restrictions on right of set-off
##### 384
- (1) Subject to subsection (2) below, a loss . . . shall not be available for relief under section 380 unless . . . , for the year of assessment in which the loss is claimed to have been sustained, the trade was being carried on on a commercial basis and with a view to the realisation of profits in the trade or, where the carrying on of the trade formed part of a larger undertaking, in the undertaking as a whole.
- (2) Subsection (1) above shall not apply—
- (a) to a loss made . . . by any person in the exercise of functions conferred by or under any enactment (including an enactment contained in a local or private Act); . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where during a year of assessment there is a change in the manner in which a trade is being carried on, it shall be treated for the purposes of this section as having been carried on throughout the year in the way in which it was being carried on by the end of the year.
- (4) Subject to subsection (5) below, where
- (a) a trade is carried on for part only of a year of assessment by reason of its being set up and commenced, or discontinued, or both, in that year, or
- (b) a person carries on, or is treated as carrying on, a trade for part only of a year of assessment by reason of—
- (i) a succession to the trade during the year which involves all the persons carrying it on before the succession permanently ceasing to carry it on, or
- (ii) a change of residence within section 17 of ITTOIA 2005,
subsections (1) to (3) above shall have effect in relation to the trade as regards that part of that year as if any reference to the manner of carrying on the trade for or by the end of that year were a reference to the manner of carrying it on for or by the end of that part of that year.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) There shall be disregarded for the purposes of sections 380 and 381 so much of any loss as derives from any allowances made to an individual under Part 2 of the Capital Allowances Act in respect of expenditure incurred on the provision of plant or machinery for leasing in the course of a trade unless—
- (a) the trade is carried on by him (alone or in partnership) for a continuous period of at least six months in, or beginning or ending in, the year of assessment in which the loss was sustained; and
- (b) he devotes substantially the whole of his time to carrying it on (alone or in partnership) throughout that year or if it is set up or permanently discontinued (or both) in that year, for a continuous period of at least six months beginning or ending in that year.
- (7) Subsection (6) above shall apply also to expenditure incurred by an individual on the provision for the purposes of a trade carried on by him (alone or in partnership) of an asset which is not to be leased if payments in the nature of royalties or licence fees are to accrue from rights granted by him in connection with that asset.
- (8) Where relief has been given in a case to which subsection (6) above applies it shall be withdrawn by the making of an assessment to income tax.
- (9) Where at any time a trade is carried on so as to afford a reasonable expectation of profit, it shall be treated for the purposes of subsection (1) above as being carried on at that time with a view to the realisation of profits.
- (10) Subsections (1) to (5) and (9) above—
- (a) apply to professions and vocations as they apply to trades, with references to a commercial basis construed accordingly; and
- (b) have effect without prejudice to section 397;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) Expressions used in subsections (6) to (8) and in Part 2 of the Capital Allowances Act have same meaning in those subsections as in that Part; and those subsections are without prejudice to section 384A.
#### Carry-forward against subsequent profits
##### 385
- (1) Where a person has, in any trade, profession or vocation carried on by him either alone or in partnership, sustained a loss (to be computed as mentioned in subsections (3) and (4) of section 382) in respect of which relief has not been wholly given either under section 380 or any provision of the Income Tax Acts—
- (a) he may make a claim requiring that any part of the loss for which relief has not been so given shall be set off for the purposes of income tax against the income of the trade, profession or vocation for subsequent years of assessment; and
- (b) where he makes such a claim, the income from the trade, profession or vocation in any subsequent year of assessment shall be treated as reduced by that part of the loss, or by so much of that part as cannot, on that claim, be relieved against such income of an earlier year of assessment.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where in any year of assessment relief cannot be given, or cannot be wholly given, in respect of a loss carried forward under this section because the amount of the profits of the trade assessed . . . for that year is insufficient, any interest or dividends being interest or dividends—
- (a) on investments arising in that year, and
- (b) which would fall to be taken into account as trading receipts in computing the profits of the trade for the purposes of assessment . . . but for the fact that they have been subjected to tax under other provisions of the Income Tax Acts,
shall be treated for the purposes of the application of this section as if they were profits on which the person carrying on the trade was assessed . . . in respect of that trade for that year of assessment, and relief shall be given accordingly by repayment or otherwise.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Where a loss is sustained by a person in the occupation of woodlands, and that person, if he had made a profit, would by reason of his election under paragraph 4 of Schedule 6 to the Finance Act 1988 have been chargeable for the following year to income tax under Schedule D computed on the amount of that profit, this section shall apply so as to give relief in respect of that loss in the same manner, and to the same extent, as if it were a loss sustained in a trade.
- (7) In so far as relief in respect of any loss has been given to any person under this section, that person shall not be entitled to claim relief in respect of that loss under any other provision of the Income Tax Acts.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward where business transferred to a company
##### 386
- (1) Where—
- (a) a business carried on by any individual, or any individuals in partnership, has been transferred to a company in consideration solely or mainly of the allotment of shares in the company to that individual or those individuals; and
- (b) in the case of any individual to whom, or to whose nominee or nominees, shares have been so allotted, his total income for any year of assessment throughout which he is the beneficial owner of the shares, and throughout which the company carries on the business, includes any income derived by him from the company, whether by way of dividends on those shares or otherwise;
then, subject to subsection (2) below, section 385 (except subsection (5)) shall apply as if the income so derived were profits on which that individual was assessed . . . in respect of that business for that year.
- (2) Where under section 385 as applied by subsection (1) above a loss falls to be deducted from or set off against any income for any year of assessment, the deduction or set-off shall be made in the first place against that part, if any, of the income in respect of which the individual has been, or is liable to be, assessed to tax for that year.
- (3) This section, in its application to the year of assessment in which a business is transferred, shall have effect as if, for the reference in subsection (1)(b) to the year of assessment throughout which the individual is the beneficial owner of the shares and the business is carried on by the company, there were substituted a reference to the period from the date of the transfer to the following 5th April.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward as losses of amounts taxed under section 350
##### 387
- (1) Subject to the provisions of this section, where under section 350 a person has been assessed to income tax in respect of a payment made wholly and exclusively for the purposes of a trade, profession or vocation, the amount on which tax has been paid under that assessment shall be treated for the purposes of sections 385 and 386 as though it were a loss sustained in that trade, profession or vocation, and relief in respect of the loss shall be allowed accordingly.
- (2) Relief shall not be allowed by virtue of this section in respect of any payment, or part of a payment, which is not ultimately borne by the person assessed, or which is charged to capital.
- (3) This section shall not apply—
- (a) to any payment falling within section 349(2);
- (b) to any payment falling within section 349 by virtue of section 43(1);
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) to any capital sum paid in respect of any patent rights assessed under section 349(1) of this Act by virtue of section 595 of ITTOIA 2005;
- (e) to any payment of, or on account of, copyright royalties to which section 536 applies or royalties in respect of a right in a design to which section 537B applies;. . .
- (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of terminal losses
##### 388
- (1) Where a trade, profession or vocation is permanently discontinued in the year 1988-89 or any later year, and any person then carrying it on, either alone or in partnership, has sustained therein a loss to which this section applies (“*a terminal loss*”), that person may, subject to the provisions of this section and of section 389, make a claim requiring that the amount of the terminal loss shall, as far as may be, be deducted from or set off against the amount of profits on which he has been charged to income tax . . . in respect of the trade, profession or vocation for the year of assessment in which the discontinuance occurs and the three years last preceding it; and there shall be made all such reductions of assessments or repayments of tax as may be necessary to give effect to the claim.
- (2) Relief shall not be given in respect of the same matter both under this section and under some other provision of the Income Tax Acts.
- (3) Any relief under this section shall be given as far as possible from the assessment for a later rather than an earlier year.
- (4) Where—
- (a) a claim under this section is made in respect of a terminal loss sustained in a trade, and
- (b) relief cannot be given, or cannot be wholly given, against the profits of the trade charged to income tax . . . for any year because the amount of those profits is insufficient,
any relevant interest or dividends arising in that year shall be treated for the purposes of the application of this section as if they were profits on which the person carrying on the trade was assessed . . . in respect of that trade for that year of assessment, and relief shall be given accordingly by repayment or otherwise.
- For the purposes of this subsection “*any relevant interest or dividends*” means interest or dividends which would fall to be taken into account as trading receipts in computing the profits of the trade for the purpose of assessment . . . but for the fact that they have been subjected to tax under other provisions of the Income Tax Acts.
- (5) The profits on which a person or partnership has been charged to income tax for any year of assessment shall be treated for the purposes of any relief under this section from the assessment for that year as reduced by the amount of those profits applied in making any payment from which income tax was deducted, but was not accounted for because the payment was made out of profits or gains brought into charge to income tax; and the like reduction shall be made in the amount of the terminal loss for which relief may be given under this section from the assessments for earlier years unless the payment was one which, if not made out of profits or gains brought into charge to income tax—
- (a) could have been assessed to income tax under section 350, and
- (b) if so assessed, could have been treated as a loss by virtue of section 387.
- (6) The question whether a person has sustained any and, if so, what terminal loss in a trade, profession or vocation shall be determined for the purposes of this section by taking the amounts (if any) of the following, in so far as they have not otherwise been taken into account so as to reduce or relieve any charge to tax—
- (a) the loss sustained by him in the trade, profession or vocation in the year of assessment in which it is permanently discontinued;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the loss sustained by him in the trade, profession or vocation in the part of the preceding year of assessment beginning 12 months before the discontinuance; . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . For the purposes of paragraphs (a) and (c) of that subsection the amount of a loss shall, subject to the provisions of this section, be computed in the same way as profitsof a trade, profession or vocation under Part 2 of ITTOIA 2005.
#### Supplementary provisions relating to carry-back of terminal losses
##### 389
- (1) Sections 387, 458 and 474 shall apply to the computation of losses, or of profit or loss, for any purpose of this section or section 388 as they apply to any such computation for the corresponding purposes of section 385.
- (2) Where on the permanent discontinuance of a trade which consists of or includes the working of a mine, oil well or other source of mineral deposits within the meaning of Part 5 of the Capital Allowances Act, a claim for relief is made both under section 388 above and section 355 of that Act (carry-back of balancing allowances), the balancing allowance in respect of which the claim is made under section 355 shall be left out of account for the purposes of section 388(6), but relief under section 388 shall be given in priority to relief under section 355.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) For the purposes of this section and section 388 references to the permanent discontinuance of a trade, profession or vocation include—
- (a) a person permanently ceasing to carry on a trade, profession or vocation, and
- (b) a partner permanently ceasing to carry on a notional trade in accordance with section 852(4) of ITTOIA 2005.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where a person occupying woodlands has elected to be charged to income tax in respect thereof under Schedule D, this section and section 388 shall apply to a terminal loss sustained by him in the occupation of the woodlands as they apply to a terminal loss sustained in a trade.
#### Treatment of interest as a loss for purposes of carry-forward and carry-back
##### 390
Where—
- (a) a payment of interest eligible for relief under section 353 is money wholly and exclusively laid out or expended for the purposes of a trade, profession or vocation carried on wholly or partly in the United Kingdom, and
- (b) full effect cannot be given to such relief in respect of the payment by reason of a want or deficiency of income of the year of assessment in which the payment is made,
the amount unallowed may be carried forward to succeeding years of assessment as if it were a loss carried forward under section 385, or may be treated for the purposes of sections 388 and 389 as a loss sustained at the date of payment.
#### Losses from trade etc. carried on abroad
##### 391
In the case of a loss sustained in a trade, profession or vocation carried on wholly outside the United Kingdom, relief under any of sections 380 to 386, 388 and 389 is given only on—
- (a) the profits of a trade, profession or vocation carried on wholly outside the United Kingdom, or
- (b) income falling within section 23, 355, 575, 613, 615, 631 or 635 of ITEPA 2003,
but no relief is to be given on income which is charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis).
### Case VI losses
#### Case VI losses
##### 392
- (1) A person may make a loss relief claim if —
- (a) in any year of assessment he sustains a loss in any transaction (whether he was engaged in it solely or in partnership), and
- (b) the transaction is of such a nature that, if any profits or other income had arisen from it, he would have been liable to be assessed to income tax in respect of the income under or by virtue of any provision to which section 836B applies.
- (2) A loss relief claim is a claim requiring—
- (a) that the amount of the loss sustained by him is, as far as may be, to be deducted from or set off against the total of the amount of any profits or other income or gains arising from any transaction in respect of which he is assessed for that year under or by virtue of any such provision, and
- (b) that any portion of the loss for which relief is not so given is, as far as may be, to be carried forward and deducted from or set off against the total of the amount of any profits or other income or gains arising from any transaction in respect of which he is assessed for a subsequent year of assessment under or by virtue of any such provision.
- (3) If a partner in a partnership sustains a loss, the expression “*the amount of any profits or other income or gains arising from any transaction in respect of which he is assessed*” is to be read in accordance with subsection (4).
- (4) In respect of any year that expression means such portion of the amount on which the partnership is assessed under or by virtue of any provision to which section 836B applies in respect of any transaction as falls to be taken into account in computing the partner's total income for that year.
- (5) Any relief under this section by way of the carrying forward of the loss is to be given as far as possible—
- (a) from the first subsequent assessment in respect of any profits or other income or gains arising from any transaction in respect of which he is assessed under or by virtue of any provision to which section 836B applies for any year, and
- (b) so far as it cannot be so given, from the next such assessment, and so on.
- (6) So far as a loss relief claim concerns the amount of the loss for any year of assessment it must be made on or before the fifth anniversary of the 31st January next following the year of assessment in question.
- (7) But the question whether and, if so, how much relief on that amount should be given under this section against tax for any year of assessment may be the subject of a separate claim made on or before the fifth anniversary of the 31st January next following that year of assessment.
- (8) Any portion of a loss sustained by any person in any transaction (whether he was engaged in it solely or in partnership)—
- (a) which was of such a nature that, if any profits had arisen from it, he would have been liable to be assessed to income tax in respect of the profits under Case VI of Schedule D for any year of assessment before the year 2005-06, and
- (b) which did not fall within section 34, 35 or 36,
is (so far as relief for that portion has not previously been given) to be treated as a loss to be carried forward and deducted in accordance with subsection (2)(b) above.
### CHAPTER II — LOSS RELIEF: CORPORATION TAX
### Trade etc. losses
#### Losses other than terminal losses
##### 393
- (1) Where in any accounting period a company carrying on a trade incurs a loss in the trade, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against any trading income from the trade in succeeding accounting periods; and (so long as the company continues to carry on the trade) its trading income from the trade in any succeeding accounting period shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot, on that claim or on a claim (if made) under section 393A(1), be relieved against income or profits of an earlier accounting period.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The amount of a loss incurred in a trade in an accounting period shall be computed for the purposes of this section in the same way as trading income from the trade in that period would have been computed.
- (8) For the purposes of this section “*trading income*” means, in relation to any trade, the income which falls or would fall to be included in respect of the trade in the total profits of the company; but where—
- (a) in an accounting period a company incurs a loss in a trade in respect of which it is within the charge to corporation tax under Case I or V of Schedule D, and
- (b) in any later accounting period to which the loss or any part of it is carried forward under subsection (1) above relief in respect thereof cannot be given, or cannot wholly be given, because the amount of the trading income of the trade is insufficient,
any interest or dividends on investments which would fall to be taken into account as trading receipts in computing that trading income but for the fact that they have been subjected to tax under other provisions shall be treated for the purposes of subsection (1) above as if they were trading income of the trade.
- (9) Where in an accounting period the charges on income paid by a company—
- (a) exceed the amount of the profits against which they are deductible, and
- (b) include payments made wholly and exclusively for the purposes of a trade carried on by the company,
then, up to the amount of that excess or of those payments, whichever is the less, the charges on income so paid shall in computing a loss for the purposes of subsection (1) above be deductible as if they were trading expenses of the trade.
- (10) In this section references to a company carrying on a trade refer to the company carrying it on so as to be within the charge to corporation tax in respect of it.
- (11) A claim under subsection (1) above must be made within six years after the end of the accounting period in which the loss is incurred, and must be so made notwithstanding that relief cannot be given in respect of the loss until after the end of that period of six years; . . ..
#### Terminal losses
##### 394
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leasing contracts and company reconstructions
##### 395
- (1) Subject to the provisions of this section, if—
- (a) under a contract entered into on or after 6th March 1973 a company (“*the first company*”) incurs capital expenditure on the provision of plant or machinery which the first company lets to another person by another contract (a “*leasing contract*”); and
- (b) apart from this subsection, the first company would be entitled under section 393(1) or in pursuance of a claim under section 393A(1) to relief in respect of losses incurred on the leasing contract; and
- (c) in the accounting period for which a first-year allowance, within the meaning of Part 2 of the Capital Allowances Act, in respect of the expenditure referred to in paragraph (a) above is made to the first company, arrangements are in existence by virtue of which, at some time during or after the expiry of that accounting period, a successor company will be able to carry on any part of the first company’s trade which consists of or includes the performance of all or any of the obligations which, apart from the arrangements, would be the first company’s obligations under the leasing contract,
then, in the accounting period specified in paragraph (c) above and in any subsequent accounting period, the first company shall not be entitled . . . as mentioned in paragraph (b) above except in computing its profits (if any) arising under the leasing contract.
- (2) For the purposes of this section a company is a successor of the first company if the circumstances are such that—
- (a) section 343 applies in relation to the first company and the other company as the predecessor and the successor within the meaning of that section; or
- (b) the two companies are connected with each other within the terms of section 839.
- (3) For the purposes of this section losses incurred on a leasing contract and profits arising under such a contract shall be computed as if the performance of the leasing contract were a trade begun to be carried on by the first company, separately from any other trade which it may carry on, at the commencement of the letting under the leasing contract.
- (4) In determining whether the first company would be entitled . . . as mentioned in subsection (1)(b) above, any losses incurred on the leasing contract shall be treated as incurred in a trade carried on by that company separately from any other trade which it may carry on.
- (5) In this section “*arrangements*” means arrangements of any kind whether in writing or not.
### Case VI losses
#### Case VI losses
##### 396
- (1) Subject to subsection (2) below, where in any accounting period a company incurs a loss in a transaction in respect of which the company is within the charge to corporation tax under Case VI of Schedule D, the company may make a claim requiring that the loss be set off against the amount of any income arising from transactions in respect of which the company is assessed to corporation tax under that Case for the same or any subsequent accounting period; and the company’s income in any accounting period from such transactions shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this section against income of an earlier accounting period.
- (2) This section shall not apply to a loss incurred in a transaction falling within section 34, 35 or 36.
- (3) A claim under this section must be made within six years after the end of the accounting period in which the loss is incurred and must be so made notwithstanding that relief cannot be given in respect of the loss until after the end of that period of six years .
### CHAPTER III — LOSS RELIEF: MISCELLANEOUS PROVISIONS
#### Restriction of relief in case of farming and market gardening
##### 397
- (1) Any loss incurred in a trade of farming or market gardening shall be excluded from section 380 if in each of the prior five years a loss , computed without regard to capital allowances, was incurred in carrying on that trade; . . . .
- (2) Any loss incurred in any accounting period by a company in carrying on a trade of farming or market gardening shall be excluded from section 393(2) if a loss, computed without regard to capital allowances, was incurred in carrying on that trade in that accounting period, and in each of the chargeable periods wholly or partly comprised in the prior five years.
- (3) Subsections (1) and (2) above shall not restrict relief for any loss or for any capital allowance in any case—
- (a) where the whole of the farming or market gardening activities in the year next following the prior five years are of such a nature, and carried on in such a way, as would have justified a reasonable expectation of the realisation of profits in the future if they had been undertaken by a competent farmer or market gardener, but
- (b) where, if that farmer or market gardener had undertaken those activities at the beginning of the prior period of loss, he could not reasonably have expected the activities to become profitable until after the end of the year next following the prior period of loss.
- (4) Subsections (1) and (2) above shall not restrict relief where the carrying on of the trade forms part of, and is ancillary to, a larger trading undertaking.
- (5) In this section—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*chargeable period*”, in relation to a company, means any accounting period . . . ;
- “*prior five years*”—in relation to a loss incurred in a year of assessment, means the last five years of assessment before that year, andin relation to a loss incurred in a company’s accounting period, means the last five years before the beginning of the accounting period;
- “*prior period of loss*” means the prior five years, except that, if losses were incurred in the trade in successive years of assessment or chargeable periods amounting in all to a period longer than five years (and ending when the prior five years end), it means that longer period, and in applying this definition to a chargeable period of a company “*losses*” means losses computed without regard to capital allowances; and
- “*farming*” and “*market gardening*” shall be construed—for income tax purposes, in accordance with the definitions in section 876 of ITTOIA 2005, andfor corporation tax purposes, in accordance with the definitions in section 832 but as if those definitions were not restricted to activities in the United Kingdom.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In ascertaining for the purposes of this section whether a loss was incurred in any part of the prior five years or earlier, the rules applicable to the calculation of the profits of a trade in Part 2 of ITTOIA 2005 or to Case I of Schedule D shall be applied; and in this section “*loss computed without regard to capital allowances*” means, in relation to a chargeable period of a company, a loss so ascertained, but disregarding—
- (a) any allowance or charge under the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act); and
- (b) any provision of that Act requiring allowances and charges to be treated as expenses and receipts of the trade.
- (8) Subsections (1) and (2) above shall not restrict relief for any loss or capital allowance if the trade was set up and commenced within the prior five years, and, for the purposes of this subsection
- (a) a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade; and
- (b) without prejudice to paragraph (a), a trade shall be treated as discontinued, and a new trade set up, at any time when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on.
- (9) For the purposes of subsection (8) above a trade shall not be treated as discontinued if, under section 343(2), it is not to be treated as discontinued for the purpose of capital allowances and charges.
- (10) Where at any time there has been a change in the persons carrying on a trade, this section shall, notwithstanding subsection (8) above, apply as if—
- (a) a husband and his wife were the same person, . . .
- (ab) two civil partners of each other were the same person,
- (b) a husband or his wife were the same person as any company of which either the husband or the wife has control, or of which the two of them have control; and
- (c) a civil partner of another were the same person as any company of which either of the civil partners has control, or of which the two of them have control;
and accordingly relief from income tax or from corporation tax may be restricted under this section by reference to losses some of which are incurred in years of assessment and some, computed without regard to capital allowances, are incurred in a company’s chargeable periods.
#### Transactions in deposits with and without certificates or in debts
##### 398
Where a person sustains a loss on the exercise or disposal of a right to receive any amount, being a right to which section 56(2) above or Chapter 11 of Part 4 of ITTOIA 2005 (transactions in deposits) applies, in a case where—
- (a) if a profit had arisen from that exercise or disposal, that profit would have been chargeable to tax by virtue of section 56(2) above or that Chapter, and
- (b) he is chargeable to corporation tax under Schedule D or income tax under that Act in respect of interest payable on that amount,
then the amount of that interest shall be included in the amounts against which the amount of his loss may be set off in pursuance of a claim under section 392 or, as the case may be, against which the amount of his loss may be set off under section 396.
#### Dealings in commodity futures etc: withdrawal of loss relief
##### 399
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) If, apart from section 143(1) of the 1992 Act or section 128(2) above, gains arising in the course of dealing in financial futures or in qualifying options would constitute, for the purposes of the Corporation Tax Acts, profits and gains chargeable to tax under Case V or VI of Schedule D, then any loss arising in the course of that dealing shall not be allowable against profits and gains which are chargeable to tax under Case V or VI of Schedule D.
- (2) Relief shall not be given to any person under section 380, 381 or 393A(1) in respect of a loss sustained in a trade of dealing in commodity futures if—
- (a) the loss was sustained in a trade carried on in partnership and that person or one or more of the other partners was a company; and
- (b) a scheme has been effected or arrangements have been made (whether by the partnership agreement or otherwise) such that the sole or main benefit that might be expected to accrue to that person from his interest in the partnership was the obtaining of a reduction in tax liability by means of any such relief.
- (3) Where relief has been given in a case to which subsection (2) above applies it shall be withdrawn by the making of an assessment (in the case of corporation tax, under Case VI of Schedule D).
- (4) Subsection (2) above does not apply where the scheme was effected or the arrangements were made wholly before 6th April 1976.
- (5) In this section “*commodity futures*”, “*financial futures*” and “*qualifying options*” have the same meanings as in section 143 of the 1992 Act, . . . .
#### Write-off of government investment
##### 400
- (1) Where any amount of government investment in a body corporate is written-off on or after 6th April 1988, an amount equal to the amount written-off shall be set off against the body’s tax losses as at the end of the accounting period ending last before the write-off date and, to the extent to which that amount exceeds those losses, against the body’s tax losses as at the end of the next accounting period and so on.
- (2) For the purposes of subsection (1) above a body’s tax losses as at the end of an accounting period are—
- (a) any losses which under section 393(1) are . . . available for relief against its trading income for the next accounting period;
- (b) in the case of a company with investment business, within the meaning of Part 4, any such excess as is mentioned in subsection (8) of section 75 which falls to be treated in accordance with subsection (9) of that section;
- (bb) any losses which—
- (i) under section 392A(2) or 392B are carried forward to the next accounting period, or
- (ii) under section 392A(3) are to be carried forward to the next accounting period and treated for the purposes of section 75 as if they were expenses of management deductible for that period;
- (c) any allowances which under section 260(2) of the Capital Allowances Act are available for carry forward to the next accounting period;
- (d) any amount paid by way of charges on income so far as it exceeds the company’s profit for the period and is not taken into account under 75(3) or 393(9); and
- (e) any allowable losses available under 8 of the 1992 Act so far as not allowed in that or a previous accounting period.
- (3) The set off to be made under subsection (1) above for any accounting period shall be made first against the amounts in paragraphs (a) to (d) of subsection (2) above and, so far as it cannot be so made, against the amount in paragraph (e) of that subsection.
- (4) For the purposes of subsection (1) above there shall be excluded from a body’s tax losses as at the end of the accounting period ending last before the write-off date any amounts in respect of which a claim has been made before the write-off date under section 393A(1) or 402 of this Act or section 260(3) of the Capital Allowances Act but the body’s tax losses as at the end of any subsequent accounting period shall be determined as if no such claim had been made on or after that date.
- (5) Any amount that could be set off under subsection (1) above against a body’s tax losses as at the end of an accounting period (or could be so set off if that body then had any such losses) may be set off against the tax losses of any other body corporate which at the end of that period is a member of the same group as the first-mentioned body, or partly against the tax losses of one member of that group and partly against those of the other or any of the others, as may be just and reasonable.
- (6) Expenditure shall not be treated for the purposes of section 532 or 536 of the Capital Allowances Act or section 50 of the 1992 Act as met by the Crown by reason only of the writing-off of any government investment in the body in question and a sum shall not by reason only of any such writing-off be treated as not having been deductible in computing the profits of that body for the purposes of Case I or II of Schedule D.
- (7) For the purposes of this section an amount of government investment in a body corporate is written-off—
- (a) if its liability to repay any money lent to it out of public funds by a Minister of the Crown or the Scottish Ministers is extinguished;
- (b) if any of its shares for which a Minister of the Crown has , or the Scottish Ministers have, subscribed out of public funds are cancelled; or
- (c) if its commencing capital debt is reduced otherwise than by being paid off or its public dividend capital is reduced otherwise than by being repaid (including, in either case, a reduction to nil);
and the amount written-off and the write-off date are the amount in respect of which the liability is extinguished and the date on which it is extinguished, the amount subscribed for the shares that are cancelled and the date of cancellation or the amount of reduction in the commencing capital debt or public dividend capital and the date of the reduction, as the case may be.
- (8) In subsection (7) above “*commencing capital debt*” means any debt to a Minister of the Crown or the Scottish Ministers assumed as such under an enactment and “*public dividend capital*” means any amount paid by a Minister of the Crown or the Scottish Ministers under an enactment in which that amount is so described or under an enactment corresponding to an enactment in which a payment made on similar terms to another body is so described.
- (9) This section shall not have effect in relation to any amount written-off if and to the extent to which it is replaced by money lent, or a payment made, out of public funds or by shares subscribed for, whether for money or money’s worth, by a Minister of the Crown or the Scottish Ministers.
- (9A) Nothing in section 80(5) of the Finance Act 1996 (matters to be brought into account in the case of loan relationships only under Chapter II of Part IV of that Act) shall be construed as preventing this section from applying where a government investment in a body corporate is written off by the extinguishment, in whole or in part, of any liability under a loan relationship.
- (10) In this section—
- “*body corporate*” means any body corporate which is a company for the purposes of corporation tax;
- “*group*” means a company having one or more 51 per cent. subsidiaries and that or those subsidiaries; and
- “*Minister of the Crown*” includes a Northern Ireland department.
#### Relief for pre-trading expenditure
##### 401
- (1) Where a company incurs expenditure for the purposes of a trade or profession before the time when the company begins to carry it on and the expenditure—
- (a) is incurred not more than seven years before that time; and
- (b) is not allowable as a deduction in computing the company'sprofits from the trade or profession for the purposes of Case I or II of Schedule D but would have been so allowable if incurred after that time,
the expenditure shall be treated as incurred on the day on which the trade or profession is first carried on by the company.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1AA) Subsection (1) above shall not apply to any expenditure in relation to which any debit falls, or (but for subsection (1AB) below) would fall, to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (1AB) Where, in the case of any company—
- (a) a non-trading debit is given for any accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships), and
- (b) an election for the purposes of this section is made by that company with respect to that debit within the period of 2 years beginning with the end of that accounting period,
that debit shall not be brought into account for the purposes of that Chapter as a non-trading debit for that period, but subsection (1AC) below shall apply instead.
- (1AC) If a company—
- (a) begins to carry on a trade within the period of seven years after the end of the accounting period for which a non-trading debit is given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships),
- (b) that debit is such that, if it had been given for the accounting period in which the company begins to carry on that trade, it would have been brought into account by reference to that trade in accordance with section 82(2) of that Act (trading debits and credits), and
- (c) an election is or has been made with respect to that debit under subsection (1AB) above,
that debit shall be treated for the purposes of that Chapter as if it were a debit for the accounting period in which the company begins to carry on the trade and shall be brought into account for that period in accordance with section 82(2) of that Act.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — GROUP RELIEF
#### Surrender of relief between members of groups and consortia
##### 402
- (1) Subject to and in accordance with this Chapter and section 492(8)—
- (a) relief for trading losses and other amounts eligible for relief from corporation tax, or
- (b) losses and other amounts not eligible for relief from corporation tax,
may, in the cases set out in subsections (2) and (3) below, be surrendered by a company (“*the surrendering company*”) and, on the making of a claim by another company (“*the claimant company*”) may be allowed to the claimant company by way of a relief from corporation tax called “*group relief*”.
- (2) In respect of amounts falling within subsection (1)(a) above, group relief shall be available in a case where—
- (a) the surrendering company and the claimant company are both members of the same group,
- (b) the surrendering company is resident in the United Kingdom or is not so resident but carries on a trade there through a permanent establishment, and
- (c) the claimant company is resident in the United Kingdom or is not so resident but carries on a trade there through a permanent establishment,
and, in respect of amounts falling within subsection (1)(b) above, group relief shall be available in a case where the condition in subsection (2A) below is satisfied.
A claim made by virtue of this subsection is referred to as a “*group claim*”.
- (2A) The condition in this subsection is satisfied if the surrendering company is within the charge to tax under the law of any EEA territory and—
- (a) the surrendering company is a 75 per cent. subsidiary of the claimant company and the claimant company is resident in the United Kingdom, or
- (b) both the surrendering company and the claimant company are 75 per cent. subsidiaries of a third company that is resident in the United Kingdom.
- (2B) For the purposes of subsection (2A) above, the surrendering company is within the charge to tax under the law of any EEA territory if—
- (a) it is a non-resident company which is resident in any EEA territory, or
- (b) it is a non-resident company which is not resident in any EEA territory but which carries on a trade in any EEA territory through a permanent establishment.
- (3A) A consortium claim shall not be made unless the following condition is satisfied in the case of both the surrendering company and the claimant company.
- (3B) The condition is that the company is resident in the United Kingdom or is a non-resident company carrying on a trade in the United Kingdom through a permanent establishment.
- (4) A consortium claim shall not be made . . . if a profit on a sale of the share capital of the other company or its holding company which the member owns would be treated as a trading receipt of that member.
- (5) Subject to the provisions of this Chapter, two or more claimant companies may make claims relating to the same surrendering company, and to the same accounting period of that surrendering company.
- (6) A payment for group relief—
- (a) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and
- (b) shall not for any of the purposes of the Corporation Tax Acts be regarded as a distribution . . . ;
and in this subsection “*a payment for group relief*” means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered by way of group relief, being a payment not exceeding that amount.
#### Losses etc. which may be surrendered by way of group relief
##### 403
- (1) If in an accounting period (the “surrender period") the surrendering company has—
- (a) trading losses, excess capital allowances or a non-trading deficit on its loan relationships, or
- (b) charges on income, Schedule A losses , management expenses or a non-trading loss on intangible fixed assets available for group relief,
the amount may, subject to the provisions of this Chapter, be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period.
- (2) Trading losses, excess capital allowances and a non-trading deficit on the company’s loan relationships are eligible for surrender as group relief even if the surrendering company has other profits of the surrender period against which they could be set.
Further provision about relief in respect of amounts eligible for surrender under this subsection is contained in sections 403ZA to 403ZC.
- (3) Charges on income, Schedule A losses management expenses and a non-trading loss on intangible fixed assets are available for surrender as group relief only to the extent that in aggregate they exceed the surrendering company’s gross profits for the surrender period.
Any excess surrendered shall be taken to consist first of charges on income, then Schedule A losses , management expenses and finally a non-trading loss on intangible fixed assets.
Further provision about relief in respect of amounts available for surrender under this subsection is contained in section 403ZD.
- (4) This section has effect subject to—
- section 404 (limitation of group relief in relation to certain dual resident companies), and
- sections 492(8) and 494A (oil extraction activities: availability of group relief against ring fence profits), and
- section 785ZA (restrictions on use of losses: leasing partnerships), and
- paragraph 38 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc: anti-avoidance).
#### Limitation of group relief in relation to certain dual resident companies
##### 404
- (1) Notwithstanding any other provision of this Chapter, no loss or other amount shall be available for set off by way of group relief in accordance with section 403 if, in the material accounting period of the company which would otherwise be the surrendering company, that company is for the purposes of this section a dual resident investing company.
- (2) In this section “*the material accounting period*” means, according to the kind of group relief which would be appropriate, the accounting period—
- (a) in which the trading loss or Schedule A loss is incurred; or
- (aa) in which the non-trading deficit on the company’s loan relationships arises; or
- (b) for which the capital allowances fall to be made; or
- (c) for which the expenses of management are deductible; or
- (d) for which the amount is paid by way of charges on income;
but subsection (1) above does not have effect unless the material accounting period begins on or after 1st April 1987.
- (3) In Schedule 17—
- (a) Part I has effect where an accounting period of a company in which it is a dual resident investing company begins before and ends on or after 1st April 1987 and references in subsections (1) and (2) above to the material accounting period shall be construed accordingly; and
- (b) Part II has effect with respect to the time at which certain interest and other payments are to be treated as paid.
- (4) A company is for the purposes of this section a dual resident company in any accounting period in which—
- (a) it is resident in the United Kingdom; and
- (b) it is also within a charge to tax under the laws of a territory outside the United Kingdom—
- (i) because it derives its status as a company from those laws; or
- (ii) because its place of management is in that territory; or
- (iii) because under those laws it is for any other reason regarded as resident in that territory for the purposes of that charge.
- (5) In any accounting period throughout which it is not a trading company, a dual resident company is for the purposes of this section an investing company.
- (6) In any accounting period of a dual resident company in which it is a trading company, the company is nevertheless for the purposes of this section an investing company if—
- (a) in that period it carries on a trade of such a description that its main function or one of its main functions consists of all or any of the following, namely—
- (i) acquiring and holding, directly or indirectly, shares, securities or investments of any other description, including interests in companies (resident outside, as well as in, the United Kingdom) with which the dual resident company is connected, within the terms of section 839;
- (ia) making payments in relation to which, being payments under loan relationships, any debits fall to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996;
- (ii) making payments which, by virtue of any enactment, are charges on income for the purposes of corporation tax;
- (iii) making payments (of interest or other sums) which are similar to those referred to in sub-paragraph (ii) above but which are deductible in computing the profits of the company for the purposes of corporation tax;
- (iv) obtaining funds (by borrowing or in any other manner whatsoever) for the purpose of, or otherwise in connection with, any of the activities referred to in sub-paragraphs (i) to (iii) above; or
- (b) it does not fall within paragraph (a) above, but in that accounting period it carries on all or any of the activities referred to in sub-paragraphs (i) to (iv) of that paragraph and does so—
- (i) to an extent which does not appear to be justified by any trade which it does carry on; or
- (ii) for a purpose which does not appear to be appropriate to any such trade; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In this section “*debtor relationship*” has the same meaning as in Chapter II of Part IV of the Finance Act 1996.
#### Claims relating to losses etc. of members of both group and consortium
##### 405
- (1) For the purposes of a consortium claim in respect of the loss or other amount of any relevant accounting period of a group/consortium company, that loss or other amount shall be treated as reduced (or, as the case may be, extinguished) by first deducting therefrom the potential relief attributable to group claims.
- (2) Subject to subsection (3) below, in relation to the loss or other amount of a relevant accounting period of a group/consortium company, the potential relief attributable to group claims is the aggregate amount of group relief that would be claimed if every company which, as a member of the same group of companies as the group/consortium company, could make a group claim in respect of that loss or other amount made such a claim for an amount which, when set against the claimant company’s total profits for its corresponding accounting period, would equal those profits.
- (3) Where for any accounting period another member of the group of companies of which the group/consortium company is a member has a loss or other amount available for relief and one or more group claims is or are in fact made in respect of that loss or other amount, account shall be taken of the relief so claimed before determining (in relation to the loss or other amount of the group/consortium company) the potential relief attributable to group claims under subsection (2) above.
- (4) In any case where—
- (a) a consortium claim is made by a group/consortium company in respect of a loss or other amount of an accounting period of a member of the consortium, and
- (b) the corresponding accounting period of the group/consortium company is a relevant accounting period,
the total profits of the corresponding accounting period of the group/consortium company against which an amount may by virtue of that claim be set off by way of group relief shall be treated as reduced (or as the case may be extinguished) by deducting therefrom the potential relief available to the group/consortium company by way of group claims.
- (5) Subject to subsection (6) below, in relation to a relevant accounting period of a group/consortium company, the potential relief available to the company by way of group claims is the maximum amount of group relief that could be claimed by the company for that accounting period on group claims relating to the losses or other amounts available for relief of other members of the group of companies of which the group/consortium company is a member.
- (6) Where another member of the group of companies of which the group/consortium company is a member in fact makes one or more group claims in respect of losses or other amounts of other members of the group, account shall be taken of the relief already claimed by that company in determining the potential relief available to the group/consortium company by way of group claims under subsection (5) above.
#### Claims relating to losses etc. of consortium company or group member
##### 406
- (1) In this section—
- (a) “*link company*” means a company which is a member of a consortium and is also a member of a group of companies; and
- (b) “*consortium company*”, in relation to a link company, means a company owned by the consortium of which the link company is a member; and
- (c) “*group member*”, in relation to a link company, means a company which is a member of the group of which the link company is also a member but is not itself a member of the consortium of which the link company is a member.
- (2) Subject to subsections (3) and (4) below, where the link company could (disregarding any deficiency of profits) make a consortium claim in respect of the loss or other amount eligible for relief of a relevant accounting period of a consortium company, a group member may make any consortium claim which could be made by the link company; and the fraction which is the relevant fraction for the purposes of section 403C where a group member is the claimant company shall be the same as it would be if the link company were the claimant company.
- (3) Sections 403A to 403C shall have effect in relation to a consortium claim made by a group member by virtue of subsection (2) above as if any time when the claimant company was not a member of the group—
- (a) were not comprised in the period which is the overlapping period in the case of that claim; and
- (b) were to be treated instead as if it constituted a part of the claim period which did not coincide with any part of the accounting period of the surrendering company to which the claim relates.
- (4) The maximum amount of relief which, in the aggregate, may be claimed by group members and the link company by consortium claims relating to the loss or other amount of a relevant accounting period of a consortium company shall not exceed the relief which could have been claimed by the link company (disregarding any deficiency of profits) if subsections (2) and (3) above had not been enacted.
- (5) Subject to subsections (6) to (8) below, where a group member has for a relevant accounting period a loss or other amount available for relief, a consortium company may make any claim in respect of that loss or other amount which it could make if the group member were a member of the consortium at all times when the link company was such a member, but not at any other time.
- (6) The fraction which is the relevant fraction for the purposes of section 403C in relation to a consortium claim made by virtue of subsection (5) above shall be the same as it would be if the link company were the surrendering company, except that the overlapping period in respect of which the relevant fraction is to be ascertained shall be that of the group member which is in fact the surrendering company.
- (7) Sections 403A to 403C shall have effect in relation to a consortium claim made by a consortium company by virtue of subsection (5) above as if any time when the surrendering company was not a member of the group—
- (a) were not comprised in the period which is the overlapping period in the case of that claim; and
- (b) were to be treated instead as if it constituted a part of the claim period that did not coincide with any part of the accounting period of the surrendering company to which the claim relates.
- (8) For any accounting period of a consortium company (“*the claimant company’s accounting period*”) the maximum amount of relief which, in the aggregate, may be claimed by that company by consortium claims relating to the losses or other amounts of accounting periods of the link company and group members shall not exceed the maximum amount of relief available to the claimant company on a consortium claim in respect of which—
- (a) the link company was the surrendering company; and
- (b) the link company’s accounting period was the same as the claimant company’s accounting period.
#### Relationship between group relief and other relief
##### 407
- (1) Group relief for an accounting period shall be allowed as a deduction against the claimant company’s total profits for the period—
- (a) before reduction by any relief derived from a subsequent accounting period, but
- (b) as reduced by any other relief from tax (including relief in respect of charges on income under section 338(1) of this Act or by virtue of section 83 of, or paragraph 4 of Schedule 11 to, the Finance Act 1996 (non-trading deficits)) determined on the assumption that the company makes all relevant claims under section 393A(1) of this Act and section 260(3) of the Capital Allowances Act(set-off of capital allowances against total profits).
- (2) For the purposes of this section “*relief derived from a subsequent accounting period*” means—
- (a) relief under section 393A(1)(b) in respect of a loss incurred in an accounting period after the accounting period the profits of which are being computed; and
- (b) relief under section 260(3) of the Capital Allowances Act in respect of capital allowances falling to be made for an accounting period after the accounting period the profits of which are being computed; and
- (c) relief in pursuance of a claim under section 83(2) of, or paragraph 4 of Schedule 11 to, the Finance Act 1996 (non-trading deficits) in respect of any deficit for a deficit period after the accounting period the profits of which are being computed.
- (3) The reductions to be made in total profits of an accounting period against which any relief derived from a subsequent accounting period is to be set off shall include any group relief for that first-mentioned accounting period.
#### Corresponding accounting periods
##### 408
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies joining or leaving group or consortium
##### 409
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements for transfer of company to another group or consortium
##### 410
- (1) If, apart from this section, two companies (“*the first company*” and “*the second company*”) would be treated as members of the same group of companies and—
- (a) in an accounting period one of the two companies has trading losses or other amounts eligible for relief from corporation tax which it would, apart from this section, be entitled to surrender by way of group relief; and
- (b) arrangements are in existence by virtue of which, at some time during or after the expiry of that accounting period—
- (i) the first company or any successor of it could cease to be a member of the same group of companies as the second company and could become a member of the same group of companies as a third company; or
- (ii) any person has or could obtain, or any persons together have or could obtain, control of the first company but not of the second; or
- (iii) a third company could begin to carry on the whole or any part of a trade which, at any time in that accounting period, is carried on by the first company and could do so either as a successor of the first company or as a successor of another company which is not a third company but which, at some time during or after the expiry of that accounting period, has begun to carry on the whole or any part of that trade;
then, for the purposes of this Chapter, the first company shall be treated as not being a member of the same group of companies as the second company.
- (2) If a trading company is owned by a consortium or is a 90 per cent. subsidiary of a holding company which is owned by a consortium and—
- (a) in any accounting period the trading company or a member of the consortium has trading losses or other amounts eligible for relief from corporation tax which it would, apart from this section, be entitled to surrender by way of group relief; and
- (b) arrangements are in existence by virtue of which—
- (i) the trading company or any successor of it could, at some time during or after the expiry of that accounting period, become a 75 per cent. subsidiary of a third company; or
- (ii) any person who owns, or any persons who together own, less than 50 per cent. of the ordinary share capital of the trading company has or together have, or could at some time during or after the expiry of that accounting period obtain, control of the trading company; or
- (iii) any person, other than a holding company of which the trading company is a 90 per cent. subsidiary, either alone or together with connected persons, holds or could obtain, or controls or could control the exercise of not less than 75 per cent. of the votes which may be cast on a poll taken at a general meeting of that trading company in that accounting period or in any subsequent accounting period; or
- (iv) a third company could begin to carry on, at some time during or after the expiry of that accounting period, the whole or any part of a trade which, at any time in that accounting period, is carried on by the trading company and could do so either as a successor of the trading company or as a successor of another company which is not a third company but which, at some time during or after the expiry of that accounting period, has begun to carry on the whole or any part of that trade;
then, for the purposes of this Chapter, the trading company shall be treated as though it did not (as the surrendering company or the claimant company) fall within section 402(3).
- (3) In any case where a trading company is a 90 per cent. subsidiary of a holding company which is owned by a consortium, any reference in subsection (2) above to the trading company, other than a reference in paragraph (b)(iv), shall be construed as including a reference to the holding company.
- (4) In this section “*third company*” means a company which, apart from any provision made by or under any such arrangements as are specified in paragraph (b) of either subsection (1) or subsection (2) above, is not a member of the same group of companies as the first company or, as the case may be, the trading company or the holding company to which subsection (2) above applies.
- (5) In subsections (1) and (2) above—
- “*arrangements*” means arrangements of any kind whether in writing or not;
- “*connected persons*” shall be construed in accordance with section 839 but as if subsection (7) of that section (persons acting together to control a company are connected) were omitted; and
- “*control*” has the meaning assigned by section 840.
- (6) For the purposes of subsections (1) and (2) above a company is the successor of another if it carries on a trade which, in whole or in part, the other company has ceased to carry on and the circumstances are such that—
- (a) section 343 applies in relation to the two companies as the predecessor and the successor within the meaning of that section; or
- (b) the two companies are connected with each other within the meaning of section 839.
- (7) Where by virtue of any enactment a Minister of the Crown or Northern Ireland department has power to give directions to a statutory body as to the disposal of assets belonging to, or to a subsidiary of, that body, the existence of that power shall not be regarded as constituting or as having at any time constituted an arrangement within the meaning of this section.
#### Exclusion of double allowances
##### 411
- (1) Relief shall not be given more than once in respect of the same amount, whether by giving group relief and by giving some other relief (in any accounting period) to the surrendering company, or by giving group relief more than once.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . Any reference in the Capital Allowances Act, except Parts 6 and 10, to an allowance made includes a reference to an allowance which would be made but for the granting of group relief, or but for that and but for an insufficiency of profits or other income against which to make it.
#### Claims and adjustments
##### 412
- (1) Claims for group relief are dealt with in Part VIII of Schedule 18 to the Finance Act 1998.
- (2) Paragraph 76 of that Schedule provides for assessments or other adjustments where group relief has been given which is or has become excessive.
#### Interpretation of Chapter IV
##### 413
- (1) The following provisions of this section have effect for the interpretation of this Chapter.
- (2) In this Chapter—
- “*claimant company*” has the meaning given by section 402(1);
- “*company*” means any body corporate;
- “*consortium claim*” means a claim for group relief made by virtue of section 402(3);
- “*EEA territory*”, in relation to any time, means a territory outside the United Kingdom which is within the European Economic Area at that time;
- “*group claim*” means a claim for group relief made by virtue of section 402(2);
- “*group/consortium company*” means a company which is both a member of a group of companies and a company owned by a consortium;
- “*group relief*” has the meaning given by section 402(1);
- “*non-resident company*” means a company that is not resident in the United Kingdom;
- “*relevant accounting period*” means an accounting period beginning after 31st July 1985; and
- “*surrendering company*” has the meaning given by section 402(1).
- (2A) For the purposes of group relief an accounting period of the claimant company which falls wholly or partly within an accounting period of the surrendering company shall be taken to correspond to that accounting period of the surrendering company.
- (3) For the purposes of this Chapter—
- (a) two companies shall be deemed to be members of a group of companies if one is the 75 per cent. subsidiary of the other or both are 75 per cent. subsidiaries of a third company;
- (b) “*holding company*” means a company the business of which consists wholly or mainly in the holding of shares or securities of companies which are its 90 per cent. subsidiaries and which are trading companies; and
- (c) “*trading company*” means a company the business of which consists wholly or mainly in the carrying on of a trade or trades.
- (4) In applying for the purposes of this Chapter the definition of “*75 per cent. subsidiary*” in section 838, any share capital of a registered industrial and provident society shall be treated as ordinary share capital.
- (5) . . . In determining for the purposes of this Chapter whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on a sale of the shares would be a trading receipt;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) References to a company being owned by a consortium shall be construed in accordance with paragraph (a) below except for the purposes of the definition of “*group consortium company*” in subsection (2) above and of sections 403ZA(3), 406(1)(b) and 409(5), (6) and (7), and for those purposes shall be construed in accordance with paragraph (b) below—
- (a) a company is owned by a consortium if three-quarters or more of the ordinary share capital of the company is beneficially owned between them by companies of which none beneficially owns less than one-twentieth of that capital;
- (b) a company is owned by a consortium if—
- (i) it is either such a trading company as is referred to in paragraph (a) or (b) of subsection (3) of section 402 or such a holding company as is referred to in paragraph (c) of that subsection, and
- (ii) three-quarters or more of the ordinary share capital of the company or, in the case of a company within section 402(3)(b), of its holding company is beneficially owned between them by companies of which none beneficially owns less than one-twentieth of that capital;
and the companies which so own three-quarters or more of that ordinary share capital are in this Chapter called the members of the consortium.
- (7) Notwithstanding that at any time a company (“*the subsidiary company*”) is a 75 per cent. subsidiary or a 90 per cent. subsidiary of another company (“*the parent company*”) it shall not be treated at that time as such a subsidiary for the purposes of this Chapter unless, additionally at that time—
- (a) the parent company is beneficially entitled to not less than 75 per cent. or, as the case may be, 90 per cent. of any profits available for distribution to equity holders of the subsidiary company; and
- (b) the parent company would be beneficially entitled to not less than 75 per cent. or, as the case may be, 90 per cent. of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) Schedule 18 shall have effect for supplementing this section.
## PART XI — CLOSE COMPANIES
### CHAPTER I — INTERPRETATIVE PROVISIONS
#### Close companies
##### 414
- (1) For the purposes of the Tax Acts, a “*close company*” is one which is under the control of five or fewer participators, or of participators who are directors, except that the expression does not apply—
- (a) to a company not resident in the United Kingdom;
- (b) to a registered industrial and provident society within the meaning of section 486(12) or to a building society;
- (c) to a company controlled by or on behalf of the Crown, and not otherwise a close company; or
- (d) to a company falling within section 415 or subsection (5) below.
- (2) Subject to section 415 and subsection (5) below, a company resident in the United Kingdom (but not falling within subsection (1)(b) above) is also a close company if five or fewer participators, or participators who are directors, together possess or are entitled to acquire—
- (a) such rights as would, in the event of the winding-up of the company (“*the relevant company*”) on the basis set out in subsection (2A) below, entitle them to receive the greater part of the assets of the relevant company which would then be available for distribution among the participators, or
- (b) such rights as would in that event so entitle them if any rights which any of them or any other person has as a loan creditor (in relation to the relevant company or any other company) were disregarded.
- (2A) In the notional winding-up of the relevant company, the part of the assets available for distribution among the participators which any person is entitled to receive is the aggregate of—
- (a) any part of those assets which he would be entitled to receive in the event of the winding-up of the company, and
- (b) any part of those assets which he would be entitled to receive if—
- (i) any other company which is a participator in the relevant company and is entitled to receive any assets in the notional winding-up were also wound up on the basis set out in this subsection, and
- (ii) the part of the assets of the relevant company to which the other company is entitled were distributed among the participators in the other company in proportion to their respective entitlement to the assets of the other company available for distribution among the participators.
- (2B) In the application of subsection (2A) above to the notional winding-up of the other company and to any further notional winding-up required by paragraph (b) of that subsection (or by any further application of that paragraph), references to “*the relevant company*” shall have effect as references to the company concerned.
- (2C) In ascertaining under subsection (2) above whether five or fewer participators, or participators who are directors, together possess or are entitled to acquire rights such as are mentioned in paragraph (a) or (b) of that subsection—
- (a) a person shall be treated as a participator in or director of the relevant company if he is a participator in or director of any other company which would be entitled to receive assets in the notional winding-up of the relevant company on the basis set out in subsection (2A) above, and
- (b) except in the application of subsection (2A) above, no account shall be taken of a participator which is a company unless the company possesses or is entitled to acquire the rights in a fiduciary or representative capacity.
- (2D) Subsections (4) to (6) of section 416 apply for the purposes of subsections (2) and (2A) above as they apply for the purposes of subsection (2) of that sections.
- (3) *In ascertaining under subsection* (2)*above whether any amount could be apportioned among five or fewer participators or among participators who are directors, account shall, in cases where an original apportionment and any sub-apportionment are involved, be taken only of persons among whom that amount could finally be apportioned as the result of the whole process of original apportionment and sub-apportionment and those persons shall be treated as participators or directors if they are participators or directors of any company in the case of which either an original apportionment or any sub-apportionment could be made*.
- (4) For the purposes of this section—
- (a) a company is to be treated as controlled by or on behalf of the Crown if, but only if, it is under the control of the Crown or of persons acting on behalf of the Crown, independently of any other person, and
- (b) where a company is so controlled, it shall not be treated as being otherwise a close company unless it can be treated as a close company as being under the control of persons acting independently of the Crown.
- (5) A company is not to be treated as a close company—
- (a) if—
- (i) it is controlled by a company which is not a close company, or by two or more companies none of which is a close company; and
- (ii) it cannot be treated as a close company except by taking as one of the five or fewer participators requisite for its being so treated a company which is not a close company;
- (b) if it cannot be treated as a close company except by virtue of paragraph (a) of subsection (2) above or paragraph (c) of section 416(2) and it would not be a close company if the references in those paragraphs to participators did not include loan creditors who are companies other than close companies.
- (6) References in subsection (5) above to a close company shall be treated as applying to any company which, if resident in the United Kingdom, would be a close company.
- (7) If shares in any company (“*the first company*”) are held on trust for a registered pension scheme, then, unless the scheme is established wholly or mainly for the benefit of persons who are, or are dependants of, directors or employees or past directors or employees of—
- (a) the first company; or
- (b) an associated company of the first company; or
- (c) a company which is under the control of any director or associate of a director of the first company or of two or more persons each of whom is such a director or associate; or
- (d) a close company;
the persons holding the shares shall, for the purposes of subsection (5) above, be deemed to be the beneficial owners of the shares and, in that capacity, to be a company which is not a close company.
#### Certain quoted companies not to be close companies
##### 415
- (1) Subject to the following provisions of this section, a company is not to be treated as being at any time a close company if—
- (a) shares in the company carrying not less than 35 per cent. of the voting power in the company (and not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) have been allotted unconditionally to, or acquired unconditionally by, and are at that time beneficially held by, the public, and
- (b) any such shares have within the preceding 12 months been the subject of dealings on a recognised stock exchange, and the shares have within those 12 months been listed in the official list of a recognised stock exchange.
- (2) Subsection (1) above shall not apply to a company at any time when the total percentage of the voting power in the company possessed by all of the company’s principal members exceeds 85 per cent.
- (3) For the purposes of subsection (1) above shares in a company shall be deemed to be beneficially held by the public if, and only if, they—
- (a) fall within subsection (4) below, and
- (b) are not within the exceptions in subsection (5) below,
and a corresponding construction shall be given to the reference to shares which have been allotted unconditionally to, or acquired unconditionally by, the public.
- (4) Shares shall fall within this subsection (as being beneficially held by the public)—
- (a) if beneficially held by a company resident in the United Kingdom which is not a close company, or by a company not so resident which would not be a close company if it were so resident, or
- (b) if held on trust for a registered pension scheme, or
- (c) If they are not comprised in a principal member’s holding.
- (5) Shares shall not be deemed to be held by the public if they are held—
- (a) by any director or associate of a director of the company, or
- (b) by any company which is under the control of any such director or associate, or of two or more persons each of whom is such a director or associate, or
- (c) by any associated company of the company, or
- (d) as part of any fund the capital or income of which is applicable or applied wholly or mainly for the benefit of, or of the dependants of, the employees or directors, or past employees or directors, of the company, or of any company within paragraph (b) or (c) above.
- (6) For the purposes of this section—
- (a) a person is a principal member of a company if he possesses a percentage of the voting power in the company of more than 5 per cent. and, where there are more than five such persons, if he is one of the five persons who possess the greatest percentages or if, because two or more persons possess equal percentages of the voting power in the company, there are no such five persons, he is one of the six or more persons (so as to include those two or more who possess equal percentages) who possess the greatest percentages, and
- (b) a principal member’s holding consists of the shares which carry the voting power possessed by him.
- (7) In arriving at the voting power which a person possesses, there shall be attributed to him any voting power which, for the purposes of section 416, would be attributed to him under subsection (5) or (6) of that section.
- (8) In this section “*shares*” include stock.
#### Meaning of “associated company” and “control”
##### 416
- (1) For the purposes of this Part,*except paragraphs* 2*and* 9(1)(a), (2)(a)*and* (3)(a)*of Schedule* 19 , a company is to be treated as another’s “*associated company*” at a given time if, at that time or at any other time within one year previously, one of the two has control of the other, or both are under the control of the same person or persons.
- (2) For the purposes of this Part, a person shall be taken to have control of a company if he exercises, or is able to exercise or is entitled to acquire, direct or indirect control over the company’s affairs, and in particular, but without prejudice to the generality of the preceding words, if he possesses or is entitled to acquire—
- (a) the greater part of the share capital or issued share capital of the company or of the voting power in the company; or
- (b) such part of the issued share capital of the company as would, if the whole of the income of the company were in fact distributed among the participators (without regard to any rights which he or any other person has as a loan creditor), entitle him to receive the greater part of the amount so distributed; or
- (c) such rights as would, in the event of the winding-up of the company or in any other circumstances, entitle him to receive the greater part of the assets of the company which would then be available for distribution among the participators.
- (3) Where two or more persons together satisfy any of the conditions of subsection (2) above, they shall be taken to have control of the company.
- (4) For the purposes of subsection (2) above a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date, or will at a future date be entitled to acquire.
- (5) For the purposes of subsections (2) and (3) above, there shall be attributed to any person any rights or powers of a nominee for him, that is to say, any rights or powers which another person possesses on his behalf or may be required to exercise on his direction or behalf.
- (6) For the purposes of subsections (2) and (3) above, there may also be attributed to any person all the rights and powers of any company of which he has, or he and associates of his have, control or any two or more such companies, or of any associate of his or of any two or more associates of his, including those attributed to a company or associate under subsection (5) above, but not those attributed to an associate under this subsection; and such attributions shall be made under this subsection as will result in the company being treated as under the control of five or fewer participators if it can be so treated.
#### Meaning of “participator”, “associate”, “director” and “loan creditor”
##### 417
- (1) For the purposes of this Part, a “*participator*” is, in relation to any company, a person having a share or interest in the capital or income of the company, and, without prejudice to the generality of the preceding words, includes—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any loan creditor of the company;
- (c) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company (construing “distributions” without regard to section 418) or any amounts payable by the company (in cash or in kind) to loan creditors by way of premium on redemption; and
- (d) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit.
- (2) The provisions of subsection (1) above are without prejudice to any particular provision of this Part requiring a participator in one company to be treated as being also a participator in another company.
- (3) “*associate*” means, in relation to a participator—
- (a) any relative or partner of the participator;
- (b) the . . . trustees of any settlement in relation to which the participator is, or any relative of his (living or dead) is or was, a settlor . . . ; and
- (c) where the participator is interested in any shares or obligations of the company which are subject to any trust, or are part of the estate of a deceased person—
- (i) the . . . trustees of the settlement concerned or, as the case may be, the personal representatives of the deceased; and
- (ii) if the participator is a company, any other company interested in those shares or obligations;
and has a corresponding meaning in relation to a person other than a participator.
- (4) In subsection (3) above “*relative*” means spouse or civil partner, parent or remoter forebear, child or remoter issue, or brother or sister.
- (5) For the purposes of this Part “*director*” includes any person occupying the position of director by whatever name called, any person in accordance with whose directions or instructions the directors are accustomed to act, and any person who—
- (a) is a manager of the company or otherwise concerned in the management of the company’s trade or business, and
- (b) is, either on his own or with one or more associates, the beneficial owner of, or able, directly or through the medium of other companies or by any other indirect means, to control 20 per cent. or over of the ordinary share capital of the company.
- (6) In subsection (5)(b) above the expression “*either on his own or with one or more associates*” requires a person to be treated as owning or, as the case may be, controlling what any associate owns or controls, even if he does not own or control share capital on his own.
- (7) Subject to subsection (9) below, for the purposes of this Part “*loan creditor*”, in relation to a company, means a creditor in respect of any debt incurred by the company—
- (a) for any money borrowed or capital assets acquired by the company; or
- (b) for any right to receive income created in favour of the company; or
- (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium thereon);
or in respect of any redeemable loan capital issued by the company.
- (8) Subject to subsection (9) below, a person who is not the creditor in respect of any debt or loan capital to which subsection (7) above applies but nevertheless has a beneficial interest therein shall, to the extent of that interest, be treated for the purposes of this Part as a loan creditor in respect of that debt or loan capital.
- (9) A person carrying on a business of banking shall not be deemed to be a loan creditor in respect of any loan capital or debt issued or incurred by the company for money lent by him to the company in the ordinary course of that business.
### Additional matters to be treated as distributions
#### “Distribution” to include certain expenses of close companies
##### 418
- (1) Subject to such exceptions as are mentioned in section 209(1), in the Corporation Tax Acts “*distribution*”, in relation to a close company, includes, unless otherwise stated, any such amount as is required to be treated as a distribution by subsection (2) below.
- (2) Subject to subsection (3) below, where a close company incurs expense in or in connection with the provision for any participator of living or other accommodation, of entertainment, of domestic or other services, or of other benefits or facilities of whatever nature, the company shall be treated as making a distribution to him of an amount equal to so much of that expense as is not made good to the company by the participator.
- (3) Subsection (2) above shall not apply to expense incurred in or in connection with the provision—
- (a) for a person employed in employment to which Part 3 of ITEPA 2003 applies (earnings and benefits etc. treated as employment income) without the exclusion in section 216 of that Act (provisions not applicable to lower-paid employment) of such benefits as are mentioned in any of Chapters 6 to 10 of Part 3 and section 223 of that Act (cars and vans, loans, shares, other benefits, and payments on account of director’s tax); or
- (b) of living accommodation for any person if the accommodation is (within the meaning of Chapter 5 of Part 3 of ITEPA 2003) provided by reason of his employment; or
- (c) for the spouse or civil partner, children or dependants of a person employed by the company of any pension, annuity, lump sum, gratuity or other like benefit to be given on that person’s death or retirement.
- (4) The amount of the expense to be taken into account under subsection (2) above as a distribution shall be the same as would under Chapters 6 to 10 of Part 3 of ITEPA 2003 be the cash equivalent of the resultant benefit to the participator.
- (5) Subsection (2) above shall not apply if the company and the participator are both resident in the United Kingdom and—
- (a) one is a subsidiary of the other or both are subsidiaries of a third company also so resident, and
- (b) the benefit to the participator arises on or in connection with a transfer of assets or liabilities by the company to him, or to the company by him.
- (6) The question whether one body corporate is a subsidiary of another for the purposes of subsection (5) above shall be determined as a question whether it is a 51 per cent. subsidiary of that other, except that that other shall be treated as not being the owner—
- (a) of any share capital which it owns directly in a body corporate if a profit on a sale of the shares would be treated as a trading receipt of its trade; or
- (b) of any share capital which it owns indirectly, and which is owned directly by a body corporate for which a profit on a sale of the shares would be a trading receipt; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.
- (7) Where each of two or more close companies makes a payment to a person who is not a participator in that company, but is a participator in another of those companies, and the companies are acting in concert or under arrangements made by any person, then each of those companies and any participator in it shall be treated as if the payment made to him had been made by that company.
- (8) For the purposes of this section any reference to a participator includes an associate of a participator, and any participator in a company which controls another company shall be treated as being also a participator in that other company.
### CHAPTER II — CHARGES TO TAX IN CONNECTION WITH LOANS
#### Loans to participators etc
##### 419
- (1) Subject to the following provisions of this section and section 420, where a close company, otherwise than in the ordinary course of a business carried on by it which includes the lending of money, makes any loan or advances any money to an individual who is a participator in the company or an associate of a participator, there shall be assessed on and recoverable from the company, as if it were an amount of corporation tax chargeable on the company for the accounting period in which the loan or advance is made, an amount equal to 25 per cent. of the amount of the loan or advance.
- (2) For the purposes of this section the cases in which a close company is to be regarded as making a loan to any person include a case where—
- (a) that person incurs a debt to the close company; or
- (b) a debt due from that person to a third party is assigned to the close company;
and then the close company shall be regarded as making a loan of an amount equal to the debt.
- (3) Tax due by virtue of this section in relation to any loan or advance shall be due and payable in accordance with section 59D of the Management Act on the day following the expiry of nine months from the end of the accounting period in which the loan or advance was made.
- (4) Where a close company has made a loan or advance which gave rise to a charge to tax on the company under subsection (1) above and
- (a) the loan or advance or any part of it is repaid to the company,or
- (b) the whole or part of the debt in respect of the loan or advance is released or written off,
relief shall be given from that tax, or a proportionate part of it . . . .
- (4A) Where
- (a) the repayment of the whole or any part of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance, or
- (b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,
relief in respect of the repayment , release or writing off shall not be given under subsection (4) above at any time before the expiry of nine months from the end of the accounting period in which the repayment , release or writing off occurred.
- (4B) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in return) applies to a claim for relief under subsection (4) above unless—
- (a) the claim is included (by amendment or otherwise) in the return for the period in which the loan or advance was made, and
- (b) the relief may be given at the time the claim is made.
- (5) Where, under arrangements made by any person otherwise than in the ordinary course of a business carried on by him—
- (a) a close company makes a loan or advance which, apart from this subsection, does not give rise to any charge on the company under subsection (1) above, and
- (b) some person other than the close company makes a payment or transfers property to, or releases or satisfies (in whole or in part) a liability of, an individual who is a participator in the company or an associate of a participator,
then, unless in respect of the matter referred to in paragraph (b) above there falls to be included in the total income of the participator or associate an amount not less than the loan or advance, this section shall apply as if the loan or advance had been made to him.
- (6) In subsections (1) and (5)(b) above the references to an individual shall apply also to a company receiving the loan or advance in a fiduciary or representative capacity . . . .
- (7) For the purposes of this section any participator in a company which controls another company shall be treated as being also a participator in that other company.
#### Exceptions from section 419
##### 420
- (1) Section 419(2)(a) shall not apply to a debt incurred for the supply by the close company of goods or services in the ordinary course of its trade or business unless the credit given exceeds six months or is longer than that normally given to the company’s customers.
- (2) Section 419(1) shall not apply to a loan made to a director or employee of a close company, or of an associated company of the close company, if—
- (a) neither the amount of the loan, nor that amount when taken together with any other outstanding loans which—
- (i) were made by the close company or any of its associated companies to the borrower*or the wife or husband of the borrower* ; and
- (ii) if made before 31st March 1971, were made for the purpose of purchasing a dwelling which was or was to be the borrower’s only or main residence;
exceeds £15,000 and the outstanding loans falling within sub-paragraph (ii) above do not together exceed £10,000; and
- (b) the borrower works full-time for the close company or any of its associated companies; and
- (c) the borrower does not have a material interest in the close company or in any associated company of the close company;
but if the borrower acquires such a material interest at a time when the whole or part of any such loan made after 30th March 1971 remains outstanding the close company shall be regarded as making to him at that time a loan of an amount equal to the sum outstanding.
#### Taxation of borrower when loan under section 419 released etc
##### 421
- (1) Subject to the following provisions of this section, where a company is assessed or liable to be assessed under section 419 in respect of a loan or advance made to the trustees of a settlement and after the settlement has ended releases or writes off the whole or part of the debt in respect of it, then—
- (a) for the purpose of computing the income of the person from whom the debt was due (“*the debtor*”) for corporation tax purposes, a sum equal to the amount so released or written off shall be treated as income received by the debtor after deduction of income tax at the dividend ordinary rate from a corresponding gross amount;
- (b) no repayment of income tax shall be made in respect of that income and the debtor shall not be liable to pay corporation tax at the dividend ordinary rate on that income;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This section shall be construed as one with section 419.
#### Extension of section 419 to loans by companies controlled by close companies
##### 422
- (1) Subject to subsection (4) below, where a company which is controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 419, that section and section 420 shall apply as if the loan had been made by the close company.
- (2) Subject to subsection (4) below, where a company which is not controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 419 and a close company subsequently acquires control of it, that section and section 420 shall apply as if the loan had been made by the close company immediately after the time when it acquired control.
- (3) Where two or more close companies together control the company that makes or has made the loan, subsections (1) and (2) above shall have effect—
- (a) as if each of them controlled that company; and
- (b) as if the loan had been made by each of those close companies,
but the loan shall be apportioned between those close companies in such proportion as may be appropriate having regard to the nature and amount of their respective interests in the company that makes or has made the loan.
- (4) Subsections (1) and (2) above do not apply if it is shown that no person has made any arrangements (otherwise than in the ordinary course of a business carried on by him) as a result of which there is a connection—
- (a) between the making of the loan and the acquisition of control; or
- (b) between the making of the loan and the provision by the close company of funds for the company making the loan;
and the close company shall be regarded as providing funds for the company making the loan if it directly or indirectly makes any payment or transfers any property to, or releases or satisfies (in whole or in part) a liability of, the company making the loan.
- (5) Where, by virtue of this section, sections 419 and 420 have effect as if a loan made by one company had been made by another, any question under those sections or section 421 whether—
- (a) the company making the loan did so otherwise than in the ordinary course of a business carried on by it which includes the lending of money;
- (b) the loan or any part of it has been repaid to the company;
- (c) the company has released or written off the whole or part of the debt in respect of the loan,
shall be determined by reference to the company that makes the loan.
- (6) This section shall be construed as one with section 419 and section 420 and in this section—
- (a) “*loan*” includes advance; and
- (b) references to a company making a loan include references to cases in which the company is, or if it were a close company would be, regarded as making a loan by virtue of section 419(2).
### CHAPTER III — APPORTIONMENT OF UNDISTRIBUTED INCOME ETC.
#### Apportionment of certain income, deductions and interest
##### 423
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusions from section 423
##### 424
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manner of apportionment
##### 425
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to income tax where apportionment is to an individual
##### 426
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of charge under section 426 in certain cases
##### 427
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Increase of apportioned sum etc. by reference to ACT
##### 428
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payment and collection of income tax
##### 429
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consequences of apportionment: ACT
##### 430
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XII — SPECIAL CLASSES OF COMPANIES AND BUSINESSES
### CHAPTER I — INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS
### Insurance companies: general
#### Interpretative provisions relating to insurance companies
##### 431
- (1) This section has effect for the interpretation of this Chapter.
- (2) Unless the context otherwise requires—
- “*annuity business*” means the business of granting annuities on human life , other than the business of granting immediate needs annuities (within the meaning of section 725 of ITTOIA 2005 (immediate needs annuities));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*basic life assurance and general annuity business*” has the meaning given by section 431F;
- “*brought into account*” has the meaning given by section 83A of the Finance Act 1989;
- “*closing*” and “*opening*”, in relation to a period of account, refer respectively to the position at the end and at the beginning of the period and, in relation to an accounting period, refer respectively to the position at the end and at the beginning of the period of account in which the accounting period falls;
- “*closing liabilities*” includes liabilities assumed at the end of the period of account concerned in consequence of the declaration of reversionary bonuses or a reduction in premiums;
- “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contract of long-term insurance” means any contract which falls within Part II of Schedule 1 to that Order;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*free assets amount*”, in relation to an insurance company, means the excess of the value of the assets of the company's long-term business over the aggregate of —the value of the liabilities of that business,any money debts (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996) of the company not within paragraph (a) above which are owed in respect of that business, andthe amount of the shareholders' excess assets within the meaning given by section 432A(8)(b));
- “*General Prudential Sourcebook*” means the General Prudential Sourcebook made by the Financial Services Authority under the Financial Services and Markets Act 2000 ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “insurance business transfer scheme” means a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 or 4 of subsection (3) of that section;
- “insurance company” means—a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, oran EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which—carries on business which consists of the effecting or carrying out of contracts of insurance, andcarries on that business through a branch or agency in the United Kingdom,but does not include an insurance special purpose vehicle;
- “*the Insurance Prudential Sourcebook*” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*insurance special purpose vehicle*” means any undertaking which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issue or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of the undertaking;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*liabilities*”, in relation to an insurance company, means—the mathematical reserves of the company as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook, andliabilities of the company (whose value falls to be determined in accordance with section 1.3 of the General Prudential Sourcebook) which arise from deposit back arrangements;and for this purpose “*deposit back arrangements*” has the same meaning as in that Sourcebook;
- “*life assurance business*” includes annuity business;
- “*life reinsurance business*” has the meaning given by section 431C;
- “*linked assets*”, and related expressions, shall be construed in accordance with section 432ZA;
- “long-term business” means business which consists of the effecting or carrying out of contracts of long-term insurance;
- “*long-term insurance fund*” means the fund maintained by an insurance company in respect of its long-term business . . . ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*overseas life assurance business*” has the meaning given by section 431D;
- “*overseas life assurance fund*” shall be construed in accordance with Schedule 19AA;
- “*overseas life insurance company*” means an insurance company not resident in the United Kingdom but carrying on life assurance business through a branch or agency in the United Kingdom; . . .
- “*pension business*” has the meaning given by section 431B;
- “*periodical return*”, in relation to an insurance company, means a return deposited with the Financial Services Authority under section 9.6 of the Prudential Sourcebook (Insurers).
- “*period of account*” means the period covered by a periodical return;
- “the Prudential Sourcebook (Insurers)” means the Interim Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*reinsurance business*” includes retrocession business;
- “*shareholders' excess assets*” has the meaning given by section 432A(8)(b));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*value*”, in relation to an asset of an insurance company, means the value of the asset as determined in accordance with section 1.3 of the General Prudential Sourcebook, as read with section 2.1 of the Insurance Prudential Sourcebook;
- “*with-profits liabilities*” means liabilities in respect of policies or contracts under which the policy holders or annuitants are eligible to participate in surplus;
- (2ZA) Subsections (2ZB) and (2ZC) below apply where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2ZB) If the transfer takes place otherwise than on the last day of a period of account of the transferor, references to—
- (a) opening liabilities of the transferor,
- (b) opening values or net values of assets of the transferor, . . .
- (c) the opening amount of the free assets amount of the transferor, or
- (d) the opening amount of the shareholders' excess assets of the transferor,
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion A/C.
- (2ZC) If the transfer takes place otherwise than on the first day of a period of account of the transferee, references to—
- (a) closing liabilities of the transferee,
- (b) closing values or net values of assets of the transferee, . . .
- (c) the closing amount of the free assets amount of the transferee, or
- (d) the closing amount of the shareholders' excess assets of the transferee,
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion B/C.
- (2ZD) For the purposes of subsection (2ZC) above—
- (a) closing liabilities of the transferee are to be taken not to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferor with the transferee, but
- (b) closing liabilities of the transferee are to be taken to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferee with the transferor if the business transferred consists of or includes that reinsurance business.
- (2ZE) In subsections (2ZB) and (2ZC) above—
- A is the number of days in the period beginning with the period of account and ending with the day of the transfer,
- B is the number of days in the period beginning with the day of the transfer and ending with the period of account, and
- C is one-half of the number of days in the period of account.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Separation of different classes of business
##### 432
- (1) Where an insurance company carries on life assurance business in conjunction with insurance business of any other category, the life assurance business shall, for the purposes of the Corporation Tax Acts, be treated as a separate business from any other category of business carried on by the company.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Profits reserved for policy holders and annuitants
##### 433
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Franked investment income etc
##### 434
- (1) Section 208 shall not apply in relation to—
- (a) the charge to corporation tax on the life assurance profits of an insurance company computed in accordance with the provisions of this Act applicable to Case I of Schedule D; or
- (b) any computation of such profits in accordance with those provisions.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) The reference in subsection (1) above to the life assurance profits of an insurance company is a reference to the profits of the company—
- (a) in respect of its life assurance business; or
- (b) in respect of any category of life assurance business which it carries on.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) So much of the policy holders' share of the franked investment income from investments of a company’s long-term insurance fund as is referable to its life assurance business shall be left out of account in determining, under subsection (7) of section 13, the franked investment income forming part of the company’s profits for the purposes of that section.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) *Subject to subsection* (5)*below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case* I*of Schedule D* (*whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods*),*would be connoted by the words in section* 433 “*such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants*”.
- (5) *If the income exceeds the profits as computed in accordance with the provisions applicable to Case* I*of Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess*.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) For the purposes of this section—
- (a) “*the policy holders’ share*” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, . . .
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) “*the policy holders’ share of the relevant profits*” has the same meaning as in section 89 of that Act.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of gains reserved for policy holders and annuitants
##### 435
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity business and pension business: separate charge on profits
##### 436
- (1) Subject to the provisions of this section, profits arising to an insurance company from . . . pension business shall be treated as income within Schedule D, and be chargeable under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, and to subsection (3) below, the profits therefrom shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (2) Subsection (1) above shall not apply to an insurance company charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its ordinary life assurance business.
- (3) In making the computation referred to in subsection (1) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . ;
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) *no deduction shall be allowed in respect of any expenses of management deductible under section* 76;
- (c) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from pension business . . .in any previous accounting period or year of assessment;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Section 396 shall not be taken to apply to a loss incurred by a company on its . . . pension business.
- (5) Nothing in section 128 or 399(1) shall affect the operation of this section.
#### General annuity business
##### 437
- (1A) In the computation, otherwise than in accordance with the provisions applicable to Case I of Schedule D, of the relevant profits (within the meaning of section 88(1) of the Finance Act 1989) of an insurance company for any accounting period, new annuities paid by the company in that period shall be brought into account by treating an amount equal to the income limit for that period as expenses payable which fall to be brought into account for that period at Step 3 in section 76(7).
- (1C) For the purposes of this section (but subject to subsections (1CA) to (1CD) below)—
- (a) “*new annuity*” means any annuity, so far as paid under a contract made by an insurance company in an accounting period beginning on or after 1st January 1992 and so far as referable to the company’s basic life assurance and general annuity business;
- (b) “*the income limit*” for an accounting period of an insurance company is the difference between—
- (i) the total amount of the new annuities paid by the company in that accounting period; and
- (ii) the total of the capital elements and amounts exempt under section 717 of ITTOIA 2005 contained in the new annuities so paid; . . .
- (c) the capital element contained in an annuity shall be determined in accordance with Chapter V of Part XIV, but for this purpose—
- (i) it is immaterial whether or not an annuitant claims any relief to which he is entitled under that Chapter; and
- (ii) where, by virtue of subsection (2) of section 657, section 656 does not apply to an annuity, the annuity shall be treated as containing the capital element that it would have contained apart from that subsection; and
- (d) the amounts exempt under section 717 of ITTOIA 2005 shall be determined in accordance with Chapter 7 of Part 6 of that Act, but for this purpose—
- (i) it is immaterial whether or not an annuitant claims any relief to which the annuitant is entitled under that section; and
- (ii) where, by virtue of section 718 of that Act, section 717 does not apply to an annuity, the annuity shall be treated as being exempt to the same extent that it would have been apart from that section.
- (1CA) Where a new annuity (“*the actual annuity*”) is a steep-reduction annuity, the income limit for an accounting period of the company paying the annuity shall be computed for the purposes of this section as if—
- (a) the contract providing for the actual annuity provided instead for the annuities identified by subsections (1CB) and (1CC) below; and
- (b) the consideration for each of those annuities were to be determined by the making of a just and reasonable apportionment of the consideration for the actual annuity.
- (1CB) The annuities mentioned in subsection (1CA)(a) above are—
- (a) an annuity the payments in respect of which are confined to the payments in respect of the actual annuity that fall to be made before the earliest time for the making in respect of the actual annuity of a reduced payment such as is mentioned in section 437A(1)(c); and
- (b) subject to subsection (1CC) below, an annuity the payments in respect of which are all the payments in respect of the actual annuity other than those mentioned in paragraph (a) above.
- (1CC) Where an annuity identified by paragraph (b) of subsection (1CB) above (“*the later annuity*”) would itself be a steep-reduction annuity, the annuities mentioned in subsection (1CA)(a) above—
- (a) shall not include the later annuity; but
- (b) shall include, instead, the annuities which would be identified by subsection (1CB) above (with as many further applications of this subsection as may be necessary for securing that none of the annuities mentioned in subsection (1CA)(a) above is a steep-reduction annuity) if references in that subsection to the actual annuity were references to the later annuity.
- (1CD) Subsections (1CA) to (1CC) above shall be construed in accordance with section 437A.
- (1D) In any case where—
- (a) a payment in respect of an annuity is made by an insurance company under a group annuity contract made in an accounting period beginning before 1st January 1992,
- (b) the company’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the company’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall be treated for the purposes of this section, other than this subsection, as if the group annuity contract had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1E) In any case where—
- (a) a payment in respect of an annuity is made by a reinsurer under a reinsurance treaty made in an accounting period beginning before 1st January 1992,
- (b) the reinsurer’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the reinsurer’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall, as respects the reinsurer, be treated for the purposes of this section, other than this subsection, as if the reinsurance treaty had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1F) In this section—
- “*group annuity contract*” means a contract between an insurance company and some other person under which the company undertakes to become liable to pay annuities to or in respect of such persons as may subsequently be specified or otherwise ascertained under or in accordance with the contract (whether or not annuities under the contract are also payable to or in respect of persons who are specified or ascertained at the time the contract is made);
- “*reinsurance treaty*” means a contract under which one insurance company is obliged to cede, and another (in this section referred to as a “*reinsurer*”) to accept, the whole or part of a risk of a class or description to which the contract relates.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pension business: exemption from tax
##### 438
- (1) Exemption from corporation tax shall be allowed in respect of income from, and chargeable gains in respect of, investments and deposits of so much of an insurance company’s long-term insurance fund as is referable (in accordance with section 432A) to pension business.
- (2) The exemption from tax conferred by subsection (1) above shall not exclude any sums from being taken into account as receipts in computing profits or losses for any purpose of the Corporation Tax Acts.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This section shall be disregarded in determining, in relation to an insurance company which is entitled to a tax credit in respect of a distribution, whether the condition in paragraph (a) or (b) of section 231(2) is satisfied.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restricted government securities
##### 439
- (1) For the purposes of this Chapter restricted government securities shall be treated as linked solely to pension business.
- (2) In this section“*restricted government securities*” means, subject to the following provisions of this section, government securities issued on the condition that, except in such circumstances as may be specified in the conditions of issue, they are to be held by insurance companies against and applied solely towards meeting pension business liabilities.
- (6) Subject to subsection (7) below, the following Treasury Stock, namely—
- (a) 2 per cent. Index-linked Treasury Stock 1996;
- (b) 2 per cent. Index-linked Treasury Stock 2006;
- (c) 2 per cent. Index-linked Treasury Stock 2011;
are not restricted government securities for the purposes of this section.
- (7) If any of the index-linked stock referred to in subsection (6) above was on 27th March 1982 held by an insurance company against and applied solely towards meeting the liabilities of the company’s pension business, then—
- (a) if and so long as the stock continues to be so held by that company, it shall continue to be treated as restricted government securities for the purposes of this section; and
- (b) if the stock ceases to be restricted government securities otherwise than by virtue of being actually disposed of or redeemed, on the day on which it so ceases the stock shall be deemed for the purposes of corporation tax, including (*subject to subsection* (8)*below*) corporation tax on chargeable gains, to have been disposed of and immediately re-acquired at its market value on that date.
- (8) *For the purposes of sections* 67*and* 68*of the* 1979*Act* (*gilt-edged securities*)—
- (a) *in ascertaining the date on which securities were acquired, no account shall be taken of any deemed disposal and reacquisition resulting from subsection* (7)(b)*above; and*
- (b) *so long as any index-linked stock continues, by virtue of subsection* (7)(a)*above, to be treated as restricted government securities for the purposes of this section, it shall be regarded as being stock of a different kind from the index-linked stock referred to in subsection* (6)*above which is not so treated*.
#### Identification or exchange of long term assets
##### 440
- (1) If at any time an asset (or a part of an asset) held by an insurance company ceases to be within one of the categories set out in subsection (4) below and comes within another of those categories, the company shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) for a consideration equal to its market value at that time.
- (2) Where—
- (a) an asset is acquired by a company as a result of an insurance business transfer scheme which has effect to transfer long-term business from any person (“the transferor”) to the company, and
- (b) the asset (or part of it) is within one of the categories set out in subsection (4) below immediately before the acquisition and is within another of those categories immediately afterwards,
the transferor shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) immediately before the acquisition for a consideration equal to its market value at that time.
- (2A) Where under subsection (1) or (2) above there is a deemed disposal and re-acquisition of any asset representing a loan relationship of a company, Chapter 2 of Part 4 of the Finance Act 1996 applies as respects that asset as if the asset that is deemed to be disposed of and the asset that is deemed to be re-acquired were different assets.
- (2B) Where under subsection (1) or (2) above there is a deemed disposal and re-acquisition of any derivative contract of a company, Schedule 26 to the Finance Act 2002 applies as respects that contract as if the contract that is deemed to be disposed of and the contract that is deemed to be re-acquired were different assets.
- (3) Where, apart from this subsection, section 171 or 173 the 1992 Act (transfers within a group) would apply to a disposal or acquisition by an insurance company of an asset (or part of an asset) which, immediately before the disposal or (as the case may be) immediately after the acquisition, is within one of the categories set out in paragraphs (a) to (e) of subsection (4) below, that section shall not apply to the disposal or acquisition.
- (4) The categories referred to in subsections (1) to (3) above are—
- (a) assets linked solely to pension business;
- (b) assets linked solely to life reinsurance business;
- (c) assets of the overseas life assurance fund;
- (d) assets linked solely to basic life assurance and general annuity business;
- (e) assets of the long-term insurance fund not within any of the preceding paragraphs;
- (f) other assets.
- (5) In this section “*market value*” has the same meaning as in the 1992 Act.
- (6) In a case where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D this section has effect with the modification specified in section 440B(3).
#### Foreign life assurance funds
##### 441
- (1) This section . . . shall apply for an accounting period of an insurance company . . . if during the period the company carries on overseas life assurance business.
- (2) Subject to the provisions of this section . . . , profits arising to the company from the overseas life assurance business shall be treated as income within Schedule D, and the chargeable under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, the profits from it shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (2) above shall not apply if the company is charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business.
- (4) In making the computation referred to in subsection (2) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . , and
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from overseas life assurance business in any previous accounting period beginning on or after 1st January 1990.
- (5) Section 396 shall not be taken to apply to a loss incurred by a company on overseas life assurance business.
- (6) Nothing in section 128 or 399(1) shall affect the operation of this section.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Gains accruing on the disposal by a company of assets of its overseas life assurance fund shall not be chargeable gains. ]
#### Overseas business of U.K. companies
##### 442
- (1) Subsections (2) and (3) below apply where a company resident in the United Kingdom carries on insurance business outside the United Kingdom through a permanent establishment and—
- (a) that business, or part of it, together with the whole assets of the company used for the purposes of that business or part (or together with the whole of those assets other than cash), is transferred to a company not resident in the United Kingdom;
- (b) the business or part is so transferred wholly or partly in exchange for shares, or for shares and loan stock, issued by the transferee company to the transferor company; and
- (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company.
- (2) In making any computation in accordance with the provisions of this Act applicable to Case I of Schedule D of the profits or losses of the transferor company for the accounting period in which the transfer occurs, there shall be disregarded any profit or loss in respect of any asset transferred which, apart from this subsection, would fall to be taken into account in making that computation.
- (3) Where by virtue of subsection (2) above any profit or loss is disregarded in making any computation . . . the profit or loss shall be treated for the purposes of the 1992 Act as a chargeable gain or allowable loss accruing to the transferor company on the transfer.
- (4) Where at any time a company resident in the United Kingdom—
- (a) which carries on insurance business wholly outside the United Kingdom, and
- (b) the whole or part of whose ordinary share capital is beneficially owned by one or more companies resident in the United Kingdom,
ceases to be resident in the United Kingdom, the profits or losses of the company in respect of that business for the accounting period ending at that time shall be computed for tax purposes without regard to the whole, or, as the case may be, a corresponding part of any profit or loss in respect of any asset which, apart from this subsection, would fall to be calculated in accordance with section 100(1)(b) and taken into account in making that computation.
#### Life policies carrying rights not in money
##### 443
Where any investments or other assets are or have been, in accordance with a policy issued in the course of life assurance business carried on by an insurance company, transferred to the policy holder on or after 6th April 1967, the policy holder’s acquisition of the assets, and the disposal of them to him, shall be deemed to be for a consideration equal to the market value of the assets for the purposes of computing income in accordance with Case I or VI of Schedule D.
#### Life policies issued before 5th August 1965
##### 444
- (1) This section applies in relation to policies of life assurance issued before 5th August 1965 by a company carrying on life assurance business, being policies which—
- (a) provide for benefits consisting to any extent of investments of a specified description or of a sum of money to be determined by reference to the value of such investments, but
- (b) do not provide for the deduction from those benefits of any amount by reference to tax chargeable in respect of chargeable gains.
- (2) Where—
- (a) the investments of the company’s life assurance fund, so far as referable to those policies, consist wholly or mainly of investments of the description so specified, and
- (b) on the company becoming liable under any of those policies for any such benefits (including benefits to be provided on the surrender of a policy), a chargeable gain accrues to the company from the disposal, in meeting or for the purpose of meeting that liability, of investments of that description forming part of its life assurance fund, or would so accrue if the liability were met by or from the proceeds of such a disposal,
then the company shall be entitled as against the person receiving the benefits to retain out of those benefits a part not exceeding in amount or value corporation tax, at the rate specified in subsection (3) below, in respect of the chargeable gain referred to in paragraph (b) above, computed without regard to any amount retained under this subsection.
- (3) The amount to be retained under subsection (2) above shall, subject to subsection (4) below, be computed by reference to the rate of corporation tax for the time being in force or, if no rate of corporation tax has yet been fixed for the financial year, the rate last in force.
- (4) In so far as the chargeable gain represents or would represent a gain belonging or allocated to, or reserved for, policy holders, the amount to be retained shall be computed by reference to a rate of tax not exceeding 37.5 per cent.
### Provisions applying only to overseas life insurance companies
#### Charge to tax on investment income
##### 445
#### Annuity business
##### 446
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of income tax and tax credits against corporation tax
##### 447
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying distributions and tax credits
##### 448
#### Double taxation agreements
##### 449
### Underwriters
#### Assessment, set-off of losses and reinsurance
##### 450
#### Regulations
##### 451
#### Special reserve funds
##### 452
#### Payments into premiums trust fund on account of losses
##### 453
#### Income tax consequences on payments into and out of special reserve fund
##### 454
#### Income tax consequences on death of underwriter
##### 455
#### Unearned income, variation of arrangements and cancellation of approval etc
##### 456
#### Interpretation of sections 450 to 456
##### 457
### Capital redemption business
#### Capital redemption business
##### 458
- (1) Where any person carries on capital redemption business in conjunction with business of any other class, the capital redemption business shall, for the purposes of the Corporation Tax Acts (including the provisions about corporation tax on chargeable gains) and the Income Tax Acts, be treated as a separate business from any other class of business carried on by that person and where section 76 applies by virtue of subsection (5A) of that section, it shall apply separately to capital redemption business.
- (2) In ascertaining whether and to what extent any person has incurred a loss on his capital redemption business for the purposes of section 380 or sections 393 and 393A(1)—
- (a) any profits derived from investments held in connection with the capital redemption business (including franked investment income of . . . a company resident in the United Kingdom) shall be treated as part of the profits of that business, and
- (b) in determining whether any, and if so what, relief can be given under section 385(4) in the case of capital redemption business, the loss which may be carried forward under subsection (1) of that section shall be similarly computed.
- (3) In this section “*capital redemption business*” means any business in so far as it—
- (a) consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts of insurance under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period; and
- (b) is not life assurance business.
- (4) This section shall not apply to any capital redemption business in so far as it consists of carrying out contracts of insurance effected before 1st January 1938.
### CHAPTER II — FRIENDLY SOCIETIES, TRADE UNIONS AND EMPLOYERS’ ASSOCIATIONS
### Unregistered friendly societies
#### Exemption from tax
##### 459
An unregistered friendly society (that is, a friendly society which is neither an incorporated friendly society nor a registered friendly society) whose income does not exceed £160 a year shall, on making a claim, be entitled to exemption from income tax and corporation tax (whether on income or chargeable gains).
### Registered friendly societies
#### Exemption from tax in respect of life or endowment business
##### 460
- (1) Subject to subsection (2) below, a friendly society shall, on making a claim, be entitled to exemption from income tax and corporation tax (whether on income or chargeable gains) on its profits arising from life or endowment business.
- (2) Subsection (1) above—
- (a) shall not, subject to section 462, exempt a registered friendly society registered after 31st December 1957 which at any time in the period of three months ending 3rd May 1966 entered into any transaction in return for a single premium, being a transaction forming part of its life or endowment business;
- (aa) shall not, subject to section 462, exempt an incorporated friendly society which, before its incorporation, was a registered friendly society such as is mentioned in paragraph (a) above;
- (b) shall not apply to profits arising from pension business;
- (c) shall not apply to profits arising from life or endowment business consisting—
- (zai) where the profits relate to contracts made on or after the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £270 or of the granting of annuities of annual amounts exceeding £156;
- (ai) where the profits relate to contracts made on or after the day on which the Finance Act 1991 was passed but before the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £200 or of the granting of annuities of annual amounts exceeding £156;
- (i) where the profits relate to contracts made after 31st August 1990 but before the day on which the Finance Act 1991 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £150 or of the granting of annuities of annual amounts exceeding £156;
- (ia) where the profits relate to contracts made after 31st August 1987 but before 1st September 1990, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100 or of the granting of annuities of annual amounts exceeding £156.
- (ii) where the profits relate to contracts made after 13th March 1984 but before 1st September 1987, of the assurance of gross sums exceeding £750 or of the granting of annuities of annual amounts exceeding £156;
- (iii) where the profits relate to contracts made before 14th March 1984, of the assurance of gross sums exceeding £500 or of the granting of annuities of annual amounts exceeding £104;
- (ca) shall not apply to so much of the profits arising from life or endowment business as is attributable to contracts for the assurance of gross sums made on or after 20th March 1991 and expressed at the outset not to be made in the course of tax exempt life or endowment business;
- (cb) shall not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP;and
- (d) as respects other life or endowment business (“tax exempt life or endowment business”), has effect subject to the following provisions of this Chapter.
- (3) In determining for the purposes of subsection (2)(c)(zai), (ai), (i) or (ia) above the total premiums payable in any period of 12 months—
- (a) where those premiums are payable more frequently than annually, there shall be disregarded an amount equal to 10 per cent. of those premiums; and
- (b) so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved shall be disregarded;
and in applying the limit of £156 in subsection (2)(c)(zai), (ai), (i) or (ia) above, any bonus or addition declared upon an annuity shall be disregarded.
- (4) In applying the limits referred to in subsection (2)(c)(ii) and (iii) above, any bonus or addition which either is declared upon an assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments shall be disregarded.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (2)(c) above, be treated, in relation to any profits relating to it as varied, as made at the time of the variation.
- (5) A friendly society is within this subsection if its rules make no provision for it to carry on life or endowment business consisting of the assurance of gross sums exceeding £2,000 or of the granting of annuities of annual amounts exceeding £416.
- (6) In the case of a friendly society within subsection (5) above—
- (a) subsection (2)(c)(iii) above shall have effect with the substitution of references to £2,000 and £416 respectively for the references to £500 and £104; and
- (b) references in this Chapter to tax exempt life or endowment business shall be construed accordingly.
- (7) Where at any time a friendly society within subsection (5) above amends its rules so as to cease to be within that subsection, any part of its life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (8) Where at any time a friendly society not within subsection (5) above amends its rules so as to bring itself within that subsection, any part of its life or endowment business consisting of business which—
- (a) related to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (9) Where at any time a friendly society not within subsection (5) above acquires by way of transfer of engagements or amalgamation from another friendly society any life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
that business shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (10) Where at any time a friendly society within subsection (5) above acquires by way of transfer of engagements or amalgamation from another friendly society any life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
that business shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (10A) Where at any time an insurance business transfer scheme has effect to transfer to a friendly society long-term business, any life or endowment business which relates to contracts included in the transfer , other than any to which subsection (11) or (12) below applied immediately before the transfer had effect, shall not thereafter be tax exempt life or endowment business for the purposes of this Chapter.
- (10B) In subsection (10A) “insurance business transfer scheme” means a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 or 4 of subsection (3) of that section.
- (11) Where at any time a friendly society ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, any part of its life or endowment business consisting of business which—
- (a) relates to contracts made before that time; and
- (b) immediately before that time was tax exempt life or endowment business,
shall continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
- (12) For the purposes of the Corporation Tax Acts any part of a company’s business which continues to be tax exempt life or endowment business by virtue of subsection (11) above shall be treated as a separate business from any other business carried on by the company.
#### Taxation in respect of other business
##### 461
- (1) Subject to the following provisions of this section, a registered friendly society other than a society to which subsection (2) below applies shall, on making a claim, be entitled to exemption from income tax and corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) This subsection applies to any society registered after 31st May 1973 unless—
- (a) its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board ; or
- (b) it was registered before 27th March 1974 and its rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as the Board may authorise for the purposes of this section;
and also applies to any society registered before 1st June 1973 with respect to which a direction under subsection (7) below is in force.
- (3) If a society to which subsection (2) above applies, after 26th March 1974 or such later date as may be specified in a direction under this section, makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society after that date, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (3A) The exemption conferred by subsection (1) above does not apply to profits arising from investments, deposits or other property held as a member of a property investment LLP.
- (4) Where a registered friendly society—
- (a) at any time ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act; and
- (b) immediately before that time was exempt from income tax or corporation tax on profits arising from any business carried on by it other than life or endowment business,
the company into which the society is converted shall be so exempt on its profits arising from any part of that business which relates to contracts made before that time so long as there is no increase in the scale of benefits which it undertakes to provide in the course of carrying on that part of its business.
- (5) For the purposes of the Corporation Tax Acts any part of a company’s business in respect of the profits from which the company is exempt by virtue of subsection (4) above shall be treated as a separate business from any other business carried on by the company.
- (6) If—
- (a) a friendly society registered before 1st June 1973 begins after 26th March 1974 to carry on business other than life or endowment business or, in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character; and
- (b) it appears to the Board, having regard to the restrictions imposed by this section on friendly societies registered later, that for the protection of the revenue it is expedient to do so;
the Board may give a direction to the society under subsection (7) below.
- (7) A direction under this subsection is that (and has the effect that) the society to which it is given is to be treated for the purposes of this Act as a society registered after 31st May 1973 with respect to business carried on after the date of the direction.
- (8) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (6)(a) above; or
- (b) the direction is not necessary for the protection of the revenue.
- (9) If a registered friendly society in respect of which a direction is in force under subsection (7) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a society registered after 31st May 1973.
- (10) For the purposes of this section a registered friendly society formed on the amalgamation of two or more friendly societies shall be treated as registered before 1st June 1973 if at the time of the amalgamation subsection (2) above did not apply to any of the societies amalgamated, but otherwise shall be treated as registered at that time.
- (11) For the purposes of this section and section 461C—
- (a) any group of persons which was approved for the purposes of this section (as mentioned in subsection (2)(a) above) immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date;
- (b) any greater amount which was authorised for the purposes of this section (as mentioned in subsection (2)(b) above) immediately before 1st December 2001 shall be treated as having been authorised for the purposes of this section by the Board on that date; and
- (c) where a direction that subsection (2) above applies to a society was in force immediately before 1st December 2001, a direction in relation to that society shall be treated as having been made under subsection (7) above by the Board on that date.
#### Conditions for tax exempt business
##### 462
- (1) Subject to subsections (2) to (4) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—
- (a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and
- (b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.
- (1A) For the purposes of subsection (1) above a policy is an excluded policy if—
- (a) it is a policy held otherwise than with the friendly society or insurance company, or
- (b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money's worth.
- (2) Section 460(2)(a) or (aa) and subsection (1) above shall not withdraw exemption in relation to profits arising from any part of a business relating to contracts made not later than 3rd May 1966.
- (3) If, with respect to a policy issued in respect of an insurance made on or after 1st June 1984 and before 19th March 1985 for the assurance of a gross sum, there is or has been an infringement of any of the conditions in paragraph 3(2) to (11) of Schedule 15, section 460 does not afford any exemption from corporation tax in relation to so much as is attributable to that policy of the profits of the friendly society or insurance company concerned.
- (4) Nothing in subsection (3) above shall be taken to affect the status of a policy as a qualifying policy.
#### Life or endowment business: application of the Corporation Tax Acts
##### 463
- (1) Subject to section 460(1), the Corporation Tax Acts shall apply to the life or endowment business carried on by friendly societies in the same way as they apply to mutual life assurance business (or other long-term business) carried on by insurance companies, so however that the Treasury may by regulations provide that those Acts as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations, and those regulations may in particular require any part of any business to be treated as a separate business.
- (2) The provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company shall apply in the same way—
- (a) on the transfer of the whole or part of the business of a friendly society to another friendly society (and on the amalgamation of friendly societies), and
- (b) on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society (and on the conversion of a friendly society into such a company),
so however that the Treasury may by regulations provide that those provisions as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations.
- (3) The Treasury may by regulations provide that the provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company to another company shall have effect where the transferee is a friendly society subject to such modifications and exceptions as may be prescribed by the regulations.
- (4) Regulations under this section may make different provision for different cases and may include provision having retrospective effect.
#### Maximum benefits payable to members
##### 464
- (1) Subject to subsections (2) and (3) below, a member of a friendly society or registered branch shall not be entitled to have at any time outstanding contracts with any one or more such societies or branches (taking together all such societies or branches throughout the United Kingdom) for the assurance of—
- (a) more than £750 by way of gross sum under tax exempt life or endowment business;
- (b) more than £156 by way of annuity under tax exempt life or endowment business.
- (2) Subsection (1)(a) above shall not apply as respects sums assured under contracts made after 31st August 1987.
- (3) With respect to contracts for the assurance of gross sums under tax exempt life or endowment business, a member of a friendly society or registered branch shall not be entitled to have outstanding with any one or more such societies or branches (taking together all such societies or branches throughout the United Kingdom)—
- (zza) contracts under which the total premiums payable in any period of 12 months exceed £270; or
- (za) contracts made before the day on which the Finance Act 1995 was passed and under which the total premiums payable in any period of 12 months exceed £200; or
- (a) contracts made before the day on which the Finance Act 1991 was passed and under which the total premiums payable in any period of 12 months exceed £150; or
- (b) contracts made before 1st September 1990 under which the total premiums payable in any period of 12 months exceed £100,
unless all those contracts were made before 1st September 1987.
- (4) In applying the limits in subsection (3) above, the premiums under any contract for an annuity which was made before 1st June 1984 by a new society shall be brought into account as if the contract were for the assurance of a gross sum.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (3) above, be treated, in relation to times when the contract has effect as varied, as made at the time of the variation.
- (5) In applying the limits in this section there shall be disregarded—
- (a) any bonus or addition which either is declared upon assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments;
- (b) any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) are secured or any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than such an occupational pension scheme;
- (c) any increase in a benefit under a friendly society contract, as defined in section 6 of the Decimal Currency Act 1969, resulting from the adoption of a scheme prescribed or approved in pursuance of subsection (3) of that section; and
- (d) so far as concerns the total premiums payable in any period of 12 months—
- (i) 10 per cent. of the premiums payable under any contract under which the premiums are payable more frequently than annually; and
- (ii) £10 of the premiums payable under any contract made before 1st September 1987 by a friendly society other than a new society; and
- (iii) so much of any premium as is charged on the ground that an exceptional risk of death is involved.
- (6) In applying the limits in this section in any case where a member has outstanding with one or more society or branch one or more contracts made after 13th March 1984 and one or more contracts made on or before that date, any contract for an annuity which was made before 1st June 1984 by a new society shall be regarded not only as a contract for the annual amount concerned but also as a contract for the assurance of a gross sum equal to 75 per cent. of the total premiums which would be payable under the contract if it were to run for its full term or, as the case may be, if the member concerned were to die at the age of 75 years.
- (7) A friendly society or registered branch may require a member to make and sign a statutory declaration that the total amount assured under outstanding contracts entered into by that member with any one or more friendly societies or registered branches (taking together all such societies or branches throughout the United Kingdom) does not exceed the limits applicable by virtue of this section and that the total premiums under those contracts do not exceed those limits.
#### Old societies
##### 465
- (1) In this section “*old society*” means a friendly society which is not a new society.
- (2) This section applies if, on or after 19th March 1985, an old society—
- (a) begins to carry on tax exempt life or endowment business; or
- (b) in the opinion of the Board begins to carry on such business on an enlarged scale or of a new character.
- (3) If it appears to the Board, having regard to the restrictions placed on qualifying policies issued by new societies by paragraphs 3(1)(b) . . . and 4(3)(b) of Schedule 15, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the old society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the old society to which it is given is to be treated for the purposes of this Act as a new society with respect to business carried on after the date of the direction.
- (5) An old society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (2) above; or
- (b) that the direction is not necessary for the protection of the revenue.
- (6) If a registered friendly society in respect of which a direction is in force under subsection (4) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a new society.
#### Interpretation of Chapter II
##### 466
- (1) In this Chapter “*life or endowment business*” means, subject to subsections (1A) and (1B) below,—
- (a) any business of effecting or carrying out contracts of insurance which fall within paragraphs I, II or III of Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- (b) pension business;
- (c) any other life assurance business;
- (d) any business within paragraph IV of Part II of that Schedule, if—
- (i) the contract is one made before 1st September 1996; or
- (ii) the contract is one made on or after 1st September 1996 and the effecting and carrying out of the contract also constitutes business within paragraphs I, II or III of Part II of that Schedule.
- (1A) Life or endowment business does not include the issue, in respect of a contract made before 1st September 1996, of a policy affording provision for sickness or other infirmity (whether bodily or mental), unless—
- (a) the policy also affords assurance for a gross sum independent of sickness or other infirmity;
- (b) not less than 60 per cent. of the amount of the premiums is attributable to the provision afforded during sickness or other infirmity; and
- (c) there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
- (1B) Life or endowment business does not include the assurance of any annuity the consideration for which consists of sums obtainable on the maturity, or on the surrender, of any other policy of assurance issued by the friendly society, being a policy of assurance forming part of the tax exempt life or endowment business of the friendly society.
- (2) In this Chapter—
- “*friendly society*”, without qualification, means (except in section 459) an incorporated friendly society or a registered friendly society;
- “*incorporated friendly society*” means a society incorporated under the Friendly Societies Act 1992;
- “*insurance company*” shall be construed in accordance with section 431;
- “*life assurance business*” means the issue of, or the undertaking of liability under, policies of assurance upon human life, or the granting of annuities upon human life, not being industrial assurance business;
- “*long-term business*” shall be construed in accordance with section 431;
- “*new society*” means—a registered friendly society which was registered after 3rd May 1966 or which was registered in the period of three months ending on that date but which at no time earlier than that date carried on any life or endowment business, oran incorporated friendly society other than one which, before its incorporation, was a registered friendly society not within paragraph (a) above;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*policy*”, in relation to life or endowment business, includes an instrument evidencing a contract to pay an annuity upon human life;
- “*registered branch*” means the same as in the Friendly Societies Act 1992 (and includes any branch that by virtue of section 96(3) of that Act is to be treated as a registered branch);
- “*registered friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society);
- . . .
- “*tax exempt life or endowment business*” has, subject to subsections (7) to (10A) of section 460, the meaning given by subsection (2)(d) of that section, that is to say, it means (subject to those subsections) life or endowment business other than business profits arising from which are excluded from subsection (1) of that section by subsection (2)(b) or (c) of that section (read, where appropriate, with subsection (6) of that section);
and references in sections 460 to 465 and this subsection to a friendly society include, in the case of a registered friendly society, references to any branch of that society.
- (2A) In this Chapter “*pension business*” means so much of a friendly society’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme.
- (2B) But where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the friendly society’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the friendly society in which the pension scheme so ceases to be a registered pension scheme.
- (3) It is hereby declared that for the purposes of this Chapter (except where provision to the contrary is made) a friendly society formed on the amalgamation of two or more friendly societies is to be treated as different from the amalgamated societies.
- (4) A registered friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society;
or, if the amalgamation took place before 19th March 1985, the society was treated as registered not later than 3rd May 1966 by virtue of the proviso to section 337(4) of the 1970 Act.
- (5) An incorporated friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as a society which, before its incorporation, was a registered friendly society registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society.
### Trade unions and employers’ associations
#### Exemption for trade unions and employers' associations
##### 467
- (1) A trade union which is precluded by Act of Parliament or by its rules from assuring to any person a sum exceeding £4,000 by way of gross sum or £825 by way of annuity shall on making a claim be entitled—
- (a) to exemption from income tax and corporation tax in respect of its income which is not trading income and which is applicable and applied for the purpose of provident benefits;
- (b) to exemption from tax in respect of chargeable gains which are applicable and applied for the purpose of provident benefits.
- (2) In this section “*provident benefits*” includes any payment, expressly authorised by the rules of the trade union, which is made to a member during sickness or incapacity from personal injury or while out of work, or to an aged member by way of superannuation, or to a member who has met with an accident, or has lost his tools by fire or theft, and includes a payment in discharge or aid of funeral expenses on the death of a member or the spouseor civil partner of a member or as provision for the children of a deceased member.
- (3) In determining for the purposes of this section whether a trade union is by Act of Parliament or its rules precluded from assuring to any person a sum exceeding £825 by way of annuity, there shall be disregarded any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004).
- (3A) The Treasury may by order substitute for any figure for the time being specified in this section such greater figure as may be specified in the order; and any amendment made in exercise of the power conferred by this subsection shall have effect in relation to such income or gains as may be specified in the order.
- (4) In this section “*trade union*” means—
- (a) any trade union the name of which is entered in the list of trade unions maintained by the Certification Officer under section 2 of the Trade Union and Labour Relations (Consolidation) Act 1992;
- (b) any employers’ association the name of which is entered in the list of employers’ associations maintained by the Certification Officer under section 123 of the Trade Union and Labour Relations (Consolidation) Act 1992 and which on 30th September 1971 was a registered trade union for the purposes of section 338 of the 1970 Act;
- (ba) any trade union the name of which is entered in the list of trade unions maintained by the Certification Officer for Northern Ireland under Article 5 of the Industrial Relations (Northern Ireland) Order 1992;
- (bb) any employers’ association the name of which is entered in the list of employers’ associations maintained by the Certification Officer for Northern Ireland under Article 5 of the Industrial Relations (Northern Ireland) Order 1992 and which immediately before the coming into operation of that Article was a trade union for the purposes of this section; and
- (c) the Police Federation for England and Wales, the Police Federation for Scotland, the Police Federation for Northern Ireland and any other organisation of persons in police service which has similar functions.
### CHAPTER III — UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.
### Unit trust schemes
#### Authorised unit trusts
##### 468
- (1) In respect of income arising to the trustees of an authorised unit trust, and for the purposes of the provisions relating to relief for capital expenditure, the Tax Acts shall have effect as if—
- (a) the trustees were a company resident in the United Kingdom; and
- (b) the rights of the unit holders were shares in the company;
but paragraph (b) above is without prejudice to the making of distributions which are interest distributions (within the meaning of regulations made under section 17(3) of the Finance (No. 2) Act 2005 (as at 1st April 2006, see regulation 18(3) of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964))) to unit holders
- (1A) In relation to any authorised unit trust the rate of corporation tax for the financial year 1996 and subsequent financial years shall be deemed to be the rate at which income tax at the lower rate is charged for the year of assessment which begins on 6th April in the financial year concerned and section 13 shall not apply.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) References in the Corporation Tax Acts to a body corporate shall be construed in accordance with subsection (1) above, and section 234A shall apply with any necessary modifications.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Subject to subsections (7) to (9) below in this section—
- “*authorised unit trust*” means, as respects an accounting period, a unit trust scheme in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force during the whole or part of that accounting period;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*unit holder*” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme; and
- “*unit trust scheme*” has the same meaning as in section 469.
- (7) Each of the parts of an umbrella scheme shall be regarded for the purposes of this Chapter as an authorised unit trust and the scheme as a whole shall not be so regarded.
- (8) In this section, “*umbrella scheme*” means a unit trust scheme—
- (a) which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are to be made to them;
- (b) under which the participants are entitled to exchange rights in one pool for rights in another; and
- (c) in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force;
and any reference to a part of an umbrella scheme is a reference to such of the arrangements as relate to a separate pool.
- (9) In relation to a part of an umbrella scheme, any reference—
- (a) to investments subject to the trusts of an authorised unit trust, shall have effect as a reference to such of the investments as under the arrangements form part of the separate pool to which the part of the umbrella scheme relates; and
- (b) to a unit holder, shall have effect as a reference to a person for the time being having rights in that separate pool.
#### Other unit trusts
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders) and, in the case of income to which section 1A applies, chargeable to income tax at the basic rate, instead of at the rate applicable in accordance with subsection (1A) of that section; and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (2A) Section 397(1) of ITTOIA 2005 shall not apply where the recipient of the distribution there mentioned is the trustees of the scheme.
- (2B) Section 348(4)(a) above and sections 399(2) and (6) and 400(2) and (3) of ITTOIA 2005 shall not apply where the recipient of the distribution in question is the trustees of the scheme.
- (3) For the purposes of the Tax Acts other than ITTOIA 2005 the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights (and see Chapter 10 of Part 4 of that Act for their treatment under that Act).
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services and Markets Act 2000, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 , 686A and 687 shall not apply to a scheme to which this section applies except as respects income to which section 686 is treated as applying by virtue of section 568 of ITTOIA 2005.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Transitional provisions relating to unit trusts
##### 470
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dealers in securities, banks and insurance businesses
#### Exchange of securities in connection with conversion operations, nationalisation etc
##### 471
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of securities issued in connection with nationalisation etc
##### 472
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conversion etc. of securities held as circulating capital
##### 473
- (1) Subsections (3) and (4) below shall have effect where a transaction to which this section applies occurs in relation to any securities (“*the original holding*”)—
- (a) to which a company carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities is beneficially entitled; and
- (b) which are such that a profit on their sale would form part of the trading profits of that business.
- (2) This section applies to any transaction which . . . —
- (a) results in the original holding being equated with a new holding by virtue of sections 126 to 136 of the 1992 Act (capital gains tax roll-over relief in cases of conversion etc.); or
- (b) is treated by virtue of section 134 of that Act (compensation stock) as an exchange for a new holding which does not involve a disposal of the original holding;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) This section does not apply to securities in respect of which unrealised profits or losses, calculated by reference to the fair value of the securities at the end of a period of account, are taken into account in the period of account in which the transaction mentioned in subsection (2) above occurs.
- (2B) Subsection (2A) above shall be disregarded in determining for the purposes of section 66 of the Finance Act 2002 (election to continue postponement of mark to market) whether an asset was held by a person on 1st January 2002.
- (3) Subject to subsection (4) below, in making any computation in accordance with the provisions of this Act applicable to Case I of Schedule D of the profits or losses of the business—
- (a) the transaction shall be treated as not involving any disposal of the original holding, and
- (b) the new holding shall be treated as the same asset as the original holding.
- (4) Where under the transaction the company concerned receives or becomes entitled to receive any consideration in addition to the new holding, subsection (3) above shall have effect as if references to the original holding were references to the proportion of it which the market value of the new holding at the time of the transaction bears to the aggregate of that value and the market value at that time (or, if it is cash, the amount) of the consideration.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In this section “*securities*” includes shares, any security within the meaning of section 132 of the 1992 Act and any rights, interests or options which by virtue of section 135(5), 136(5), 147 or 99 of that Act are treated as shares for the purposes of sections 126 to 136 of that Act.
- (7) In determining for the purposes of subsection (2)(a) above whether a transaction results in the original holding being equated with a new holding by virtue of section 135 or 136 of the 1992 Act the reference in section 137(1) of that Act to capital gains tax shall be construed as a reference to income tax.
#### Treatment of tax-free income
##### 474
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax-free Treasury securities: exclusion of interest on borrowed money
##### 475
- (1) This section has effect where a banking business, an insurance business or a business consisting wholly or partly in dealing in securities—
- (a) is carried on in the United Kingdom by a person not ordinarily resident there; and
- (b) in computing for any of the purposes of the Tax Acts the profits arising from, or loss sustained, in the business, any amount which would otherwise be brought into account is disregarded by virtue of a condition subject to which any 3½% War Loan 1952 or after was issued;
and for this purpose insurance business includes insurance business of any category.
- (2) Up to the amount determined under this section (“*the amount ineligible for relief*”), interest on money borrowed for the purposes of the business—
- (a) shall be excluded in any computation under the Tax Acts of the profits (or losses) arising from the business . . . , and
- (b) shall not be brought into account by way of any debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (3) Subject to subsection (4) below, in determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting or basis period, up to the total cost of the 3½% War Loan 1952 or after held for the purpose of the business in that period.
- (4) Where the person carrying on the business is a company, account shall not be taken of any borrowed money carrying interest which, apart from subsection (2) above, does not fall to be included in the computations under paragraph (a) of that subsection or to be brought into account by way of a debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (5) . . . The amount ineligible for relief shall be equal to a year’s interest on the amount of money borrowed which is to be taken into account under subsection (3) above at a rate equal to the average rate of interest in the accounting or basis period on money borrowed for the purposes of the business, except that in the case of a period of less than 12 months interest shall be taken for that shorter period instead of for a year.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this section the cost of a holding of 3½% War Loan 1952 or after which has fluctuated in the accounting or basis period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting or basis period, applied to the average amount of the holding in the accounting or basis period, . . . .
- (9) In this section “*accounting or basis period*” means the company’s accounting period or the period by reference to which the profits or gains arising in the year of assessment are to be computed.
### CHAPTER IV — BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS
#### Building societies: regulations for payment of tax
##### 476
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Investments becoming or ceasing to be relevant building society investments
##### 477
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Building societies: time for payment of tax
##### 478
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid on deposits with banks etc
##### 479
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deposits becoming or ceasing to be composite rate deposits
##### 480
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Deposit-taker”, “deposit” and “relevant deposit”
##### 481
- (1) In this section “*the relevant provisions*” means . . . this section and section 482.
- (1A) In this section “*the relevant provisions*” also means section 480A.
- (2) In the relevant provisions “*deposit-taker*” means any of the following—
- (a) the Bank of England;
- (b) any person falling within section 840A(1)(b) whose permission under Part 4 of the Financial Services and Markets Act 2000 includes permission to accept deposits which are relevant deposits;
- (ba) any company within the meaning of the Companies Act 1985 —
- (i) in respect of which a resolution has been passed by a local authority under section 48(3) of the Banking Act 1979 or section 103(3) of the Banking Act 1987; and
- (ii) which is exempt from the prohibition imposed by section 19 of the Financial Services and Markets Act 2000 in relation to the acceptance of deposits which are relevant deposits;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ca) any local authority;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) any person or class of person who receives deposits in the course of his business or activities and which is for the time being prescribed by order made by the Treasury for the purposes of this paragraph.
- (3) In the relevant provisions “*deposits*” means a sum of money paid on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made.
- (4) For the purposes of the relevant provisions a deposit is a relevant deposit if, but only if—
- (a) the person who is beneficially entitled to any interest in respect of the deposit is an individual or, where two or more persons are so entitled, all of them are individuals; or
- (b) in Scotland, the person who is so entitled is a partnership all the partners of which are individuals; or
- (c) the person entitled to any such interest receives it as a personal representative in his capacity as such; or
- (d) any interest in respect of the deposit is income arising to the trustees of a discretionary or accumulation settlement in their capacity as such;
and the deposit is not prevented from being a relevant deposit by any of subsections (5) to (5B) below.
- (4A) For the purposes of the relevant provisions a settlement is a discretionary or accumulation settlement if it is such that some or all of any income arising to the trustees would fall (unless treated as income of the settlor . . . ) to be comprised for the year of assessment in which it arises in income to which section 686 applies.
- (5) A deposit is not a relevant deposit if—
- (a) a qualifying certificate of deposit has been issued in respect of it or it is a qualifying time deposit;
- (b) it is a debt on a debenture (“*debenture*” having the meaning given in section 744 of the Companies Act 1985) issued by the deposit-taker;
- (c) it is a loan made by a deposit-taker in the ordinary course of his business or activities;
- (d) it is a debt on a security which is listed on a recognised stock exchange;
- (e) it is a general client account deposit;
- (f) it forms part of a premiums trust fund (within the meaning of section 184 of the Finance Act 1993) of an underwriting or former underwriting member of Lloyd’s;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) in the case of a deposit-taker resident in the United Kingdom for the purposes of income tax or corporation tax, it is held at a branch of his situated outside the United Kingdom;
- (j) in the case of a deposit-taker who is not so resident, it is held otherwise than at a branch of his situated in the United Kingdom; or
- (k) the appropriate person has declared in writing to the deposit-taker liable to pay interest in respect of the deposit . . . —
- (i) in a case falling within subsection (4)(a) or (b) above, that at the time when the declaration is made, the person who is beneficially entitled to the interest is not, or, as the case may be, all the persons who are so entitled are not, ordinarily resident in the United Kingdom;
- (ii) in a case falling within subsection (4)(c) above , that the deceased was, immediately before his death, not ordinarily resident in the United Kingdom.
- (iii) in a case falling within subsection (4)(d) above, that, at the time when the declaration is made, the trustees are not resident in the United Kingdom and do not have any reasonable grounds for believing that any of the beneficiaries under the settlement is an individual who is ordinarily resident in the United Kingdom or a company which is resident in the United Kingdom.
- (5A) In a case where—
- (a) there is an arrangement falling within section 56A above or an uncertificated right falling within section 552(1)(c) of ITTOIA 2005,
- (b) the deposit is with a deposit-taker,
- (c) no certificate of deposit or uncertificated eligible debt security units have been issued in respect of the right at the time the interest mentioned in section 480A . . . is paid, and
- (d) the conditions set out in paragraphs (a) and (b) in the definition of “qualifying certificate of deposit” in section 482(6) apply,
the deposit is not a relevant deposit.
- (5B) In a case falling within subsection (4)(d) above, a deposit shall not be taken to be a relevant deposit in relation to a payment of interest in respect of that deposit if—
- (a) the deposit was made before 6th April 1995; and
- (b) the deposit-taker has not, at any time since that date but before the making of the payment, been given a notification by the Board or any of the trustees in question that interest in respect of that deposit is income arising to the trustees of a discretionary or accumulation trust.
- (6) The Treasury may by order make amendments in this section and sections 480A . . . . . . and 482 providing for deposits of a kind specified in the order to be or, as the case may be, not to be relevant deposits in relation to all deposit-takers or such deposit-takers or classes of deposit-takers as may be so specified.
#### Supplementary provisions
##### 482
- (1) For the purposes of sections . . . 481 and this section, any amount which is credited as interest in respect of a relevant deposit shall be treated as a payment of interest.
- (2) A declaration under section 481(5)(k) shall—
- (a) if made under sub-paragraph (i) or (iii), contain an undertaking by the person making it that where—
- (i) the individual or any of the individuals in respect of whom it is made becomes ordinarily resident in the United Kingdom,
- (ii) the trustees or any company in respect of whom it is made become or becomes resident in the United Kingdom, or
- (iii) an individual who is ordinarily resident in the United Kingdom or a company which is resident in the United Kingdom becomes or is found to be a beneficiary of a trust to which the declaration relates,
the person giving the undertaking will notify the deposit-taker accordingly; and
- (b) in any case, be in such form as may be prescribed or authorised, and contain such information as may reasonably be required, by the Board.
- (2A) A declaration under section 481(5)(k)(i) must contain—
- (a) in a case falling within section 481(4)(a), the name and principal residential address of the individual who is beneficially entitled to the interest or, where two or more individuals are so entitled, of each of them;
- (b) in a case falling within section 481(4)(b), the name and principal residential address of each of the partners.
- (3) A deposit-taker shall, on being so required by notice given to him by an inspector, make all declarations which have been made to him under section 481(5) available for inspection by the inspector or by a named officer of the Board.
- (4) Where a notice has been given to a deposit-taker under subsection (3) above, the declarations shall be made available within such time as may be specified in the notice, and the person to whom they are to be made available may take copies of or extracts from them.
- (5) A deposit-taker shall treat every deposit made with him as a relevant deposit unless satisfied that it is not a relevant deposit, but where he has satisfied himself that a deposit is not a relevant deposit he shall be entitled to continue to so treat it until such time as he is in possession of information which can reasonably be taken to indicate that the deposit is or may be a relevant deposit.
- (5A) The persons who are to be taken for the purposes of section 481(5)(k)(iii) and subsection (2) above to be the beneficiaries of a discretionary or accumulation trust shall be every person who, as a person falling wholly or partly within any description of actual or potential beneficiaries, is either—
- (a) a person who is, or will or may become, entitled under the trust to receive the whole or any part of any income under the trust; or
- (b) a person to or for the benefit of whom the whole or any part of any such income may be paid or applied in exercise of any discretion conferred by the trust;
and for the purposes of this subsection references, in relation to a trust, to income under the trust shall include references to so much (if any) of any property falling to be treated as capital under the trust as represents amounts originally received by the trustees as income.
- (6) In section 481(5) and (5A)—
- “*appropriate person*”, in relation to a deposit, means any person who is beneficially entitled to any interest in respect of the deposit or entitled to receive any such interest in his capacity as a personal representative or as a trustee of a discretionary or accumulation trust or to whom any such interest is payable;
- “*certificate of deposit*” for corporation tax purposes has the meaning given in section 56(5) above and for income tax purposes has the meaning given in section 552(2) of ITTOIA 2005,
- “*general client account deposit*” means a deposit, held by the deposit-taker in a client account (other than one which is identified by the deposit-taker as one in which sums are held only for one or more particular clients of the person whose account it is) in respect of which that person is required by provision made under any enactment to make payments representing interest to some or all of the clients for whom, or on whose account, he received the sums deposited in the account;
- “*qualifying certificate of deposit*” means a certificate of deposit or uncertificated eligible debt security units, being a certificate or units issued by a deposit-taker and under which—the amount payable by the deposit-taker, exclusive of interest, is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made); andthe obligation of the deposit-taker to pay that amount arises after a period of not less than seven days beginning with the date on which the deposit is made; and
- “*qualifying time deposit*” means a deposit which is made by way of loan for an amount which is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made) and on terms which—prevent repayment of the deposit before the expiry of the period of seven days beginning with the date on which the deposit is made, but which require repayment at the end of a specified period;do not make provision for the transfer of the right to repayment; andprevent partial withdrawals of, or additions to, the deposit.
- “*uncertificated eligible debt security units*” has the meaning given in section 552(2) of ITTOIA 2005
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) For the purposes of section 481(5)(h) and (j) a deposit is held at a branch of a deposit-taker if it is recorded in his books as a liability of that branch.
- (8) A certificate of deposit, as defined in subsection (6) above, which was issued before 13th March 1984 on terms which provide for interest to be payable on the deposit at any time after 5th April 1985 (whether or not interest is payable on it before that date) shall, if it is not a qualifying certificate of deposit, be treated for the purposes of section 481(5) as if it were a qualifying certificate of deposit.
- (9) Any deposit which was made before 6th July 1984 but which is not a qualifying time deposit shall, where it is made on terms which—
- (a) do not make provision for the transfer of the right to repayment;
- (b) prevent partial withdrawals of, or additions to, the deposit; and
- (c) require—
- (i) the deposit-taker to repay the sum at the end of a specified period which ends after 5th April 1985; or
- (ii) in a case where interest is payable only at the time of repayment of the deposit, the deposit-taker to repay the sum on demand or on notice;
be treated for the purposes of section 481(5) as if it were a qualifying time deposit.
- (10) A n order under section 481(2)(f) may prescribe a person or class of person in relation to all relevant deposits or only in relation to relevant deposits of a kind specified in the order.
- (11) The Board may by regulations make provision—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (aa) with respect to the furnishing of information by depositors or deposit-takers, including, in the case of deposit-takers, the inspection of books, documents and other records on behalf of the Board; and
- (ab) with respect to—
- (i) the manner and form in which a notification for the purposes of section 481(5B) is to be given or may be withdrawn, and
- (ii) the circumstances in which the deposit-taker is to be entitled to delay acting on such a notification,
and
- (b) generally for giving effect to sections 479 to 481 and this section.
- (11A) In subsection (11)(aa) above the reference to depositors is to persons who are appropriate persons (within the meaning given by subsection (6) above) in relation to deposits.
- (12) Regulations under subsection (11) above or an order under section 481(6) may contain such incidental and consequential provision as appears to the Board or the Treasury, as the case may be, to be appropriate.
#### Determination of reduced rate for building societies and composite rate for banks etc
##### 483
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Savings banks: exemption from tax
##### 484
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Savings banks: supplemental
##### 485
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Industrial and provident societies and co-operative associations
##### 486
- (1) Notwithstanding anything in the Tax Acts, share interest or loan interest paid by a registered industrial and provident society shall not be treated as a distribution for the purposes of corporation tax; but interest payable by such a society (whether as share interest or loan interest) shall be treated for those purposes as interest under a loan relationship of the society.
- (2) Notwithstanding anything in sections 348 to 350, any share interest or loan interest paid by a registered industrial and provident society, except any to which subsection (3) below applies, shall be paid without deduction of income tax.
- (3) This subsection applies to any share interest or loan interest payable to a person whose usual place of abode is not within the United Kingdom, and in any such case section 349(2) shall apply to the payment as it applies to a payment of yearly interest, and income tax shall be deducted accordingly.
- (4) Any share interest or loan interest paid by a registered industrial and provident society shall be chargeable under Case III of Schedule D for the purposes of corporation tax.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Every registered industrial and provident society shall, within three months after the end of any accounting period of the society, deliver to the inspector a return showing—
- (a) the name and place of residence of every person to whom the society has by virtue of this section paid without deduction of income tax sums amounting to more than £15 in that period; and
- (b) the amount so paid in that period to each of those persons.
- (7) If for any accounting period a return under subsection (6) above is not duly made by a registered industrial and provident society, share and loan interest paid by the society in that period shall not be brought into account in that period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (8) If in the course of, or as part of, a union or amalgamation of two or more registered industrial and provident societies, or a transfer of engagements from one registered industrial and provident society to another, there is a disposal of an asset by one society to another, both shall be treated for the purposes of corporation tax in respect of chargeable gains as if the asset were acquired from the society making the disposal for a consideration of such amount as would secure that neither a gain nor a loss would accrue to that society on the disposal.
- (9) Subsections (1) and (8) above shall have effect as if references to a registered industrial and provident society included any co-operative association established and resident in the United Kingdom, and having as its object or primary object to assist its members in the carrying on of agricultural or horticultural businesses on land occupied by them in the United Kingdom or in the carrying on of businesses consisting in the catching or taking of fish or shellfish.
- (10) It is hereby declared that, in computing, for the purposes of any provision of the Tax Acts relating to profits chargeable under Case I of Schedule D (“the tax computation”), any profits of—
- (a) any registered industrial and provident society which does not sell to persons not members thereof; or
- (b) any registered industrial and provident society the number of the shares in which is not limited by its rules or practice;
there are to be deducted as expenses any sums which—
- (i) represent a discount, rebate, dividend or bonus granted by the company to members or other persons in respect of amounts paid or payable by or to them on account of their transactions with the company, being transactions which are taken into account in the tax computation; and
- (ii) are calculated by reference to those amounts or to the magnitude of those transactions and not by reference to the amount of any share or interest in the capital of the company.
- (11) No dividends or bonus deductible in computing income as mentioned in subsection (10) above shall be regarded as a distribution.
- (12) In this section—
- “*co-operative association*” means a body of persons having a written constitution from which the Minister is satisfied, having regard to the provision made as to the manner in which the income of the body is to be applied for the benefit of its members and all other relevant provisions, that the body is in substance a co-operative association;
- “*the Minister*” means—
- the Secretary of State, as regards England and Wales;
- the Secretary of State, as regards Scotland; and
- the Department of Agriculture for Northern Ireland, as regards Northern Ireland;
- “*registered industrial and provident society*” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or under the Industrial and Provident Societies Act (Northern Ireland) 1969;
- “*share interest*” means any interest, dividend, bonus or other sum payable to a shareholder of the society by reference to the amount of his holding in the share capital of the society;
- “*loan interest*” means any interest payable by the society in respect of any mortgage, loan, loan stock or deposit;
and references to the payment of share interest or loan interest include references to the crediting of such interest.
#### Credit unions
##### 487
- (1) Subject to subsection (2) below, in computing for the purposes of corporation tax the income of a credit union for any accounting period—
- (a) neither the activity of the credit union in making loans to its members nor in placing on deposit or otherwise investing from time to time its surplus funds shall be regarded as the carrying on of a trade or part of a trade; and
- (b) no credits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a debtor as respects the debt in question.
- (2) Paragraph (b) of subsection (1) above shall not apply to an accounting period of a credit union for which the credit union is obliged to make a return under section 486(6) and has not done so within three months after the end of that accounting period or such longer period as the inspector shall allow.
- (3) An annuity or other annual payment (not being a payment of share interest or loan interest) which is paid or payable by a credit union in any accounting period shall not be deductible in computing for the purposes of corporation tax the income of the credit union for that period from any trade carried on by it . . . .
- (3A) No debits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a creditor as respects the debt in question.
- (4) A credit union shall not be regarded as a company with investment business for the purposes of section 75 above or Part 2 of the Capital Allowances Act (plant and machinery allowances).
- (5) In this section—
- “*credit union*” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;
- “*share interest*” and “*loan interest*” have the same meaning as in section 486;
- “*surplus funds*”, in relation to a credit union, means funds not immediately required for its purposes;
and references to the payment of share interest or loan interest include references to the crediting of such interest.
#### Co-operative housing associations
##### 488
- (1) Where a housing association makes a claim in that behalf for any year or part of a year of assessment during which the association was approved for the purposes of this section—
- (a) rent to which the association was entitled from its members for the year or part shall be disregarded for tax purposes; and
- (b) any yearly interest payable by the association for the year or part shall be treated for tax purposes in relation to the association as if there were no interest so payable.
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where the property, or any of the properties, to which any such interest as is mentioned in paragraph (b) of subsection (1) above relates is for any period not subject to a tenancy—
- (a) that paragraph shall not apply in relation to so much of the interest as is attributable to the property not subject to a tenancy;. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a claim under subsection (1) above has effect, any adjustment of the liability to tax of . . . the association which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (5) Where a housing association makes a claim in that behalf for an accounting period or part of an accounting period during which it was approved for the purposes of this section, the housing association shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part on the disposal by way of sale of any property which has been or is being occupied by a tenant of the housing association.
- (6) References in this section to the approval of an association shall be construed as references to approval—
- (a) by the Secretary of State in the case of a housing association in Great Britain;
- (b) by the Head of the Department of the Environment for Northern Ireland in the case of a housing association in Northern Ireland;
and an association shall not be approved unless the approving authority is satisfied—
- (i) that the association is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969, and is a housing association within the meaning of the Housing Associations Act 1985 or Article 3 of the Housing (Northern Ireland) Order 1992;
- (ii) that the rules of the association restrict membership to persons who are tenants or prospective tenants of the association, and preclude the granting or assignment (or, in Scotland, the granting or assignation) of tenancies to persons other than members; and
- (iii) that the association satisfies such other requirements as may be prescribed by the Secretary of State as respects Great Britain, or the Head of the Department for Social Development for Northern Ireland as respects Northern Ireland, and will comply with such conditions as may for the time being be so prescribed.
- (7) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the approving authority and shall cease to have effect if revoked.
- (7A) The Secretary of State may delegate any of his functions under subsections (6) and (7)—
- (a) to the Housing Corporation, in the case of a body registered as a social landlord in the register maintained by the Housing Corporation under Part I of the Housing Act 1996, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (8) The Secretary of State as respects Great Britain, or the Head of the Department of the Environment for Northern Ireland as respects Northern Ireland, may make regulations for the purpose of carrying out the provisions of this section; and, from the coming into operation of regulations under this subsection prescribing requirements or conditions for the purposes of subsection (6)(iii) above, “prescribed” in subsection (6)(iii) above shall mean prescribed by or under such regulations.
- (9) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (10) Subject to subsection (11) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no property belonging to the association making the claim was let otherwise than to a member of the association;
- (b) no property let by the association, and no part of such property, was occupied, whether solely or as joint occupier, by a person not being a member of the association;
- (c) the association making the claim satisfies the conditions specified in subsection (6)(i) and (ii) above and has complied with the conditions prescribed under subsection (6)(iii) for the time being in force; and
- (d) any covenants required to be included in grants of tenancies by those conditions have been observed.
- (11) A housing association may make a claim under this section notwithstanding anything in subsection (10) above, if the association reasonably considers that the requirements of that subsection are substantially complied with.
- (11A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a housing association is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a housing association, or an amendment of such a claim,
an amendment is made to the association’s return or, as the case may be, to the claim, the liability of the association to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Self-build societies
##### 489
- (1) Where a self-build society makes a claim in that behalf for any year or part of a year of assessment during which the society was approved for the purposes of this section, rent to which the society was entitled from its members for the year or part shall be disregarded for tax purposes.
- (2) Where a claim under subsection (1) above has effect, any adjustment of the society’s liability to tax which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (3) Where a self-build society makes a claim in that behalf for an accounting period or part during which it was approved for the purposes of this section, the society shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part thereof on the disposal of any land to a member of the society.
- (4) References in this section to the approval of a self-build society are references to its approval by the Secretary of State, and the Secretary of State shall not approve a self-build society for the purposes of this section unless he is satisfied—
- (a) that the society is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965; and
- (b) that the society satisfies such other requirements as may be prescribed by or under regulations under subsection (6) below and will comply with such conditions as may for the time being be so prescribed.
- (5) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the Secretary of State and shall cease to have effect if revoked by him.
- (5A) The Secretary of State may delegate any of his functions under subsections (4) and (5) to—
- (a) the Housing Corporation, where the society has its registered office in England for the purposes of the Industrial and Provident Societies Act 1965,. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (6) The Secretary of State may by statutory instrument make regulations for the purpose of carrying out the provisions of this section; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (7) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (8) Subject to subsection (9) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no land owned by the society was occupied, in whole or in part and whether solely or as joint occupier, by a person who was not, at the time of his occupation, a member of the society; and
- (b) the society making the claim satisfies the condition specified in paragraph (a) of subsection (4) above and has complied with the conditions prescribed under paragraph (b) of that subsection and for the time being in force;
and for the purposes of paragraph (a) above, occupation by any other person in accordance with the will, or the provisions applicable on the intestacy, of a deceased member, shall be treated during the first six months after the death as if it were occupation by a member.
- (9) A self-build society may make a claim under this section notwithstanding anything in subsection (8) above, if the society reasonably considers that the requirements of that subsection are substantially complied with.
- (9A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a self-build society is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a self-build society or an amendment of such a claim,
an amendment is made to the society’s return or, as the case may be, to the claim, the society’s liability to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (10) A claim under this section shall be in such form and contain such particulars as may be prescribed by the Board.
- (11) In this section—
- “*self-build society*” has the same meaning as in the Housing Associations Act 1985 or, in Northern Ireland, Part VII of the Housing (Northern Ireland) Order 1981; and
- “*rent*” includes any sums to which a self-build society is entitled in respect of the occupation of any of its land under a licence or otherwise.
- (12) In the application of this section to Northern Ireland—
- (a) any reference in subsections (4) and (5) above to the Secretary of State shall be construed as a reference to the Department of the Environment for Northern Ireland;
- (b) the reference in subsection (4)(a) to the Industrial and Provident Societies Act 1965 shall be construed as a reference to the Industrial and Provident Societies Act (Northern Ireland) 1969; and
- (c) for subsection (6) there shall be substituted the following subsection—
> (6) the Department of the Environment for Northern Ireland may by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 make regulations for the purpose of carrying out the provisions of this section; and a statutory rule containing any such regulations shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
#### Companies carrying on a mutual business or not carrying on a business
##### 490
- (1) Subject to subsection (2) below, where a company carries on any business of mutual trading or mutual insurance or other mutual business the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company notwithstanding that they are made to persons participating in the mutual activities of that business and derive from those activities, but shall so apply only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income . . . . . . .
- (2) In the case of a company carrying on any mutual life assurance business, the provisions of the Tax Acts relating to distributions shall not apply to distributions made to persons participating in the mutual activities of that business and derived from those activities . . . .
- (3) Subject to subsections (1) and (2) above, the fact that a distribution made by a company carrying on any such business is derived from the mutual activities of that business and the recipient is a person participating in those activities shall not affect the character which the payment or other receipt has for purposes of corporation tax or income tax in the hands of the recipient.
- (4) Where a company does not carry on, and never has carried on, a trade or a business of holding investments, and is not established for purposes which include the carrying on of a trade or of such a business, the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of assets of body corporate carrying on mutual business
##### 491
- (1) Where any company receives any money or money’s worth—
- (a) forming part of the assets of a body corporate, other than assets representing capital; or
- (b) forming part of the consideration for the transfer of the assets of a body corporate, other than assets representing capital, as part of a scheme of amalgamation or reconstruction which involves the winding up of the body corporate; or
- (c) consisting of the consideration for a transfer or surrender of a right to receive anything falling under paragraph (a) or (b) above, being a receipt not giving rise to any charge to tax on the recipient apart from this section,
and the body corporate has at any time carried on a trade which consists of or includes the conducting of any mutual business (whether confined to members of the body corporate or not), and is being or has been wound up or dissolved, the provisions of this section shall apply to the receipt.
- (2) If a transfer or surrender of a right under subsection (1)(c) above is not at arm’s length, the company making the transfer or surrender shall, for the purposes of this section, be deemed then to have received consideration equal to the value of the right.
- (3) If in respect of a payment of any amount made to the body corporate for the purposes of its mutual business any deduction has been allowed for the purposes of corporation tax in computing the profits or losses of a trade, then—
- (a) if at the time of the receipt the recipient company is the person, or one of the persons, carrying on that trade, the amount or value of the receipt shall be treated for the purposes of corporation tax as a trading receipt of that trade; and
- (b) if at the time of the receipt the recipient company is not the person, or one of the persons, carrying on that trade, but was the person, or one of the persons, carrying on that trade when any payment was made to the body corporate for the purposes of its mutual business in respect of which a deduction was allowed for the purposes of corporation tax in computing the profits or losses of the trade, the recipient company shall, subject to subsection (6) below, be charged to corporation tax under Case VI of Schedule D for the accounting period in which the receipt falls on an amount equal to the amount or value of the receipt.
- (4) Subsection (3)(a) above applies notwithstanding that, as a result of a change in the persons carrying on the trade, the profits are under section . . . 337(1) determined as if it had been permanently discontinued and a new trade set up and commenced.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) If the trade mentioned in subsection (3)(b) above was permanently discontinued before the time of the receipt, then in computing the charge to tax under subsection (3)(b) above there shall be deducted from the amount or value of the receipt—
- (a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade had not been discontinued, would have been deducted in computing for tax purposes the profits or losses of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and
- (b) any capital allowance to which the person who carried on the trade was entitled immediately before the discontinuance and to which effect has not been given by way of relief before discontinuance.
- (7) Relief shall not be given under subsection (6) above or under section 105(1) in respect of any loss, expense, debit or allowance if and so far as it has been so given by reference to another charge to tax under this section or under section 103.
- (8) For the purposes of subsection (1) above assets representing capital consist of—
- (a) assets representing any loan or other capital subscribed, including income derived from any investment of any part of that capital, but not including profits from the employment of that capital for the purposes of the mutual business of the body corporate;
- (b) assets representing any profits charged to tax as being profits of any part of the trade carried on by the body corporate which does not consist of the conducting of any mutual business;
- (c) (so far as not comprised in paragraphs (a) and (b) above) assets representing taxed income from any investments.
- (9) In this section “*mutual business*” includes any business of mutual insurance or mutual trading.
- (10) Subsections (3) to (7) above shall apply with any necessary modifications—
- (a) to a profession . . . ; and
- (b) to the occupation of woodlands the profits or gains of which are assessable under Schedule D;
as they apply to a trade.
- (11) It is hereby declared that the description of trades in subsection (1) above does not include any trade all the profits of which are chargeable to tax and, in particular, does not include such a trade carried on by any registered industrial and provident society.
### CHAPTER V
#### Treatment of oil extraction activities etc. for tax purposes
##### 492
those activities shall be treated for the purposes of the charge of corporation tax on income as a separate trade, distinct from all other activities carried on by him as part of the trade.
- (2) Relief in respect of a loss incurred by a person shall not be given under section 380 or 381 against income arising from oil extraction activities or from oil rights (“*ring fence income*”) except to the extent that the loss arises from such activities or rights.
- (3) Relief in respect of a loss incurred by a person shall not be given under section 393A(1) against his ring fence profits except to the extent that the loss arises from oil extraction activities or from oil rights.
- (4) In any case where—
- (a) in any chargeable period a person incurs a loss in activities (“separate activities”) which, for that or any subsequent chargeable period, are treated by virtue of section 16(1) of ITTOIA 2005 or subsection (1) above as a separate trade for income tax purposes or (as the case may be) for the purposes of the charge of corporation tax on income; and
- (b) in any subsequent chargeable period any of his trading income is derived from activities (“*related activities*”) which are not part of the separate activities but which, apart from section 16(1) of ITTOIA 2005 or subsection (1) above, would together with those activities constitute a single trade,
then, notwithstanding anything in that section or subsection, the amount of the loss may be set off, in accordance with section 385 or 393(1), against so much of his trading income in any subsequent chargeable period as is derived from the related activities.
- (5) Subject to subsection (7) below, a capital allowance which is to be given to any person by discharge or repayment of tax shall not to any extent be given effect under section 258 of the Capital Allowances Act by deduction from or set off against his ring fence income.
- (6) Subject to subsection (7) below, a capital allowance which is to be given to any person by discharge or repayment of tax shall not to any extent be given effect under section 259 or 260 of the Capital Allowances Act by deduction from or set off against his ring fence profits.
- (7) Subsection (5) or (6) above shall not apply to a capital allowance which falls to be made to a company for any accounting period in respect of an asset used in the relevant accounting period by a company associated with it and so used in carrying on oil extraction activities. For the purposes of this subsection, the relevant accounting period is that in which the allowance in question first falls to be made to the company (whether or not it can to any extent be given effect in that period under section 259 of the Capital Allowances Act.
- (8) On a claim for group relief made by a claimant company in relation to a surrendering company, group relief shall not be allowed against the claimant company’s ring fence profits except to the extent that the claim relates to losses incurred by the surrendering company that arose from oil extraction activities or from oil rights.
#### Valuation of oil disposed of or appropriated in certain circumstances
##### 493
- (A1) Where the conditions in subsection (A2) below are met in the case of a disposal of oil by a person, section 2(5A) of the Oil Taxation Act 1975 (“*the 1975 Act*”) (transportation etc) is to apply in determining the amount which the person is to bring into account for the purposes of the charge to corporation tax on income in respect of the disposal as it applies (or would apply) for the purposes of petroleum revenue tax.
- (A2) The conditions are that—
- (a) the oil is oil won from an oil field in the United Kingdom,
- (b) the disposal is a disposal of the oil by the person crude in a sale at arm's length, as defined in paragraph 1 of Schedule 3 to the 1975 Act,
- (c) the circumstances are such that the price received or receivable—
- (i) falls to be taken into account under section 2(5)(a) of that Act in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to the person in any chargeable period from the oil field, or
- (ii) would fall to be so taken into account, had the oil field been a taxable field, as defined in section 185 of the Finance Act 1993,
- (d) the terms of the contract are such as are described in the opening words of section 2(5A) of the 1975 Act,
- (e) apart from subsection (A1) above, the person is not entitled to a transportation allowance in respect of the oil (see subsection (A3)) in computing his ring fence profits,
- (f) the person does not claim a transportation allowance in respect of the oil in computing for the purposes of corporation tax any profits of his that are not ring fence profits.
- (A3) In subsection (A2) above “*transportation allowance*”, in relation to any oil, means any of the following—
- (a) a deduction in respect of the expense of transporting the oil as mentioned in the opening words of section 2(5A) of the 1975 Act,
- (b) a deduction in respect of any costs of or incidental to the transportation of the oil as there mentioned,
- (c) any such reduction in the price to be regarded as received or receivable for the oil as would result from the application of section 2(5A) of the 1975 Act, if that provision applied for the purposes of corporation tax.
- (1) Where a person disposes of any oil in circumstances such that the market value of that oil . . . falls to be taken into account under section 2 of the 1975 Act, otherwise than by virtue of paragraph 6 of Schedule 3 to that Act, in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to him in any chargeable period from an oil field (or as would so fall but for section 10 of that Act), then—
- (a) for all purposes of income tax, and
- (b) for the purposes of the charge of corporation tax on income,
the disposal of the oil and its acquisition by the person to whom it was disposed of shall be treated as having been for a consideration equal to the market value of the oil as so taken into account under section 2 of that Act (or as would have been so taken into account under that section but for section 10 of that Act).
- (1A) Where an excess of nominated proceeds in a chargeable period (within the meaning given by section 61 of the Finance Act 1987) is taken into account in computing a person's profits under section 2(5)(e) of the 1975 Act (or would be taken into account if the person were chargeable to tax under that Act in respect of a field)—
- (a) for the purposes of subsection (1) the amount of the excess shall be added to the consideration which the person is deemed to have received in respect of oil disposed of by him in the period, and
- (b) for the purposes of corporation tax, that amount shall be available to the person as a deduction in computing the profits of any trade to which section 492(1) does not apply.
- (2) Where a person makes a relevant appropriation of any oil without disposing of it and does so in circumstances such that the market value of that oil . . . falls to be taken into account under section 2 of the 1975 Act in computing for the purposes of petroleum revenue tax the assessable profit or allowable loss accruing to him in any chargeable period from an oil field (or would so fall but for section 10 of that Act), then for all the purposes of income tax and for the purposes of the charge of corporation tax on income, he shall be treated—
- (a) as having, at the time of the appropriation—
- (i) sold the oil in the course of the separate trade consisting of activities falling within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1)(a) or (b) above; and
- (ii) bought it in the course of the separate trade consisting of activities not so falling; and
- (b) as having so sold and bought it at a price equal to its market value as so taken into account under section 2 of the 1975 Act (or as would have been so taken into account under that section but for section 10 of that Act).
In this subsection “*relevant appropriation*” has the meaning given by section 12(1) of the 1975 Act.
- (3) Where—
- (a) a person disposes otherwise than in a sale at arm’s length (as defined in paragraph 1 of Schedule 3 to the 1975 Act) of oil acquired by him in the course of oil extraction activities carried on by him or by virtue of oil rights held by him, and
- (b) subsection (1) above does not apply in relation to the disposal,
then, for all purposes of income tax and for the purposes of the charge of corporation tax on income, the disposal of the oil and its acquisition by the person to whom it was disposed of shall be treated as having been for a consideration equal to the market value of the oil . . . .
- (4) If a person appropriates oil acquired by him in the course of oil extraction activities carried on by him or by virtue of oil rights held by him and the appropriation is to refining or to any use except for production purposes of an oil field, within the meaning of Part I of the 1975 Act, then, unless subsection (2) above applies, for all purposes of income tax and for the purposes of the charge of corporation tax on income—
- (a) he shall be treated as having, at the time of the appropriation, sold and bought the oil as mentioned in subsection (2)(a)(i) and (ii) above; and
- (b) that sale and purchase shall be deemed to have been at a price equal to the market value of the oil . . . .
- (5) For the purposes of subsections (3) and (4) above, paragraph 2 of Schedule 3 to the 1975 Act shall apply as it applies for the purposes of Part 1 of that Act, but with the following modifications—
- (a) sub-paragraph (4) shall be treated as omitted;
- (b) any reference in paragraphs 2 and 2A to oil being relevantly appropriated shall be construed as a reference to its being appropriated as mentioned in section 493(4) of the Taxes Act; and
- (c) any reference in paragraph 2 to the notional delivery day for the actual oil shall be construed as a reference to the day on which the oil is disposed of or appropriated as mentioned in subsection (3) or (4) above.
- (6) In subsections (3) and (4) above the references to the market value of any oil in the calendar month in which a disposal of the oil was made or, as the case may be, in which it was appropriated shall each have effect in relation to light gases (within the meaning of the 1975 Act) as a reference to the amount which, if paragraph 3A of Schedule 3 to the 1975 Act applied, would be the market value of that oil in relation to the disposal or appropriation in question.
#### Charges on income
##### 494
- (1) . . . Chapter II of Part IV of the Finance Act 1996 (loan relationships) shall have effect subject to the following provisions of this section.
- (2) Debits shall not be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a company in any manner that results in a reduction of what would otherwise be the company’s ring fence profits except—
- (a) to the extent that the loan relationship is in respect of money borrowed by the company which has been—
- (i) used to meet expenditure incurred by the company in carrying on oil extraction activities or in acquiring oil rights otherwise than from a connected person; or
- (ii) appropriated to meeting expenditure to be so incurred by the company;
- (b) in the case of debits falling to be brought into account by virtue of subsection (4) of section 84 of that Act in respect of a loan relationship that has not been entered into, to the extent that the relationship would have been one entered into for the purpose of borrowing money to be used or appropriated as mentioned in paragraph (a) above; and
- (c) in the case of debits in respect of a relationship to which section 100 of that Act applies, to the extent that—
- (i) the payment of interest under that relationship is expenditure incurred as mentioned in sub-paragraph (i) of paragraph (a) above; or
- (ii) the exchange loss arising from that relationship is in respect of a money debt on which the interest payable (if any) is, or would be, such expenditure;
as the case may be;. . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- In this subsection “*debtor relationship*” and “*creditor relationship*” have the same meanings as in Chapter II of Part IV of the Finance Act 1996, and references to a loan relationship, in relation to the borrowing of money, do not include references to any relationship to which section 100 of that Act applies.
- Section 839 shall apply for the purposes of this subsection.
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2ZA) Credits in respect of exchange gains from a company’s loan relationships shall not be brought into account for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 in respect of any loan relationship of a company in any manner that results in an increase of what would otherwise be the company’s ring fence profits, except to the extent that, if the credit had been a debit in respect of an exchange loss from the relationship, it would have been brought into account by virtue of any of paragraphs (a) to (c) of subsection (2) above.
- (2A) Where any debit or credit—
- (a) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a company, but
- (b) in accordance with subsection (2) or (2ZA) above cannot be brought into account in a manner that results in any reduction or, as the case may be, increase of what would otherwise be the company’s ring fence profits,
then (notwithstanding anything in section 82(2) of that Act) that debit or credit shall be brought into account for those purposes as a non-trading debit or, as the case may be, non-trading credit.
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Regional development grants
##### 495
- (1) Subsection (2) below applies in any case where—
- (a) a person has incurred expenditure (by way of purchase, rent or otherwise) on the acquisition of an asset in a transaction to which paragraph 2 of Schedule 4 to the 1975 Act applies (transactions between connected persons and otherwise than at arm’s length), and
- (b) the expenditure incurred by the other person referred to in that paragraph in acquiring, bringing into existence or enhancing the value of the asset as mentioned in that paragraph has been or is to be met by a regional development grant and, in whole or in part, falls to be taken into account Part 2, 3 or 6 of the Capital Allowances Act (capital allowances relating to plant and machinery, industrial buildings or research and development).
- (2) Where this subsection applies, for the purposes of the charge of income tax or corporation tax on the income arising from those activities of the person referred to in paragraph (a) of subsection (1) above which are treated by virtue of section 16(1) of ITTOIA 2005 or section 492(1) above as a separate trade for those purposes, the expenditure referred to in that paragraph shall be treated as reduced by the amount of the regional development grant referred to in paragraph (b) of that subsection.
- (3) Subsections (4) to (6) below apply where—
- (a) expenditure incurred by any person in relation to an asset in any relevant period (“*the initial period*”) has been or is to be met by a regional development grant; and
- (b) notwithstanding the provisions of section 137 of the Finance Act 1982 and subsections (1) and (2) above, in determining that person’s liability to income tax or corporation tax for the initial period the whole or some part of that expenditure falls to be taken into account Part 2, 3 or 6 of the Capital Allowances Act; and
- (c) in a relevant period subsequent to the initial period either expenditure on the asset becomes allowable under section 3 or 4 of the 1975 Act or the proportion of any such expenditure which is allowable is different as compared with the initial period;
and in subsections (4) to (6) below the subsequent relevant period referred to in paragraph (c) above is referred to as “*the adjustment period*”.
- (4) Where this subsection applies—
- (a) there shall be redetermined for the purposes of subsections (5) and (6) below the amount of the expenditure referred to in subsection (3)(a) above which would have been taken into account as mentioned in subsection (3)(b) if the circumstances referred to in subsection (3)(c) had existed in the initial period; and
- (b) according to whether the amount as so redetermined is greater or less than the amount actually taken into account as mentioned in subsection (3)(b), the difference is in subsections (5) and (6) below referred to as the increase or the reduction in the allowance.
- (5) If there is an increase in the allowance, then, for the purposes of the provisions referred to in subsection (3)(b) above, an amount of capital expenditure equal to the increase shall be deemed to have been incurred by the person concerned in the adjustment period on an extension of or addition to the asset referred to in subsection (3)(a) above.
- (6) If there is a reduction in the allowance, then, for the purpose of determining the liability to income tax or corporation tax of the person concerned, he shall be treated as having received in the adjustment period, as income of the trade in connection with which the expenditure referred to in subsection (3)(a) above was incurred, a sum equal to the amount of the reduction in the allowance.
- (7) In this section—
- “*regional development grant*” means a grant falling within section 534(1) of the Capital Allowances Act; and
- “*relevant period*” means an accounting period of a company or a year of assessment.
#### Tariff receipts
##### 496
- (1) Any sum which—
- (a) constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator in an oil field, and
- (b) constitutes consideration in the nature of income rather than capital, and
- (c) would not, apart from this subsection, be treated for the purposes of this Chapter as a receipt of the separate trade referred to in section 16(1) of ITTOIA 2005 or section 492(1) above,
shall be so treated for those purposes.
- (2) To the extent that they would not otherwise be so treated, the activities of a participator in an oil field or a person connected with him in making available an asset in a way which gives rise to tariff receipts or tax-exempt tariffing receipts of the participator shall be treated for the purposes of this Chapter as oil extraction activities.
- (3) In determining for the purposes of subsection (1) above whether any sum constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator, no account shall be taken of any sum which—
- (a) is in fact received or receivable by a person connected with the participator, and
- (b) constitutes a tariff receipt or tax-exempt tariffing receipt of the participator,
but in relation to the person by whom such a sum is actually received, subsection (1) above shall have effect as if he were a participator and as if the condition in paragraph (a) of that subsection were fulfilled.
- (4) References in this section to a person connected with a participator include references to a person with whom the person is associated within the meaning of paragraph 11 of Schedule 2 to the Oil Taxation Act 1983.
#### Restriction on setting ACT against income from oil extraction activities etc
##### 497
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limited right to carry back surrendered ACT
##### 498
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Surrender of ACT where oil extraction company etc. owned by a consortium
##### 499
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deduction of PRT in computing income for corporation tax purposes
##### 500
- (1) Where a participator in an oil field has paid any petroleum revenue tax with which he was chargeable for a chargeable period, then, in computing for corporation tax the amount of his income arising in the relevant accounting period from oil extraction activities or oil rights, there shall be deducted an amount equal to that petroleum revenue tax.
- (2) There shall be made all such adjustments of assessments to corporation tax as are required in order to give effect to subsection (1) above.
- (3) For the purposes of subsection (1) above, the relevant accounting period, in relation to any petroleum revenue tax paid by a company, is—
- (a) the accounting period of the company in or at the end of which the chargeable period for which that tax was charged ends; or
- (b) if that chargeable period ends after the accounting period of the company in or at the end of which the trade giving rise to the income referred to above is permanently discontinued, that accounting period.
- (4) Subject to the following provisions of this section if some or all of the petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is subsequently repaid, that deduction shall be reduced or extinguished accordingly; and any additional assessment to corporation tax required in order to give effect to this subsection may be made at any time not later than six years after the end of the calendar year in which the first-mentioned tax was repaid.
- (5) If, in a case where paragraph 17 of Schedule 2 to the 1975 Act applies, an amount of petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is repaid by virtue of an assessment under that Schedule or an amendment of such an assessment, then, so far as concerns so much of that repayment as constitutes the appropriate repayment,—
- (a) subsection (4) above shall not apply; and
- (b) the following provisions of this section shall apply in relation to the company which is entitled to the repayment.
- (6) In subsection (5) above and the following provisions of this section—
- (a) “*the appropriate repayment*” has the meaning assigned by sub-paragraph (2) of paragraph 17 of Schedule 2 to the 1975 Act;
- (b) in relation to the appropriate repayment, a “*carried back loss*” means an allowable loss which falls within sub-paragraph (1)(a) of that paragraph and which (alone or together with one or more other carried back losses) gives rise to the appropriate repayment;
- (c) in relation to a carried back loss, “*the operative chargeable period*” means the chargeable period in which the loss accrued; and
- (d) in relation to the company which is entitled to the appropriate repayment, “*the relevant accounting period*” means the accounting period in or at the end of which ends the operative chargeable period or, if the company’s ring fence trade is permanently discontinued before the end of the operative chargeable period, the last accounting period of that trade.
- (7) In computing for corporation tax the amount of the company’s income arising in the relevant accounting period from oil extraction activities or oil rights there shall be added an amount equal to the appropriate repayment; but this subsection has effect subject to subsection (8) below in any case where—
- (a) two or more carried back losses give rise to the appropriate repayment; and
- (b) the operative chargeable period in relation to each of the carried back losses is not the same; and
- (c) if subsection (6)(d) above were applied separately in relation to each of the carried back losses there would be more than one relevant accounting period.
- (8) Where paragraphs (a) to (c) of subsection (7) above apply, the appropriate repayment shall be treated as apportioned between each of the relevant accounting periods referred to in paragraph (c) of that subsection in such manner as to secure that the amount added by virtue of that subsection in relation to each of those relevant accounting periods is what it would have been if—
- (a) relief for each of the carried back losses for which there is a different operative chargeable period had been given by a separate assessment or amendment of an assessment under Schedule 2 to the 1975 Act; and
- (b) relief for a carried back loss accruing in an earlier chargeable period had been so given before relief for a carried back loss accruing in a later chargeable period.
- (9) Any additional assessment to corporation tax required in order to give effect to the addition of an amount by virtue of subsection (7) above may be made at any time not later than six years after the end of the calendar year in which is made the repayment of petroleum revenue tax comprising the appropriate repayment.
- (10) In this section “*allowable loss*” and “*chargeable period*” have the same meaning as in Part I of the 1975 Act and “*calendar year*” means a period of twelve months beginning on 1st January.
#### Interest on repayment of PRT
##### 501
Where any amount of petroleum revenue tax paid by a participator in an oil field is, under any provision of Part I of the 1975 Act, repaid to him with interest, the amount of the interest paid to him shall be disregarded in computing the amount of his income for the purposes of corporation tax.
#### Interpretation of Chapter V
##### 502
- (1) In this Chapter—
- “*the 1975 Act*” means the Oil Taxation Act 1975 ;
- “*oil*” means any substance won or capable of being won under the authority of a licence granted under either Part I of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964, other than methane gas won in the course of operations for making and keeping mines safe;
- “*oil extraction activities*” means any activities of a person—in searching for oil in the United Kingdom or a designated area or causing such searching to be carried out for him; orin extracting or causing to be extracted for him oil at any place in the United Kingdom or a designated area under rights authorising the extraction and held by him or, if the person in question is a company, by the company or a company associated with it; orin transporting or causing to be transported for him . . . oil extracted at any such place not on dry land under rights authorising the extraction and so held where the transportation is—to the place where the oil is first landed in the United Kingdom, orto the place in the United Kingdom or, in the case of oil first landed in another country, the place in that or any other country (other than the United Kingdom) at which the seller in a sale at arm’s length could reasonably be expected to deliver it or, if there is more than one such place, the one nearest to the place of extraction; orin effecting or causing to be effected for him the initial treatment or initial storage of oil won from any oil field under rights authorising its extraction and so held;
- “*oil field*” has the same meaning as in Part I of the 1975 Act;
- “*oil rights*” means rights to oil to be extracted at any place in the United Kingdom or a designated area, or to interests in or to the benefit of such oil;
- “*participator*” has the same meaning as in Part I of the 1975 Act; and
- “*ring fence income*” means income arising from oil extraction activities or oil rights; and
- “*ring fence profits*” has the meaning given by subsection (1A) below or, in any case where that subsection does not apply, means ring fence income; and
- “*ring fence trade*” means activities which—fall within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1) above; andconstitute a separate trade (whether by virtue of section 16(1) of ITTOIA 2005 or section 492(1) above or otherwise).
- (1A) Where in accordance with section 197(3) of the 1992 Act a person has an aggregate gain for any chargeable period, that gain and his ring fence income (if any) for that period together constitute his ring fence profits for the purposes of this Chapter.
- (2) For the purposes of subsection (1) above—
- (a) “*designated area*” means an area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964;
- (b) “*initial treatment*” has the same meaning as in Part I of the 1975 Act; and
- (c) the definition of “*initial storage*” in section 12(1) of the 1975 Act shall apply but, in its application for those purposes in relation to the person mentioned in subsection (1)(d) above and to oil won from any one oil field shall have effect as if the reference to the maximum daily production rate of oil for the field as there mentioned were a reference to that person’s share of that maximum daily production rate, that is to say, a share thereof proportionate to his share of the oil won from that field.
- (3) For the purposes of this Chapter two companies are associated with one another if—
- (a) one is a 51 per cent. subsidiary of the other;
- (b) each is a 51 per cent. subsidiary of a third company; or
- (c) one is owned by a consortium of which the other is a member.
- (3A) Section 413(6) applies for the purposes of subsection (3)(c) above but as if section 413 were modified as follows—
- (a) as if the definition of “company" in subsection (2) were omitted;
- (b) as if at the beginning of subsection (5) there were inserted “References in this Chapter to a company apply only to bodies corporate resident in the United Kingdom; and"; and
- (c) as if in that subsection, after the word “*receipt*”, in the second place where it occurs, there were inserted “; or
- (c) of any share capital which it owns directly or indirectly in a body corporate not resident in the United Kingdom.”
- (4) Without prejudice to subsection (3) above, for the purposes of this Chapter, two companies are also associated with one another if one has control of the other or both are under the control of the same person or persons; and in this subsection “control” shall be construed in accordance with section 416.
### CHAPTER VI — MISCELLANEOUS BUSINESSES AND BODIES
#### Letting of furnished holiday accommodation treated as a trade
##### 503
- (1) For the purposes of Chapter 2 of Part 10 (loss relief for corporation tax)—
- (a) a Schedule A business which consists in, or so far as it consists in, the commercial letting of furnished holiday accommodation . . . shall be treated as if it were a trade the profits of which are chargeable to corporation tax under Case I of Schedule D, and
- (b) all such lettings made by a particular company or partnership shall be treated as one trade.
The “*commercial letting of furnished holiday accommodation*” is defined below in section 504.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where there is a letting of accommodation only part of which is holiday accommodation, such apportionments shall be made for the purposes of this section as are just and reasonable.
- (5) Relief shall not be given for the same loss, or the same portion of a loss, both under a provision of Chapter 2 of Part 10 as applied by this section and under any other provision of the Corporation Tax Acts.
#### Supplementary provisions
##### 504
- (1) This section has effect for the purposes of section 503.
- (2) A letting—
- (a) is a commercial letting if it is let on a commercial basis and with a view to the realisation of profits; and
- (b) is of furnished accommodation if the tenant is entitled to the use of furniture.
- (3) Accommodation shall not be treated as holiday accommodation for the purposes of this section unless—
- (a) it is available for commercial letting to the public generally as holiday accommodation for periods which amount, in the aggregate, to not less than 140 days;
- (b) the periods for which it is so let amount in the aggregate to at least 70 days; and
- (c) for a period comprising at least seven months (which need not be continuous but includes any months in which it is let as mentioned in paragraph (b) above) it is not normally in the same occupation for a continuous period exceeding 31 days.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Any question whether accommodation let by a company is at any time in an accounting period holiday accommodation shall be determined—
- (a) if the accommodation was not let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is so let in the period of 12 months immediately following the accounting period, by reference to the 12 months beginning with the date in the accounting period on which it first so let it;
- (b) if the accommodation was let by it as furnished accommodation in the period of 12 months immediately preceding the accounting period but is not so let by it in the period of 12 months immediately following the accounting period, by reference to the 12 months ending with the date in the accounting period on which it ceased so to let it;
- (c) in any other case, by reference to the period of 12 months ending with the last day of the accounting period.
- (6) Where, in any . . . accounting period, a company lets furnished accommodation which is treated as holiday accommodation for the purposes of this section in that . . . period (“*the qualifying accommodation*”), the company may make a claim under this subsection, within the time specified in subsection (6A) below, for averaging treatment to apply for that . . . period to that and any other accommodation specified in the claim which was let by the company as furnished accommodation during that . . . period and would fall to be treated as holiday accommodation in that . . . period if subsection (3)(b) above were satisfied in relation to it.
- (6A) The time mentioned in subsection (6) above is the period of two years beginning at the end of the accounting period in which the accommodation was let.
- (7) Where a claim is made under subsection (6) above in respect of any . . . accounting period, any such other accommodation shall be treated as being holiday accommodation in that . . . period if the number of days for which the qualifying accommodation and any other such accommodation was let by the claimant as mentioned in subsection (3)(a) above during the . . . period amounts on average to at least 70.
- (8) Qualifying accommodation may not be specified in more than one claim in respect of any one . . . accounting period.
- (9) For the purposes of this section a company lets accommodation if it permits another person to occupy it, whether or not in pursuance of a lease; and “*letting*” and “*tenant*” shall be construed accordingly.
#### Charities: general
##### 505
- (1) Subject to subsections (2) and (3) below, the following exemptions shall be granted on a claim in that behalf to the Board—
- (a) exemption from tax under Schedules A and D , or under Parts 2 and 3 of ITTOIA 2005, in respect of any profits or gains arising in respect of rents or other receipts from an estate, interest or right in or over any land (whether situated in the United Kingdom or elsewhere) to the extent that the profits or gains—
- (i) arise in respect of rents or receipts from an estate, interest or right vested in any person for charitable purposes; and
- (ii) are applied to charitable purposes only;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) exemption—
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) from tax under Case III of Schedule D or under Chapter 2, 7, 8 or 10 of Part 4 of ITTOIA 2005 (interest, purchased life annuity payments, profits from deeply discounted securities and distributions from unauthorised unit trusts), section 579 of that Act so far as it relates to annual payments (royalties etc. from intellectual property), Chapter 4 of Part 5 of that Act so far as it relates to annual payments (certain telecommunication rights: non-trading income) or Chapter 7 of Part 5 of that Act (annual payments not otherwise charged),
- (iia) from tax under Case . . . V of Schedule D in respect of income equivalent to income chargeable under Case III of that Schedule but arising from securities or other possessions outside the United Kingdom,
- (iiaa) from tax under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies) or from tax under Chapter 8 of Part 5 of that Act (income not otherwise charged) so far as it applies to relevant foreign distributions,
- (iib) from tax under Case V of Schedule D in respect of such dividends as would, in the case of income tax, be chargeable to tax under Chapter 4 of Part 4 of ITTOIA 2005 or such distributions (other than dividends) as would, in the case of income tax, be chargeable to tax under Chapter 8 of Part 5 of that Act so far as it would apply to what would be a relevant foreign distribution,
- (iic) from tax under Case VI of Schedule D in respect of non-trading gains on intangible fixed assets under Schedule 29 to the Finance Act 2002, and
- (iii) from tax under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.) in respect of any distribution,
where the income in question forms part of the income of a charity, or is, according to rules or regulations established by Act of Parliament, charter, decree, deed of trust or will, applicable to charitable purposes only, and so far as it is applied to charitable purposes only;
- (d) exemption from tax under Schedule D or Chapter 2 of Part 4 of ITTOIA 2005 (interest) in respect of public revenue dividends on securities which are in the name of trustees, to the extent that the dividends are applicable and applied only for the repair of—
- (i) any cathedral, college, church or chapel, or
- (ii) any building used only for the purposes of divine worship;
- (e) exemption from tax under Schedule D or Part 2 of ITTOIA 2005 (trading income) in respect of the profits of any trade carried on by a charity (whether in the United Kingdom or elsewhere), if the profits are applied solely to the purposes of the charity and either—
- (i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charity; or
- (ii) the work in connection with the trade is mainly carried out by beneficiaries of the charity;
- (f) exemption from tax under Schedule D or Part 2 or 5 of ITTOIA 2005 (trading and miscellaneous income) in respect of profits accruing to a charity from a lottery if—
- (i) the lottery is promoted and conducted in accordance with section 3 or 5 of the Lotteries and Amusements Act 1976 or Article 133 or 135 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985; and
- (ii) the profits are applied solely to the charity’s purposes.
- (1AA) In subsection (1)(c)(iiaa) and (iib) “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part of that Act if the company were resident in the United Kingdom.
- (1A) In subsection (1)(d) above “*public revenue dividends*” means—
- (a) income from securities which is payable out of the public revenue of the United Kingdom or Northern Ireland;
- (b) income from securities issued by or on behalf of a government or a public or local authority in a country outside the United Kingdom.
- (1B) For the purpose of subsection (1)(e)—
- (a) where a trade is exercised partly in the course of the actual carrying out of a primary purpose of the charity and partly otherwise, each part shall be treated as a separate trade (for which purpose reasonable apportionment of expenses and receipts shall be made), and
- (b) where the work in connection with the trade is carried out partly but not mainly by beneficiaries, the part in connection with which work is carried on by beneficiaries and the other part shall be treated as separate trades (for which purpose reasonable apportionment of expenses and receipts shall be made).
- (2) Any payment which—
- (a) is received by a charity from another charity; and
- (b) is not made for full consideration in money or money’s worth; and
- (c) is not chargeable to tax apart from this subsection; and
- (d) is not, apart from this subsection, of a description which (on a claim) would be eligible for relief from tax by virtue of any provision of subsection (1) above;
shall be chargeable to income tax under Chapter 7 of Part 5 of ITTOIA 2005 (annual payments not otherwise charged) so far as it does not apply to relevant foreign income and shall be chargeable to corporation tax under Case III of Schedule D but shall be eligible for relief from tax under subsection (1)(c) above as if it were an annual payment.
- (3) In subsections (4) to (7)—
- (a) “*charitable expenditure*” has the meaning given by section 506,
- (b) “*relief*” means relief or exemption under—
- (i) subsection (1) above,
- (ii) section 56(3)(c) above,
- (iii) section 761(6) below,
- (iv) section 256 of the 1992 Act (charities), or
- (v) section 46 of the Finance Act 2000 (small trades),
- (c) “*relievable income and gains*” means income and gains which would be eligible for relief or exemption under any of those provisions (disregarding subsections (4) to (6)), and
- (d) “*total income and gains*” means the aggregate of—
- (i) relievable income and gains,
- (ii) income and gains, other than relievable income and gains, chargeable to tax, and
- (iii) donations, legacies and other similar receipts that are not chargeable to tax.
- (4) If a charity incurs (or is treated as incurring) non-charitable expenditure in a chargeable period, relief shall be disallowed in respect of such amount of relievable income and gains as equals the amount of the non-charitable expenditure.
- (5) If in a chargeable period a charity's non-charitable expenditure exceeds its total income and gains the excess shall be treated as non-charitable expenditure of the previous period for the purposes of subsection (4); and any necessary adjustments shall be made, whether by making assessments or otherwise.
- (6) Subsection (5) may apply to a chargeable period wholly or partly as a result of the application of that subsection in respect of a later period; but no excess of non-charitable expenditure shall be treated as non-charitable expenditure of a chargeable period which ended more than six years before the end of the period in which the expenditure was actually incurred.
- (7) Where an amount of a charity's relievable income and gains is disallowed for relief by subsection (4) (whether or not as a result of the application of subsection (5))—
- (a) the charity may by notice to the Board specify which items of income or gains are to be disallowed, but
- (b) if the Board requires the charity to give a notice under paragraph (a) and the charity fails to comply within the period of 30 days beginning with the date on which the requirement is imposed, the Board shall determine which items to disallow.
#### Qualifying expenditure and non-qualifying expenditure
##### 506
- (1) In this section, section 505 and Schedule 20—
- “*charity*” means any body of persons or trust established for charitable purposes only;
- “*charitable expenditure*” means (subject to subsections (3) to (5) below) expenditure which is exclusively for charitable purposes.
- (2) For the purposes of section 505 . . . , where expenditure which is not actually incurred in a particular chargeable period properly falls to be charged against the income of that chargeable period as being referable to commitments (whether or not of a contractual nature) which the charity has entered into before or during that period, it shall be treated as incurred in that period.
- (3) A payment made (or to be made) to a body situated outside the United Kingdom shall not be charitable expenditure by virtue of this section unless the charity concerned has taken such steps as may be reasonable in the circumstances to ensure that the payment will be applied for charitable purposes.
- (4) If in any chargeable period a charity—
- (a) invests any of its funds in an investment which is not a qualifying investment, as defined in Part I of Schedule 20; or
- (b) makes a loan (not being an investment) which is not a qualifying loan, as defined in Part II of that Schedule;
then, subject to subsection (5) below, the amount so invested or lent in that period shall be treated for the purposes of this section as being an amount of expenditure incurred by the charity, and, accordingly, as being non-charitable expenditure.
- (5) If, in any chargeable period, a charity which has in that period made an investment or loan falling within subsection (4) above—
- (a) realises the whole or part of that investment; or
- (b) is repaid the whole or part of that loan;
any further investment or lending in that period of the sum realised or repaid shall, to the extent that it does not exceed the sum originally invested or lent, be left out of account in determining the amount which, by virtue of subsection (4) above, is treated as non-charitable expenditure incurred in that period.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The National Heritage Memorial Fund, the Historic Buildings and Monuments Commission for England and the British Museum
##### 507
- (1) There shall on a claim in that behalf to the Board be allowed in the case of—
- (a) the Trustees of the National Heritage Memorial Fund;
- (b) the Historic Buildings and Monuments Commission for England;
- (c) the Trustees of the British Museum;
- (d) the Trustees of the Natural History Museum;
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) the National Endowment for Science, Technology and the Arts;
such exemption from tax as falls to be allowed under section 505 in the case of a charity the whole income of which is applied to charitable purposes.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scientific research organisations
##### 508
- (1) Where—
- (a) an Association has as its object the undertaking of research and development which may lead to or facilitate an extension of any class or classes of trade; and
- (b) the memorandum of association or other similar instrument regulating the functions of the Association precludes the direct or indirect payment or transfer to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit;
there shall, on a claim in that behalf to the Board in relation to any accounting period, be allowed in the case of the Association for that accounting period such exemption from tax as falls to be allowed under section 505 in the case of a charity the whole income of which is applied to charitable purposes.
- (1A) The Treasury may by regulations prescribe circumstances in which the conditions in subsection (1) above shall be deemed not to be complied with.
- (1B) The Treasury may by regulations make provision specifying for the purposes of paragraph (a) of that subsection—
- (a) what shall be deemed to be, or not to be, an Association,
- (b) circumstances in which an Association shall be deemed to have, or not to have, the undertaking of research and development as its object,
- (c) circumstances in which the undertaking of research and development shall be deemed to be, or not to be, capable of leading to or facilitating an extension of a class of trade, or
- (d) what shall be deemed to be, or not to be, a class of trade.
- (2) The condition specified in paragraph (b) of subsection (1) above shall not be deemed not to be complied with in the case of any Association by reason only that the memorandum or other similar instrument regulating its functions does not prevent the payment to its members of reasonable remuneration for goods, labour or power supplied, or for services rendered, of reasonable interest for money lent, or of reasonable rent for any premises.
- (3) Section 837A (meaning of “research and development”) applies for the purposes of subsection (1)(a) above.
- (4) Regulations under subsection (3) of that section (power to prescribe activities which are, or are not, research and development) may make provision for the purposes of that section as it applies by virtue of subsection (3) of this section which is additional to, or different from, the provision made otherwise for the purposes of that section.
#### Reserves of marketing boards and certain other statutory bodies
##### 509
- (1) Where a body established by or under any enactment and having as its object, or one of its objects, the marketing of an agricultural product or the stabilising of the price of an agricultural product is required, by or under any scheme or arrangements approved by or made with a Minister of the Crown or government department, to pay the whole or part of any surplus derived from its trading operations or other trade receipts into a reserve fund satisfying the conditions specified in subsection (2) below, then, in computing for the purposes of tax the profits or losses of the body’s trade—
- (a) there shall be allowed as deductions any sums so required to be paid by the body into the reserve fund out of the profits of the trade, and
- (b) there shall be taken into account as trading receipts any sums withdrawn by the body from the fund, except so far as they are so required to be paid to a Minister or government department, or are distributed to producers of the product in question or refunded to persons paying any levy or duty.
- (2) The conditions to be satisfied by the reserve fund are as follows—
- (a) that no sum may be withdrawn from the fund without the authority or consent of a Minister of the Crown or government department; and
- (b) that where money has been paid to the body by a Minister of the Crown or government department in connection with arrangements for maintaining guaranteed prices, or in connection with the body’s trading operations, and is repayable to that Minister or department, sums afterwards standing to the credit of the fund are required as mentioned in subsection (1) above to be applied in whole or in part in repaying the money; and
- (c) that the fund is reviewed by a Minister of the Crown at intervals fixed by or under the scheme or arrangements in question, and any amount by which it appears to the Minister to exceed the reasonable requirements of the body is withdrawn therefrom.
- (3) In this section references to a Minister of the Crown or government department include references to a Head of a Department or a Department in Northern Ireland, and references to producers of a product include references to producers of one type or quality of a product from another.
#### Agricultural societies
##### 510
- (1) Profits or gains arising to an agricultural society from any exhibition or show held for the purposes of the society shall be exempt from tax if applied solely to the purposes of the society.
- (2) In this section “*agricultural society*” means any society or institution established for the purpose of promoting the interests of agriculture, horticulture, livestock breeding or forestry.
#### The Electricity Council and Boards, the Northern Ireland Electricity Service and the Gas Council
##### 511
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The Corporation Tax Acts shall apply in relation to the trade of the Gas Council as if before the beginning of April 1962 it had consisted of the trades of the Area Boards (within the meaning of the Gas Act 1948), and (without prejudice to the generality of the foregoing) allowances and balancing charges shall be made to or on the Gas Council accordingly by reference to the capital expenditure of Area Boards and to the allowances made to Area Boards in respect of that expenditure.
#### Atomic Energy Authority and National Radiological Protection Board
##### 512
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### British Airways Board and National Freight Corporation
##### 513
- (1) Subject to subsection (2) below, the successor company in which the property, rights, liabilities and obligations of the British Airways Board are vested by the Civil Aviation Act 1980 shall be treated for all purposes of corporation tax as if it were the same person as the British Airways Board; and the successor company to which the undertaking of the National Freight Corporation is transferred by the Transport Act 1980 shall be treated for those purposes as if it were the same person as the National Freight Corporation.
- (2) The transfer by the Civil Aviation Act 1980 from the British Airways Board to the successor company of liability for any loan made to the Board shall not affect any direction in respect of the loan which has been given by the Treasury under section 581.
- (3) A successor company shall not by virtue of subsection (1) above be regarded as a body falling within section 170(12) of the 1992 Act.
#### Funds for reducing the National Debt
##### 514
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Signatories to Operating Agreement for INMARSAT
##### 515
- (1) An overseas signatory to the Operating Agreement made pursuant to the Convention on the International Maritime Satellite Organisation which came into force on 16th July 1979 shall be exempt from income tax and corporation tax in respect of any payment received by that signatory from the Organisation in accordance with that Agreement.
- (2) In this section “*an overseas signatory*” means a signatory other than one designated for the purposes of the Agreement by the United Kingdom in accordance with the Convention.
#### Government securities held by non-resident central banks
##### 516
- (1) Tax shall not be chargeable on income from securities which is payable out of the public revenue of the United Kingdom and which is income of any bank or issue department of a bank to which this subsection for the time being applies.
- (2) Subsection (1) above shall not prevent any such income being taken into account in computing profits or gains or losses of a business carried on in the United Kingdom.
- (3) A bank or issue department of a bank to which this subsection for the time being applies shall be exempt from tax in respect of chargeable gains accruing to it.
- (4) Her Majesty may by Order in Council direct that subsection (1) or (3), or both, shall apply to any bank, or to its issue department, if it appears to Her Majesty that the bank is not resident in the United Kingdom and is entrusted by the government of a territory outside the United Kingdom with the custody of the principal foreign exchange reserves of that territory.
- (5) No recommendation shall be made to Her Majesty in Council to make an order under this section unless a draft of the order has been laid before the House of Commons and has been approved by resolution of that House.
#### Issue departments of the Reserve Bank of India and the State Bank of Pakistan
##### 517
There shall be exempt from tax any profits or income arising or accruing to the issue department of the Reserve Bank of India constituted under an Act of the Indian legislature called the Reserve Bank of India Act 1934, or to the issue department of the State Bank of Pakistan constituted under certain orders made under section 9 of the Indian Independence Act 1947.
#### Harbour reorganisation schemes
##### 518
- (1) This section has effect where the trade of any body corporate other than a limited liability company is transferred to a harbour authority by or under a certified harbour reorganisation scheme which provides also for the dissolution of the transferor.
- (2) For the purposes of the Corporation Tax Acts, the trade shall not be treated as permanently discontinued, nor shall a new trade be treated as set up and commenced.
- (3) The transferee shall be entitled to relief from corporation tax under section 393(1), as for a loss sustained by it in carrying on the transferred trade or any trade of which it comes to form part, for any amount which, if the transferor had continued to carry it on, would have been available to the transferor for carry-forward against chargeable profits of succeeding accounting periods, but subject to any claim made by the transferor under section 393A(1).
- (4) There shall be made to or on the transferee in accordance with the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act) all such allowances and charges as would, if the transferor had continued to carry on the trade, have fallen to be made to or on it under those Acts and the amount of any such allowance or charge shall be computed as if the transferee had been carrying on the trade since the transferor had begun to do so and as if everything done to or by the transferor had been done to or by the transferee.
- (5) No sale or transfer which on the transfer of the trade is made by the transferor to the transferee of any assets in use for the purposes of the trade shall be treated as giving rise to any such allowance or charge as is mentioned in subsection (4) above.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) The transferee shall be entitled to relief from corporation tax in respect of chargeable gains for any amount for which the transferor would have been entitled to claim relief in respect of allowable losses if it had continued to carry on the trade.
- (8) Where part only of such trade is transferred to a harbour authority by or under a certified harbour organisation scheme, and the transferor continues to carry on the remainder of the trade, or any such trade is, by or under a certified harbour reorganisation scheme which provides also for the dissolution of the transferor, transferred in parts to two or more harbour authorities, this section shall apply as if the transferred part, or each of the transferred parts, had at all times been a separate trade.
- (9) Where a part of any trade is to be treated by virtue of subsection (8) above as having been a separate trade over any period there shall be made any necessary adjustments of accounting periods, and such apportionments as may be just of receipts, expenses, allowances or charges.
- (10) In this section—
- “*harbour authority*” has the same meaning as in the Harbours Act 1964;
- “*harbour reorganisation scheme*” means any statutory provision providing for the management by a harbour authority of any harbour or group of harbours in the United Kingdom, and “*certified*”, in relation to any harbour reorganisation scheme, means certified by a Minister of the Crown or government department as so providing with a view to securing, in the public interest, the efficient and economical development of the harbour or harbours in question;
- “*limited liability company*” means a company having a limit on the liability of its members;
- “*statutory provision*” means any enactment, or any scheme, order or other instrument having effect under an enactment, and includes an enactment confirming a provisional order; and
- “*transferor*”, in relation to a trade, means the body from whom the trade is transferred, whether or not the transfer is effected by that body.
#### Local authorities
##### 519
- (1) A local authority in the United Kingdom—
- (a) shall be exempt from all charge to income tax in respect of its income;
- (b) shall be exempt from corporation tax;
and so far as the exemption from income tax conferred by this subsection calls for repayment of tax, effect shall be given thereto by means of a claim.
- (2) Subsection (1) above shall apply to a local authority association as it applies to a local authority.
- (3) In this Act “*local authority association*” means any incorporated or unincorporated association—
- (a) of which all the constituent members are local authorities, groups of local authorities or local authority associations, and
- (b) which has for its object or primary object the protection and furtherance of the interests in general of local authorities or any description of local authorities;
and for this purpose, if a member of an association is a representative of or appointed by any authority, group of authorities or association, that authority, group or association (and not he) shall be treated as a constituent member of the association.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XIII — MISCELLANEOUS SPECIAL PROVISIONS
### CHAPTER I — INTELLECTUAL PROPERTY
### Patents and know-how
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure
##### 520
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 520
##### 521
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances for expenditure on purchase of patent rights: pre-1st April 1986 expenditure
##### 522
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lapses of patent rights, sales etc
##### 523
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of receipts from sale of patent rights
##### 524
- (1) Subject to subsection (2) below, where a company resident in the United Kingdom sells all or any part of any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, the company shall, subject to the provisions of this Chapter, be charged to corporation tax under Case VI of Schedule D, for the accounting period in which the sum is received by it and successive accounting periods, being charged in each period on the same fraction of the sum as the period is of six years (or such less fraction as has not already been charged).
- (2) If the company by notice served on an officer of the Board within the period specified in subsection (2A) below, elects that the whole of the sum shall be charged to corporation tax for the accounting period in which it was received, it shall be charged to corporation tax accordingly.
- (2A) The period mentioned in subsection (2) above is—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . the period of two years beginning at the end of the accounting period in which the sum was received.
- (3) Where a relevant non-resident company sells all or any part of any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, and the patent is a United Kingdom patent, then, subject to the provisions of this Chapter—
- (a) the company shall be chargeable to corporation tax in respect of that sum under Case VI of Schedule D; and
- (b) section 349(1) shall apply to that sum as if it was an annual sum payable otherwise than out of profits or gains charged to income tax; and
- (c) all other provisions of the Tax Acts shall, save as therein otherwise provided, have effect accordingly.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In subsection (3) above “*relevant non-resident company*” means a company not resident in the United Kingdom which would be within the charge to corporation tax in respect of any proceeds of the sale of the patent rights not consisting of a capital sum.
- (6) Where subsection (3) applies to charge a company to corporation tax in respect of a sum paid to it, . . . the company may, by notice given to the Board not later than two years after the end of the accounting period in which the sum is paid, elect that the sum shall be treated as arising rateably in the accounting periods ending not later than six years from the beginning of that in which the sum is paid (being accounting periods during which the company remains within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum), and there shall be made all such repayments of tax and assessments to tax as are necessary to give effect to any such election.
- (7) Subject to subsections (8) and (9) below, where the company selling all or any part of any patent rights (“*the seller*”) acquired the rights sold, or the rights out of which they were granted, by purchase and the price paid by it consisted wholly or partly of a capital sum, the preceding provisions of this section shall apply as if any capital sum received by it when it sells the rights were reduced by the amount of that sum.
- (8) Where between the purchase and the sale the seller has sold part of the rights acquired by it and the net proceeds of that sale consist wholly or partly of a capital sum, the amount of the reduction falling to be made under subsection (7) above in respect of the subsequent sale shall be itself reduced by the amount of that sum.
- (9) Nothing in subsections (7) and (8) above shall affect the amount of income tax which is to be deducted and assessed under section 349(1) and (3) by virtue of subsection (3) above, and, where any sum is deducted under section 349(1), any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.
- (10) A claim for relief under this section shall be made to the Board.
#### Capital sums: death, winding up or partnership change
##### 525
- (1) Where a body corporate on which, by reason of the receipt of a capital sum, a charge falls or would otherwise fall to be made under section 524 commences to be wound up—
- (a) no sums shall be charged under that section on that body for any accounting period subsequent to that in which the winding up commences; and
- (b) the amount falling to be charged for the accounting period in which the winding up commences shall be increased by the total amounts which, but for the winding up, would have fallen to be charged for subsequent accounting periods.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, under section 559 of the Capital Allowances Act (effect of successions) as applied by section 532, a charge under section 524 falls to be made on two or more persons jointly as being the persons for the time being carrying on a trade, and that trade is discontinued, subsection (1) above shall have effect in relation to the discontinuance as it has effect where a body corporate commences to be wound up.
- (4) Where subsection (3) above applies—
- (a) the additional sum which, under subsection (1) above, falls to be charged for the accounting period in which the discontinuance occurs shall be apportioned among the members of the partnership immediately before the discontinuance, according to their respective interests in the partnership profits before the discontinuance, and each partner . . . shall be charged separately for its proportion; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for expenses
##### 526
- (1) Where—
- (a) a company, otherwise than for the purposes of a trade carried on by it, pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, or the obtaining of an extension of a term of a patent, or a rejected or abandoned application for a patent, and
- (b) those fees or expenses would, if they had been paid or incurred for the purposes of a trade, have been allowable as a deduction in estimating the profits of that trade,
there shall be made to the company for the purposes of corporation tax, for the accounting period in which those expenses were paid or incurred, an allowance equal to the amount thereof.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Spreading of royalties over several years
##### 527
- (1) Where a royalty or other sum to which section 348 or 349(1) applies is paid in respect of the user of a patent, and that user extended over a period of six complete years or more, the person receiving the payment may on the making of a claim require that the income tax or corporation tax payable by him by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of income tax or corporation tax which would have been payable by him if that royalty or sum had been paid in six equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made.
- (2) Subsection (1) above shall apply in relation to a royalty or other sum where the period of the user is two complete years or more but less than six complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to six equal instalments of a reference to so many equal instalments as there are complete years comprised in that period.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Nothing in this section shall apply to any sum to which section 349(1) applies by virtue of section 524(3)(b) of this Act or by virtue of section 595 of ITTOIA 2005.
#### Manner of making allowances and charges
##### 528
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where an allowance falls to be made to a company for any accounting period under section 526. . . , and is not to be made in taxing a trade—
- (a) the allowance shall, as far as may be, be given effect by deducting the amount of the allowance from the company’s income from patents of the accounting period;
- (b) where the allowance cannot be given full effect under paragraph (a) above in that period by reason of a want or deficiency of income from patents, then (so long as the company remains within the charge to corporation tax) the amount unallowed shall be carried forward to the succeeding accounting period, and shall be treated for the purposes of that paragraph, and of any further application of this paragraph, as the amount of a corresponding allowance for that period.
- (3A) In this section references to . . . a company’s income from patents are references to that income after any allowance has been deducted from or set off against it under section . . . 480 of the Capital Allowances Act.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Patent income to be earned income in certain cases
##### 529
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal of know-how
##### 530
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 530
##### 531
- (1) Subject to subsection (7) below, where, after 19th March 1968, a company disposes of know-how which has been used in a trade carried on by the company, and continues to carry on the trade after the disposal, the amount or value of any consideration received by the company for the disposal shall—
- (a) if it is received in respect of the disposal of know-how after 31st March 1986, so far as it is not brought into account as a disposal value under section 462 of the Capital Allowances Act, nor is chargeable to corporation tax as a revenue or income receipt;
- (b) in any other case, so far as it is not chargeable to corporation tax as a revenue or income receipt,
be treated for the purposes of corporation tax as a trading receipt.
- (2) Subject to subsection (3) below, where—
- (a) a person carrying on a trade receives consideration for the disposal of know-how which has been used in the trade, and
- (b) the know-how is disposed of as part of the disposal of all or part of the trade,
the consideration shall for the purposes of corporation tax be treated as a payment for goodwill in relation both to the person making the disposal and to the person acquiring the know-how (if that person provided the consideration).
- (3) Subsection (2) above shall not apply—
- (a) if, in the case of the person disposing of the know-how being within the charge to corporation tax, that person and the person acquiring the know-how (whether or not within the charge to corporation tax) elect for that subsection not to apply by notice given jointly to the inspector within two years of the disposal, or
- (b) to the person acquiring the know-how if the trade in question was, before the acquisition, carried on wholly outside the United Kingdom;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) If—
- (a) an election is made under section 194 of ITTOIA 2005 (provision corresponding to subsections (2) and (3) of this section for the purposes of income tax), and
- (b) the person making the acquisition mentioned in that section is within the charge to corporation tax,
the persons making the election under that section are treated as also making an election under subsection (3) of this section (even though the person disposing of the know-how is not within the charge to corporation tax).
- (4) Subject to subsections (5) and (7) below, any consideration received by a company for the disposal of know-how shall—
- (a) if it is received in respect of the disposal of know-how after 31st March 1986 and is not brought into account as a disposal value under section 462 of the Capital Allowances Act, or
- (b) if it is neither chargeable to corporation tax under subsection (1) above or otherwise as a revenue or income receipt, nor dealt with in relation to the company as a payment for goodwill as mentioned in subsection (2) above, (whether the disposal took place before or after 31st March 1986),
be treated as a profit or gain chargeable to corporation tax under Case VI of Schedule D.
- (5) Where the company concerned has incurred expenditure wholly and exclusively in the acquisition or disposal of the know-how, the amount which would apart from this subsection be treated as a profit or gain chargeable to corporation tax under Case VI of Schedule D shall be reduced by the amount of that expenditure; but a deduction shall not be twice made in respect of the same expenditure, whether under this subsection or otherwise.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subsections (1) and (3) to (5) above . . . shall not apply on any sale of know-how where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them; and subsection (2) above shall apply in any such case with the omission of the words “Subject to subsection (3) below”.
- (8) Where in connection with any disposal of know-how a person gives an undertaking (whether absolute or qualified, and whether legally valid or not) the tenor or effect of which is to restrict his or another’s activities in any way, any consideration received in respect of the giving of the undertaking or its total or partial fulfilment shall be treated for the purposes of this section as consideration received for the disposal of the know-how.
#### Application of the 1968 Act
##### 532
The Tax Acts have effect as if sections 524 to 528 and 531, this section and section 533 were contained in the Capital Allowances Act.
#### Interpretation of sections 520 to 532
##### 533
- (1) In sections 524 to 528—
- “*income from patents*” means—any royalty or other sum paid in respect of the use of a patent; andany amount on which tax is payable for any accounting period by virtue of section 524 or 525 above or section 472(5) of, or paragraph 100 of Schedule 3 to, the Capital Allowances Act,but does not include any amount chargeable to income tax.
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*patent rights*” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;
- “*United Kingdom patent*” means a patent granted under the laws of the United Kingdom.
- (2) Subject to subsection (3) below, in sections 524 to 528 any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent.
- (3) If a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the right subsists, the grantor shall be treated for the purposes of sections 524 to 528 as thereby selling the whole of the rights.
- (4) Where, under sections 46 to 49 of the Patents Act 1949 , sections 55 to 59 of the Patents Act 1977 or any corresponding provisions of the law of any country outside the United Kingdom, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the Crown or the government of the country concerned, sections 524 to 528 shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.
- (5) Expenditure incurred in obtaining a right to acquire in the future patent rights as respects any invention in respect of which the patent has not yet been granted shall be deemed for all the purposes of sections 524 to 528 to be expenditure on the purchase of patent rights, and if the patent rights are subsequently acquired the expenditure shall be deemed for those purposes to have been expenditure on the purchase of those rights.
- (6) Any sum received from a person which by virtue of subsection (5) above is deemed to be expenditure incurred by him on the purchase of patent rights shall be deemed to be proceeds of a sale of patent rights.
- (7) In section 531“*know-how*” means any industrial information and techniques likely to assist in the manufacture or processing of goods or materials, or in the working of a mine, oil-well or other source of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto), or in the carrying out of any agricultural, forestry or fishing operations.
### Copyright and public lending right
#### Relief for copyright payments etc
##### 534
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where copyright sold after ten years or more
##### 535
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of royalties where owner abroad
##### 536
- (1) Subject to the provisions of this section, where the usual place of abode of the owner of a copyright is not within the United Kingdom, section 349(1) shall apply to any payment of or on account of any royalties or sums paid periodically for or in respect of that copyright as it applies to annual payments not payable out of profits or gains brought into charge to income tax.
- (2) In subsection (1) above—
- “*copyright*” does not include copyright in—a cinematograph film or video recording, orthe sound-track of such a film or recording, so far as it is not separately exploited; and
- “owner of a copyright” includes a person who, notwithstanding that he has assigned a copyright to some other person, is entitled to receive periodical payments in respect of that copyright;
and the reference to royalties or sums paid periodically for or in respect of a copyright does not include royalties or sums paid in respect of copies of works which . . . have been exported from the United Kingdom for distribution outside the United Kingdom.
- (3) Subject to subsection (4) below, where any payment to which subsection (1) above applies is made through an agent resident in the United Kingdom and that agent is entitled as against the owner of the copyright to deduct any sum by way of commission in respect of services rendered, the amount of the payment shall for the purposes of section 349(1) be taken to be diminished by the sum which the agent is so entitled to deduct.
- (4) Where the person by or through whom the payment is made does not know that any such commission is payable or does not know the amount of any such commission, any income tax deducted by or assessed and charged on him shall be computed in the first instance on, and the account to be delivered of the payment shall be an account of, the total amount of the payment without regard being had to any diminution thereof . . . .
- (5) The time of the making of a payment to which subsection (1) above applies shall, for all tax purposes, be taken to be the time when it is made by the person by whom it is first made and not the time when it is made by or through any other person.
- (6) Any agreement for the making of any payment to which subsection (1) above applies in full and without deduction of income tax shall be void.
#### Public lending right
##### 537
Section 536 shall have effect in relation to public lending right as it has effect in relation to copyright.
### Artists’ receipts
#### Relief for painters, sculptors and other artists
##### 538
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES
#### Introductory
##### 539
- (1) This Chapter shall have effect for the purposes of imposing, in the manner and to the extent therein provided, charges to corporation tax. . . in respect of gains to be treated in accordance with this Chapter as arising in connection with policies of life insurance, contracts for life annuities and capital redemption policies.
- (2) Nothing in this Chapter shall apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of insurance which constitutes, or is issued or held in connection with, a registered pension scheme; or
- (e) to any group life policy having as its sole object the provision, on the death or disability of any of the individuals insured under the policy, of a sum substantially the same as any amount then outstanding under a loan made by a credit union to that individual; or
- (f) to any group life policy with respect to which the conditions in section 539A are satisfied (“*an excepted group life policy*”).
- (3) In this Chapter—
- “*assignment*”, in relation to Scotland, means an assignation;
- “*capital redemption policy*” means any contract effected in the course of a capital redemption business as defined in section 458(3);
- “*charitable trust*” means any trust established for charitable purposes only;
- “*credit union*” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;
- “*excepted group life policy*” shall be construed in accordance with subsection (2)(f) above;
- “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act);
- “*group life policy*” means a policy of life insurance whose terms provide—for the payment of benefits on the death of more than one individual; andfor those benefits to be paid on the death of each of those individuals;
- “*life annuity*” means—any annuity to which section 656 (as read with section 657) applies, orany annuity that—is a purchased life annuity for the purposes of Chapter 7 of Part 4 of ITTOIA 2005 (see section 423 of that Act), andis not specified in section 718 of that Act (annuities the payments under which are not within section 717 of that Act (exemption for part of purchased life annuity payments)); and
- “*non-charitable trust*” means any trust other than a charitable trust.
- (3A) References in this Chapter to assignment of the whole of, or assignment of part of or a share in, the rights conferred by a policy or contract shall, in any case where section 546A applies, be construed in accordance with that section.
- (4) For the purposes of this Chapter the falling due of a sum payable in pursuance of a right conferred by a policy or contract to participate in profits shall be treated as the surrender of rights conferred by the policy or contract.
- (5) This Chapter shall have effect only as respects policies of life insurance issued in respect of insurances made after 19th March 1968, contracts for life annuities entered into after that date, and capital redemption policies effected after that date.
- (6) A policy of life insurance issued in respect of an insurance made on or before 19th March 1968 shall be treated for the purposes of subsection (5) above and the following provisions of this Chapter as issued in respect of one made after that date if it is varied after that date so as to increase the benefits secured or to extend the term of the insurance.
- (7) A variation effected before the end of the year 1968 shall be disregarded for the purposes of subsection (6) above if its only effect was to bring into conformity with paragraph 2 of Schedule 9 to the Finance Act 1968 (which is re-enacted, as amended, by paragraph 2 of Schedule 15 to this Act) a policy previously conforming therewith except as respects the amount guaranteed on death, and no increase was made in the premiums payable under the policy.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) A policy of life insurance issued in respect of an insurance made before 14th March 1989 shall be treated for the purposes of sections 540(5A), 547(8) and 548(3A) as issued in respect of one made on or after that date if it is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and any exercise of rights conferred by the policy shall be regarded for this purpose as a variation.
#### Life policies: chargeable events
##### 540
- (1) Subject to the provisions of this section, in this Chapter “*chargeable event*” means, in relation to a policy of life insurance—
- (a) if it is not a qualifying policy, any of the following—
- (i) any death giving rise to benefits under the policy;
- (ii) the maturity of the policy;
- (iii) the surrender in whole of the rights conferred by the policy;
- (iv) the assignment for money or money’s worth of those rights; and
- (v) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section) except, if it ends with another chargeable event, the final year; and
- (b) if it is a qualifying policy (whether or not the premiums thereunder are eligible for relief under section 266), any of the above events, but—
- (i) in the case of death or maturity, only if the policy is converted into a paid-up policy before the expiry of ten years from the making of the insurance, or, if sooner, of three-quarters of the term for which the policy is to run if not ended by death or disability;
- (ii) in the case of a surrender or assignment or (subject to section 546B(3)(a)) such an excess as is mentioned in paragraph (a)(v) above, only if it is effected or occurs within that time, or the policy has been converted into a paid-up policy within that time.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Except as provided by section 544, no event is a chargeable event in relation to a policy issued in respect of an insurance made before 26th June 1982 if the rights conferred by the policy have at any time before that date and before the event been assigned for money or money’s worth and are not at the time of the event held by the original beneficial owner.
- (4) No account shall be taken for the purposes of subsections (1) and (3) above of any assignment effected by way of security for a debt, or on the discharge of a debt secured by the rights or share concerned, or of any assignment between spouses living together or between civil partners living together.
- (5) Where subsection (1)(b) applies to a policy which has been varied so as to increase the premiums payable thereunder, it shall so apply as if the references in subsection (1)(b)(i) to the making of the insurance and the term of the policy were references respectively to the taking effect of the variation and the term of the policy as from the variation.
- (5A) Sub-paragraphs (i) and (ii) of subsection (1)(b) above shall not apply inrelation to a policy issued in respect of an insurance made on or after 14th March 1989 if, immediately before the happening of the event, the rights conferred by the policy were in the beneficial ownership of a company, or were held on trusts created, or as security for a debt owed, by a company.
- (6) This section has effect subject to paragraph 20 of Schedule 15.
#### Life policies: computation of gain
##### 541
- (1) On the happening of a chargeable event in relation to any policy of life insurance, there shall be treated as a gain arising in connection with the policy—
- (a) if the event is a death, the excess (if any) of the surrender value of the policy immediately before the death, plus the amount or value of any relevant capital payments, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (b) if the event is the maturity of the policy, or the surrender in whole of the rights thereby conferred, the excess (if any) of the amount or value of the sum payable or other benefits arising by reason of the event, plus the amount or value of any relevant capital payments, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (c) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or , subject to subsection (3A) below, of any previously assigned share in the rights conferred by the policy, over the sum of the following—
- (i) the total amount previously paid under the policy by way of premiums; and
- (ii) the total amount treated as a gain by virtue of paragraph (d) below or section 546C(7)(b) on the previous happening of chargeable events;
- (d) if the event is the occurrence of such an excess as is mentioned in section 540(1)(a)(v), the amount of the excess (subject to section 546B(3)(a)) .
- (2) Where, in a case falling within subsection (1)(b) above, a right to periodical payments arises by reason of the event, there shall be treated as payable by reason thereof an amount equal to the capital value of those payments at the time the right arises.
- (3) Where, in a case falling within subsection (1)(c) above, the assignment is between persons who are connected with each other within the meaning of section 839, the assignment shall be deemed to have been made for a consideration equal to the market value of the rights or share assigned.
- (3A) he amount or value of such a previously assigned share as is mentioned in paragraph (c) of subsection (1) above falls to be brought into account for the purposes of that paragraph only where that share was so assigned—
- (a) in a year (as defined in section 546(4)) beginning on or before 5th April 2001; or
- (b) for money or money’s worth in a year (as so defined) beginning on or after 6th April 2001.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) Where, immediately before the happening of the chargeable event, the rights conferred by a qualifying endowment policy are held as security for a debt owed by a company, then, if—
- (a) the conditions in subsection (4B) below are satisfied,
- (b) the amount of the debt exceeds the total amount previously paid under the policy by way of premiums, and
- (c) the company makes a claim for the purpose within two years after the end of the accounting period in which the chargeable event happens,
this section shall have effect as if the references in subsection (1)(a) and (b) to that total amount were references to the amount of the debt.
- (4B) The conditions referred to in subsection (4A) above are—
- (a) that, throughout the period beginning with the making of the insurance and ending immediately before the happening of the chargeable event, the rights conferred by the policy have been held as security for a debt owed by the company;
- (b) that the capital sum payable under the policy in the event of death during the term of the policy is not less than the amount of the debt when the insurance was made;
- (c) that any sum payable under the policy by reason of the chargeable event is applied in repayment of the debt (except to the extent that its amount exceeds the amount of debt);
- (d) that the debt was incurred to defray money applied—
- (i) in purchasing an estate or interest in land to be occupied by the company for the purposes of a trade carried on by it, or
- (ii) for the purpose of the construction, extension or improvement (but not the repair or maintenance) of buildings which are or are to be so occupied.
- (4C) If the amount of the debt is higher immediately before the happening of the chargeable event than it was at some earlier time during the period mentioned in subsection (4B)(a) above, the amount to be taken into account for the purposes of subsection (1) above shall be the lowest amount at which it stood during that period.
- (4D) If during the period mentioned in subsection (4B)(a) above the company incurs a debt by borrowing in order to repay another debt, subsections (4B) and (4C) above shall have effect as if, where appropriate, references to either debt included references to the other.
- (5) In this section—
- (a) “*relevant capital payments*” means, in relation to any policy, any sum or other benefit of a capital nature, other than one attributable to a person’s disability, paid or conferred under the policy before the happening of the chargeable event; and
- (b) references in this subsection and (in relation to premiums) in subsection (1) above to “the policy” include references to any related policy, that is to say, to any policy in relation to which the policy is a new policy within the meaning of paragraph 17 of Schedule 15, and any policy in relation to which that policy is such a policy, and so on; and
- (c) “*qualifying endowment policy*” means a policy which is a qualifying policy by virtue of paragraph 2 of Schedule 15;
and the provisions of this section are subject to paragraph 20 of Schedule 15.
- (6) There shall be disregarded for the purposes of this section any amount which was treated under section 72(9) of the Finance Act 1984 as an additional premium.
#### Life annuity contracts: chargeable events
##### 542
- (1) Subject to subsections (2) and (3) below, in this Chapter “*chargeable event*” means, in relation to any contract for a life annuity—
- (a) the surrender in whole of the rights conferred by the contract, or
- (b) the assignment for money or money’s worth of those rights, or
- (c) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section) except, if it ends with another chargeable event, the final year.
- (2) Where the terms of a contract provide for the payment of a capital sum as an alternative, in whole or in part, to payments by way of annuity, the taking of the capital sum shall be treated for the purposes of this section and section 543 as a surrender in whole or in part of the rights conferred by the contract, and where the terms of the contract provide for the payment of a capital sum on death and the contract was made on or after 10th December 1974, the death shall be treated for those purposes as a surrender in whole of the rights conferred by the contract.
- (3) Except as provided by section 544, an event referred to in subsection (1) above or section 546C(7)(a) is not a chargeable event in relation to any contract made before 26th June 1982 if the rights conferred by the contract have at any time before that date and before the event been assigned for money or money’s worth and are not at the time of the event held by the original beneficial owner.
- (4) Subsection (4) of section 540 shall, with any necessary modifications, apply for the purposes of this section as it applies for the purposes of that section.
#### Life annuity contracts: computation of gain
##### 543
- (1) On the happening of a chargeable event in relation to any contract for a life annuity, there shall be treated as a gain arising in connection with the contract—
- (a) if the event is the surrender in whole of the rights conferred by the contract, the excess (if any) of the amount payable by reason of the event plus the amount or value of any relevant capital payments over the sum of the following—
- (i) the total amount previously paid under the contract, whether by way of premiums or as lump sum consideration, reduced, if before the happening of the event any payments have been made on account of the annuity, by so much of those payments as is determined to be the capital element in them under section 656 of this Act or is exempt under section 717 of ITTOIA 2005; and
- (ii) the total amount treated as a gain by virtue of paragraph (c) below or section 546C(7)(b) on the previous happening of chargeable events;
- (b) if the event is an assignment, the excess (if any) of the amount or value of the consideration, plus the amount or value of any relevant capital payments or , subject to subsection (2A) below, of any previously assigned share in the rights conferred by the contract, over the sum of the following—
- (i) the amount specified paragraph (a)(i) above; and
- (ii) any amount treated as a gain by virtue of paragraph (c) below or section 546C(7)(b) on the previous happenings of chargeable events;
- (c) if the event is the occurrence of such an excess as is mentioned in section 542(1), the amount of the excess (subject to section 546B(3)(a)).
- (2) Subsection (3) of section 541 shall apply for the purposes of subsection (1) above as it applies for the purposes of subsection (1)(c) of that section, and subsection (4) of that section shall apply for the purposes of this section with the substitution of references to the contract for references to the policy.
- (2A) The amount or value of such a previously assigned share as is mentioned in paragraph (b) of subsection (1) above falls to be brought into account for the purposes of that paragraph only where that share was so assigned—
- (a) in a year (as defined in section 546(4)) beginning on or before 5th April 2001; or
- (b) for money or money’s worth in a year (as so defined) beginning on or after 6th April 2001.
- (3) In this section “*relevant capital payments*” means, in relation to any contract, any sum or other benefit of a capital nature paid or conferred under the contract before the happening of the chargeable event.
#### Second and subsequent assignment of life policies and contracts
##### 544
- (1) In this section “*assigned policy*” means a policy of life assurance—
- (a) which was issued in respect of an insurance made before 26th June 1982; and
- (b) the rights conferred by which have been assigned for money or money’s worth before that date; and
- (c) in relation to which an event occurring on or after that date would not, apart from this section, be a chargeable event.
- (2) In this section “*assigned contract*” means a contract for a life annuity—
- (a) which was made before 26th June 1982; and
- (b) the rights conferred by which have been assigned for money or money’s worth before that date; and
- (c) in relation to which an event occurring on or after that date would not, apart from this section, be a chargeable event.
- (3) In any case where after 23rd August 1982—
- (a) the rights conferred by an assigned policy or, as the case may be, an assigned contract are again assigned for money or money’s worth; or
- (b) a payment is made by way of premium or as lump sum consideration under the policy or contract; or
- (c) subject to subsections (5) and (7) below, a sum is lent by or by arrangement with the body issuing the policy or, as the case may be, the body with which the contract was made;
section 540(3) shall cease to apply to the policy or section 542(3) shall cease to apply to the contract, as the case may be.
- (4) No account shall be taken for the purposes of subsection (3)(a) above of any assignment effected by way of security for a debt, or on the discharge of a debt secured by the rights concerned, or of an assignment between spouses living together or between civil partners living together.
- (5) Subsection (3)(c) above does not apply unless—
- (a) the policy was issued in respect of an insurance made after 26th March 1974 or, as the case may be, the contract was entered into after that date; and
- (b) the sum concerned is lent to or at the direction of the individual who, in accordance with subsection (6) below, is at the time of the loan the chargeable individual.
- (6) The individual who is at any time the chargeable individual for the purposes of subsection (5)(b) above shall be determined as follows—
- (a) if at the time the rights conferred by the policy or contract are vested in an individual as beneficial owner or are held on trusts created by an individual (including such trusts as are referred to in section 547A(17)), that individual is the chargeable individual; and
- (b) if at that time those rights are held as security for a debt owed by an individual, that individual is the chargeable individual.
- (7) Subsection (3)(c) above does not apply in relation to a policy if—
- (a) it is a qualifying policy; and
- (b) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling-house to be used as his only or main residence.
- (8) Where section 540(3) or 542(3) ceases to apply to an assigned policy or assigned contract by virtue of paragraph (c) of subsection (3) above, the lending of the sum concerned shall be regarded for the purposes of the Income Tax Acts (other than that paragraph) as taking place immediately after the time at which section 540(3) or, as the case may be, 542(3) ceases so to apply.
#### Capital redemption policies
##### 545
- (1) Subject to subsection (2) below, in this Chapter “*chargeable event*” means, in relation to a capital redemption policy, any of the following—
- (a) the maturity of the policy, except where the sums payable on maturity are annual payments chargeable —
- (i) to corporation tax under Schedule D,
- (ii) to income tax under Part 9 of ITEPA 2003 (pension income) because section 609, 610 or 611 of that Act applies to them (certain employment related annuities), or
- (iii) to income tax under Chapter 7 of Part 4 (purchased life annuity payments) or Chapter 7 of Part 5 (annual payments not otherwise charged) of ITTOIA 2005;
- (b) the surrender in whole of the rights conferred by the policy;
- (c) the assignment for money or money’s worth of those rights; and
- (d) subject to section 546B(3)(a), an excess of the reckonable aggregate value mentioned in subsection (2) of section 546 over the allowable aggregate amount mentioned in subsection (3) of that section, being an excess occurring at the end of any year (as defined in subsection (4) of that section), except, if it ends with another chargeable event, the final year.
- (2) Subsection (4) of section 540 shall apply for the purposes of this section as it applies for purposes of that section.
- (3) The provisions of section 541, except subsection (3), shall, so far as appropriate and subject to subsection (4) below, apply to capital redemption policies as they apply to policies of life assurance.
- (4) Where a chargeable event happens in relation to a capital redemption policy which has previously been assigned for money or money’s worth, section 541 shall have effect in relation thereto as if, for the references to the total amount previously paid under the policy by way of premiums, there were substituted references to the amount or value of the consideration given for the last such assignment, plus the total amount of the premiums paid under the policy since that assignment.
#### Calculation of certain amounts for purposes of sections 540, 542 and 545
##### 546
- (1) For the purposes of sections 540, 542 and 545, there shall be calculated as at the end of each year—
- (a) the value, as at the time of surrender or assignment, of any part of or share in the rights conferred by the policy or contract which—
- (i) has been assigned for money or money’s worth, or surrendered, during the period ending with the end of that year and beginning with the commencement of the first year which falls wholly after 13th March 1975; or
- (ii) has been assigned otherwise than for money or money’s worth during that period but in a year beginning on or before 5th April 2001; and
- (b) the appropriate portion of any payment made up to the end of that period by way of premium or as a lump sum consideration;
and the appropriate portion of any payment shall be one-twentieth for the year in which it is made, increased by a further one-twentieth for each of the subsequent years, up to a maximum of nineteen, but excluding therefrom any such one-twentieth for any year before that first year.
- (2) The reckonable aggregate value referred to in those sections shall be—
- (a) the sum of the values calculated under subsection (1) above; less
- (b) the sum of the values so calculated for a previous year and brought into account on the previous happening of a chargeable event.
- (3) The allowable aggregate amount referred to in those sections shall be—
- (a) the aggregate of the appropriate portions calculated under subsection (1) above; less
- (b) the aggregate of the appropriate portions so calculated for a previous year and brought into account on the previous happening of a chargeable event.
- (4) In this section “*year*” means the 12 months beginning with the making of the insurance or contract and any subsequent period of 12 months; except that—
- (a) death, the maturity of the policy or the surrender of the rights conferred by the policy or contract shall be treated as ending the final year; and
- (b) if the final year would by virtue of paragraph (a) above begin and end in the same year of assessment, the final year and the year preceding it shall together be one year.
- (5) There shall be disregarded for the purposes of this section any amount which was treated under section 72(9) of the Finance Act 1984 as an additional premium.
- (6) Where any part of or share in the rights conferred by a policy or contract is assigned, the value of the part or share, as at the time of the assignment, shall be taken for the purposes of this section to be its surrender value at that time.
#### Method of charging gain to tax
##### 547
- (1) Where under section 541, 543 , 545 or 546C a gain is to be treated as arising in connection with any policy or contract—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if, immediately before the happening of the chargeable event in question, the rights conferred by the policy or contract were in the beneficial ownership of a company, or were held on non-charitable trusts created, or as security for a debt owed, by a company, the amount of the gain shall be deemed to form part of the company’s income (chargeable under Case VI of Schedule D) for the accounting period in which the event happened;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (cc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) In its application in relation to a gain which is treated as arising by virtue of section 546C(7)(b), subsection (1) above is subject to section 546C(8).
- (2) Nothing in subsection (1) above shall apply to any amount which is chargeable to tax apart from that subsection.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) References in subsection (1) above to the rights conferred by a policy or contract are, in the case of an assignment or surrender of only a part of or share in any rights, references to that part or share.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Subsection (1)(b) above shall not have effect as respects—
- (a) a policy of life insurance issued in respect of an insurance made before 14th March 1989,
- (b) a contract for a life annuity made before that date, or
- (c) a capital redemption policy issued in respect of an insurance made before that date, or issued by a company resident in the United Kingdom in respect of an insurance made on or after that date.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed surrender of certain loans
##### 548
- (1) Where—
- (a) a gain arising in connection with a policy or contract would be—
- (i) treated as forming part of the income of a company under section 547(1)(b), or
- (ii) a gain for which an individual is, or any trustees are, liable to tax under Chapter 9 of Part 4 of ITTOIA 2005; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 or the contract was made after that date; and
- (c) any sum is at any time after the making of the insurance or contract lent to or at the direction of that individual or companyor those trustees by or by arrangement with the body issuing the policy or, as the case may be, the body with which the contract was made;
then, subject to subsections (3) and (3A) below, the same results shall follow under this Chapter as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy or contract and the sum had been paid as consideration for the surrender.
- (2) If the whole or any part of the sum is repaid the repayment shall be treated, for the purpose of computing any gain arising on the happening, at the end of the final year, of a chargeable event, as a payment of a premium or lump sum consideration.
- (3) Subsections (1) and (2) above do not apply in relation—
- (a) to a policy if it is a qualifying policy and interest at a commercial rate is payable on the sum lent;
- (b) to a contract if and to the extent that interest on the sum lent is eligible for relief under section 353 by virtue of section 365.
- (3A) Subsections (1) and (2) do not apply where the rights conferred by thepolicy or contract are in the beneficial ownership of a company, or are heldon trusts created, or as security for a debt owed, by a company, if the policywas issued in respect of an insurance made before 14th March 1989 or thecontract was made before that date.
- (4) In this section “*final year*” has the same meaning as in section 546.
#### Certain deficiencies allowable as deductions
##### 549
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where gain charged at a higher rate
##### 550
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Right of individual to recover tax from trustees
##### 551
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: duty of insurers
##### 552
- (1) Where a chargeable event . . . has happened in relation to any policy or contract, the body by or with whom the policy or contract was issued, entered into or effected shall—
- (a) unless satisfied that no gain is to be treated as arising by reason of the event, deliver to the appropriate policy holder before the end of the relevant three month period a certificate specifying the information described in subsection (5) below; and
- (b) if the condition in paragraph (a) or (b) of subsection (2) below is satisfied, deliver to the inspector before the end of the relevant three month period a certificate specifying the information described in subsection (5) below together with the name and address of the appropriate policy holder.
- (2) For the purposes of this section—
- (a) the condition in this paragraph is that the event is an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract; or
- (b) the condition in this paragraph is that the amount of the gain, or the aggregate amount of the gain and any gains connected with it, exceeds one half of the basic rate limit for the relevant year of assessment.
- (3) If, in the case of every certificate which a body delivers under subsection (1)(a) above which relates to a gain attributable to a year of assessment (or, where the appropriate policy holder is a company, the corresponding financial year), the body also delivers to the inspector—
- (a) before the end of the relevant three month period for the purposes of subsection (1)(b) above,
- (b) by a means prescribed by the Board for the purposes of this subsection under section 552ZA(5), and
- (c) in a form so prescribed in the case of that means,
a certificate specifying the same information as the certificate under subsection (1)(a) together with the name and address of the appropriate policy holder, the body shall be taken to have complied with the requirements of subsection (1)(b) above in relation to that year of assessment, and the corresponding financial year, so far as relating to the chargeable events to which the certificates relate.
- (4) Where a certificate is not required to be delivered under subsection (1)(b) above in the case of any chargeable event—
- (a) the inspector may by notice require the body to deliver to him a copy of any certificate that the body was required to deliver under subsection (1)(a) above which relates to the chargeable event; and
- (b) it shall be the duty of the body to deliver such a copy within 30 days of receipt of the notice.
- (5) The information to be given to the appropriate policy holder pursuant to subsection (1)(a) above or the inspector pursuant to subsection (1)(b) above is—
- (a) any unique identifying designation given to the policy or contract;
- (b) the nature of the chargeable event and—
- (i) the date on which it happened; and
- (ii) if it is a chargeable event by virtue of section 546C(7)(a) of this Act and section 514(1) of ITTOIA 2005 (chargeable events where transaction-related calculations show gains), the date on which the year and the insurance year end;
- (c) if the event is the assignment of all the rights conferred by the policy or contract, such of the following as may be required for computing the amount of the gain to be treated as arising by virtue of this Chapter and Chapter 9 of Part 4 of ITTOIA 2005—
- (i) the amount or value of any relevant capital payments and the amount or value of any capital sums of a kind referred to in section 492(1)(b) to (e) of ITTOIA 2005;
- (ii) the amounts previously paid under the policy or contract by way of premiums or otherwise by way of consideration for an annuity;
- (iii) the capital element in any payment previously made on account of an annuity determined in accordance with section 656 and the amount of so much of any payment previously made on account of an annuity as is exempt under section 717 of ITTOIA 2005;
- (iv) the value of any previously assigned parts of or shares in the rights conferred by the policy or contract;
- (v) the total of the amounts of gains treated as arising on previous chargeable events by reason, or in consequence, of the occurrence of a section 546 excess at the end of a year and the total of the amounts of gains treated as arising on previous chargeable events within section 509(1) or 514(1) of ITTOIA 2005;
- (d) except where paragraph (c) above applies, the amount of the gain treated as arising by reason of the event;
- (e) the number of years relevant for computing the annual equivalent of the amount of the gain for the purposes of subsection (1) of section 536 of ITTOIA 2005 (top slicing relieved liability: one chargeable event), apart from subsections (6) and (8) of that section;
- (f) on the assumption that section 465 of ITTOIA 2005 (person liable: individuals) has effect in relation to the gain —
- (i) whether an individual would fall to be treated as having paid income tax at the lower rate on the amount of the gain in accordance with section 530 of that Act; and
- (ii) if so, except in a case where paragraph (c) above applies, the amount of such tax that would fall to be so treated as paid.
- (6) For the purposes of subsection (1)(a) above, the relevant three month period is whichever of the following periods ends the latest—
- (a) the period of three months following the happening of the chargeable event;
- (b) if the event is a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months following the end of the year (and the insurance year) in which the event happens;
- (c) if the event is a death or an assignment of the whole of the rights or a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months beginning with receipt of written notification of the event.
- (7) For the purposes of subsection (1)(b) above, the relevant three month period is whichever of the following periods ends the latest—
- (a) the period of three months following the end of the year of assessment, or, where the policy holder is a company, the financial year, in which the event happened;
- (b) if the event is a surrender or assignment which is a chargeable event by virtue of section 546C(7)(a) of this Act (and section 514(1) of ITTOIA 2005), the period of three months following the end of the year (and the insurance year) in which the event happens;
- (c) if the event is a death or an assignment, the period of three months beginning with receipt of written notification of the event;
- (d) if a certificate under subsection (1)(b) above would not be required in respect of the event apart from the happening of another event, and that other event is one of those mentioned in paragraph (c) above, the period of three months beginning with receipt of written notification of that other event.
- (8) For the purposes of this section the cases where a gain is connected with another gain are those cases where—
- (a) both gains arise in connection with policies or contracts containing obligations which, immediately before the chargeable event, were obligations of the same body;
- (b) the policy holder of those policies or contracts is the same;
- (c) both gains are attributable to the same year of assessment or, where the policy holder is a company, to the same financial year;
- (d) the terms of the policies or contracts are the same, apart from any difference in their maturity dates; and
- (e) the policies or contracts were issued in respect of insurances made, or were entered into or effected, on the same date.
- (9) For the purposes of this section, the year of assessment or financial year to which a gain is attributable is—
- (a) in the case of a gain treated as arising by virtue of section 546C(7)(b) of this Act (and section 514(1) of ITTOIA 2005), the year of assessment or financial year which includes the end of the year as at which the section 546 excess in question occurs (and the end of the insurance year mentioned in section 514(3) and (4) of ITTOIA 2005); or
- (b) in any other case, the year of assessment or financial year in which happens the chargeable event by reason of which the gain is treated as arising.
- (10) In this section—
- “*amount*”, in relation to any gain, means the amount of the gain apart from section 553(3) of this Act and section 528 of ITTOIA 2005;
- “*appropriate policy holder*” means—in relation to an assignment of part of or a share in the rights conferred by a policy or contract, any person who is both—the policy holder, or one of the policy holders, immediately before the assignment; andthe assignor or one of the assignors; andin relation to any other chargeable event, the person who is the policy holder immediately before the happening of the event;
- “*chargeable event*” means an event which is a chargeable event within the meaning of this Chapter and Chapter 9 of Part 4 of ITTOIA 2005;
- “*financial year*” means a period of 12 months beginning with 1st April;
- “*the relevant year of assessment*”, in the case of any gain, means—the year of assessment to which the gain is attributable, orif the gain arises to a company, the year of assessment which corresponds to the financial year to which the gain is attributable;
- “*section 546 excess*” has the meaning given in section 546B(4);
- “*year*”, in relation to any policy or contract, has the meaning given by section 546(4).
- (11) For the purposes of this section a year of assessment and a financial year correspond to each other if the financial year ends with 31st March in the year of assessment.
- (12) This section is supplemented by section 552ZA.
#### Non-resident policies and off-shore capital redemption policies
##### 553
- (1) If, in the case of a substitution of policies falling within paragraph 25(1) or (3) of Schedule 15, the new policy is a qualifying policy, section 540 shall have effect with the following modifications—
- (a) the surrender of the rights conferred by the old policy shall not be a chargeable event (within the meaning of that section); and
- (b) the new policy shall be treated as having been issued in respect of an insurance made on the day referred to in paragraph 26 of that Schedule.
- (2) If at any time the conditions in paragraph 24(3) of Schedule 15 to this Act are not fulfilled with respect to a new non-resident policy which has previously become a qualifying policy, then, from that time onwards, this Chapter shall apply in relation to the policy as if it were not a qualifying policy.
- (3) Subject to subsections (5) and (5A) below, on the happening of a chargeable event in relation to a new non-resident policy or a new offshore capital redemption policy, the amount which, apart from this subsection, would by virtue of section 541 or 546C(7)(b) be treated as a gain arising in connection with the policy shall be reduced by multiplying it by the fraction—
$$AB$where—$
A is the number of days on which the policy holder was resident in the United Kingdom in the period for which the policy has run before the happening of the chargeable event; and
B is the number of days in that period.
- (4) The number of days in the period referred to in subsection (3) shall be calculated, where appropriate, from the issue of the earliest related policy, that is, any policy in relation to which the policy is a new policy within the meaning of paragraph 17 of Schedule 15, any policy in relation to which that policy is such a policy, and so on.
- (5) If, on the happening of the chargeable event referred to in subsection (3) above or at any time during the period referred to in that subsection, the policy is or was held by a trustee resident outside the United Kingdom or by two or more trustees any of whom is or was so resident, no reduction shall be made under that subsection unless—
- (a) the policy was issued in respect of an insurance made on or before 19th March 1985; and
- (b) on that date the policy was held by a trustee who was so resident or, as the case may be, by two or more trustees any of whom was so resident.
- (5A) If, on the happening of the chargeable event referred to in subsection (3) above or at any time during the period referred to in that subsection, the policy is or was held by a foreign institution, no reduction shall be made under that subsection unless—
- (a) the policy was issued in respect of an insurance made on or before 16th March 1998; and
- (b) on that date the policy was held by a foreign institution.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) In this section—
- “*chargeable event*” has, subject to subsection (1) above, the meaning given by section 540 or, as the case may be, 545 or 546C(7)(a);
- “*foreign institution*” has the same meaning as in section 547A;
- “*new non-resident policy*” has the meaning given by paragraph 24 of Schedule 15; and
- “*new offshore capital redemption policy*” means a capital redemption policy, as defined in section 539(3), which—is issued in respect of a contract made after 22nd February 1984; andis so issued by a company resident outside the United Kingdom.
#### Borrowings on life policies to be treated as income in certain cases
##### 554
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — ENTERTAINERS AND SPORTSMEN
#### Payment of tax
##### 555
- (1) Where a person who is an entertainer or sportsman of a prescribed description performs an activity of a prescribed description in the United Kingdom (“*a relevant activity*”), this Chapter shall apply if he is not resident in the United Kingdom in the year of assessment in which the relevant activity is performed.
- (2) Where a payment is made (to whatever person) and it has a connection of a prescribed kind with the relevant activity, the person by whom it is made shall on making it deduct out of it a sum representing income tax and shall account to the Board for the sum.
- (3) Where a transfer is made (to whatever person) and it has a connection of a prescribed kind with the relevant activity, the person by whom it is made shall account to the Board for a sum representing income tax.
- (4) The sums mentioned in subsections (2) and (3) above shall be such as are calculated in accordance with prescribed rules but shall in no case exceed the relevant proportion of the payment concerned or of the value of what is transferred, as the case may be; and “*relevant proportion*” here means a proportion equal to the basic rate of income tax for the year of assessment in which the payment or, as the case may be, the transfer is made.
- (5) In this Chapter—
- (a) references to a payment include references to a payment by way of loan of money; and
- (b) references to a transfer do not include references to a transfer of money but, subject to that, include references to a temporary transfer (as by way of loan) and to a transfer of a right (whether or not a right to receive money).
- (6) This section shall not apply to payments or transfers of such a kind as may be prescribed.
- (7) Regulations may—
- (a) make provision enabling the Board to serve notices requiring persons who make payments or transfers to which subsection (2) or (3) above applies to furnish to the Board particulars of a prescribed kind in respect of payments or transfers;
- (b) make provision requiring persons who make payments or transfers to which subsection (2) or (3) above applies to make, at prescribed times and for prescribed periods, returns to the Board containing prescribed information about payments or transfers and the income tax for which those persons are accountable in respect of them;
- (c) make provision for the collection and recovery of such income tax, provision for assessments and claims to be made in respect of it, and provision for the payment of interest on it;
- (d) adapt, or modify the effect of, any enactment relating to income tax for the purpose of making any such provision as is mentioned in paragraphs (a) to (c) above.
- (8) Where in accordance with subsections (2) to (7) above a person pays a sum to the Board, they shall treat it as having been paid on account of a liability of another person to income tax or corporation tax; and the liability and the other person shall be such as are found in accordance with prescribed rules.
- (9) Where the sum exceeds the liability concerned, the Board shall pay such of the sum as is appropriate to the other person mentioned in subsection (8) above.
- (10) Where no liability is found as mentioned in subsection (8) above, the Board shall pay the sum to the person to whom the payment or transfer to which subsection (2) or (3) above applies, and which gave rise to the payment of the sum concerned to the Board, was made.
- (11) In construing references to a sum in subsections (8) to (10) above, anything representing interest shall be ignored.
#### Activity treated as trade etc. and attribution of income
##### 556
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) If—
- (a) under section 13(5) of ITTOIA 2005 a payment made to a person is treated as made instead to the performer, and
- (b) the person to whom the payment is actually made is a company within the charge to corporation tax,
the company is treated for corporation tax purposes as if the payment had not been made to it.
- (3) Regulations may provide—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) that any liability to corporation tax which would, apart from subsection (2) above, arise in relation to the payment shall not arise or shall arise only to a prescribed extent.
- (4) References in this section to a payment include references to a transfer.
- (5) This section shall not apply unless the payment or transfer is one to which section 555(2) or (3) applies, and subsections (2) and (3) above shall not apply in such circumstances as may be prescribed.
#### Charge on profits or gains
##### 557
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions
##### 558
- (1) A payment to which subsection (2) of section 555 applies shall be treated for the purposes of the Tax Acts as not diminished by the sum mentioned in that subsection.
- (2) Regulations may provide that for the purposes of the Tax Acts the value of what is transferred by a transfer to which section 555(3) applies shall be calculated in accordance with prescribed rules.
- (3) In particular, rules may include provision for the calculation of an amount representing the actual worth of what is transferred, for that amount to be treated as a net amount corresponding to a gross amount from which income tax at the basic rate has been deducted, and for the gross amount to be taken to be the value of what is transferred.
- (4) No obligation as to secrecy imposed by statute or otherwise shall preclude the Board or an authorised officer of the Board from disclosing to any person who appears to the Board to have an interest in the matter information which may be relevant to determining whether section 555(2) or (3) applies to a payment or transfer.
- (5) Regulations may make provision generally for giving effect to this Chapter, and may make different provision for different cases or descriptions of case.
- (6) In this Chapter—
- “*regulations*” means regulations made by the Treasury; and
- “*prescribed*” means prescribed by regulations.
### CHAPTER IV — SUB-CONTRACTORS IN THE CONSTRUCTION INDUSTRY
#### Deductions on account of tax etc. from payments to certain sub-contractors
##### 559
- (1) Subject to the following provisions of this section, where a contract relating to construction operations is not a contract of employment but—
- (a) one party to the contract is a sub-contractor; and
- (b) another party to the contract (“*the contractor*”) either is a sub-contractor under another such contract relating to all or any of the construction operations or is a person to whom section 560(2) applies,
this section shall apply to any payments which are made under the contract and are so made by the contractor to—
- (i) the sub-contractor;
- (ii) a person nominated by the sub-contractor or the contractor; or
- (iii) a person nominated by a person who is a sub-contractor under another such contract relating to all or any of the construction operations.
- (1A) Subsection (1) above shall not apply to any payment made under the contract in question that is treated as earnings from an employment by virtue of Chapter 7 of Part 2 of ITEPA 2003 (agency workers).
- (2) Subsection (1) above shall not apply to any payment made under the contract in question if the person to whom it is made or, if it is made to a nominee, each of the following persons, that is to say, the nominee, the person who nominated him and the person for whose labour (or, where that person is a company, for whose employees’ or officers’ labour) the payment is made, is excepted from this section in relation to those payments by virtue of section 561.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) Subsection (1) above shall not apply to a payment made under any contract if such conditions as may be prescribed in regulations made by the Board are satisfied in relation to the payment and the person making it.
- (4) On making a payment to which this section applies the contractor shall deduct from it a sum equal to the relevant percentage of so much of the payment as is not shown to represent the direct cost to any other person of materials used or to be used in carrying out the construction operations to which the contract under which the payment is to be made relates; . . .
- (4A) In subsection (4) above “*the relevant percentage*”, in relation to a payment, means such percentage (not exceeding the percentage which is the basic rate for the year of assessment in which the payment is made) as the Treasury may by order determine.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) References in section 1(1) of the Preferential Payments (Bankruptcies and Arrangements) Act (Northern Ireland) 1964 to sums due on account of tax deductions for any period shall be construed as including references to any amounts due from any person in respect of deductions required to be made by him under this section.
- (7) For the purposes of this Chapter a payment (including a payment by way of loan) that has the effect of discharging an obligation under a contract relating to construction operations shall be taken to be made under the contract; and if—
- (a) the obligation is to make a payment to a person within subsection (1)(i) to (iii) above, but
- (b) the payment discharging that obligation is made to a person not within those paragraphs,
the payment shall for those purposes be taken to be made to the first-mentioned person.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons who are sub-contractors or contractors for purposes of Chapter IV
##### 560
- (1) For the purposes of this Chapter a party to a contract relating to construction operations is a sub-contractor if, under the contract—
- (a) he is under a duty to the contractor to carry out the operations, or to furnish his own labour (that is to say, in the case of a company, the labour of employees or officers of the company) or the labour of others in the carrying out of the operations or to arrange for the labour of others to be furnished in the carrying out of the operations; or
- (b) he is answerable to the contractor for the carrying out of the operations by others, whether under a contract or under other arrangements made or to be made by him.
- (2) This subsection applies (subject to subsection (2A) below) to the following persons, that is to say—
- (a) any person carrying on a business which includes construction operations;
- (aa) any public office or department of the Crown (including any Northern Ireland department and any part of the Scottish Administration);
- (b) any local authority;
- (c) any development corporation or new town commission;
- (d) the Commission for the New Towns;
- (da) the Secretary of State if the contract is made by him under section 89 of the Housing Associations Act 1985;
- (e) the Housing Corporation,. . . a housing association, a housing trust, the Scottish Special Housing Association, and the Northern Ireland Housing Executive;
- (ea) any such body, being a body (in addition to those falling within paragraphs (aa) to (e) above) which has been established for the purpose of carrying out functions conferred on it by or under any enactment, as may be designated as a body to which this subsection applies in regulations made by the Board;
- (f) a person carrying on a business at any time if—
- (i) his average annual expenditure on construction operations in the period of three years ending with the end of the last period of account before that time exceeds £1,000,000, or
- (ii) where he was not carrying on the business at the beginning of that period of three years, one-third of his total expenditure on construction operations for the part of that period during which he has been carrying on the business exceeds £1,000,000;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) Subject to subsection (2B) below, subsection (2) above does not apply at any time to an office, department or body falling within paragraph (aa), (b), (c), (d), (e) or (ea) of that subsection unless that office, department or body has, in the period of three years ending with the 31st March next before that time, had an average annual expenditure on construction operations of more than £1,000,000.
- (2B) Where the condition provided for in subsection (2A) above has been satisfied in the case of any office, department or body in relation to any period of three years, that subsection shall not prevent subsection (2) above from applying to that office, department or body until there have been three successive years after the end of that period in each of which the office, department or body has had expenditure on construction operations of less than £1,000,000.
- (3) Where section 559(1)(b) begins to apply to any person in any period of account by virtue of his falling within subsection (2)(f) above, it shall continue to apply to him until he satisfies the Board that his expenditure on construction operations has been less than £1,000,000 in each of three successive years beginning in or after that period of account.
- (4) Where the whole or part of a trade is transferred by a company (“*the transferor*”) to another company (“*the transferee*”) and section 343 has effect in relation to the transfer, then in determining for the purposes of this section the amount of expenditure incurred by the transferee—
- (a) the whole or, as the case may be, a proportionate part of any expenditure incurred by the transferor at a time before the transfer shall be treated as if it had been incurred at that time by the transferee; and
- (b) where only a part of the trade is transferred the expenditure shall be apportioned in such manner as appears to the Board, or on appeal to the Commissioners, to be just and reasonable.
- (5) In this section—
- “*development corporation*” has the same meaning as in the New Towns Act 1981 or the New Towns (Scotland) Act 1968;
- “*housing association*” has the same meaning as in the Housing Associations Act 1985 or the Housing (Northern Ireland) Order 1981;
- “*housing trust*” has the same meaning as in the Housing Associations Act 1985; and
- “*new town commission*” has the same meaning as in the New Towns Act (Northern Ireland) 1965.
#### Exceptions from section 559
##### 561
- (1) Subject to the provisions of regulations under . . . section 566(2), a person is excepted from section 559 in relation to payments made under a contract if a certificate under this section has been issued to that person and is in force when the payment is made, but—
- (a) where the certificate has been issued to a person who becomes a partner in a firm, that person is not excepted in relation to payments made under contracts under which the firm or, where a person has nominated the firm to receive payments, the person who has nominated the firm is a sub-contractor; and
- (b) where a certificate has been issued to a person as a partner in a firm, that person is excepted in relation only to payments made under contracts under which the firm or, where a person has nominated the firm to receive payments, the person who has nominated the firm, is a sub-contractor.
- (2) If the Board are satisfied, on the application of an individual or a company, that—
- (a) where the application is for the issue of a certificate to an individual (otherwise than as a partner in a firm), he satisfies the conditions set out in section 562;
- (b) where the application is for the issue of a certificate to a person as a partner in a firm, that person satisfies the conditions set out in section 562 if he is an individual or, if a company, the conditions set out in section 565 and, in either case, the firm itself satisfies the conditions set out in section 564;
- (c) where the application is for the issue of a certificate to a company, the company satisfies the conditions set out in section 565 and, if the Board have given a direction under subsection (6) below, each of the persons to whom any of the conditions set out in section 562 applies in accordance with the direction satisfies the conditions which so apply to him,
the Board shall issue to that individual or company a certificate excepting that individual or company (or, in a case falling within paragraph (b) above, that individual or company as a partner in the firm specified in the certificate) from section 559.
- (3) References in subsection (2) above to an individual, a company or a firm satisfying conditions set out in section 562, . . . 564 or 565 include, in relation to a condition which may, by virtue of a provision of that section, be treated as being satisfied, references to that individual, company or firm being treated as satisfying that condition.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Where it appears to the Board, on an application made under subsection (2) above by a company, that the company—
- (a) was incorporated on a date within the period of three years ending with the date of the application; or
- (b) has not carried on business continuously throughout that period; or
- (c) has carried on business continuously throughout that period but the business has not at all times in that period consisted of or included the carrying out of construction operations; or
- (d) does not at the date of the application hold a certificate which is then in force under this section;
the Board may direct that the conditions set out in section 562 or such of them as are specified in the direction shall apply to the directors of the company and, if the company is a close company, to the persons who are the beneficial owners of shares in the company or to such of those directors or persons as are so specified as if each of them were an applicant for a certificate under this section. . . .
- In this subsection “*director*” has the meaning given by section 67 of ITEPA 2003.
- (7) Where it appears to the Board that there has been a change in the control of a company holding or applying for a certificate, the Board may make any such direction as is referred to in subsection (6) above.
- (8) The Board may at any time cancel a certificate which has been issued to a person and is in force under this section if it appears to them that—
- (a) it was issued on information which was false;
- (b) if an application for the issue of a certificate under this section to that person were made at that time, the Board would refuse to issue a certificate;
- (c) that person has permitted the certificate to be misused; or
- (d) in the case of a certificate issued to a company, there has been a change in the control of the company and information with respect to that change has not been furnished in accordance with regulations under section 566(2);
and may by notice require that person to deliver the certificate to the Board within the time specified in the notice.
- (9) A person aggrieved by the refusal of an application for a certificate under this section or the cancellation of such a certificate may, by notice given to the Board within 30 days after the refusal or, as the case may be, cancellation, appeal to the General Commissioners or, if he so elects in the notice, to the Special Commissioners; and the jurisdiction of the Commissioners on such an appeal shall include jurisdiction to review any relevant decision taken by the Board in the exercise of their functions under this section.
- (10) If any person, for the purpose of obtaining a certificate under this section—
- (a) makes any statement, or furnishes any document, which he knows to be false in a material particular; or
- (b) recklessly makes any statement, or furnishes any document, which is false in a material particular,
he shall be liable to a penalty not exceeding £3,000.
- (11) A person to whom a certificate is issued under this section or a voucher is given as required by regulations under section 566(2)(j) or who is in possession of any form or other document supplied to him by the Board for use in connection with any regulations under this Chapter shall take all reasonable steps to ensure its safety; and any person who, without lawful authority or lawful excuse—
- (a) disposes of any such certificate or voucher or any form supplied by the Board in connection with regulations made by virtue of section 566(2)(e); or
- (b) possesses such a certificate, voucher or form or any document purporting to be such a certificate, voucher or form,
shall be liable to a penalty not exceeding £3,000.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) Without prejudice to section 843(3), this section shall come into force on 6th April 1988 to the exclusion of the provisions of section 70 of the Finance (No.2) Act 1975 which are re-enacted in this section, but any offence committed before that date shall not be punishable under this section and neither this subsection nor any other provision of this Act shall prevent any such offence from being punishable as if this Act had not been passed.
#### Conditions to be satisfied by individuals
##### 562
- (1) In the case of an application for the issue of a certificate under section 561 to an individual . . . the following conditions are required to be satisfied by that individual except that, where the application is for the issue of that certificate to that individual as a partner in a firm, this section shall have effect with the omission of subsections (2) to (2B).
- (2) The applicant must be carrying on a business in the United Kingdom which satisfies the following conditions, that is to say—
- (a) the business consists of or includes the carrying out of construction operations or the furnishing or arranging for the furnishing of labour in carrying out construction operations;
- (b) the business is, to a substantial extent, carried on by means of an account with a bank;
- (c) the business is carried on with proper records and in particular with records which are proper having regard to the obligations referred to in subsections (8) to (12) below; and
- (d) the business is carried on from proper premises and with proper equipment, stock and other facilities.
- (2A) The applicant must satisfy the Board, by such evidence as may be prescribed in regulations made by the Board, that the carrying on of the business mentioned in subsection (2) above is likely to involve the receipt, annually in the period to which the certificate would relate, of an aggregate amount by way of relevant payments which is not less than the amount specified in regulations made by the Board as the minimum turnover for the purposes of this subsection.
- (2B) In subsection (2A) above “*relevant payments*” means the following payments, other than so much of them as would fall, as representing the direct cost to any person of any materials, to be disregarded in calculating the amount of any deductions under subsection (4) of section 559, that is to say—
- (a) payments from which such deductions would fall to be made if the certificate is not granted; and
- (b) payments which would be such payments but for any regulations under subsection (3A) of that section.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) The applicant must, subject to subsection (10) below, have complied with all obligations imposed on him by or under the Tax Acts or the Management Act in respect of periods ending within the qualifying period and with all requests to supply to an inspector accounts of, or other information about, any business of his in respect of periods so ending.
- (9) An applicant who at any time in the qualifying period had control of a company shall be taken not to satisfy the condition in subsection (8) above unless the company has satisfied that condition in relation to periods ending at a time within that period when he had control of it; and for this purpose “*control*”shall be construed in accordance with section 416(2) to (6).
- (10) An applicant or company that has failed to comply with such an obligation or request as is referred to in subsection (8) above shall nevertheless be treated as satisfying that condition as regards that obligation or request if the Board are of the opinion that the failure is minor and technical and does not give reason to doubt that the conditions mentioned in subsection (13) below will be satisfied.
- (11) Where the applicant states, for the purpose of showing that he has complied with all obligations imposed on him as mentioned in subsection (8) above, that he was not subject to any of one or more obligations in respect of any period ending within the qualifying period—
- (a) he must satisfy the Board of that fact by such evidence as may be prescribed in regulations made by the Board; and
- (b) if for that purpose he states that he has been outside the United Kingdom for the whole or any part of the qualifying period, he must also satisfy them, by such evidence as may be so prescribed, that he has complied with any obligations imposed under the tax laws of any country in which he was living during that period which are comparable to the obligations mentioned in subsection (8) above.
- (12) The applicant must, if any contribution has at any time during the qualifying period become due from him under Part I of the Social Security Act 1975 or Part I of the Social Security (Northern Ireland) Act 1975, have paid the contribution when it became due.
- (13) There must be reason to expect that the applicant will, in respect of periods ending after the end of the qualifying period, comply with such obligations as are referred to in subsections (8) to (12) above and with such requests as are referred to in subsection (8) above.
- (13A) Subject to subsection (10) above, a person shall not be taken for the purposes of this section to have complied with any such obligation or request as is referred to in subsections (8) to (11) above if there has been a contravention of a requirement as to the time at which, or the period within which, the obligation or request was to be complied with.
- (14) In this section “*the qualifying period*”, in relation to an application for the issue of a certificate under section 561, means the period of three years ending with the date of the application.
#### Conditions to be satisfied by partners who are individuals
##### 563
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions to be satisfied by firms
##### 564
- (1) In the case of an application for the issue of a certificate under section 561 to an individual or a company as a partner in a firm the following conditions are required to be satisfied by the firm.
- (2) The firm’s business must be carried on in the United Kingdom and must satisfy the conditions mentioned in section 562(2)(a) to (d).
- (2A) The partners must satisfy the Board, by such evidence as may be prescribed in regulations made by the Board, that the carrying on of the firm’s business is likely to involve—
- (a) the receipt, annually in the period to which the certificate would relate, of an aggregate amount by way of relevant payments which is not less than the sum specified in subsection (2B) below; or
- (b) the receipt, annually in the period to which the certificate would relate, of an aggregate amount by way of construction contract payments which is not less than the amount specified for the purposes of this paragraph in regulations made by the Board.
- (2AA) In subsection (2A)(a) above “*relevant payments*” has the meaning given by section 562(2B).
- (2B) The sum referred to in subsection (2A)(a) above is the sum of the following amounts, that is to say—
- (a) the amount obtained by multiplying the number of partners in the firm who are individuals by the amount specified in regulations as the minimum turnover for the purposes of section 562(2A); and
- (b) in respect of each partner in the firm who is a company (other than one to which section 565(2A)(b) would apply), the amount equal to what would have been the minimum turnover for the purposes of section 565(2A) if the application had been for the issue of a certificate to that company.
- (2C) In subsection (2A)(b) above “*construction contract payments*” means payments under contracts relating to, or to the work of individuals participating in the carrying out of, any operations which—
- (a) are of a description specified in subsection (2) of section 567; but
- (b) are not of a description specified in subsection (3) of that section,
other than so much of the payments as represents the direct cost to the firm of materials used or to be used in carrying out the operations in question.
- (3) Subject to subsection (4) below, each of the persons who are partners at the time of the application must have complied, so far as any such charge to income tax or corporation tax is concerned as falls to be computed by reference to the profits or gains of the firm’s business—
- (a) with all obligations imposed on him by or under the Tax Acts or the Management Act in respect of periods ending within the qualifying period; and
- (b) with all requests to him as such a partner to supply to an inspector accounts of, or other information about, the firm’s business or his share of the profits or gains of that business.
- (4) Where a person has failed to comply with such an obligation or request as is referred to in subsection (3) above the firm shall nevertheless be treated, in relation to that partner, as satisfying that condition as regards that obligation or request if the Board are of the opinion that the failure is minor and technical and does not give reason to doubt that the condition mentioned in subsection (5) below will be satisfied.
- (5) There must be reason to expect that each of the persons who are from time to time partners in the firm will, in respect of periods ending after the end of the qualifying period, comply with such obligations and requests as are referred to in subsection (3) above.
- (6) Subject to subsection (4) above, a person shall not be taken for the purposes of this section to have complied with any such obligation or request as is referred to in subsection (3) above if there has been a contravention of a requirement as to the time at which, or the period within which, the obligation or request was to be complied with.
- (7) In this section “*the qualifying period*”, in relation to an application for the issue of a certificate under section 561, means the period of three years ending with the date of the application.
#### Conditions to be satisfied by companies
##### 565
- (1) In the case of an application for the issue of a certificate under section 561 to a company (whether as a partner in a firm or otherwise), the following conditions are required to be satisfied by the company.
- (2) The company must be carrying on (whether or not in partnership) a business in the United Kingdom and that business must satisfy the conditions mentioned in section 562(2)(a) to (d).
- (2A) The company must either—
- (a) satisfy the Board, by such evidence as may be prescribed in regulations made by them, that the annual receipts test is satisfied; or
- (b) satisfy the Board that the only persons with shares in the company are companies which are limited by shares and themselves excepted from section 559 by virtue of a certificate which is in force under section 561.
- (2B) The annual receipts test is satisfied in relation to a company if the carrying on of its business is likely to involve the receipt, annually in the period to which the certificate would relate—
- (a) of an aggregate amount by way of relevant payments which is not less than the amount obtained by multiplying the amount specified in regulations as the minimum turnover for the purposes of section 562(2A) by the number of persons who are relevant persons in relation to the company; or
- (b) of an aggregate amount by way of construction contract payments which is not less than the amount specified for the purposes of this paragraph in regulations made by the Board.
- (2BB) In subsection (2B) above “*relevant payments*” has the meaning given by section 562(2B).
- (2C) For the purposes of subsection (2B) above a person is a relevant person in relation to the company—
- (a) where the company is a close company, if he is a director of the company (within the meaning given by section 67 of ITEPA 2003) or a beneficial owner of shares in the company; and
- (b) in any other case, if he is such a director of the company.
- (2D) In subsection (2B) above “*construction contract payments*” means payments under contracts relating to, or to the work of individuals participating in the carrying out of, any operations which—
- (a) are of a description specified in subsection (2) of section 567; but
- (b) are not of a description specified in subsection (3) of that section,
other than so much of the payments as represents the direct cost to the company of materials used or to be used in carrying out the operations in question.
- (3) The company must, subject to subsection (4) below, have complied with all obligations imposed on it by or under the Tax Acts or the Management Act in respect of periods ending within the qualifying period and with all requests to supply to an inspector accounts of, or other information about, the business of the company in respect of periods so ending.
- (4) A company which has failed to comply with such an obligation or request as is referred to in subsection (3) above shall nevertheless be treated as satisfying this condition as regards that obligation or request if the Board are of the opinion that the failure is minor and technical and does not give reason to doubt that the conditions mentioned in subsection (8) below will be satisfied.
- (5) The company must, if any contribution has at any time during the qualifying period become due from the company under Part I of the Social Security Act 1975 or Part I of the Social Security (Northern Ireland) Act 1975 have paid the contribution when it became due.
- (6) The company must have complied with any obligations imposed on it by the following provisions of the Companies Act 1985, in so far as those obligations fell to be complied with within the qualifying period, that is to say—
- (a) sections 226, 241 and 242 (contents, laying and delivery of annual accounts);
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) section 288(2) (return of directors and secretary and notification of changes therein);
- (d) sections 363 to 365 (annual returns);
- (e) section 691 (registration of constitutional documents and list of directors and secretary of oversea company);
- (f) section 692 (notification of changes in constitution or directors or secretary of oversea company);
- (g) section 693 (oversea company to state its name and country of incorporation);
- (h) section 699 (obligations of companies incorporated in Channel Islands or Isle of Man);
- (j) Chapter II of Part XXIII (accounts of oversea company).
- (7) The company must have complied with any obligations imposed on it by the following provisions of the Companies (Northern Ireland) Order 1986, in so far as those obligations fell to be complied with within the qualifying period, that is to say—
- (a) Articles 235, 247 and 249 (annual accounts, documents included in annual accounts and laying and delivery of accounts);
- (b) Article 295 (registered office and notification of changes therein);
- (c) Article 296(2) (return of directors and secretary and notification of changes therein);
- (d) Articles 371 to 373 (annual returns);
- (e) Article 641 (registration of constitutional documents and list of directors and secretary of oversea company);
- (f) Article 642 (notification of changes in constitution or directors or secretary of oversea company);
- (g) Article 643 (oversea company to state its name and country of incorporation);
- (h) Article 649 (accounts of oversea company).
- (8) There must be reason to expect that the company will, in respect of periods ending after the end of the qualifying period, comply with all such obligations as are referred to in subsections (2) to (7) above and with such requests as are referred to in subsection (3) above.
- (8A) Subject to subsection (4) above, a company shall not be taken for the purposes of this section to have complied with any such obligation or request as is referred to in subsections (3) to (7) above if there has been a contravention of a requirement as to the time at which, or the period within which, the obligation or request was to be complied with.
- (9) In this section “*qualifying period*” means the period of three years ending with the date of the company’s application for a certificate under section 561.
#### General powers to make regulations under Chapter IV
##### 566
- (1) The Board shall make regulations with respect to the collection and recovery, whether by assessment or otherwise, of sums required to be deducted from any payments under section 559 and for the giving of receipts by persons receiving the payments to persons making them; and those regulations may include any matters with respect to which PAYE regulations may be made.
- (1A) Interest required to be paid by regulations under subsection (1) above shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.
- (2) The Board may make regulations—
- (a) prescribing the period for which certificates under section 561 are to be issued and the form of such certificates;
- (b) providing for the renewal of such certificates;
- (c) providing for the issue, renewal or cancellation of such certificates or the giving of directions under section 561(6) . . . on behalf of the Board;
- (d) requiring the furnishing of information with respect to changes in the control of a company holding or applying for such a certificate;
- (e) requiring the production of such certificates to such persons and in such circumstances as may be specified in the regulations and providing for the completion and return to the Board of forms certifying such production;
- (f) requiring the surrender to the Board of such certificates in such circumstances as may be specified in the regulations;
- (g) requiring persons who make payments under contracts relating to construction operations to keep such records and to make to the Board such returns relating to payments so made by them as may be specified in the regulations, and requiring persons who hold such certificates to keep such records relating to payments so made to them as may be so specified;
- (h) with respect to the production, copying and removal of, and the making of extracts from, any records kept by virtue of any such requirement as is referred to in paragraph (g) above and with respect to rights of access to or copies of any such records which are removed;
- (j) requiring vouchers for payments made under contracts relating to construction operations to persons who hold such certificates to be obtained by the person making, and given by the person receiving, the payment, prescribing the form of the vouchers, and requiring their production or surrender to the Board in such circumstances as may be specified in the regulations; and
- (k) excluding payments from the operation of section 561 where, in such circumstances as may be specified in the regulations, the requirements of regulations relating to the production of certificates or the obtaining, production or surrender of vouchers have not been complied with.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) The Board may by regulations make provision—
- (a) for the issue of documents (to be known as “registration cards”) to persons who are parties, as sub-contractors, to any contract relating to construction operations or who are likely to become such parties;
- (b) for a registration card to contain all such information about the person to whom it is issued as may be required, for the purposes of any regulations under this section, by a person making payments under any such contract;
- (c) for a registration card to take such form and to be valid for such period as may be prescribed by the regulations;
- (d) for the renewal, replacement or cancellation of a registration card;
- (e) for requiring the surrender of a registration card in such circumstances as may be specified in the regulations;
- (f) for requiring the production of a registration card to such persons and in such circumstances as may be so specified;
- (g) for requiring any person who—
- (i) makes or is proposing to make payments to which section 559 applies, and
- (ii) is a person to whom a registration card has to be produced under the regulations,
to take steps that ensure that it is produced to him and that he has an opportunity of inspecting it for the purpose of checking that it is a valid registration card issued to the person required to produce it.
- (2B) A person who fails to comply with an obligation imposed on him by virtue of subsection (2A)(g) above shall be liable to a penalty not exceeding £3,000.
- (2C) Subject to subsection (2D) below, where—
- (a) a person who is a party to a contract relating to any construction operations (“the contractor”) makes or is proposing to make payments to which section 559 applies,
- (b) the contractor is required by regulations under this section to make statements about another party to the contract (“the sub-contractor”) in any return, certificate or other document,
- (c) a registration card containing the information to be stated should have been produced, in accordance with any such regulations, to the contractor, and
- (d) the statements made in the return, certificate or other document, so far as relating to matters the information about which should have been obtainable from the card, are inaccurate or incomplete in any material respect,
the contractor shall be liable to a penalty not exceeding £3,000.
- (2D) A person shall not be liable to a penalty under subsection (2C) above if—
- (a) a valid registration card issued to the sub-contractor, or a document which the contractor had reasonable grounds for believing to be such a card, was produced to the contractor and inspected by him before the statements in question were made; and
- (b) the contractor took all such steps as were reasonable, in addition to the inspection of that card, for ensuring that the statements were accurate and complete.
- (2E) A person liable to a penalty under subsection (2C) above shall not, by reason only of the matters in respect of which he is liable to a penalty under that subsection, be liable to any further penalty under section 98 of the Management Act.
- (2F) Regulations under this section may make different provision for different cases.
- (3) Any power under this Chapter to make regulations prescribing the evidence required for establishing what is likely to happen at any time shall include power to provide for such matters to be presumed (whether conclusively or unless the contrary is shown in the manner provided for in the regulations) from evidence of what has previously happened.
- (4) Any power under this Chapter to make regulations authorising or requiring a document (whether or not of a particular description), or any records or information, to be issued, given or requested or to be sent, produced, returned or surrendered to the Board shall include power—
- (a) to authorise the Board to nominate a person who is not an officer of the Board to be the person who on behalf of the Board—
- (i) issues, gives or requests the document, records or information; or
- (ii) is the recipient of the document, records or information;
and
- (b) to require the document, records or information, in cases prescribed by or determined under the regulations, to be sent, produced, returned or surrendered to the address (determined in accordance with the regulations) of the person nominated by the Board to receive it on their behalf.
- (5) Any power under this Chapter to make regulations imposing requirements with respect to any description of document, with respect to documents generally or with respect to any records or information shall include power to make provision, subject to such conditions as may be prescribed by or determined in accordance with the regulations—
- (a) for the documents, records or information to be allowed to take an electronic form so prescribed or determined;
- (b) for the issue, completion, furnishing, production, keeping, cancellation, return, surrender or giving of the documents, records or information to be something that has to be or may be done by the electronic means so prescribed or determined; and
- (c) for the manner of proving in any proceedings the contents or transmission of anything that, by virtue of any regulations under this Chapter, takes an electronic form or is transmitted to any person by electronic means.
#### Meaning of “construction operations”
##### 567
- (1) In this Chapter “*construction operations*” means operations of any description specified in subsection (2) below, not being operations of any description specified in subsection (3) below; and references to construction operations shall be taken—
- (a) except where the context otherwise requires, as including references to the work of individuals participating in the carrying out of such operations; and
- (b) except in the case of offshore installations, as not including references to operations carried out or to be carried out otherwise than in the United Kingdom.
- (2) The following operations are, subject to subsection (3) below, construction operations for the purposes of this Chapter—
- (a) construction, alteration, repair, extension, demolition or dismantling of buildings or structures (whether permanent or not), including offshore installations;
- (b) construction, alteration, repair, extension or demolition of any works forming, or to form, part of the land, including (without prejudice to the foregoing) walls, roadworks, power-lines, electronic communications apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, reservoirs, water-mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence;
- (c) installation in any building or structure of systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection;
- (d) internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration;
- (e) operations which form an integral part of, or are preparatory to, or are for rendering complete, such operations as are previously described in this subsection, including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works;
- (f) painting or decorating the internal or external surfaces of any building or structure.
- (3) The following operations are not construction operations for the purposes of this Chapter—
- (a) drilling for, or extraction of, oil or natural gas;
- (b) extraction (whether by underground or surface working) of minerals; tunnelling or boring, or construction of underground works, for this purpose;
- (c) manufacture of building or engineering components or equipment, materials, plant or machinery, or delivery of any of these things to site;
- (d) manufacture of components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or delivery of any of these things to site;
- (e) the professional work of architects or surveyors, or of consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape;
- (f) the making, installation and repair of artistic works, being sculptures, murals and other works which are wholly artistic in nature;
- (g) signwriting and erecting, installing and repairing signboards and advertisements;
- (h) the installation of seating, blinds and shutters;
- (j) the installation of security systems, including burglar alarms, closed circuit television and public address systems.
- (4) In this section “*offshore installations*” means installations which are maintained, or are intended to be established, for underwater exploitation or exploration to which the Mineral Workings (Offshore Installations) Act 1971 applies.
- (5) The Treasury may by order—
- (a) include in subsection (2) above any description of operations as to which they are satisfied that it is a normal activity of the construction industry and that its inclusion in that subsection is necessary for achieving the object of section 559;
- (b) include in subsection (3) above any description of operations as to which they are satisfied that it cannot properly be considered a normal activity of the construction industry and ought to be excluded from subsection (2) above.
- (6) An order under subsection (5) above shall not have effect unless a draft of the instrument containing it has been laid before and approved by a resolution of the House of Commons.
### CHAPTER V — SCHEMES FOR RATIONALIZING INDUSTRY
#### Deductions from profits of contributions paid under certified schemes
##### 568
- (1) Notwithstanding anything contained in section 74 of this Act or section 33 of ITTOIA 2005 but subject to the following provisions of this Chapter, where a person pays, wholly and exclusively for the purposes of a trade in respect of which he is chargeable under Case I of Schedule D, or under Part 2 of ITTOIA 2005, a contribution in furtherance of a scheme which is for the time being certified by the Secretary of State under this section, the contribution shall, in so far as it is paid in furtherance of the primary object of the scheme, be allowed to be deducted as an expense in computing the profits of that trade.
- (2) The Secretary of State shall certify a scheme under this section if he is satisfied—
- (a) that the primary object of the scheme is the elimination of redundant works or machinery or plant from use in an industry in the United Kingdom; and
- (b) that the scheme is in the national interest and in the interests of that industry as a whole; and
- (c) that such number of persons engaged in that industry as are substantially representative of the industry are liable to pay contributions in furtherance of the primary object of the scheme by agreement between them and the body of persons carrying out the scheme.
- (3) The Secretary of State shall cancel any certificate granted under this section if he ceases to be satisfied as to any of the matters referred to in subsection (2) above.
- (4) The Secretary of State may at any time require the body of persons carrying out a scheme certified under this section to produce any books or documents of whatever nature relating to the scheme and, if the requirement is not complied with, he may cancel the certificate.
- (5) In this section and in section 569 “*contribution*”, in relation to a scheme, does not include a sum paid by a person by way of loan or subscription of share capital, or in consideration of the transfer of assets to him, or by way of a penalty for contravening or failing to comply with the scheme.
#### Repayment of contributions
##### 569
- (1) In the event of the repayment, whether directly or by way of distribution of assets on a winding up or otherwise, of a contribution or any part of a contribution which has been allowed to be deducted under section 568, the deduction of the contribution, or so much of it as has been repaid, shall be deemed to be an unauthorised deduction in respect of which an assessment shall be made, and, notwithstanding the provisions of the Tax Acts requiring assessments to be made within six years after the end of the chargeable period to which they relate, any such assessment and any consequential assessment may be made at any time within three years after the end of the chargeable period in which the repayment was made.
- (2) For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on.
#### Payments under certified schemes which are not repayments of contributions
##### 570
- (1) Subject to the provisions of this section, where, under any scheme which is for the time being certified or has at any time been certified by the Secretary of State under section 568, any payment (not being a payment made by way of repayment of contributions) is made to a person carrying on a trade to which the scheme relates, that payment shall be treated for the purposes of the Tax Acts as a trading receipt of the trade, and shall accordingly be taken into account in computing the profits of the trade for those purposes.
- (2) Where . . . the payments which have been made under such a scheme in respect of a trade (not being payments made by way of repayment of contributions) have been made wholly or partly in respect of damage in respect of which no relief may be given under the Tax Acts, and a claim is made to that effect, then, subject to and in accordance with the provisions of Schedule 21—
- (a) relief shall be given in respect of those payments by reducing the amounts which are to be treated as trading receipts of the trade under subsection (1) above; but
- (b) where such relief is given, section 568 shall, in relation to contributions subsequently paid under the scheme in respect of the trade, have effect subject to the modifications specified in Part III of that Schedule,
and paragraph 6 of that Schedule applies for the purposes of this subsection as it applies for the purposes of that Schedule.
- (3) The provisions of this section and Schedule 21 shall apply in relation to any payment made to a person who has ceased to carry on a trade to which any such scheme as is mentioned in subsection (1) above relates as they apply in relation to payments made to a person carrying on such a trade, subject to the modification that so much of that payment as falls to be treated as a trading receipt by virtue of those provisions shall be deemed for the purposes of those provisions to have been made to him on the last day on which he was engaged in carrying on the trade.
- (4) In determining for the purposes of this section and of Schedule 21—
- (a) whether any trade has ceased to be carried on; or
- (b) whether any contribution is paid in respect of a trade in respect of which a payment has been made; or
- (c) whether any payment is made in respect of a trade in respect of which a contribution has been paid,
no regard shall be had to any event which, by virtue of section 337(1) above or section 18 of ITTOIA 2005 (companies beginning or ceasing to carry on trade), is to be treated as effecting a discontinuance of a trade.
#### Cancellation of certificates
##### 571
- (1) Where any certificate granted with respect to a scheme under section 568 is cancelled by the Secretary of State, and any deductible contributions paid in furtherance of the scheme have not been repaid at the expiration of one year from the cancellation, the body of persons carrying out the scheme shall, for the chargeable period in which that year expires, be charged to tax (in the case of corporation tax, under Case VI of Schedule D) upon the aggregate amount of the deductible contributions which have not been repaid at that time.
- (2) The charge to tax under subsection (1) above shall not be made if the total amount of any contributions, other than deductible contributions, which have been paid under the scheme and have not been repaid before that time is greater than the available resources of the scheme, and shall not in any case be made upon an amount greater than the excess, if any, of those resources over that total amount.
- (3) In subsection (2) above “*the available resources*”, in relation to any scheme, means a sum representing the total funds held for the purposes of the scheme at the expiration of one year from the cancellation of the certificate plus a sum representing any funds held for the purposes of the scheme which, during that year, have been applied otherwise than in accordance with the provisions of the scheme as in force when the certificate was granted.
- (4) Where the body of persons carrying out a scheme are charged to tax by virtue of subsection (1) above, and, after the expiration of one year from the cancellation of the certificate, any deductible contribution paid in furtherance of the scheme is repaid, the amount upon which the charge is made shall on the making of a claim be reduced by the amount repaid, and all such repayments of tax shall be made as are necessary to give effect to the provisions of this subsection.
- (5) In this section “*contribution*” includes a part of a contribution, and “*deductible contribution*” means a contribution allowed to be deducted under section 568, any reduction under Part III of Schedule 21 being left out of account.
- (6) For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on.
#### Application to statutory redundancy schemes
##### 572
- (1) Sections 569 to 571 and Schedule 21 shall, subject to the adaptations specified in subsection (2) below, apply in relation to a statutory redundancy scheme as they apply in relation to a scheme certified under section 568.
- (2) The adaptations referred to above are as follows, that is to say—
- (a) for any reference to a contribution allowed to be deducted under section 568 there shall be substituted a reference to a contribution allowed to be deducted under any provision of the Tax Acts other than that section;
- (b) any provision that section 568 shall, in relation to contributions, have effect subject to modifications, shall be construed as a provision that so much of any provision of the Tax Acts other than that section as authorises the deduction of contributions shall, in relation to the contributions in question, have effect subject to the modifications in question;
- (c) for any reference to the cancellation of a certificate with respect to a scheme there shall be substituted a reference to the scheme ceasing to have effect; and
- (d) for any reference to the provisions of the scheme as in force when the certificate was granted there shall be substituted a reference to the provisions of the scheme as in force when the contributions were first paid thereunder.
- (3) In this section “*statutory redundancy scheme*” means a scheme for the elimination or reduction of redundant works, machinery or plant, or for other similar purposes, to which effect is given by or under any Act, whether passed before or after this Act.
### CHAPTER VI — OTHER PROVISIONS
### Relief for losses on unquoted shares in trading companies
#### Relief for companies
##### 573
- (1) Subsection (2) below has effect where a company which has subscribed for shares in a qualifying trading company incurs an allowable loss (for the purpose of corporation tax on chargeable gains) on the disposal of the shares in any accounting period and the company disposing of the shares—
- (a) is an investment company on the date of the disposal and either—
- (i) has been an investment company for a continuous period of six years ending on that date; or
- (ii) has been an investment company for a shorter continuous period ending on that date and has not before the beginning of that period been a trading company or an excluded company; and
- (b) was not associated with, or a member of the same group as, the qualifying trading company at any time in the period beginning with the date when it subscribed for the shares and ending with the date of the disposal.
- (2) The company disposing of the shares may, within two years after the end of the accounting period in which the loss was incurred, make a claim requiring that the loss be set off for the purposes of corporation tax against income—
- (a) of that accounting period; and
- (b) if the company was then an investment company and the claim so requires, of preceding accounting periods ending within the time specified in subsection (3) below;
and, subject to any relief for an earlier loss, the income of any of those periods shall then be treated as reduced by the amount of the loss or by so much of it as cannot be relieved under this subsection against income of a later accounting period.
- (3) The time referred to in subsection (2) above is the period of 12 months ending immediately before the accounting period in which the loss is incurred; but the amount of the reduction which may be made under that subsection in the income of an accounting period falling partly before that time shall not exceed a part of that income proportionate to the part of the accounting period falling within that time.
- (4) Where relief is claimed under subsection (2) above, it must be claimed before any deduction is made for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of any description; and where relief is obtained under that subsection for an amount of a loss no deduction shall be made in respect of that amount for the purposes of corporation tax on chargeable gains.
This subsection is subject to subsection (4A) below.
- (4A) Paragraph 70 of Schedule 15 to the Finance Act 2000 (priority of loss relief) provides that where relief under Part VII of that Schedule (relief for losses on disposals of shares to which investment relief is attributable) is claimed it must be claimed in priority to relief under subsection (2) above.
- (5) For the purposes of subsection (1)(b) above companies are associated with each other if one controls the other or both are under the control of the same person or persons; and section 416(2) to (6) shall apply for the purposes of this subsection.
- (6) For the purposes of this section a company subscribes for shares in another company if they are issued to it by that other company in consideration of money or money’s worth.
#### Relief for individuals
##### 574
- (1) Where an individual who has subscribed for shares in a qualifying trading company incurs an allowable loss (for capital gains tax purposes) on the disposal of the shares in any year of assessment, he may, by notice given within twelve months from the 31st January next following that year, make a claim for relief from income tax on—
- (a) so much of his income for that year as is equal to the amount of the loss or, where it is less than that amount, the whole of that income; or
- (b) so much of his income for the last preceding year as is equal to that amount or, where it is less than that amount, the whole of that income;
but relief shall not be given for the loss or the same part of the loss both under paragraph (a) and under paragraph (b) above.
Where such relief is given in respect of the loss or any part of it, no deduction shall be made in respect of the loss or (as the case may be) that part under the 1992 Act.
- (2) Any relief claimed under paragraph (a) of subsection (1) above in respect of any income shall be given in priority to any relief claimed in respect of that income under paragraph (b) of that subsection; and any relief claimed under either paragraph in respect of any income shall be given in priority to any relief claimed in respect of that income under section 380 or 381.
- (3) For the purposes of this section—
- (a) an individual subscribes for shares if they are issued to him by the company in consideration of money or money’s worth; and
- (b) an individual shall be treated as having subscribed for shares if his spouse or civil partner did so and transferred them to him by a transaction inter vivos.
#### Exclusion of relief under section 573 or 574 in certain cases
##### 575
- (1) Sections 573 and 574 do not apply unless the disposal is—
- (a) by way of a bargain made at arm’s length for full consideration; or
- (b) by way of a distribution in the course of dissolving or winding up the company; or
- (ba) a disposal within section 24(1) of the 1992 Act (entire loss, destruction, dissipation or extinction of asset); or
- (c) a deemed disposal under section 24(2) of the 1992 Act (claim that value of asset has become negligible).
- (2) Where a person disposes of shares (“*the new shares*”) which by virtue of section 127 of the 1992 Act (reorganisation etc. treated as not involving disposal) are identified with other shares (“*the old shares*”) previously held by him, relief shall not be given under section 573 or 574 on the disposal of the new shares unless—
- (a) relief under section 573 or 574 could (or if this section had been in force could) have been given on a disposal of the old shares if he had incurred an allowable loss in disposing of them as mentioned in subsection (1)(a) above on the occasion of the disposal that would have occurred but for section 127 of the 1992 Act; or
- (b) he gave new consideration for the new shares;
but in a case within paragraph (b) above the amount of relief under section 573 or 574 on the disposal of the new shares shall not exceed the amount or value of the new consideration taken into account as a deduction in computing the loss incurred on their disposal.
- (3) Where the shares are the subject of an exchange or arrangement of the kind mentioned in section 135 or 136 of the 1992 Act (company reconstructions etc.) which by reason of section 137 of that Act involves a disposal of the shares, section 573 or 574 shall not apply to any allowable loss incurred on the disposal.
#### Provisions supplementary to sections 573 to 575
##### 576
- (1) Subject to subsections (1A) to (1C) below, where a person holds shares in a company which constitute a holding and comprise—
- (a) shares for which he has subscribed (“*qualifying shares*”); and
- (b) shares which he has acquired otherwise than by subscription,
any question whether a disposal by him of shares forming part of the holding is of qualifying shares shall be determined by treating that and any previous disposal by him out of the holding as relating to shares acquired later rather than earlier; and if a disposal by him is of qualifying shares forming part of a holding and he makes a claim under section 573 or 574 in respect of a loss incurred on their disposal, the amount of relief under that section on the disposal shall not exceed the sums that would be allowed as deductions in computing the loss if the shares had not been part of the holding.
- (1A) Subsection (1B) below applies where the holding mentioned in subsection (1) above comprises any of the following, namely—
- (a) shares issued before 1st January 1994 in respect of which relief has been given under Chapter III of Part VII and has not been withdrawn;
- (b) shares issued on or after that date to which relief under that Chapter is attributable; and
- (c) shares to which deferral relief (within the meaning of Schedule 5B to the 1992 Act) is attributable.
- (1B) Any such question as is mentioned in subsection (1) above shall not be determined as provided by that subsection, but shall be determined instead—
- (a) in the case of shares issued before 1st January 1994, as provided by subsections (3) to (4C) of section 299 as it has effect in relation to such shares; and
- (b) in the case of shares issued on or after that date, as provided by subsections (6) to (6D) of that section as it has effect in relation to such shares.
- (1C) Where the holding mentioned in subsection (1) above comprises any shares—
- (a) to which investment relief is attributable under Schedule 15 to the Finance Act 2000 (corporate venturing scheme), and
- (b) which have been held continuously (within the meaning of paragraph 97 of that Schedule) from the time they were issued until the disposal,
any such question as is mentioned in that subsection shall not be determined as provided by that subsection, but shall be determined instead as provided by paragraph 93 of that Schedule (identification of shares on a disposal of part of a holding where investment relief is attributable to any shares in the holding held continuously by the disposing company).
For this purpose paragraph 93 of that Schedule shall have effect as if the references in it to a disposal had the same meaning as in subsection (1) above.
- (2) Where a claim is made under section 573 or 574 in respect of a loss accruing on the disposal of shares, section 30 of the 1992 Act (value-shifting) shall have effect in relation to the disposal as if for the references in subsections (1)(b) and (5) to a tax-free benefit there were substituted references to any benefit whether tax-free or not.
- (3) There shall be made all such adjustments of corporation tax on chargeable gains or capital gains tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of relief being given under section 573 or 574 in respect of an allowable loss or in consequence of the whole or part of such a loss in respect of which a claim is made not being relieved under that section.
- (4) For the purposes of sections 573 to 575 and this section a qualifying trading company is a company which . . . —
- (a) either—
- (i) is an eligible trading company on the date of the disposal; or
- (ii) has ceased to be an eligible trading company at a time which is not more than three years before that date and has not since that time been an excluded company, an investment company or a trading company that is not an eligible trading company; and
- (b) either—
- (i) has been an eligible trading company for a continuous period of six years ending on that date or at that time; or
- (ii) has been an eligible trading company for a shorter continuous period ending on that date or at that time and has not before the beginning of that period been an excluded company, an investment company or a trading company that is not an eligible trading company; and
- (c) has carried on its business wholly or mainly in the United Kingdom throughout the relevant period.
- (4A) A company is an eligible trading company for the purposes of subsection (4) above at any time when, or in any period throughout which, it would comply with the requirements of section 293 if—
- (a) the provisions mentioned in subsection (4B) below were omitted;
- (ab) the reference in subsection (1A) of section 293 to the beginning of the relevant period were a reference to the time at which the shares in respect of which relief is claimed under section 573 or 574 were issued;
- (b) the references in subsection (6) of section 293 to dissolution were omitted and after paragraph (a) of that subsection there were inserted— and
- (b) the company continues, during the winding up, to be a trading company within the meaning of section 576(5).;
- (c) the reference in section 293(6A) to the eligible shares were a reference to the shares in respect of which relief is claimed under section 573 or 574;
- (d) any reference in section 293 (except subsection (1A)), 297 or 308 to the relevant period were a reference to the time that is relevant for the purposes of subsection (4)(a) above or, as the case may require, the continuous period that is relevant for the purposes of subsection (4)(b) above;
- (e) the reference in section 304A(1)(e)(i) to eligible shares were a reference to shares in respect of which relief is claimed under section 573 or 574;
- (f) references in section 304A(3) to an individual were references to a person;
- (g) the reference in section 304A(4) to section 304 were a reference to section 574(3)(b); and
- (h) the reference in section 304A(6) to the expressions “eligible shares" and “subscriber shares" were a reference to the expression “subscriber shares".
- (4B) The provisions are—
- (a) in section 293, the words “*Subject to section 294,*” in subsection (1). . . and subsections (8A) and (8B);
- (b) sections 294 to 296;
- (c) in section 298(5), the words “and section 312(1A)(b) shall apply to determine the relevant period for the purposes of that section";
- (d) in section 304A, subsections (1)(e)(ii) and (2)(b), in subsection (3), the words “to which relief becomes so attributable" and paragraphs (c) and (d), in subsection (4), the words “to which relief becomes so attributable" and paragraphs (c) and (d), and subsection (5); and
- (e) section 308(5A).
- (5) In sections 573 to 575 and this section—
- “*civil partner*” refers to one of two civil partners who are living together (construed in accordance with section 282);
- “*excluded company*” means a company—which has a trade which consists wholly or mainly of dealing in land, in commodities or futures or in shares, securities or other financial instruments, or is not carried on on a commercial basis and in such a way that profits in the trade can reasonably be expected to be realised; orwhich is the holding company of a group other than a trading group; orwhich is a building society or a registered industrial and provident society as defined in section 486(12);
- “*group*” means a company which has one or more 51 per cent. subsidiaries together with that or those subsidiaries;
- “*holding*” means any number of shares of the same class held by one person in one capacity, growing or diminishing as shares of that class are acquired or disposed of, but shares shall not be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange, and subsection (4) of section 104 of the 1992 Act shall apply for the purposes of this definition as it applies for the purposes of subsection (1) of that section;
- “*holding company*” means a company whose business consists wholly or mainly in the holding of shares or securities of one or more companies which are its 51 per cent. subsidiaries;
- “*investment company*” has the meaning given by section 130 except that it does not include the holding company of a trading group;
- “*new consideration*” means consideration in money or money’s worth other than consideration of the kind excluded by paragraph (a) or (b) of section 128(2)of the 1992 Act;
- “*relevant period*” means the period ending with the date on which the shares in question are disposed of and beginning with the incorporation of the company, or, if later, one year before the date on which the shares were issued;
- “*shares*”—except in subsections (1A) and (1B) above, includes stock; butexcept in the definition of “excluded company", does not include shares or stock not forming part of a company’s ordinary share capital;
- “*spouse*” refers to one of two spouses who are living together (construed in accordance with section 282);
- “*trading company*” means a company other than an excluded company which is— a company whose business consists wholly or mainly of the carrying on of a trade or trades; orthe holding company of a trading group;
- “*trading group*” means a group the business of whose members, taken together, consists wholly or mainly in the carrying on of a trade or trades, but for the purposes of this definition any trade carried on by a subsidiary which is an excluded company . . . shall be treated as not constituting a trade.
### Miscellaneous
#### Business entertaining expenses
##### 577
- (1) Subject to the provisions of this section—
- (a) no deduction shall be made in computing profits chargeable to corporation tax under . . . Schedule D for any expenses incurred in providing business entertainment, and such expenses—
- (i) shall not be included in computing any expenses of management in respect of which relief may be given under the Corporation Tax Acts; and
- (ii) shall not be brought into account under section 76 as expenses payable.. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The expenses to which paragraph (a) of subsection (1) above applies include, in the case of any company, any sums paid by the company to, or on behalf of, or placed by the company at the disposal of an employee of the company exclusively for the purpose of defraying expenses incurred or to be incurred by him in providing business entertainment . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of this section “*business entertainment*” means entertainment (including hospitality of any kind) provided by a company, or by an employee of the company, in connection with a trade carried on by the company, but does not include anything provided by the company for bona fide employees of the company unless its provision for them is incidental to its provision also for others.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In this section—
- (a) any reference to expenses incurred in . . . providing entertainment includes a reference to expenses incurred in . . . providing anything incidental thereto;
- (b) references to a trade include references to any business or profession; and
- (c) references to a company's employees are references to persons employed by the company, directors of the company or persons engaged in the management of the company being for this purpose deemed to be persons employed by it.
- (8) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment, except that it shall not by virtue of this subsection apply in relation to the provision for any person of a gift consisting of an article incorporating a conspicuous advertisement for the donor, being an article—
- (a) which is not food, drink, tobacco or a token or voucher exchangeable for goods; and
- (b) the cost of which to the donor, taken together with the cost to the donor of any other such articles given by the donor to that person in the same accounting period, does not exceed £50.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Subsection (8) above shall not preclude the deduction, in computing profits under . . . Case I or II of Schedule D, of expenditure incurred in making a gift to a body of persons or trust established for charitable purposes only; and for the purposes of this subsection the Historic Buildings and Monuments Commission for England and the Trustees of the National Heritage Memorial Fund shall each be treated as such a body of persons.
- (10) Nothing in this section shall be taken as precluding the deduction of expenses incurred in . . . the provision by any company of anything which it is its trade to provide, and which is provided by the company in the ordinary course of that trade for payment or, with the object of advertising to the public generally, gratuitously.
#### Housing grants
##### 578
- (1) Where, under any enactment relating to the giving of financial assistance for the provision, maintenance or improvement of housing accommodation or other residential accommodation, a payment is made to a person by way of grant or other contribution towards expenses incurred, or to be incurred, by that or any other person, the payment shall not be treated as a receipt in computing income for corporation tax purposes.
- (2) Subsection (1) above shall not apply to a payment in so far as it is made in respect of an expense giving rise to a deduction in computing income for any tax purpose.
#### Statutory redundancy payments
##### 579
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where a redundancy payment or other employer’s payment is made by a company in respect of employment wholly in a trade or profession carried on by the company, and within the charge to tax, the amount of the redundancy payment or the corresponding amount of the other employer’s payment shall (if not otherwise so allowable) be allowable as a deduction in computing for the purposes of Schedule D the profits or losses of the trade or profession, but—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if the employer’s payment was made after the discontinuance of the trade or profession the . . . amount so deductible shall be treated as if it were a payment made on the last day on which the trade or profession was carried on.
- (3) Where a redundancy payment or other employer’s payment is made by a company in respect of employment wholly in a business carried on by the company and—
- (a) expenses of management of the business are deductible under section 75, or
- (b) a deduction for expenses payable falls to be allowed in accordance with section 76 in computing profits of the business,
the amount of the redundancy payment, or the corresponding amount of the other employer’s payment, shall (to the extent that it would not otherwise fall to be so treated) be deductible under section 75 as expenses of management or as the case may be, be included at Step 1 in section 76(7).
- (3A) If in a case where subsection (3) above applies, the payment in question is for the purposes of section 75 or 76 referable to an accounting period beginning after discontinuance, it shall be treated as referable to the accounting period ending on the last day on which the business was carried on.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Relief shall not be given under subsections (2) and (3) above, or otherwise, more than once in respect of any employer’s payment, and if the employee was being employed in such a way that different parts of his remuneration fell for corporation tax purposes to be treated in different ways—
- (a) the amount of the redundancy payment or the corresponding amount of the other employer’s payment shall be apportioned to the different capacities in which the employee was employed; and
- (b) subsections (2) and (3) above shall apply separately to the employment in those capacities, and by reference to the apportioned part of that amount, instead of by reference to the full amount of the employer’s payment . . . .
- (6) Where the Minister pays a sum under section 166 of the Employment Rights Act 1996 or Article 201 of the Employment Rights (Northern Ireland) Order 1996 in respect of an employer’s payment this section shall apply as if—
- (a) that sum had been paid on account of that redundancy or other employer’s payment, and
- (b) so far as the company has reimbursed the Minister, it had been so paid by the company.
#### Provisions supplementary to section 579
##### 580
- (1) In section 579—
- (a) “*redundancy payment*” and “*employer’s payment*” have the same meaning as in Part XI of the Employment Rights Act 1996 or Part XII of the Employment Rights (Northern Ireland) Order 1996;
- (b) references to the corresponding amount of an employer’s payment (other than a redundancy payment) are references to the amount of that employer’s payment so far as not in excess of the amount which would have been payable as a redundancy payment had one been payable;
- (c) “*the Minister*” in relation to the Employment Rights Act 1996 means the Secretary of State and in relation to the Employment Rights (Northern Ireland) Order 1996 means the Department of Health and Social Services.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Borrowing in foreign currency by local authorities and statutory corporations
##### 581
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funding bonds issued in respect of interest on certain debts
##### 582
- (1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on any debt to which this section applies—
- (a) the issue of the bonds shall be treated for all the purposes of the Corporation Tax Acts as if it were the payment of an amount of that interest equal to the value of the bonds at the time of their issue, and
- (b) where paragraph (a) above or section 380 of ITTOIA 2005 (which makes provision similar to that paragraph for income tax purposes) applies the redemption of the bonds shall not be treated for those purposes as the payment of any amount of that interest.
- (2) Where an issue of bonds is treated by virtue of subsection (1) above or section 380 of ITTOIA 2005 as if it were the payment of an amount of interest, and any person by or through whom the bonds are issued would be required by virtue of any provision of the Tax Acts to deduct income tax from that amount of interest if it had been actually paid by or through him, the following provisions shall have effect—
- (a) subject to paragraph (b) below, any such person—
- (i) shall retain bonds the value of which at the time of their issue is equal to income tax on that amount of interest at the applicable rate for the year of assessment in which the bonds are issued, and
- (ii) shall be acquitted in respect of any such retention in the same way as if he had deducted such tax from the interest, and
- (iii) shall be chargeable with that tax accordingly, but may tender the bonds retained in satisfaction thereof;
- (b) where . . . it is impracticable to retain bonds on account of income tax under paragraph (a) above—
- (i) any such person shall be relieved from the obligation to retain bonds and account for income tax under that paragraph, on his furnishing to the Board a statement of the names and addresses of the persons to whom the bonds have been issued and the amount of the bonds issued to each such person; and
- (ii) tax in respect of the amount of interest treated by virtue of this section or section 380 of ITTOIA 2005 as having been paid by the issue of the bonds shall be charged under Case VI of Schedule D (corporation tax) or under Chapter 2 of Part 4 of ITTOIA 2005 (income tax) for the chargeable period in which the bonds are issued on the persons receiving or entitled to the bonds.
- (2A) In subsection (2) above “*the applicable rate*”, in relation to a year of assessment, means whichever of the basic rate and the lower rate for that year is the rate at which the person by or through whom the bonds are issued would have had to deduct income tax from the amount of interest in question if that amount had been actually paid by or through him.
- (3) This section applies to any debt incurred, whether in respect of any money borrowed or otherwise, by any government, public authority or public institution whatsoever, or by any body corporate whatsoever.
- (3A) Chapter 2 of Part 4 of the Finance Act 1996 has effect subject to and in accordance with this section, notwithstanding anything in section 80(5) of that Act (matters to be brought into account in the case of loan relationships only under Chapter 2 of Part 4 of that Act).
- (4) For the purposes of this section “*funding bonds*” includes any bonds, stocks, shares, securities or certificates of indebtedness.
#### Inter-American Development Bank
##### 583
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for unremittable overseas income
##### 584
- (1) Where a company is chargeable to corporation tax by reference to the amount of any income arising in a territory outside the United Kingdom (“*overseas income*”), then for the purposes of corporation tax this section shall apply to the overseas income in so far as—
- (a) the company is prevented from transferring the amount of the overseas income to the United Kingdom, either by the laws of that territory or any executive action of its government or by the impossibility of obtaining foreign currency in that territory; and
- (b) the company has not realised the overseas income outside that territory for a consideration in sterling or a consideration in some other currency which the company is not prevented from transferring to the United Kingdom.
- (2) Subject to subsection (2A) below, where a company so chargeable makes a claim under this subsection in relation to any overseas income—
- (a) which is unremittable; and
- (b) to which subsection (1)(a) above will continue to apply notwithstanding any reasonable endeavours on its part,
then, in the first instance, account shall not be taken of that income, and corporation tax shall be assessable and shall be charged on all persons concerned and for all periods accordingly.
- (2A) If on any date paragraph (a) or (b) of subsection (2) above ceases to apply to any part of any overseas income in relation to which a claim has been made under that subsection—
- (a) that part of the income shall be treated as income arising on that date, and
- (b) account shall be taken of it, and of any tax payable in respect of it under the law of the territory where it arises, according to their value at that date.
- (4) Where a company becomes chargeable to corporation tax in respect of income from any source by virtue of subsection (2) or (2A) above after it has ceased to possess that source of income, the income shall be chargeable under Case VI of Schedule D.
- (5) Where under an agreement entered into under arrangements made by the Secretary of State in pursuance of section 11 of the Export Guarantees and Overseas Investment Act 1978 any payment is made by the Export Credit Guarantee Department in respect of any income which cannot be transferred to the United Kingdom, then, to the extent of the payment, the income shall be treated as income to which paragraphs (a) and (b) of subsection (2) above do not apply (and accordingly cannot cease to apply).
- (6) A claim under subsection (2) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) for the purposes of corporation tax, shall be made no later than two years after the end of the accounting period in which the income arises.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Subject to subsections (2) and (2A) above, the amount of any unremittable overseas income shall be determined by reference to the generally recognised market value in the United Kingdom (if any), or, in the absence of any such value, according to the official rate of exchange of the territory where the income arises.
- (9) Any appeal against an assessment which involves a question as to the operation of this section shall be made to the Special Commissioners and not to the General Commissioners.
- (10) This section shall have effect as respects any accounting period in which the conditions in subsection (2) above cease to be satisfied in relation to any income, being an accounting period ending on or before such day, not being earlier than 31st March 1992, as the Treasury may by order appoint for the purposes of this section, with the omission of subsections (3) and (4).
#### Relief from tax on delayed remittances
##### 585
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of deductions for war risk premiums
##### 586
- (1) In computing the amount of the profits or gains of any person for any corporation tax purpose, no sum shall be deducted in respect of any payment made by him to which this section applies.
- (2) No payment to which this section applies shall be included in computing the expenses of management in respect of which relief may be given under section 75 or 76.
- (3) Subject to subsections (4) and (5) below, this section applies to any payment made by any person under any contract or arrangement under which that person is, in the event of war damage, entitled or eligible, either absolutely or conditionally, to or for any form of indemnification, whether total or partial, and whether by way of a money payment or not, in respect of that war damage.
- (4) Where the payment is made in respect of the right or eligibility mentioned in subsection (3) above and also in respect of other matters, the deduction or inclusion of so much of the payment as is properly attributable to the other matters shall not be disallowed by virtue only of subsection (1) or (2) above.
- (5) This section shall not apply to any payment made under any contract of marine insurance, or any contract of insurance of an aircraft, or any contract of insurance of goods in transit.
- (6) In this section “*war damage*” means loss or damage arising from action taken by an enemy of Her Majesty, or action taken in combating such an enemy or in repelling an imagined attack by such an enemy, or action taken in anticipation of or in consequence of an attack by such an enemy.
#### Disallowance of certain payments in respect of war injuries to employees
##### 587
- (1) In computing the amount of the profits or gains . . . of any person for any corporation tax purpose, no sum shall be deducted in respect of any payment made by him to which this section applies.
- (2) No payment to which this section applies shall be included in computing—
- (a) the expenses of management in respect of which relief may be given under section 75 or 76; or
- (b) the expenses of management or supervision in respect of which relief may be given under section 121(3).
- (3) Subject to subsections (4) and (5) below, this section applies—
- (a) to any payments by way of benefit made by any person to, or to the personal representatives or dependants of, any employees of his on account of their incapacity, retirement or death owing to war injuries, whether sustained in the United Kingdom or elsewhere; and
- (b) to any payments made by any person by way of premium or contribution under any policy, agreement, scheme or arrangement providing for the payment of benefits to, or to the personal representatives or dependants of, any employees of his on account of their incapacity, retirement or death owing to such war injuries.
- (4) This section shall not apply to any payment (whether by way of benefit or by way of premium or contribution) which is payable under any policy, agreement, scheme or arrangement made before 3rd September 1939, except to the extent that the amount of the payment is increased by any variation of the terms of that policy, agreement, scheme or arrangement made on or after that date.
- (5) This section shall not apply to any payment by way of benefit if, in the opinion of the Board, that payment was made under an established practice which was such that the same or a greater payment would have been made if the incapacity, retirement or death had not been due to war injuries.
- (6) Where a person makes a payment by way of benefit to which this section applies and, in the opinion of the Board, there is an established practice under which a smaller payment would have been made if the incapacity, retirement or death had not been due to war injuries, the deduction or inclusion of an amount equal to that smaller payment shall not be disallowed by virtue only of subsection (1) or (2) above.
- (7) Where a person makes a payment to which this section applies by way of premium or contribution, and the policy, agreement, scheme or arrangement provides for the payment of any benefit in the event of incapacity, retirement or death not due to war injuries, the deduction or inclusion of so much of the payment of premium or contribution as, in the opinion of the Board, is properly attributable to benefit payable in the event of incapacity, retirement or death not due to war injuries shall not be disallowed by virtue only of subsection (1) or (2) above.
- (8) In this section “*war injuries*” means physical injuries—
- (a) caused by—
- (i) the discharge of any missile (including liquids and gas);
- (ii) the use of any weapon, explosive or other noxious thing; or
- (iii) the doing of any other injurious act,
either by the enemy or in combating the enemy or in repelling an imagined attack by the enemy; or
- (b) caused by the impact on any person or property of any enemy aircraft, or any aircraft belonging to, or held by any person on behalf of, or for the benefit of, Her Majesty or any allied power, or any part of, or anything dropped from, any such aircraft.
#### Training courses for employees
##### 588
- (1) This section applies where a company (“*the employer*”) incurs retraining course expenses within the meaning of section 311 of ITEPA 2003 (exemptions: retraining courses).
- (3) Subject to subsection (4) below, where—
- (a) an employer incurs expenditure in paying or reimbursing retraining course expenses as mentioned in subsection (1) above; and
- (b) by virtue of section 311 of ITEPA 2003, no liability to income tax arises in respect of the payment or reimbursement,
then, if and so far as that expenditure would not, apart from this subsection, be so deductible, it shall be deductible in computing for the purposes of Schedule D the profits of the trade or profession of the employer for the purposes of which the employee is or was employed.
- (4) Where the employer is a company with investment business or a company carrying on life assurance business, subsection (3) above shall have effect with the substitution for the words following paragraph (b) of—
- (5) In any case where—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) an employer’s liability to corporation tax for any accounting period is determined (by assessment or otherwise) on the assumption that, by virtue only of subsection (3) above (or subsections (3) and (4) above), it is entitled to a deduction on account of any expenditure and, subsequently, there is a failure to meet a condition of the kind mentioned in section 312(1)(b)(i) or (ii) of ITEPA 2003;
an assessment under . . . paragraph 41 of Schedule 18 to the Finance Act 1998, of an amount due in consequence of the failure referred to above may be made at any time not later than six years after the end of the accounting period in which the failure occurred.
- (5A) The reference in subsection (5)(b) above to a deduction on account of any expenditure includes a reference to bringing an amount into account in determining the amount of the deduction to be made under section 76.
- (6) Where an event occurs by reason of which there is a failure to meet a condition in section 312(1)(b)(i) or (ii) of ITEPA 2003, the employer of the employee concerned shall within 60 days of coming to know of the event give a notice to the inspector containing particulars of the event.
- (7) If the inspector has reason to believe that an employer has not given a notice which it is required to give under subsection (6) above in respect of any event, the inspector may by notice require the employer to furnish him within such time (not less that 60 days) as may be specified in the notice with such information relating to the event as the inspector may reasonably require for the purposes of this section.
#### Qualifying courses of training etc
##### 589
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XIV — PENSION SCHEMES, SOCIAL SECURITY BENEFITS, LIFE ANNUITIES ETC.
### CHAPTER I — RETIREMENT BENEFIT SCHEMES
### Approval of schemes
#### Conditions for approval of retirement benefit schemes
##### 590
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Discretionary approval
##### 591
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Tax reliefs
#### Exempt approved schemes
##### 592
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief by way of deductions from contributions
##### 593
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exempt statutory schemes
##### 594
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Charge to tax in certain cases
#### Charge to tax in respect of certain sums paid by employer etc
##### 595
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from section 595
##### 596
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: pensions
##### 597
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: repayment of employee’s contributions
##### 598
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: commutation of entire pension in special circumstances
##### 599
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: unauthorised payments to or for employees
##### 600
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax: payments to employers
##### 601
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Regulations relating to pension fund surpluses
##### 602
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of surpluses
##### 603
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
#### Application for approval of a scheme
##### 604
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 605
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Responsibilities of administrator of scheme, and employer
##### 606
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pilots' benefit fund
##### 607
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Superannuation funds approved before 6th April 1980
##### 608
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schemes approved before 23rd July 1987
##### 609
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amendments of schemes
##### 610
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definition of “retirement benefits scheme”
##### 611
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other interpretative provisions, and regulations for purposes of this Chapter
##### 612
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — OTHER PENSION FUNDS AND SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS
#### Parliamentary pension funds
##### 613
- (1) The salary of a Member of the House of Commons shall, for all the purposes of the Income Tax Acts, be treated as reduced by the amounts deducted in pursuance of section 1 of the House of Commons Members’ Fund Act 1939; but a Member shall not by reason of any such deduction be entitled to relief under any other provision of the Income Tax Acts.
- (2) In subsection (1) above the reference to salary shall be construed as mentioned in subsection (3) of section 1 of the House of Commons Members’ Fund Act 1939, the reference to amounts deducted includes a reference to amounts required to be set aside under that subsection, and “deduction” shall be construed accordingly.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The . . . trustees of—
- (a) the House of Commons Members’ Fund established under section 1 of that Act of 1939;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
shall be entitled to exemption from income tax in respect of all income derived from that Fund or any investment of that Fund.
#### Exemptions and reliefs in respect of income from investments etc. of certain pension schemes
##### 614
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Any interest or dividends received by the person in whom is vested any of the Family Pension Funds mentioned in section 273 of the Government of India Act 1935, and having effect as a scheme made under section 2 of the Overseas Pensions Act 1973, on sums forming part of that fund shall be exempt from income tax.
- (2A) The reference in subsection (2) above to interest on sums forming part of a fund include references to any amount which is treated as income by virtue of Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) and derives from any investment forming part of that fund.
- (3) Income derived from investments or deposits of any fund referred to in section 648, 649, 650 or 651 of ITEPA 2003 shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income.
- (4) In respect of income derived from investments or deposits of the Overseas Service Pensions Fund established pursuant to section 7(1) of the Overseas Aid Act 1966, the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
- (5) In respect of dividends and other income derived from investments, deposits or other property of a superannuation fund to which section 615(3) applies the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.
- (6) A claim under this section shall be made to the Board.
#### Exemption from tax in respect of certain pensions
##### 615
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under section 349(1) by the trustees or other persons having the control of the fund.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Subsection (3) above applies to any superannuation fund which—
- (a) is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom;
- (b) has for its sole purpose (subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme) the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; and
- (c) is recognised by the employer and employed persons in the trade or undertaking;
and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom.
- (7) In this section—
- “*pension*” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto;
- “*overseas territory*” means any territory or country outside the United Kingdom;
- “*the Pensions (Increase) Acts*” means the Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act;
- “*United Kingdom trust territory*” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) For the purposes of this section, a person shall be taken to be employed in the public service of an overseas territory at any time when—
- (a) he is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,
- (b) he is employed, in circumstances not falling within paragraph (a) above, by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or
- (c) he is the holder of a public office in that territory in circumstances not falling within either paragraph (a) or (b).
- (10) For the purposes of subsection (9), references to the government of an overseas territory include references to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.
#### Other overseas pensions
##### 616
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Social security benefits and contributions
##### 617
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to subsections (4) and (5) below, no relief or deduction shall be given or allowed for corporation tax purposes in respect of any contribution paid by any person under—
- (a) Part I of the Social Security Contributions and Benefits Act 1992, or
- (b) Part I of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
- (4) Subsection (3) above shall not apply to a contribution if it is a secondary Class 1 contribution , a Class 1A contribution or a Class 1B contribution (within the meaning of Part I of either of those Acts) and is allowable—
- (a) as a deduction in computing profits or gains;
- (b) as expenses of management deductible under section 75 or falls to be brought into account under section 76 as expenses payable; or
- (c) as expenses of management or supervision deductible under section 121;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Subsection (3) above shall not apply for the purposes of deductions under Chapter 2 of Part 5 of ITEPA 2003 (in relation to which section 360A of that Act applies).
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — RETIREMENT ANNUITIES
#### Termination of relief under this Chapter, and transitional provisions
##### 618
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from tax in respect of qualifying premiums
##### 619
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying premiums
##### 620
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other approved contracts
##### 621
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substituted retirement annuity contracts
##### 622
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relevant earnings
##### 623
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sponsored superannuation schemes and controlling directors
##### 624
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward of unused relief under section 619
##### 625
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Modification of section 619 in relation to persons over 50
##### 626
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lloyd’s underwriters
##### 627
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partnership retirement annuities
##### 628
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity premiums of Ministers and other officers
##### 629
- (1) For the purposes of this Chapter so much of any salary which—
- (a) is payable to the holder of a qualifying office who is also a Member of the House of Commons, and
- (b) is payable for a period in respect of which the holder is not a participant in relation to that office in arrangements contained in the Parliamentary pension scheme but is a participant in relation to his membership of the House of Commons in any such arrangements, or for any part of such a period,
as is equal to the difference between a Member’s pensionable salary and the salary which (in accordance with any such resolution as is mentioned in subsection (3)(a) below) is payable to him as a Member holding that qualifying office shall be treated as remuneration from the office of Member and not from the qualifying office.
- (2) In this section—
- “*Member’s pensionable salary*” means a Member’s ordinary salary under any resolution of the House of Commons which, being framed otherwise than as an expression of opinion, is for the time being in force relating to the remuneration of Members or, if the resolution provides for a Member’s ordinary salary thereunder to be treated for pension purposes as being at a higher rate, a notional yearly salary at that higher rate;
- “*qualifying office*” means an office mentioned in section 2(2)(b), (c) or (d) of the Parliamentary and other Pensions Act 1987;
- “*the Parliamentary pension scheme*” has the same meaning as in that Act;
and without prejudice to the power conferred by virtue of paragraph 13 of Schedule 1 to that Act, regulations under section 2 of that Act may make provision specifying the circumstances in which a person is to be regarded for the purposes of this section as being or not being a participant in relation to his Membership of the House of Commons, or in relation to any office, in arrangements contained in the Parliamentary pension scheme.
- (3) In subsection (2) above “*a Member’s ordinary salary*”, in relation to any resolution of the House of Commons, means—
- (a) if the resolution provides for salary to be paid to Members at different rates according to whether or not they are holders of particular offices, or are in receipt of salaries or pensions as the holders or former holders of particular offices, a Member’s yearly salary at the higher or highest rate; and
- (b) in any other case, a Member’s yearly salary at the rate specified in or determined under the resolution.
### CHAPTER IV — PERSONAL PENSION SCHEMES
### Preliminary
#### Interpretation
##### 630
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Approval of schemes
##### 631
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Restrictions on approval
#### Establishment of schemes
##### 632
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scope of benefits
##### 633
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity to member
##### 634
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lump sum to member
##### 635
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity after death of member
##### 636
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lump sum on death of member
##### 637
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other restrictions on approval
##### 638
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Tax reliefs
#### Member’s contributions
##### 639
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Maximum amount of deductions
##### 640
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of contributions
##### 641
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward of relief
##### 642
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employer’s contributions and personal pension income etc
##### 643
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “relevant earnings”
##### 644
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Earnings from pensionable employment
##### 645
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “net relevant earnings”
##### 646
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Charge to tax
#### Unauthorised payments
##### 647
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Contributions under unapproved arrangements
##### 648
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Miscellaneous
#### Minimum contributions under Social Security Act 1986
##### 649
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Withdrawal of approval
##### 650
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Appeals
##### 651
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information about payments
##### 652
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: penalties
##### 653
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Remuneration of Ministers and other officers
##### 654
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transitional provisions
##### 655
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — PURCHASED LIFE ANNUITIES
#### Purchased life annuities other than retirement annuities
##### 656
- (1) Subject to section 657, a purchased life annuity shall, for the purposes of the provisions of the Corporation Tax Acts relating to tax on annuities and other annual payments, be treated as containing a capital element and, to the extent of the capital element, as not being an annual payment or in the nature of an annual payment; but the capital element in such an annuity shall be taken into account in computing profits or gains or losses for other corporation tax purposes in any circumstances in which a lump sum payment would be taken into account.
- (2) Where, in the case of any purchased life annuity to which this section applies, the amount of any annuity payment (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives—
- (a) the capital element shall be determined by reference—
- (i) to the amount or value of the payments made or other consideration given for the grant of the annuity (“*the purchase price*”); and
- (ii) to the expected term of the annuity, as at the date when the first annuity payment began to accrue, expressed in years (and any odd fraction of a year), and determined by reference to the prescribed tables of mortality;
and in head (ii) above “*term*” means the period from the date when the first annuity payment begins to accrue to the date when the last payment becomes payable;
- (b) the capital element in any annuity payment made in respect of a period of 12 months shall be a fraction—
$1E$
of the purchase price, where E is the expected term referred to in paragraph (a)(ii) above;
- (c) the capital element in any annuity payment made in respect of a period of less than, or more than, 12 months shall be the amount at (b) above reduced or, as the case may be, increased, in the same proportion as the length of that period bears to a period of 12 months;
- (d) subsection (3) below shall not apply but paragraphs (a) and (b) of subsection (4) below shall apply as they apply to that subsection.
- (3) Subject to subsection (2) above, in the case of any purchased life annuity to which this section applies—
- (a) the capital element shall be determined by reference to the amount or value of the payments made or other consideration given for the grant of the annuity; and
- (b) the proportion which the capital element in any annuity payment bears to the total amount of that payment shall be constant for all payments on account of the annuity; and
- (c) where neither the term of the annuity nor the amount of any annuity payment depends on any contingency other than the duration of a human life or lives, that proportion shall be the same proportion which the total amount or value of the consideration for the grant of the annuity bears to the actuarial value of the annuity payments as determined in accordance with subsection (4) below; and
- (d) where either the term of the annuity or the amount of any annuity payment (but not both) depends on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to paragraph (c) above and to the contingencies affecting the annuity; and
- (e) where both the term of the annuity and the amount of any annuity payment depend on any contingency other than the duration of a human life or lives, that proportion shall be such as may be just, having regard to subsection (2) above and to the contingencies affecting the annuity.
- (4) For the purposes of subsection (3) above—
- (a) any entire consideration given for the grant of an annuity and for some other matter shall be apportioned as appears just (but so that a right to a return of premiums or other consideration for an annuity shall not be treated for this purpose as a distinct matter from the annuity);
- (b) where it appears that the amount or value of the consideration purporting to be given for the grant of an annuity has affected, or has been affected by, the consideration given for some other matter, the aggregate amount or value of those considerations shall be treated as one entire consideration given for both and shall be apportioned under paragraph (a) above accordingly; and
- (c) the actuarial value of any annuity payments shall be taken to be their value as at the date when the first of those payments begins to accrue, that value being determined by reference to the prescribed tables of mortality and without discounting any payment for the time to elapse between that date and the date it is to be made.
- (5) Where a person making a payment on account of any life annuity has been notified in the prescribed manner of any decision as to its being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), and has not been notified of any alteration of that decision, the notice shall be conclusive as to those matters for the purpose of determining the amount of income tax which the person is entitled or required to deduct from the payment, or for which the person is chargeable in respect of it.
- (6) Where a person making a payment on account of a purchased life annuity to which this section applies has not been notified in the prescribed manner of the amount of the capital element, the amount of income tax which the person is entitled or required to deduct from the payment, or for which the person is chargeable in respect of it, shall be the same as if the annuity were not a purchased life annuity to which this section applies.
- (7) In using the prescribed tables of mortality to determine—
- (a) the expected term of an annuity for the purposes of subsection (2)(a) above, or
- (b) the actuarial value of any annuity payments for the purposes of subsection (4)(c) above,
the age, as at the date when the first of the annuity payments begins to accrue, of a person during whose life the annuity is payable shall be taken to be the number of years of his age at his last birthday preceding that date.
- (8) In any case where it is not possible to determine the expected term of an annuity for the purposes of subsection (2)(a) above by reference to the prescribed tables of mortality, that term shall for those purposes be such period as may be certified by the Government Actuary or the Deputy Government Actuary.
- (9) In any case where it is not possible to determine the actuarial value of any annuity payments for the purposes of subsection (4)(c) above by reference to the prescribed tables of mortality, that value shall for those purposes be such amount as may be certified by the Government Actuary or the Deputy Government Actuary.
#### Purchased life annuities to which section 656 applies
##### 657
- (1) For the purposes of section 656—
- “*life annuity*” means an annuity payable for a term ending with (or at a time ascertainable only by reference to) the end of a human life, whether or not there is provision for the annuity to end during the life on the expiration of a fixed term or on the happening of any event or otherwise, or to continue after the end of the life in particular circumstances; and
- “*purchased life annuity*” means a life annuity granted for consideration in money or money’s worth in the ordinary course of a business of granting annuities on human life.
- (2) Section 656 does not apply—
- (a) to any annuity which would, apart from that section, be treated for the purposes of the provisions of the Corporation Tax Acts relating to tax on annuities and other annual payments as consisting to any extent in the payment or repayment of a capital sum;
- (b) to any annuity where the whole or part of the consideration for the grant of the annuity consisted of sums satisfying the conditions for relief under section 266 or 273;
- (c) to any annuity purchased in pursuance of any direction in a will, or to provide for an annuity payable by virtue of a will or settlement out of income of property disposed of by the will or settlement (whether with or without resort to capital);
- (d) to any annuity under, or purchased with sums or assets held for the purposes of, a registered pension scheme; or
- (e) to any annuity purchased by any person in recognition of another’s services (or past services) in any office or employment.
#### Supplementary
##### 658
- (1) Any question whether an annuity is a purchased life annuity to which section 656 applies, or what is the capital element in such an annuity, shall be determined by the inspector; but a person aggrieved by the inspector’s decision on any such question may appeal within the prescribed time to the Special Commissioners.
- (2) Save as otherwise provided in this Chapter, the procedure to be adopted in giving effect to this Chapter shall be such as may be prescribed.
- (3) The Board may make regulations for prescribing anything which is to be prescribed under this Chapter, and the regulations may apply for the purposes of this Chapter or of the regulations any provision of the Income Tax Acts, with or without modifications.
- (4) Regulations under subsection (3) above may in particular make provision as to the time limit for making any claim for relief from or repayment of tax under this Chapter and as to all or any of the following matters, that is to say—
- (a) as to the information to be furnished in connection with the determination of any question whether an annuity is a purchased life annuity to which section 656 applies or what is the capital element in an annuity, and as to the persons who may be required to furnish any such information;
- (b) as to the manner of giving effect to the decision on any such question, and (notwithstanding anything in section 348) as to the making of assessments for the purpose on the person entitled to the annuity; and
- (c) as to the extent to which the decision on any such question is to be binding, and the circumstances in which it may be reviewed.
- (5) Any person who, for the purpose of obtaining . . . any relief from or repayment of tax under this Chapter, knowingly makes any false statement or false representation . . . shall be liable to a penalty not exceeding £3,000.
- (6) It does not matter for whom that relief or repayment is to be obtained.
### CHAPTER VI — MISCELLANEOUS
#### Financial futures and traded options
##### 659
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XV — SETTLEMENTS
### CHAPTER I — DISPOSITIONS FOR SHORT PERIODS
#### Dispositions for period which cannot exceed six years
##### 660
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments between disponor and trustees
##### 661
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter I to dispositions by two or more disponors
##### 662
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — SETTLEMENTS ON CHILDREN
#### The general rule
##### 663
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accumulation settlements
##### 664
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “irrevocable”
##### 665
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid by trustees
##### 666
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments between disponor and trustees
##### 667
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter II to settlements by two or more settlors
##### 668
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information under Chapter II
##### 669
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter II
##### 670
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — REVOCABLE SETTLEMENTS ETC.
#### Revocable settlements allowing release of obligation
##### 671
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing reversion of property
##### 672
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements where settlor retains an interest
##### 673
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements: discretionary power for benefit of settlor etc
##### 674
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 671 to 674
##### 675
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disallowance of deduction from total income of certain sums paid by settlor
##### 676
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sums paid to settlor otherwise than as income
##### 677
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Capital sums paid by body connected with settlement
##### 678
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Chapter III to settlements by two or more settlors
##### 679
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to obtain information for purposes of Chapter III
##### 680
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter III
##### 681
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Ascertainment of undistributed income
##### 682
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — LIABILITY TO HIGHER RATE AND ADDITIONAL RATE TAX
### Liability of settlors
#### Settlements made after 6th April 1965
##### 683
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements made before 7th April 1965 but after 9th April 1946
##### 684
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 683 and 684
##### 685
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Liability of trustees
#### Liability to additional rate tax of certain income of discretionary trusts
##### 686
- (1) So far as income arising to the trustees of a settlement is income to which this section applies it shall (subject to section 686D) be chargeable to income tax at the rate applicable in accordance with subsection (1AA) below, instead of at the basic rate or, in accordance with section 1A, at the lower rate or the dividend ordinary rate.
- (1AA) The rate applicable in accordance with this subsection is—
- (a) in the case of so much of any income to which this section applies as is distribution type income, the dividend trust rate; and
- (b) in the case of any other income to which this section applies, the rate applicable to trusts.
- (1A) In relation to any year of assessment for which income tax is charged—
- (a) the dividend trust rate shall be 32.5 per cent., and
- (b) the rate applicable to trusts shall be 40 per cent.,
or, in either case, such other rate as Parliament may determine.
For the purposes of assessments for the year 1993-94 and in relation to years of assessment for which tax at the basic rate and the additional rate was separately chargeable, references to the charging of income with tax at the rate applicable to trusts shall be taken to include references to the charging of income with tax both at the basic rate and at the additional rate.
- (2) This section applies to income arising to the trustees of a settlement in any year of assessment so far as it—
- (a) is income which is to be accumulated or which is payable at the discretion of the trustees or any other person (whether or not the trustees have power to accumulate it); and
- (b) is not, before being distributed, . . . the income of a person other than the trustees; and
- (ba) is not income from service charges held on trust (or, in Scotland, held in trust) by a relevant housing body; and
- (c) is not income arising under a trust established for charitable purposes only or , subject to section (6A) below, income from investments, deposits or other property held for the purposes of a superannuation fund to which section 615(3) applies; . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2AA) The rate at which income tax is chargeable on so much of any income arising to the trustees of a settlement in any year of assessment as—
- (a) is income to which this section applies, and
- (b) is treated in accordance with section 689B as applied in defraying the expenses of the trustees in that year which are properly chargeable to income (or would be so chargeable but for any express terms of the settlement),
shall be the rate at which it would be chargeable on that income apart from this section, instead of the rate applicable to trusts or the dividend trust rate (as the case may be).
- (2A) For the purposes of this section where—
- (a) the trustees of a settlement have expenses in any year of assessment (“*management expenses*”) which are properly chargeable to income or would be so chargeable but for any express terms of the settlement, and
- (b) there is income arising to them in that year (“*the untaxed income*”) which does not bear income tax for that year by reason wholly or partly of the trustees not having been resident in the United Kingdom or being deemed under any arrangements under section 788, or any arrangements having effect by virtue of that section, to have been resident in a territory outside the United Kingdom,
there shall be disregarded for the purposes of subsection (2AA) above such part of the management expenses as bears the same proportion to all those expenses as the untaxed income bears to all the income arising to the trustees in that year.
- (2B) For the purposes of subsection (2A) above where the income tax borne by any income arising to the trustees of a settlement is limited in accordance with section 128 of the Finance Act 1995 (limit on income chargeable on non-residents), the income arising to the trustees which shall be taken not to bear tax by reason wholly or partly of their not having been resident in the United Kingdom shall include so much of any income arising to them as—
- (a) is excluded income within the meaning of that section; and
- (b) is not income which is treated for the purposes of subsection (1)(b) of that section as income the tax on which is deducted at source.
- (3) *This section also applies to sums apportioned to the trustees under section* 423*and treated, under* 426(2)*as applied by subsection* (4)*below, as income received by the trustees*.
- (4) *Sections* 426(1)*and* (2), 427*and* 428*shall, with the omission in section* 426(2)(a)*of the words following “the apportionment relates”, the substitution of* “ *income* ”*for “total income” and all other necessary modifications, apply to a sum apportioned to trustees as they apply to sums apportioned to an individual; and section* 429*shall apply accordingly*.
- (5) For the purposes of this section sums paid or credited to trustees in any year of assessment in respect of dividends or interest payable in respect of shares in or deposits with or loans to a building society being sums in respect of which the society is required to account for and pay an amount in accordance with regulations under section 476(1) shall be treated as income for that year received by the trustees after deduction of income tax from a corresponding gross amount.
- (5A) In this section “*distribution type income*”, in relation to the trustees of a settlement, means—
- (a) income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
- (b) income chargeable under Chapter 4 of that Part (dividends from non-UK resident companies);
- (c) income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies);
- (d) income chargeable under Chapter 6 of that Part (release of loan to participator in close company);
- (e) a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged); or
- (f) any amount which, by virtue of section 686A(2)(a) of this Act, is treated for the purposes of the Tax Acts as if it were income to which this section applies.
- (5B) In subsection (5A) “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.
- (6) In this section “*the trustees of a settlement*” does not include personal representatives; but where personal representatives, on or before the completion of the administration of the estate, pay to the trustees of a settlement any sum representing income which, if personal representatives were the trustees of a settlement within the meaning of this section, would be income to which this section applies, that sum shall be deemed to be paid to the trustees as income and to have borne income tax at the applicable rate.
- (6ZA) In this section—
- “*relevant housing body*” means—a local authority,a registered social landlord,a Northern Ireland housing association,a charitable housing association,a charitable housing trust,a housing action trust established under Part 3 of the Housing Act 1988,the Housing Corporation, orthe Northern Ireland Housing Executive; and
- “*service charge*” has the meaning given by section 18(1) of the Landlord and Tenant Act 1985.
- (6ZB) In subsection (6ZA)—
- “*charitable housing association*” means a society, body or company which—satisfies the conditions in section 5(1)(a) and (b) of the Housing Act 1985, andis registered in a register kept under section 3 of the Charities Act 1993 or section 3 of the Charities and Trustee Investment (Scotland) Act 2005;
- “*charitable housing trust*” means a corporation or body which—satisfies the condition in section 6(a) or (b) of the Housing Act 1985, andis registered in a register kept under section 3 of the Charities Act 1993 or section 3 of the Charities and Trustee Investment (Scotland) Act 2005;
- “*Northern Ireland housing association*” means a body which is registered in the register maintained under Article 14 of the Housing (Northern Ireland) Order 1992; and
- “*registered social landlord*” means a body which is registered in a register maintained under section 1 of the Housing Act 1996 or section 57 of the Housing (Scotland) Act 2001.
- (6A) The exemption provided for by subsection (2)(c) above in relation to income from investments, deposits or other property held for the purposes of a superannuation fund to which section 615(3) applies does not apply to income derived from investments, deposits or other property held as a member of a property investment LLP.
#### Payments under discretionary trusts
##### 687
- (1) Where in any year of assessment the trustees of a settlement make a payment to any person in the exercise of a discretion, whether a discretion exercisable by them or by any other person, then if the payment—
- (a) is for all the purposes of the Income Tax Acts income of the person to whom it is made (but would not be his income if it were not made to him), or
- (b) is treated for those purposes as the income of the settlor by virtue of section 629 of ITTOIA 2005 (income paid to relevant children of settlor),
the following provisions of this section apply with respect to the payment in lieu of section 348 or 349(1).
- (2) The payment shall be treated as a net amount corresponding to a gross amount from which tax has been deducted at the rate applicable to trusts for the year in which the payment is made; and the sum treated as so deducted shall be treated—
- (a) as income tax paid by the person to whom the payment is made or, as the case may be, the settlor; and
- (b) so far as not set off under the following provisions of this section, as income tax assessable on the trustees.
- (3) The following amounts, so far as not previously allowed, shall be set against the amount assessable (apart from this subsection) on the trustees in pursuance of subsection (2)(b) above—
- (a) the amount of any tax on income arising to the trustees which (not being income the tax on which falls within paragraphs (a1) to (bc) below) is charged in pursuance of section 686 at the rate applicable to trusts or the dividend trust rate;
- (aa1) the amount of any tax on income arising to the trustees which is charged by virtue of section 686D(3) at the basic rate or the lower rate;
- (a1) the amount of tax at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate on any income of the trustees chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
- (a2) the amount of tax which, by virtue of section 399 of ITTOIA 2005 (non-UK residents other than eligible non-UK residents receiving qualifying distributions), is charged, at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate, on the amount or value of the whole or any part of any qualifying distribution included in the income arising to the trustees;
- (aa) the amount of tax which, by virtue of section 400 of that Act (non-qualifying distributions), is charged, at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate, on the amount or value of the whole or any part of any non-qualifying distribution included in the income arising to the trustees;
- (aaa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the amount of tax at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate on any sum treated, under section 410(3) of ITTOIA 2005 (when stock dividend income arises), as income of the trustees;
- (bb) the amount of tax at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate on any sum treated under section 416(3) of ITTOIA 2005 (income charged on release of loan to participator in close company) as income of the trustees;
- (bc) the amount of tax at a rate equal to the difference between the dividend ordinary rate and the dividend trust rate on any sum treated under section 686A as income of the trustees;
- (c) *the amount of tax at the basic rate on any amount taken for the purposes of sections* 426*to* 428*as applied by section* 686(4)*to be the amount to be excluded from the income of the trustees in accordance with section* 427(4) ;
- (d) an amount of tax in respect of income found on a claim made by the trustees to have been available to them for distribution at the end of the year 1972-73, which shall be taken to be two-thirds of the net amount of that income;
- (e) the amount of any tax on income arising to the trustees by virtue of section 761(1) and charged at the rate applicable to trusts by virtue of section 764; and
- (f) the amount of any tax on annual profits or gains treated as received by trustees by virtue of section 714(2) or 716(3) of this Act or paragraph 2(2) or (3) of Schedule 22 to the Finance Act 1985 and charged at the rate applicable to trusts by virtue of section 720(5) of this Act or paragraph 8(1) of Schedule 23 to that Act;
- (g) the amount of any tax on income which arose to the trustees by virtue of section 38(2) of the Finance Act 1974 (development gains) and charged at a rate equal to the basic rate and the additional rate in pursuance of section 43(1) of that Act;
- (h) the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 4 of Schedule 4 and is charged to tax at the rate applicable to trusts by virtue of paragraph 17 of that Schedule;
- (i) the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 5 of Schedule 11 to the Finance Act 1989 and is charged to tax at the rate applicable to trusts by virtue of paragraph 11 of that Schedule;
- (j) the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 12 of Schedule 10 to the Finance Act 1990 and is charged to tax at the rate applicable to trusts by virtue of paragraph 19 of that Schedule;
- (k) the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 1 of Schedule 13 to the Finance Act 1996 and is charged to tax at the rate applicable to trusts by virtue of paragraph 6 of that Schedule;
- (l) the amount of any tax on an amount which is treated as income of the trustees by virtue of Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) and is charged to tax at the rate applicable to trusts by virtue of section 457 of that Act;
- (l) the amount of any income tax determined in accordance with section 26 of the Finance Act 2005;
but tax on any income represented by amounts paid or credited as mentioned in section 686(5) shall be taken into account under paragraph (a) above only on production of a certificate from the building society concerned specifying those amounts and stating that an amount representing income tax on that income calculated at the basic rate has been or will be accounted for.
- (3A) Paragraphs (a1) to (bc) of subsection (3) above do not apply in relation to income, distributions or sums chargeable to tax by virtue of section 686D(3) at the basic rate, the lower rate or the dividend ordinary rate.
- (4) In this section “*trustees*” does not include personal representatives within the meaning of section 701(4).
- (5) References in this section to payments include payments in money or money’s worth.
#### Schemes for employees and directors to acquire shares
##### 688
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery from trustees of discretionary trusts of higher rate tax due from beneficiaries
##### 689
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER V — MAINTENANCE FUNDS FOR HISTORIC BUILDINGS
#### Schedule 4 directions
##### 690
In this Chapter “*a Schedule 4 direction*” means a direction under paragraph 1 of Schedule 4 to the Inheritance Tax Act 1984 (maintenance funds for historic buildings); and any reference in this Chapter to paragraph 1 or Schedule 4 is a reference to that paragraph or that Schedule, as the case may be.
#### Certain income not to be income of settlor etc
##### 691
- (1) This section applies to any settlement in relation to which a Schedule 4 direction has effect.
- (2) The trustees of the settlement may elect that this subsection shall have effect in relation to any year of assessment, and if they do so—
- (a) any income arising in that year from the property comprised in the settlement which, apart from this subsection, would be treated by virtue of this Part as income of the settlor shall not be so treated; and
- (b) no sum applied in that year out of the property for the purposes mentioned in paragraph 3(1)(a)(i) of Schedule 4 (maintenance etc. of qualifying property) shall be treated for any purposes of the Income Tax Acts as the income of any person—
- (i) by virtue of any interest of that person in, or his occupation of, the qualifying property in question; or
- (ii) by virtue of section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement).
- (3) Where income arising from the property comprised in the settlement in a year of assessment for which no election is made under subsection (2) above is treated by virtue of this Part as income of the settlor, paragraph (b) of that subsection shall have effect in relation to any sums in excess of that income which are applied in that year as mentioned in that paragraph.
- (4) Any election under subsection (2) above shall be by notice to the Board in such form as the Board may require and shall be made on or before the first anniversary of the 31st January next following the year of assessment to which it relates.
- (5) Where—
- (a) for part of a year of assessment a Schedule 4 direction has effect and circumstances obtain by virtue of which income arising from property comprised in the settlement is treated as income of a settlor under this Part; and
- (b) for the remainder of that year either no such direction has effect, or no such circumstances obtain, or both,
subsections (1) to (4) above shall apply as if each of those parts were a separate year of assessment and separate elections may be made accordingly.
#### Reimbursement of settlor
##### 692
- (1) This section applies to income arising from settled property in respect of which a Schedule 4 direction has effect if the income—
- (a) is treated by virtue of this Part as income of the settlor, and
- (b) is applied in reimbursing the settlor for expenditure incurred by him for a purpose within paragraph 3(1)(a)(i) of Schedule 4,
and if that expenditure is (or would apart from the reimbursement be) deductible in computing either the profits of a trade carried on by the settlor or the profits of a UK property business so carried on.
- (2) Income to which this section applies shall not be treated as reducing the expenditure deductible in computing the profits referred to in subsection (1) above, and shall not be regarded as income of the settlor otherwise than by virtue of this Part.
#### Severance of settled property for certain purposes
##### 693
Where settled property in respect of which a Schedule 4 direction has effect constitutes part only of the property comprised in a settlement, it and the other property shall be treated as comprised in separate settlements for the purposes of sections 27 and 380 to 387 and this Part.
#### Trustees chargeable to income tax at 30 per cent. in certain cases
##### 694
- (1) If in the case of a settlement in respect of which a Schedule 4 direction has effect—
- (a) any of the property comprised in the settlement (whether capital or income) is applied otherwise than as mentioned in paragraph 3(1)(a)(i) or (ii) of Schedule 4; or
- (b) any of that property on ceasing to be comprised in the settlement devolves otherwise than on any such body or charity as is mentioned in paragraph 3(1)(a)(ii) of that Schedule; or
- (c) the direction ceases to have effect;
then, unless subsection (6) below applies, income tax shall be charged under this section in respect of the settlement.
- (2) Subject to subsection (3) below, tax chargeable under this section shall be charged *at the rate of* 30*per cent.* on the whole of the income which has arisen in the relevant period from the property comprised in the settlement and has not been applied (or accumulated and then applied) as mentioned in paragraph 3(1)(a)(i) or (ii) of Schedule 4.
- In this subsection “*the relevant period*” means, if tax has become chargeable under this section in respect of the settlement on a previous occasion, the period since the last occasion and, in any other case, the period since the settlement took effect.
- (2A) The rate at which tax is charged under this section shall be equivalent to the higher rate of income tax for the year of assessment during which the charge arises, reduced by the amount of the rate applicable to trusts for that year.
- (3) Tax shall not be chargeable under this section in respect of income which by virtue of section 624 or 629 of ITTOIA 2005 (income where settlor retains an interest in settlement or income paid to relevant children of settlor) is treated as income of the settlor; but where income arising in any year of assessment is exempted by this subsection any sums applied in that year as mentioned in paragraph 3(1)(a)(i) or (ii) of Schedule 4 shall be treated as paid primarily out of that income and only as to the excess, if any, out of income not so exempted.
- (4) Tax charged under this section shall be in addition to any tax chargeable apart from this section and—
- (a) the persons assessable and chargeable with tax under this section shall be the trustees of the settlement; and
- (b) all the provisions of the Income Tax Acts relating to assessments and to the collection and recovery of income tax shall, so far as applicable, apply to the charge, assessment, collection and recovery of tax under this section.
- (5) Tax shall also be chargeable in accordance with subsections (1) to (4) above if—
- (a) any of the property comprised in a settlement to which subsection (1) above applies, on ceasing at any time to be comprised in the settlement, devolves on any such body or charity as is referred to in paragraph (b) of that subsection, and
- (b) at or before that time an interest under the settlement is or has been acquired for a consideration in money or money’s worth by that or another such body or charity;
but for the purposes of this subsection any acquisition from another such body or charity shall be disregarded.
- (6) Tax shall not be chargeable under this section in respect of a settlement on an occasion when the whole of the property comprised in it is transferred tax-free into another settlement; but on the first occasion on which tax becomes chargeable under this section in respect of a settlement (“*the current settlement*”) comprising property which was previously comprised in another settlement or settlements and has become comprised in the current settlement as a result of, or of a series of, tax-free transfers, the relevant period for the purposes of subsection (2) above shall, as respects that property, be treated as having begun—
- (a) on the last occasion on which tax became chargeable under this section in respect of the other settlement or any of the other settlements; or
- (b) if there has been no such occasion, when the other settlement or the first of the other settlements took effect.
- (7) For the purposes of subsection (6) above, property is transferred tax-free from one settlement into another if either—
- (a) it ceases to be comprised in the first-mentioned settlement and becomes comprised in the other settlement in circumstances such that by virtue of paragraph 9(1) of Schedule 4 there is (or, but for paragraph 9(4), there would be) no charge to capital transfer tax or inheritance tax in respect of the property; or
- (b) both immediately before and immediately after the transfer it is property in respect of which a Schedule 4 direction has effect.
## PART XVI — ESTATES OF DECEASED PERSONS IN COURSE OF ADMINISTRATION
#### Limited interests in residue
##### 695
- (1) The following provisions of this section shall have effect in relation to a company which, during the period commencing on the death of a deceased person and ending on the completion of the administration of his estate (“*the administration period*”) or during a part of that period, has a limited interest in the residue of the estate or in a part thereof.
- (2) When any sum has been paid during the administration period in respect of that limited interest, the amount of that sum shall . . . be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which that sum was paid or, in the case of a sum paid in respect of an interest that has ceased, for the last accounting period in which it was subsisting.
- (3) Where, on the completion of the administration of the estate, there is an amount which remains payable in respect of that limited interest, that amount shall be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which the administration period ends or, in the case of a sum which is deemed to be paid in respect of an interest that ceased before the end of the administration period, for the last accounting period in which that interest was subsisting.
- (4) Any amount which is deemed to have been paid to that company as income for any accounting period by virtue of this section shall—
- (a) in the case of a United Kingdom estate, be deemed to be income of such an amount as would after deduction of income tax for the relevant year of assessment be equal to the amount deemed to have been so paid, and to be income which has borne income tax at the applicable rate; and
- (b) in the case of a foreign estate, be deemed to be income of the amount deemed to have been so paid . . . .
- (5) Where—
- (a) a company has been charged to corporation tax for any accounting period by virtue of this section in respect of an amount deemed to have been paid to it as income in respect of an interest in a foreign estate (“*the deemed income*”), and
- (b) any part of the aggregate income of that estate for the relevant year of assessment has borne United Kingdom income tax by deduction or otherwise (“*the aggregate income*”),
the tax so charged on it shall, on proof of the facts on a claim, be reduced by an amount bearing the same proportion thereto as the amount of the deemed income which has borne United Kingdom income tax, less the tax so borne, bears to the amount of the aggregate income, less the tax so borne.
- (6) Where relief has been given under subsection (5) above, such part of the amount in respect of which the company has been charged to corporation tax as corresponds to the proportion mentioned in that subsection shall . . . be deemed to represent income of such an amount as would after deduction of income tax be equal to that part of the amount charged.
- (7) In this section “*the relevant year of assessment*”, in relation to an amount deemed to have been paid to a company as income for an accounting period by virtue of this section, means the year of assessment for which the amount would have been deemed to have been paid as income if references to accounting periods in subsections (2) and (3) were references to years of assessment.
#### Absolute interests in residue
##### 696
- (1) The following provisions of this section shall have effect in relation to a company which, during the administration period or during a part of that period, has an absolute interest in the residue of the estate of a deceased person or in a part thereof.
- (2) There shall be ascertained in accordance with section 697 the amount of the residuary income of the estate for each whole year of assessment, and for each broken part of a year of assessment, during which—
- (a) the administration period was current, and
- (b) that company had that interest;
and the amount so ascertained in respect of any year or part of a year or, in the case of a company having an absolute interest in a part of a residue, a proportionate part of that amount, is in this Part referred to as the “*residuary income*” of that company for that year of assessment ; and references to the residuary income of a company for an accounting period are to be construed in accordance with subsection (8).
- (3) When any sum has been paid during the administration period in respect of that absolute interest, that sum, except so far as it is excluded from the operation of this subsection, shall be deemed for corporation tax purposes to have been paid to that company as income for the accounting period in which it was actually paid.
- (3A) A payment shall be excluded from the operation of subsection (3) above to the extent (if any) that the aggregate of that sum and all the sums which—
- (a) have been paid previously during the administration period in respect of that absolute interest, and
- (b) fall under this section to be treated as paid to that company as income (whether or not the company was a company liable to corporation tax at the time of payment),
exceeds the aggregated income entitlement of that company for the accounting period in which the sum is paid.
- (3B) For the purposes of this section the aggregated income entitlement of that company for any accounting period is the amount which would be the aggregate of the amounts received for that accounting period and all previous accounting periods in respect of the interest if that company had a right in each accounting period to receive, and had received—
- (a) in the case of a United Kingdom estate, its residuary income for that accounting period less income tax at the applicable rate for that accounting period; and
- (b) in the case of a foreign estate, its residuary income for that accounting period.
- (4) In the case of a United Kingdom estate, any amount which is deemed to have been paid to that company as income for any accounting period by virtue of subsection (3) above shall be deemed to be income of such an amount as would, after deduction of income tax for that accounting period, be equal to the amount deemed to have been so paid, and to be income that has borne income tax at the applicable rate.
- (5) Where, on the completion of the administration of the estate, the aggregate of all the sums which, apart from this subsection—
- (a) have been paid during the administration period in respect of that absolute interest, and
- (b) fall under this section to be treated as paid to that company as income,
is exceeded by the aggregated income entitlement of that company for the accounting period in which the administration of the estate is completed, then an amount equal to the amount of the excess shall be treated for the purposes of subsections (3) to (4) above as having been actually paid, immediately before the end of the administration period, in respect of that interest.
- (6) In the case of a foreign estate, any amount which is deemed to have been paid to that company as income for any accounting period by virtue of this section shall be deemed to be income of that amount . . . .
- (7) Where—
- (a) a company has been charged to corporation tax for any accounting period by virtue of this section in respect of an amount deemed to have been paid to it as income in respect of an interest in a foreign estate (“*the deemed income*”), and
- (b) any part of the aggregate income of that estate for the relevant year of assessment has borne United Kingdom income tax by deduction or otherwise (“*the aggregate income*”),
the tax so charged on it shall, on proof of the facts on a claim, be reduced by an amount bearing the same proportion thereto as the amount of the deemed income which has borne United Kingdom income tax bears to the amount of the aggregate income.
- (8) . . . The residuary income of a company shall be computed in the first instance by reference to years of assessment, and the residuary income for any such year shall be apportioned between the accounting periods (if more than one) comprising that year.
- (9) In subsection (7) “*the relevant year of assessment*”, in relation to an amount deemed to have been paid to a company as income for an accounting period by virtue of this section, means the year of assessment for which the amount would have been deemed to have been paid as income if references in subsections (3) to (6) to accounting periods were references to years of assessment.
#### Supplementary provisions as to absolute interests in residue
##### 697
- (1) The amount of the residuary income of an estate for any year of assessment shall be ascertained by deducting from the aggregate income of the estate for that year—
- (a) the amount of any annual interest, annuity or other annual payment for that year which is a charge on residue and the amount of any payment made in that year in respect of any such expenses incurred by the personal representatives as such in the management of the assets of the estate as, in the absence of any express provision in a will, would be properly chargeable to income, but excluding any such interest, annuity or payment allowed or allowable in computing the aggregate income of the estate; and
- (b) the amount of any of the aggregate income of the estate for that year to which a person has on or after assent become entitled by virtue of a specific disposition either for a vested interest during the administration period or for a vested or contingent interest on the completion of the administration.
- (1A) For the purpose of ascertaining under subsection (1) above the residuary income of an estate for any year, where the amount of the deductions falling to be made from the aggregate income of the estate for that year (including any falling to be made by virtue of this subsection) exceeds the amount of that income, the excess shall be carried forward and treated for that purpose as an amount falling to be deducted from the aggregate income of the estate for the following year.
- (2) In the event of its appearing, on the completion of the administration of an estate in the residue of which, or in a part of the residue of which, a company had an absolute interest at the completion of the administration, that the aggregate of the benefits received in respect of that interest does not amount to as much as the aggregate for all years of the residuary income of the company having that interest, section 696 shall have effect as if the amount of the deficiency were to be applied in reducing the amount taken to be its residuary income for the year in which the administration of the estate is completed and, in so far as the deficiency exceeds that income, in reducing the amount taken to be its residuary income for the previous year, and so on.
- (3) In subsection (2) above “*benefits received*” in respect of an absolute interest means the following amounts in respect of all sums paid before, or payable on, the completion of the administration in respect of that interest, that is to say—
- (a) as regards a sum paid before the completion of the administration, in the case of a United Kingdom estate such an amount as would, after deduction of income tax for the year of assessment in which that sum was paid, be equal to that sum, or in the case of a foreign estate the amount of that sum; and
- (b) as regards a sum payable on the completion of the administration, in the case of a United Kingdom estate such an amount as would, after deduction of income tax for the year of assessment in which the administration is completed, be equal to that sum, or in the case of a foreign estate the amount of that sum.
- (4) In the application of subsection (2) above to a residue or a part of a residue in which a person other than the person having an absolute interest at the completion of the administration had an absolute interest at any time during the administration period, the aggregates mentioned in that subsection shall be computed in relation to those interests taken together . . . .
- (5) If the amount resulting from the computation mentioned in subsection (4) is greater than the total amount of the reduction which can be made under subsection (2), the share of the residuary income of the estate of the last previous holder of the interest for the last year in which that person had that interest is to be reduced, and so on.
#### Special provisions as to certain interests in residue
##### 698
- (1) Where the personal representatives of a deceased person have as such a right in relation to the estate of another deceased person such that, if that right were vested in them for their own benefit, they would have an absolute or limited interest in the residue of that estate or in a part of that residue, they shall be deemed to have that interest notwithstanding that that right is not vested in them for their own benefit, and any amount deemed to be paid to them as income by virtue of this Part shall be treated as part of the aggregate income of the estate of the person whose personal representatives they are.
- (1A) Subsection (1B) below applies where—
- (a) successively during the administration period there are different persons with interests in the residue of the estate of a deceased person or in parts of such a residue;
- (b) the later interest or, as the case may be, each of the later interests arises or is created on the cessation otherwise than by death of the interest that precedes it; and
- (c) the earlier or, as the case may be, earliest interest is a limited interest.
- (1B) Where this subsection applies, this Part shall have effect in relation to any payment made in respect of any of the interests referred to in subsection (1A) above—
- (a) as if all those interests were the same interest so that none of them is to be treated as having ceased on being succeeded by any of the others;
- (b) as if (subject to paragraph (c) below) the interest which is deemed to exist by virtue of paragraph (a) above (“the deemed single interest”) were an interest of—
- (i) except in a case to which sub-paragraph (ii) below applies, the person in respect of whose interest or previous interest the payment is made;
- (ii) in a case where the person entitled to receive the payment is any other person who has or has had an interest which is deemed to be comprised in the deemed single interest, that other person;
and
- (c) in so far as any of the later interests is an absolute interest as if, for the purposes of section 696(3A) to (5)—
- (i) the earlier interest or interests had never existed and the absolute interest had always existed;
- (ii) the sums (if any) which were deemed in relation to the earlier interest or interests to have been paid as income for any accounting period to any of the persons entitled thereto were sums previously paid during the administration period in respect of the absolute interest; and
- (iii) those sums were sums falling to be treated as sums paid as income to the person entitled to the absolute interest.
- (2) Where successively during the administration period there are different persons with absolute interests in the residue of the estate of a deceased person or in parts of such a residue, the aggregate payments and aggregated income entitlement referred to in subsections (3A) and (3B) of section 696 shall be computed for the purposes of that section in relation to an absolute interest subsisting at any time (“the subsequent interest”)—
- (a) as if the subsequent interest and any previous absolute interest corresponding to the subsequent interest, or relating to any part of the residue to which the subsequent interest relates, were the same interest; and
- (b) as if the residuary income for any accounting period of the person entitled to the previous interest were residuary income of the person entitled to the subsequent interest and any amount deemed to be paid as income to the person entitled to the previous interest were an amount deemed to have been paid to the person entitled to the subsequent interest.
- (3) Where, upon the exercise of a discretion, any of the income of the residue of the estate of a deceased person for any period (being the administration period or a part of the administration period) would, if the residue had been ascertained at the commencement of that period, be properly payable to any person, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person—
- (a) the amount of any sum paid pursuant to an exercise of the discretion in favour of that person shall be deemed for corporation tax purposes to have been paid to that person as income for the accounting period in which it was paid; and
- (b) section 695(4) to (6) shall have effect in relation to an amount which is deemed to have been paid as income by virtue of paragraph (a) above.
- (4) Subsection (5) applies in any case where—
- (a) successively during the administration period there are different persons with absolute interests in the residue of the estate of a deceased person, or in parts of such a residue, and
- (b) some, but not all are companies liable to corporation tax in respect of income within this Part.
- (5) References in this section—
- (a) to sums deemed to be paid as income for an accounting period to a person who is not such a company,
- (b) to the residuary income for any accounting period of such a person, or
- (c) to amounts deemed to be paid to such a person as income,
are references to sums that would be so deemed, to the income that would be such residuary income or, as the case may be, to the amounts that would be so deemed if the assumptions in subsection (6) were made.
- (6) The assumptions are—
- (a) that each of the persons who is not a company liable to corporation tax in respect of income within this Part is such a company, and
- (b) that in the case of each person who is not a company, the person's accounting periods correspond with years of assessment.
#### Relief from higher rate tax for inheritance tax on accrued income
##### 699
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustments and information
##### 700
- (1) Where on the completion of the administration of an estate any amount is deemed by virtue of this Part to have been paid to any company as income for any accounting period and—
- (a) that amount is greater than the amount that has previously been deemed to have been paid to it as income for that accounting period by virtue of this Part; or
- (b) no amount has previously been so deemed to have been paid to it as income for that accounting period;
an assessment may be made upon it for that accounting period and corporation tax charged accordingly or, on a claim being made for the purpose, any relief or additional relief to which it may be entitled shall be allowed accordingly.
- (2) Where on the completion of the administration of an estate any amount is deemed by virtue of this Part to have been paid to any company as income for any accounting period, and that amount is less than the amount that has previously been so deemed to have been paid to it, then—
- (a) if an assessment has already been made upon it for that accounting period, such adjustments shall be made in that assessment as may be necessary for the purpose of giving effect to the provisions of this Part which take effect on the completion of the administration, and any corporation tax overpaid shall be repaid; and
- (b) if—
- (i) any relief has been allowed to it by reference to the amount which has been previously deemed by virtue of this Part to have been paid to it as income for that accounting period, and
- (ii) the amount of that relief exceeds the amount of relief which could have been given by reference to the amount which, on the completion of the administration, is deemed to have been paid to it as income for that accounting period,
the relief so given in excess may, if not otherwise made good, be charged under Case VI of Schedule D and recovered from that company accordingly.
- (3) Notwithstanding anything in the Tax Acts, the time within which an assessment may be made for the purposes of this Part, or an assessment may be adjusted for those purposes, or a claim for relief may be made by virtue of this Part, shall not expire before the end of the period of three years beginning with the 31st January next following the accounting period in which the administration of the estate in question was completed.
- (4) An inspector may by notice require any person being or having been a personal representative of a deceased person, or having or having had an absolute or limited interest in the residue of the estate of a deceased person or in a part of such residue, to furnish him within such time as he may direct (not being less than 28 days) with such particulars as he thinks necessary for the purposes of this Part or Chapter 6 of Part 5 of ITTOIA 2005.
- (5) It shall be the duty of a personal representative of a deceased person, if a request to do so is made in writing by a person who has, or has had, an absolute or limited interest in the residue of the estate of the deceased or by a person to whom any of the income of the residue of that estate has been paid in the exercise of any discretion, to furnish the person making the request with a statement in writing setting out—
- (a) in respect of every amount which has been, or is treated as having been, actually paid to that person in respect of that interest or in the exercise of that discretion, the amount (if any) deemed under this Part to have been paid to him as income for an accounting period; . . .
- (aa) the amount treated as estate income under Chapter 6 of Part 5 of ITTOIA 2005 in respect of that interest or the exercise of that discretion for which he is liable to income tax for a year of assessment, and
- (b) the amount of any tax at the applicable rate which any amount falling within paragraph (a) or (aa) above is deemed to have borne;
and, where an amount deemed to have been paid as income to any person for any accounting period under this Part or treated as estate income under that Chapter is deemed for any of the purposes of this Part or that Chapter to have borne tax on different parts of it at different applicable rates, the matters to be set out in pursuance of paragraphs (a) to (b) above shall be set out separately as respects each part of that amount.
- (6) The duty imposed by subsection (5) above shall be enforceable at the suit or instance of the person making the request.
#### Interpretation
##### 701
- (1) The following provisions of this section shall have effect for the purpose of the interpretation of sections 695 to 700.
- (2) A person shall be deemed to have an absolute interest in the residue of the estate of a deceased person, or in a part of such residue, if and so long as the capital of the residue or of that part would, if the residue had been ascertained, be properly payable to him, or to another in his right, for his benefit, or is properly so payable, whether directly by the personal representatives or indirectly through a trustee or other person.
- (3) A person shall be deemed to have a limited interest in the residue of the estate of a deceased person, or in a part of such residue, during any period, being a period during which he has not an absolute interest in the residue or in that part, where the income of the residue or of that part for that period would, if the residue had been ascertained at the commencement of that period, be properly payable to him, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person.
- (3A) “*Applicable rate*”, in relation to any amount which a person is deemed by virtue of this Part to receive or to have a right to receive, means the basic rate , the lower rate or the dividend ordinary rate according as the income of the residue of the estate out of which that amount is or would be paid bears tax at the basic rate , the lower rate or the dividend ordinary rate; and in determining for the purposes of this Part whether or how much of any payment is or would be deemed to be made out of income that bears tax at one rate rather than another—
- (a) such apportionments of the amounts bearing tax at different rates shall be made between different persons with interests in the residue of the estate as are just and reasonable in relation to their different interests; and
- (b) subject to paragraph (a) above, it shall be assumed that—
- (i) payments are to be made out of income bearing tax at the basic rate before they are made out of income bearing tax at the lower rate or the dividend ordinary rate; and
- (ii) that payments are to be made out of income bearing tax at the lower rate before they are made out of income bearing tax at the dividend ordinary rate.
- (4) “*Personal representatives*” means, in relation to the estate of a deceased person, his personal representatives as defined in relation to England and Wales by section 55 of the Administration of Estates Act 1925, and persons having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under the law of England and Wales of personal representatives as so defined; and references to “*personal representatives as such*” shall be construed as references to personal representatives in their capacity as having such functions.
- (5) “*Specific disposition*” means a specific devise or bequest made by a testator, and includes the disposition of personal chattels made by section 46 of the Administration of Estates Act 1925 and any disposition having, whether by virtue of any enactment or otherwise, under the law of another country an effect similar to that of a specific devise or bequest under the law of England and Wales.
- (6) Subject to subsection (7) below, “*charges on residue*” means, in relation to the estate of a deceased person, the following liabilities, properly payable thereout and interest payable in respect of those liabilities, that is to say—
- (a) funeral, testamentary and administration expenses and debts, and
- (b) general legacies, demonstrative legacies, annuities and any sum payable out of residue to which a person is entitled under the law of intestacy of any part of the United Kingdom or any other country, and
- (c) any other liabilities of his personal representatives as such.
- (7) Where, as between persons interested under a specific disposition or in a general or demonstrative legacy or in an annuity and persons interested in the residue of the estate, any such liabilities as are mentioned in subsection (6) above fall exclusively or primarily upon the property that is the subject of the specific disposition or upon the legacy or annuity, only such part (if any) of those liabilities as falls ultimately upon the residue shall be treated as charges on residue.
- (8) References to the aggregate income of the estate of a deceased person for any year of assessment shall be construed as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—
- (a) any such income which is chargeable to United Kingdom income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year; . . .
- (b) any such income which would have been so chargeable if it had arisen in the United Kingdom to a person resident and ordinarily resident there, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to United Kingdom income tax;
- (c) any amount of income treated as arising to the personal representatives under section 410(4) of ITTOIA 2005 (stock dividends) that would be charged to income tax under Chapter 5 of Part 4 of that Act if income arising to personal representatives were so charged (see section 413 of that Act);
- (d) in a case where section 419(2) of that Act applies (release of loans to participator in close company: debts due from personal representatives), the amount that would be charged to income tax under Chapter 6 of Part 4 apart from that section; and
- (e) any amount that would have been treated as income of the personal representatives as such under section 466 of that Act if the condition in section 466(2) had been met (gains from contracts for life insurance);
but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased.
- (9) “*United Kingdom estate*” means, as regards any year of assessment or accounting period, an estate the income of which comprises only income which either—
- (a) has borne United Kingdom income tax by deduction, or
- (b) in respect of which the personal representatives are directly assessable to United Kingdom income tax,
not being an estate any part of the income of which is income in respect of which the personal representatives are entitled to claim exemption from United Kingdom income tax by reference to the fact that they are not resident, or not ordinarily resident, in the United Kingdom.
- (10) “*Foreign estate*” means, as regards any year of assessment or accounting period, an estate which is not a United Kingdom estate.
- (10A) Amounts to which section 699A(1)(a) and (b) applies shall be disregarded in determining whether an estate is a United Kingdom estate or a foreign estate, except that any estate the aggregate income of which comprises only such amounts shall be a United Kingdom estate.
- (11) In a case in which different parts of the estate of a deceased person are the subjects respectively of different residuary dispositions, this Part shall have effect in relation to each of those parts with the substitution—
- (a) for references to the estate of references to that part of the estate; and
- (b) for references to the personal representatives of the deceased as such of references to his personal representatives in their capacity as having the functions referred to in subsection (4) above in relation to that part of the estate.
- (12) In this Part—
- (a) references to sums paid include references to assets that are transferred or that are appropriated by a personal representative to himself, and to debts that are set off or released;
- (b) references to sums payable include references to assets as to which an obligation to transfer or a right of a personal representative to appropriate to himself is subsisting on the completion of the administration and to debts as to which an obligation to release or set off, or a right of a personal representative so to do in his own favour, is then subsisting; and
- (c) references to amount shall be construed, in relation to such assets as are referred to in paragraph (a) or (b) above, as references to their value at the date on which they were transferred or appropriated, or at the completion of the administration, as the case may require, and, in relation to such debts as are so referred to, as references to the amount thereof.
- (13) In this Part references to the administration period shall be construed in accordance with section 695(1).
- (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application to Scotland
##### 702
For the purpose of the application of this Part to Scotland—
- (a) any reference to the completion of the administration of an estate shall be construed as a reference to the date at which, after discharge of, or provision for, liabilities falling to be met out of the deceased’s estate (including, without prejudice to the generality of the foregoing, debts, legacies immediately payable, prior rights of surviving spouse or civil partner on intestacy and legal rights of surviving spouse or civil partner or children), the free balance held in trust for behoof of the residuary legatees has been ascertained;
- (b) for paragraph (b) of section 697(1) the following paragraph shall be substituted—
> (b) the amount of any of the aggregate income of the estate for that year to which a person has become entitled by virtue of a specific disposition
;
- (c) “*real estate*” means heritable estate, and
- (d) “*charge on residue*” shall include, in addition to the liabilities specified in section 701(6), any sums required to meet claims in respect of prior rights by surviving spouse or civil partner or in respect of legal rights by surviving spouse or civil partner or children.
## PART XVII — TAX AVOIDANCE
### CHAPTER I — CANCELLATION OF TAX ADVANTAGES FROM CERTAIN TRANSACTIONS IN SECURITIES
#### Cancellation of tax advantage
##### 703
- (1) Where—
- (a) in any such circumstances as are mentioned in section 704, and
- (b) in consequence of a transaction in securities or of the combined effect of two or more such transactions,
a person is in a position to obtain, or has obtained, a tax advantage, then unless he shows that the transaction or transactions were carried out either for bona fide commercial reasons or in the ordinary course of making or managing investments, and that none of them had as their main object, or one of their main objects, to enable tax advantages to be obtained, this section shall apply to him in respect of that transaction or those transactions.
- (2) For the purposes of this Chapter a tax advantage obtained or obtainable by a person shall be deemed to be obtained or obtainable by him in consequence of a transaction in securities or of the combined effect of two or more such transactions, if it is obtained or obtainable in consequence of the combined effect of the transaction or transactions and the liquidation of a company.
- (3) Where this section applies to a person in respect of any transaction or transactions, the tax advantage obtained or obtainable by him in consequence thereof shall be counteracted by such of the following adjustments, that is to say an assessment, the nullifying of a right to repayment or the requiring of the return of a repayment already made (the amount to be returned being chargeable in the case of corporation tax under Case VI of Schedule D and recoverable accordingly), or the computation or recomputation of profits or gains, or liability to tax, on such basis as the Board may specify by notice served on him as being requisite for counteracting the tax advantage so obtained or obtainable.
- (3A) The amount of income tax which may be specified in an assessment which is made under subsection (3) above to counteract a tax advantage—
- (a) obtained by a person in circumstances falling within paragraph D or paragraph E of section 704, and
- (b) consisting of the avoidance of a charge to income tax,
shall not exceed the amount of income tax for which that person would be liable in respect of the receipt, on the date on which the consideration mentioned in paragraph D or paragraph E of section 704 is received, of a qualifying distribution of an amount equal to the amount or value of that consideration.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) *In the case of a man and his wife living with him (whether or not she is separately assessed to tax), this Chapter shall, subject to subsection* (8)*below, be treated as applying to him in respect of any transaction or transactions as it would apply if any property, rights or liabilities of the wife were his property, rights or liabilities in relation to which she had acted only as nominee for him, and shall be treated as applying to the wife in respect of any transaction or transactions as it would apply if any property, rights or liabilities of the man were her property, rights or liabilities in relation to which he had acted only as nominee for her*.
- (8) *No adjustment made under subsection* (3)*above by reference to any transaction or transactions to counteract any tax advantage shall by virtue of subsection* (7)*above be so made that a person bears more tax than if the transaction or transactions had not had as a consequence that any relief or increased relief from, or repayment or increased repayment of, income tax, or any deduction in computing profits or gains, was obtained or obtainable, or that the way in which receipts accrued was such that the recipient did not pay or bear tax on them*.
- (9) The Board shall not give a notice under subsection (3) above until they have notified the person in question that they have reason to believe that this section may apply to him in respect of a transaction or transactions specified in the notification; and if within 30 days of the issue of the notification that person, being of opinion that this section does not so apply to him, makes a statutory declaration to that effect stating the facts and circumstances upon which his opinion is based, and sends it to the Board, then subject to subsection (10) below, this section shall not apply to him in respect of the transaction or transactions.
- (10) If, when a statutory declaration has been sent to the Board under subsection (9) above, they see reason to take further action in the matter—
- (a) the Board shall send to the tribunal a certificate to that effect, together with the statutory declaration, and may also send therewith a counter-statement with reference to the matter;
- (b) the tribunal shall take into consideration the declaration and the certificate, and the counter-statement, if any, and shall determine whether there is or is not a prima facie case for proceeding in the matter, and if they determine that there is no such case this section shall not apply to the person in question in respect of the transaction or transactions;
but any such determination shall not affect the operation of this section in respect of transactions which include that transaction or some or all of those transactions and also include another transaction or other transactions.
- (11) Any notice or notification under subsection (3) or subsection (9) above, or under section 708, concerning the application of this section to a person who has died may be given or issued to his personal representatives, and the provisions of this Chapter relating to the making of a statutory declaration, to rights of appeal and to the giving of information shall be construed accordingly.
- (12) This section applies whether the tax advantage in question relates to a chargeable period ending before or after the commencement of this Act, but nothing in this section shall authorise the making of an assessment later than six years after the chargeable period to which the tax advantage relates; and no other provision contained in the Tax Acts shall be construed as limiting the powers conferred by this section.
#### The prescribed circumstances
##### 704
The circumstances mentioned in section 703(1) are—
- (A) That in connection with the distribution of profits of a company, or in connection with the sale or purchase of securities being a sale or purchase followed by the purchase or sale of the same or other securities, the person in question receives an abnormal amount by way of dividend, and the amount so received is taken into account for any of the following purposes—
- (a) any exemption from tax, or
- (b) the setting-off of losses against profits or income, or
- (c) the giving of group relief, or
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) the computation of profits or gains out of which are made payments falling within section 348 or 349(1), or
- (g) the deduction from or set-off against income of interest under section 353.
#### Appeals against Board’s notices under section 703
##### 705
- (1) Any person to whom notice has been given under section 703(3) may within 30 days by notice to the Board appeal to the Special Commissioners on the grounds that section 703 does not apply to him in respect of the transaction or transactions in question, or that the adjustments directed to be made are inappropriate.
- (2) If he or the Board are dissatisfied with the determination of the Special Commissioners he or they may, on giving notice to the clerk to the Special Commissioners within 30 days after the determination, require the appeal to be re-heard by the tribunal, and the Special Commissioners shall transmit to the tribunal any document in their possession which was delivered to them for the purposes of the appeal.
- (3) Where notice is given under subsection (2) above, the tribunal shall re-hear and determine the appeal and shall have and exercise the same powers and authorities in relation to the appeal as the Special Commissioners might have and exercise, and the determination of the tribunal thereon shall be final and conclusive.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) On an appeal under subsections (1) to (3) above the Special Commissioners or the tribunal shall have power to cancel or vary a notice under subsection (3) of section 703 or to vary or quash an assessment made in accordance with such a notice, but the bringing of an appeal or the statement of a case shall not affect the validity of a notice given or of any other thing done in pursuance of that subsection pending the determination of the proceedings.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The tribunal
##### 706
- (1) For the purposes of this Chapter the tribunal shall consist of—
- (a) a chairman, appointed by the Lord Chancellor, and
- (b) two or more persons appointed by the Lord Chancellor as having special knowledge of and experience in financial or commercial matters.
- (2) A person appointed as chairman or other member of the tribunal shall vacate his office on the day on which he attains the age of 70; but this subsection is subject to section 26(4) to (6) of the Judicial Pensions and Retirement Act 1993 (power to authorise continuance in office up to the age of 75).
#### Procedure for clearance in advance
##### 707
- (1) The following provisions shall have effect where in pursuance of this section a person furnishes to the Board particulars of a transaction or transactions effected or to be effected by him, that is to say—
- (a) if the Board are of opinion that the particulars, or any further information furnished in pursuance of this paragraph, are not sufficient for the purposes of this section, they shall within 30 days of the receipt thereof notify to that person what further information they require for those purposes, and unless that further information is furnished to the Board within 30 days from the notification, or such further time as the Board may allow, they shall not be required to proceed further under this section;
- (b) subject to paragraph (a) above, the Board shall within 30 days of the receipt of the particulars, or, where that paragraph has effect, of all further information required, notify that person whether or not they are satisfied that the transaction or transactions as described in the particulars were or will be such that no notice under section 703(3) ought to be given in respect of it or them;
and, subject to the following provisions of this section, if the Board notify him that they are so satisfied, section 703 shall not apply to him in respect of that transaction or those transactions.
- (2) If the particulars, and any further information given under this section with respect to any transaction or transactions, are not such as to make full and accurate disclosure of all facts and considerations relating thereto which are material to be known to the Board, any notification given by the Board under this section shall be void.
- (3) In no event shall the giving of a notification under this section with respect to any transaction or transactions prevent section 703 applying to a person in respect of transactions which include that transaction or all or some of those transactions and also include another transaction or other transactions.
#### Power to obtain information
##### 708
Where it appears to the Board that by reason of any transaction or transactions a person may be a person to whom section 703 applies, the Board may by notice served on him require him, within such time not less than 28 days as may be specified in the notice, to furnish information in his possession with respect to the transaction or any of the transactions, being information as to matters, specified in the notice, which are relevant to the question whether a notice under section 703(3) should be given in respect of him.
#### Meaning of “tax advantage” and other expressions
##### 709
- (1) In this Chapter “*tax advantage*” means a relief or increased relief from, or repayment or increased repayment of, tax, or the avoidance or reduction of a charge to tax or an assessment to tax or the avoidance of a possible assessment thereto, whether the avoidance or reduction is effected by receipts accruing in such a way that the recipient does not pay or bear tax on them, or by a deduction in computing profits or gains.
- (2) In this Chapter—
- “*company*” includes any body corporate,
- “*securities*”—includes shares and stock, andin relation to a company not limited by shares (whether or not it has a share capital) includes also a reference to the interest of a member of the company as such, whatever the form of that interest;
- “*trading stock*” has the same meaning as in section 100(1);
- “*transaction in securities*” includes transactions, of whatever description, relating to securities, and in particular—the purchase, sale or exchange of securities;the issuing or securing the issue of, or applying or subscribing for, new securities;the altering, or securing the alteration of, the rights attached to securities;and references to dividends include references to other qualifying distributions and to interest.
- (2A) In this Chapter references to a relief . . . include . . . references to a tax credit . . . .
- (3) In section 704—
- (a) references to profits include references to income, reserves or other assets;
- (b) references to distribution include references to transfer or realisation (including application in discharge of liabilities); and
- (c) references to the receipt of consideration include references to the receipt of any money or money’s worth.
- (4) For the purposes of section 704 an amount received by way of dividend shall be treated as abnormal if the Board, the Special Commissioners or the tribunal, as the case may be, are satisfied—
- (a) in the case of a dividend at a fixed rate, that it substantially exceeds the amount which the recipient would have received if the dividend had accrued from day to day and he had been entitled only to so much of the dividend as accrued while he held the securities, so however that an amount shall not be treated as abnormal by virtue only of this paragraph if during the six months beginning with the purchase of the securities the recipient does not sell or otherwise dispose of, or acquire an option to sell, any of those securities or any securities similar to those securities; or
- (b) in any case, that it substantially exceeds a normal return on the consideration provided by the recipient for the relevant securities, that is to say, the securities in respect of which the dividend was received and, if those securities are derived from securities previously acquired by the recipient, the securities which were previously acquired.
- (5) For the purposes of subsection (4)(a) above securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred, and for those purposes rights guaranteed by the Treasury shall be treated as rights against the Treasury.
- (6) For the purposes of subsection (4)(b) above—
- (a) if the consideration provided by the recipient for any of the relevant securities was in excess of their market value at the time he acquired them, or if no consideration was provided by him for any of the relevant securities, the recipient shall be taken to have provided for those securities consideration equal to their market value at the time he acquired them; and
- (b) in determining whether an amount received by way of dividend exceeds a normal return, regard shall be had to the length of time previous to the receipt of that amount that the recipient first acquired any of the relevant securities and to any dividends and other distributions made in respect of them during that time.
### CHAPTER II — TRANSFERS OF SECURITIES
### Transfers with or without accrued interest: introductory
#### Meaning of “securities”, “transfer” etc. for purposes of sections 711 to 728
##### 710
- (1) This section has effect for the interpretation of sections 711 to 728.
- (1A) Sections 711 to 728 shall not apply for the purposes of corporation tax except as respects transfers of securities taking place before 1st April 1996.
- (2) “*Securities*” does not , except as provided by subsection (2A) below, include shares in a company but, subject to subsection (3) below, includes any loan stock or similar security—
- (a) whether of the government of the United Kingdom, any other government, any public or local authority in the United Kingdom or elsewhere, or any company or other body; and
- (b) whether or not secured, whether or not carrying a right to interest of a fixed amount or at a fixed rate per cent. of the nominal value of the securities, and whether or not in bearer form.
- (2A) “*Securities*” includes shares in a building society which are qualifying shares for the purposes of section 117(4) of the 1992 Act (qualifying corporate bonds).
- (3) “*Securities*” does not include—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) national savings certificates (including Ulster Savings Certificates , as defined in section 693(7) of ITTOIA 2005);
- (c) war savings certificates;
- (ca) uncertificated eligible debt security units within the meaning of section 552(2) of that Act;
- (d) certificates of deposit (within the meaning of section 552(2) of that Act);
- (da) any security which is a right falling within section 552(1)(c) of that Act at the time of the transfer concerned;
- (e) any security which fulfils the following conditions, namely, it is redeemable, the amount payable on its redemption exceeds its issue price, and no return other than the amount of that excess is payable on it;
- (f) any security that is a deeply discounted security for the purposes of Chapter 8 of Part 4 of ITTOIA 2005 (see section 430 of that Act).
- (3A) Paragraph (f) of subsection (3) does not apply to a security on the transfer of which Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) would apply subject to the rules in sections 454 to 456 of that Act (see section 453(2) and (3) of that Act).
- (4) Securities are to be taken to be of the same kind if they are treated as being of the same kind by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange.
- (5) “*Transfer*”, in relation to securities, means transfer by way of sale, exchange, gift or otherwise , but—
- (a) does not include the vesting of securities in a person’s personal representatives on his death; . . .
- (b) except as otherwise provided by subsections (1) and (3) of section 722A, does not include any transaction forming part of any such exchange as is mentioned in either of those subsections;and
- (c) does not include any transfer of a security to which Chapter 8 of Part 4 of ITTOIA 2005 applies subject to the rules in sections 454 to 456 of that Act.
- (6) Where an agreement for the transfer of securities is made, they are transferred, and the person to whom they are agreed to be transferred becomes entitled to them, when the agreement is made and not on a later transfer made pursuant to the agreement; and “entitled”, “transfer” and cognate expressions shall be construed accordingly.
- (7) A person holds securities—
- (a) at a particular time if he is entitled to them at the time;
- (b) on a day if he is entitled to them throughout the day or he becomes and does not cease to be entitled to them on the day.
- (8) A person acquires securities when he becomes entitled to them.
- (9) Where—
- (a) one individual holds securities at a particular time, and
- (b) any interest on them would, if it became payable at that time, be treated for the purposes of the Tax Acts as part of another individual’s income,
then, for the purposes of section 715(1)(b) and section 715(2)(b) so far as relating to section 715(1)(b), each of them shall be treated as holding at that time the securities which the other holds as well as those which he actually holds.
- (10) Where in Scotland two or more persons carry on a trade or business in partnership, any partnership dealings shall be treated as dealings by the partners and not by the firm as such and the partners as being entitled to securities held by the firm.
- (11) The nominal value of securities is—
- (a) where the interest on them is expressed to be payable by reference to a given value, that value; and
- (b) in any other case, the price of the securities when they were issued.
- (12) Where apart from this subsection the nominal value of securities would be a value (“the foreign value”) expressed in a currency other than sterling, then, for the purposes of section 715, their nominal value on a particular day is the sterling equivalent on that day of the foreign value.
- (13) Where there is a conversion of securities then,—
- (a) the person who was entitled to them immediately before the conversion shall be treated as transferring them on the day of the conversion (if there is no actual transfer); and
- (b) the interest period in which the conversion is made shall be treated as ending on the day on which it would have ended had the conversion not been made.
- In this subsection “*conversion*” means a conversion within the meaning of section 132 of the 1992 Act.
- (13A) Where a security is deemed to have been transferred by virtue of section 722A(1), the interest period in which the exchange in question takes place shall be treated as ending on the day on which it would have ended had the exchange not taken place.
- (13B) Where a security is deemed to have been transferred by virtue of section 722A(3), the interest period in which the exchange in question takes place shall be treated as having begun on such day as shall for that purpose be specified in the security.
- (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “interest”, “transfers with or without accrued interest” etc
##### 711
- (1) This section has effect for the interpretation of sections 710 and 712 to 728.
- (2) An interest payment day, in relation to securities, is a day on which interest on them is payable; and, in a case where a particular payment of interest may be made on one of a number of days, the interest is for the purposes of this subsection payable on the first of those days.
- (3) Subject to subsection (4) below, the following are interest periods in relation to securities—
- (a) the period beginning with the day following that on which they are issued and ending with the first interest payment day to fall;
- (b) the period beginning with the day following one interest payment day and ending with the next to fall.
- (4) A period which would (apart from this subsection) be an interest period exceeding 12 months (“a long period”) is not an interest period, but the following shall apply to it—
- (a) the period of 12 months beginning with the day on which it begins is an interest period;
- (b) each successive period (if any) of 12 months falling within it is an interest period;
- (c) any period of it which remains after applying paragraphs (a) and (b) above is an interest period.
- (5) Securities are transferred with accrued interest if they are transferred with the right to receive interest payable on—
- (a) the settlement day, if that is an interest payment day; or
- (b) the next (or first) interest payment day to fall after the settlement day, in any other case;
and they are transferred without accrued interest if they are transferred without that right.
- (6) Where section 710(13), 715(3), 720(4), 721(1) ,722(1) or (2) or 724(1A) applies, the transfer shall be treated as made with accrued interest if the person treated as making the transfer was entitled to receive in respect of the securities interest payable on—
- (a) the settlement day, if that is an interest payment day; or
- (b) the next (or first) interest payment day to fall after that day, in any other case;
and they shall be treated as transferred without accrued interest if he was not so entitled.
- (6A) In any case where section 722A(1) or (3) applies, the deemed transfer shall be treated as made—
- (a) without accrued interest in any such case where the exchange in question is made at any time after the balance has been struck for a dividend on the security but before the day on which that dividend is payable;
- (b) with accrued interest in any other such case.
- (7) The interest applicable to securities for an interest period is, subject to subsection (8) below, the interest payable on them on the interest payment day with which the period ends.
- (8) In the case of a period which is an interest period by virtue only of subsection (4) above . . .—
- (a) the interest applicable to securities for the period is the interest payable on them on the interest payment day with which the long . . . period concerned ends; and
- (b) section 713(6) shall have effect as if the references to the period were to the long . . . period concerned.
- (9) “*Interest*” includes dividends and any other return (however described) except a return consisting of an amount by which the amount payable on a security’s redemption exceeds its issue price.
#### Meaning of “settlement day” for purposes of sections 711 to 728
##### 712
- (1) This section has effect to determine, for the purposes of sections 711 and 713 to 728, the settlement day in relation to a transfer of securities.
- (2) Where the securities are transferred in accordance with the rules of a recognised market, the settlement day is the day on which the transferee agrees to settle or, if he may settle on one of a number of days, the day on which he settles; and, where they are transferred otherwise, subsections (3) to (5) below apply.
- (3) Where the consideration for the transfer is money alone, and the transferee agrees to pay the whole of it on or before the next (or first) interest payment day to fall after an agreement for transfer is made, the settlement day is the day on which he agrees to make the payment or, if payment may be made on one of a number of days, or on a number of different days, the latest of them to fall.
- (4) Where there is no consideration for the transfer, or the transfer is a transfer by virtue of sections 710(13), 715(3), 717(8), 720(4), 721 , 722 , 722A and 724(1A), the settlement day is the day on which the securities are transferred.
- (5) In any other case, the settlement day is such day as an inspector decides; and the jurisdiction of the General Commissioners or the Special Commissioners on any appeal shall include jurisdiction to review such a decision of the inspector.
### Transfers with or without accrued interest: charge to tax and reliefs
#### Deemed sums and reliefs
##### 713
- (1) Subject to sections 714 to 728, this section applies whether the securities in question are transferred before, on or after 6th April 1988; and in this section references to a period are references to the interest period in which the settlement day falls.
- (2) If securities are transferred with accrued interest—
- (a) the transferor shall be treated as entitled to a sum on them in the period of an amount equal to the accrued amount; and
- (b) the transferee shall be treated as entitled to relief on them in the period of the same amount.
- (3) If securities are transferred without accrued interest—
- (a) the transferor shall be treated as entitled to relief on them in the period of an amount equal to the rebate amount; and
- (b) the transferee shall be treated as entitled to a sum on them in the period of the same amount.
- (4) In subsection (2) above “*the accrued amount*” means—
- (a) if the securities are transferred under an arrangement by virtue of which the transferee accounts to the transferor separately for the consideration for the securities and for gross interest accruing to the settlement day, an amount equal to the amount (if any) of gross interest so accounted for; and
- (b) in any other case, an amount equal to the accrued proportion of the interest applicable to the securities for the period.
- (5) In subsection (3) above “*the rebate amount*” means—
- (a) if the securities are transferred under an arrangement by virtue of which the transferor accounts to the transferee for gross interest accruing from the settlement day to the next interest payment day, an amount equal to the amount (if any) of gross interest so accounted for; and
- (b) in any other case, an amount equal to the rebate proportion of the interest applicable to the securities for the period.
- (6) In this section—
- (a) the accrued proportion is—
$AB$
- (b) the rebate proportion is—
$$B-AB$where—A is the number of days in the period up to (and including)the settlement day, andB is the number of days in the period.$
- (7) For the purposes of subsection (2) above, in a case where the interest on the securities is payable in a currency other than sterling the accrued amount is to be determined as follows—
- (a) if subsection (4)(a) above applies and the sterling equivalent of the amount of gross interest there mentioned is shown in an agreement for transfer, the accrued amount is the sterling equivalent so shown;
- (b) if subsection (4)(a) applies but paragraph (a) above does not, or if subsection (4)(b) above applies, the accrued amount is the sterling equivalent on the settlement day of the amount found by virtue of subsection (4)(a) or (b) (as the case may be).
- (8) For the purposes of subsection (3) above, in a case where the interest on the securities is payable in a currency other than sterling the rebate amount is to be determined as follows—
- (a) if subsection (5)(a) above applies and the sterling equivalent of the amount of gross interest there mentioned is shown in an agreement for transfer, the rebate amount is the sterling equivalent so shown;
- (b) if subsection (5)(a) applies but paragraph (a) above does not, or if subsection (5)(b) above applies, the rebate amount is the sterling equivalent on the settlement day of the amount found by virtue of subsection (5)(a) or (b) (as the case may be).
- (9) For the purposes of subsections (7) and (8) above the sterling equivalent of an amount on a particular day is the sterling equivalent calculated by reference to the London closing rate of exchange for that day.
#### Treatment of deemed sums and reliefs
##### 714
- (1) Subsection (2) below applies if a person is treated as entitled under section 713 to a sum on securities of a particular kind in an interest period, and either—
- (a) he is not treated as entitled under that section to relief on securities of that kind in the period; or
- (b) the sum (or total sum) to which he is treated as entitled exceeds the amount (or total amount) of relief to which he is treated as entitled under that section on securities of that kind in the period.
- (2) The person shall be treated as receiving on the day the period ends income of an amount which is (depending on whether subsection (1)(a) or (1)(b) above applies) equal to the sum (or total sum) to which he is treated as entitled or equal to the amount of the excess; and the income shall be chargeable to tax . . . for the chargeable period in which it is treated as received.
- (2A) Income tax chargeable by virtue of subsection (2) shall be charged on the full amount of the income treated as received.
- (2B) The person liable for any tax so charged shall be the person treated as receiving the income.
- (3) Subsection (4) below applies if a person is treated as entitled under section 713 to relief on securities of a particular kind in an interest period, and either—
- (a) he is not treated as entitled under that section to a sum on securities of that kind in the period; or
- (b) the amount (or total amount) of relief to which he is treated as entitled exceeds the sum (or total sum) to which he is treated as entitled under that section on securities of that kind in the period.
- (4) The person shall be entitled to an allowance whose amount is (depending on whether subsection (3)(a) or (3)(b) above applies) equal to the amount (or total amount) of relief to which he is treated as entitled or equal to the amount of the excess; and subsection (5) below shall apply.
- (5) Any amount to which the person is entitled by way of interest which—
- (a) falls due on the securities at the end of the interest period, and
- (b) is taken into account in computing tax charged for the chargeable period in which the interest period ends,
shall for the purposes of the Tax Acts be treated as reduced by the amount of the allowance; but if the period is one which does not end with an interest payment day, he shall be treated as becoming, in the next interest period, entitled under section 713 to relief on the securities of an amount equal to the amount of the allowance.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from sections 713 and 714
##### 715
- (1) Section 713(2)(a) or (3)(a) (as the case may be) does not apply—
- (a) if the transferor carries on a trade and the transfer falls to be taken into account for the purposes of the Tax Acts in computing the profits or losses of that trade;
- (b) if the transferor is an individual and on no day in the year of assessment in which the interest period ends or the previous year of assessment the nominal value of securities held by him exceeded £5,000;
- (c) if the securities transferred form part of the estate of a deceased person, the transferor is that person’s personal representative and on no day in the year of assessment in which the interest period ends or the previous year of assessment the nominal value of securities held by him as the deceased’s personal representative exceeded £5,000;
- (d) where—
- (i) if the transferor became entitled to any interest on the securities transferred and applied it for charitable purposes only, exemption could be granted under section 505(1)(c) in respect of the interest;
- (ii) if the transferor became entitled to any interest on the securities transferred and applied it for the purposes mentioned in paragraph (d) of section 505(1), exemption could be granted under that paragraph in respect of the interest;
- (e) if the securities transferred are held on a disabled person’s trusts, the transferor is trustee of the settlement and on no day in the year of assessment in which the interest period ends or the previous year of assessment the nominal value of securities held by him as trustee of the settlement exceeded £5,000;
- (f) if the transferor does not fulfil the residence requirement for the chargeable period in which the transfer is made and is not a non-resident United Kingdom trader in that period;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (j) if the transferor is an individual who, if he became entitled in the year of assessment in which the transfer occurs to any interest on the securities transferred, would be liable, in respect of the interest, to tax charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis); or
- (k) where, if the transferor became entitled to any interest on the securities transferred, exemption could be allowed under section 186 of the Finance Act 2004 in respect of the interest.
- (2) Section 713(2)(b) or (3)(b) (as the case may be) does not apply if—
- (a) the transferee carries on a trade, and if at the time he acquired the securities he were to transfer them that transfer would fall to be taken into account for the purposes of the Tax Acts in computing the profits or losses of that trade; or
- (b) any provision of subsection (1) above except paragraph (a) would apply if “transferor” read “transferee”.
- (3) If securities held on charitable trusts cease to be subject to charitable trusts the trustees shall be treated for the purposes of sections 710 to 728 as transferring the securities (in their capacity as charitable trustees) to themselves (in another capacity) at the time when the securities cease to be so subject.
- (4) For the purposes of this section a person fulfils the residence requirement for a chargeable period if he is resident in the United Kingdom during any part of the period or is ordinarily resident in the United Kingdom during the period.
- (5) For the purposes of this section a person is a non-resident United Kingdom trader in a chargeable period if during any part of it he is (though neither resident during any part of it nor ordinarily resident during it) carrying on a trade in the United Kingdom through a branch or agency and the securities transferred—
- (a) were situated in the United Kingdom and used or held for the purposes of the branch or agency at or before the time of the transfer (where the person concerned is a transferor); or
- (b) were so situated at the time of the transfer and were acquired for use by or for the purposes of the branch or agency (where the person concerned is a transferee);
but the provisions of this subsection relating to the situation of the securities in the United Kingdom do not apply where the person concerned is a company.
- (6) In any case where securities are transferred without accrued interest to a person (“the seller”) and a contract is made for the sale by the seller of securities of that kind (“the seller’s contract”) and the seller’s contract or any contract under which the securities are transferred to the seller is one in the case of which . . . paragraph 3 or 4 of Schedule 23A has effect and in relation to which the seller is the dividend manufacturer, then—
- (a) where the nominal value of the securities subject to the seller’s contract is greater than or equal to that of the securities transferred, the seller shall not be treated as entitled to any sum to which, but for this subsection, he would be treated as entitled under section 713(3)(b) on the securities transferred;
- (b) where the nominal value of the securities subject to the seller’s contract is less than that of the securities transferred, any sum (or the aggregate of any sums) to which he is treated as entitled under section 713(3)(b) on the securities transferred shall be reduced by the amount of any part of the sum (or aggregate) attributable to securities (“relevant securities”) of a nominal value equal to that of the securities subject to the seller’s contract;
and for the purposes of sections 710 to 728 the securities which the seller contracts to sell shall not be treated as transferred by him (though treated as transferred to the person to whom he contracts to sell).
- (7) In determining for the purposes of subsection (6)(b) above which of the securities transferred are relevant securities, those transferred to the seller earlier must be chosen before those transferred to him later.
- (8) For the purposes of this section—
- “*disabled person’s trusts*” means trusts falling within paragraph 1(1) of Schedule 1 to the 1992 Act;
- “*branch or agency*” has the meaning given by section 10(6) of the 1992 Act;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and the place where securities are situated shall be determined in accordance with sections 275(1) and (2)(b) and 275Cof the 1992 Act.
#### Transfer of unrealised interest
##### 716
- (1) This section applies where securities are transferred (whether before or after 6th April 1988) with the right to receive interest (“unrealised interest”) payable on them on an interest payment day falling before the settlement day.
- (2) Where the settlement day falls within an interest period, section 714 shall (subject to subsection (5) below) apply as if the transferor were entitled under section 713 to a sum on them in the period of an amount equal to the unrealised interest (in addition to any other sum to which he may be treated as so entitled).
- (3) Where the settlement day falls after the end of the last interest period in relation to the securities, the transferor shall be treated as receiving on the settlement day income of an amount equal to the unrealised interest; and the income shall be chargeable to tax . . . for the chargeable period in which it is treated as received.
- (3A) Income tax chargeable by virtue of subsection (3) shall be charged on the full amount of the income treated as received.
- (3B) The person liable for any tax so charged shall be the person treated as receiving the income.
- (4) Where the transferee receives the unrealised interest, and but for this subsection it would be taken into account in computing tax charged for the chargeable period in which the interest is received, it shall for the purposes of the Tax Acts be left out of account.
- (5) Section 715 shall apply for the purposes of this section as if—
- (a) in subsection (1)—
- (i) the reference to section 713(2)(a) or (3)(a) were a reference to subsection (2) or (3) above; and
- (ii) references to the year of assessment in which the interest period ends were references to the year in which the settlement day falls; and
- (b) in subsection (2) the reference to section 713(2)(b) or (3)(b) were a reference to subsection (4) above.
- (6) Where the unrealised interest is payable in a currency other than sterling its amount is for the purposes of this section the sterling equivalent on the settlement day of the amount it would be apart from this subsection; and for this purpose the sterling equivalent is to be calculated by reference to the London closing rate of exchange for the day.
#### Variable interest rate
##### 717
- (1) This section applies to securities other than securities falling within subsection (2) . . . below.
- (2) Securities fall within this subsection if their terms of issue provide that throughout the period from issue to redemption (whenever redemption might occur) they are to carry interest at a rate which falls into one, and one only, of the following categories—
- (a) a fixed rate which is the same throughout the period;
- (b) a rate which bears to a standard published base rate the same fixed relationship throughout the period;
- (c) a rate which bears to a published index of prices the same fixed relationship throughout the period.
- (3) In subsection (2)(c) above “*published index of prices*” means the retail prices index or any similar general index of prices which is published by, or by an agent of, the government of any territory outside the United Kingdom.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Subsections (7) to (11) below apply if securities to which this section applies are transferred at any time between the time they are issued and the time they are redeemed.
- (7) If the securities are transferred without accrued interest they shall be treated for the purposes of sections 710 to 728 as transferred with accrued interest.
- (8) The person entitled to the securities immediately before they are redeemed shall be treated for the purposes of those sections as transferring them with accrued interest on the day they are redeemed.
- (9) Where there is a transfer as mentioned in subsection (6) above or by virtue of subsection (8) above, section 713 shall have effect with the omission of subsection (2)(b) and with the substitution for subsections (3) to (6) of the following subsection—
> (3) In subsection (2) above “*the accrued amount*” means such amount (if any) as is just and reasonable.
.
- (10) Subsection (11) below applies where there is a transfer by virtue of subsection (8) above and the settlement day in relation to the transfer falls after the end of a period which would (by virtue of section 711(3) and (4) and apart from this subsection) be the only or last interest period in relation to the securities.
- (11) For the purposes of sections 710 to 728 the period beginning with the day following that interest period and ending with the settlement day shall be treated as an interest period in relation to the securities; and section 711(4) shall not apply to it.
#### Interest in default
##### 718
- (1) This section applies where, because of any failure to fulfil the obligation to pay interest on securities, the value (on a day mentioned in section 711(7) or (8)(a), as the case may be) of the right to receive the interest payable on them on that day is less than the interest so payable.
- (2) Section 711(7) or (8)(a), as the case may be, shall be construed as if the reference to that interest were to an amount equal to that value.
#### Unrealised interest in default
##### 719
- (1) Where securities are transferred as mentioned in section 716(1) and, because of any failure to fulfil the obligation to pay interest on them, the value (on the day of the transfer) of the right to receive the unrealised interest is less than the amount of the unrealised interest, section 716 shall have effect as modified by subsections (2) to (4) below.
- (2) In subsections (2) and (3) for “the unrealised interest” there shall be substituted “ amount A ”.
- (3) For subsection (4) there shall be substituted—
> (4) Where the transferee receives an amount by way of the unrealised interest (amount B) and that amount falls to be taken into account in computing tax charged for the chargeable period in which it is received, it shall for the purposes of the Tax Acts be treated as reduced by an amount (amount C) equal to—
> (a) nil, if the amounts have been previously received by the transferee by way of the unrealised interest and their aggregate is equal to or greater than the value (on the day of the transfer to the transferee) of the right to receive the unrealised interest;
> (b) amount B, if that value is equal to or greater than amount B (aggregated with other amounts previously so received, if any);
> (c) that value, if no amount has been previously so received and that value is less than amount B; or
> (d) so much of that value as exceeds the aggregate of amounts previously so received, in any other case.
.
- (4) The following shall be substituted for subsection (6)—
> (6) In this section “*amount A*” means, in a case where the transferor acquired the securities on or after 28th February 1986 with the right to received unrealised interest—
> (a) an amount equal to amount D less amount E; or
> (b) if amount D is equal to or less than amount E, nil.
> (7) In this section “*amount A*” means, in a case not falling within subsection (6) above, an amount equal to amount D.
> (8) In this section “*amount D*” means an amount equal to the value (on the day of the transfer by the transferor) of the right to receive the unrealised interest.
> (9) In this section “*amount E*” means, in a case where the transferor (as transferee) has received in respect of the securities an amount or amounts falling within subsection (4) above—
> (a) an amount equal to amount F less the total received; or
> (b) if amount F is equal to or less than the total received, nil.
> (10) In this section “*amount E*” means, in any other case, an amount equal to amount F.
> (11) In this section “*amount F*” means an amount equal to the value (on the day of the transfer to the transferor) of the right to receive the unrealised interest.
> (12) In determining for the purposes of this section which securities of a particular kind a person has transferred, he is to be taken to have transferred securities of that kind which he acquired later before securities of that kind which he acquired earlier.
> (13) Where the unrealised interest is payable in a currency other than sterling—
> (a) any amount received by way of the interest is for the purposes of this section the sterling equivalent on the day it is received of the amount it would be apart from this subsection; and
> (b) the value (on the day of a transfer) of the right to receive the interest is for the purposes of this section the sterling equivalent (on that day) of the value it would be apart from this subsection;
> and for this purpose the sterling equivalent is to be calculated by reference to the London closing rate of exchange for the day concerned.
### Transfers with or without accrued interest: supplemental
#### Nominees, trustees etc
##### 720
- (1) Where securities are transferred by or to a person as nominee for another person, or as trustee for another person absolutely entitled as against the trustee, or for any person who would be so entitled but for being an infant or other person under disability, or for two or more persons who are or would be jointly so entitled, sections 713, 715 and 716 shall apply as if references to the transferor or the transferee (as the case may be) were to the person or persons for whom the nominee or trustee disposes or acquires.
- (2) It is hereby declared that for the purposes of subsection (1) above—
- (a) securities are transferred by a person as trustee for another person absolutely entitled as against the trustee if that other person has immediately before the transfer the exclusive right to direct how the securities shall be dealt with, subject only to satisfying any outstanding charge, lien or other right of the trustee to resort to the securities for payment of duty, taxes, costs or other outgoings; and
- (b) securities are t ransferred to a person as trustee for another person so entitled if that other person has that right immediately after the transfer.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a person who is entitled to securities becomes trustee of them, he shall be treated for the purposes of sections 710 to 728 as transferring them (in a capacity other than trustee) to himself (in his capacity as trustee), or to himself and any other trustees, at the time he becomes trustee.
- (5) Income which by virtue of 714(2) or 716(3) is treated as received in a year of assessment by trustees shall be chargeable to income tax at the rate applicable to trusts for that year.
- (6) In any case where—
- (a) the trustees of a settlement are treated as receiving income under section 714(2), or
- (b) the trustees of a settlement who are resident or domiciled outside the United Kingdom throughout any chargeable period in which an interest period (or part of it) falls would, at the end of the interest period, have been treated under section 714(2) as receiving income or income of a greater amount if he had been resident or domiciled in the United Kingdom during a part of each such chargeable period,
Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) and Chapter 1C of Part 15 of this Act (liability of trustees) shall have effect as if the amount which the trustees are or would be treated as receiving were income arising under the settlement.
- (7) In any case where income of the trustees of a settlement who is resident or domiciled outside the United Kingdom throughout any chargeable period in which an interest period (or part of it) falls consists of interest which—
- (a) falls due at the end of the interest period; and
- (b) would have been treated under section 714(5) as reduced by an allowance or an allowance of a greater amount if he had been resident or domiciled in the United Kingdom during a part of each such chargeable period;
then, for the purposes of Chapter 5 of Part 5 of ITTOIA 2005 and Chapter 1C of Part 15 of this Act, the interest shall be treated as being reduced by the amount of the allowance or by the additional amount (as the case may be).
- (8) In subsections (6) and (7) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) references to a trustee of a settlement are, where there is no trustee of the settlement, to any person entitled to securities comprised in the settlement.
#### Death
##### 721
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where—
- (a) an individual who is entitled to securities dies, and
- (b) in the interest period in which the individual died, the securities are transferred by his personal representatives to a legatee,
section 713 shall not apply to the transfer.
- (3) In subsection (2) above “*legatee*” includes any person taking (whether beneficially or as trustee) under a testamentary disposition or on an intestacy or partial intestacy, including any person taking by virtue of an appropriation by the personal representatives in or towards satisfaction of a legacy or other interest or share in the deceased’s property.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Trading stock
##### 722
- (1) Where securities acquired by a person otherwise than as trading stock of a trade carried on by him are appropriated by him for the purposes of the trade as trading stock (whether on the commencement of the trade or otherwise), he shall be treated for the purposes of sections 710 to 728 as transferring them otherwise than in the course of the trade and re-acquiring them in the course of the trade on the day the appropriation is made.
- (2) Where securities forming part of the trading stock of a person’s trade are appropriated by him for any other purpose, or are retained by him on his ceasing to carry on the trade, he shall be treated for the purposes of sections 710 to 728 as transferring them in the course of the trade and re-acquiring them otherwise than in the course of the trade on the day the appropriation is made or (as the case may be) he ceases to carry on the trade.
#### Foreign securities: delayed remittances
##### 723
- (1) This section applies where in an interest period a person is treated as entitled to a sum or sums under section 713(2)(a) in respect of a transfer or transfers of securities of a particular kind which are situated outside the United Kingdom.
- (2) Subject to subsection (3) below, the amount of any income which the person is treated under section 714 as receiving on the day the period ends in respect of securities of that kind shall be reduced—
- (a) if the amount of the sum or aggregate of the sums exceeds the amount of that income, to nil; or
- (b) in any other case, by the amount of the sum or aggregate.
- (3) No reduction shall be made unless the person makes a claim and shows that the conditions in subsection (5) below are, so far as applicable, satisfied in the chargeable period in which the profits or gains are treated as received.
- (4) The claimant (or his personal representatives) shall be charged to tax on the full amount of the reduction for the chargeable period in which the conditions in subsection (5) below cease to be satisfied.
- (5) The conditions are—
- (a) that the claimant was unable to remit the proceeds of the transfer or transfers to the United Kingdom;
- (b) that the inability was due to the laws of the territory in which the securities are situated, or to the executive action of its government, or to the impossibility of obtaining foreign currency in that territory; and
- (c) that the inability was not due to any want of reasonable endeavours on the part of the claimant.
- (6) No claim under this section shall be made in respect of a transfer more than six years after the end of the interest period in which the transfer occurred.
- (7) The personal representatives of a deceased person may make any claim which he might have made under this section if he had not died.
- (8) For the purposes of this section the place where securities are situated shall be determined in accordance with sections 275(1) and (2)(b) and 275Cof the 1992 Act.
#### Insurance companies
##### 724
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lloyd’s underwriters
##### 725
#### Building societies
##### 726
#### Stock lending
##### 727
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where securities are transferred in circumstances such that by virtue of section 263B(2) of the 1992 Act (capital gains tax exemption) any disposal and acquisition are disregarded for the purposes of capital gains tax, sections 713(2) and (3) and 716 shall not apply.
#### Information
##### 728
- (1) In order to obtain for the purposes of sections 710 to 727A particulars relating to securities, an inspector may by notice require a return under subsection (2) or (3) below.
- (2) A member of the Stock Exchange, other than a market maker, may be required to make a return giving, in relation to any transactions effected by him in the course of his business in the period specified in the notice, such particulars as may be so specified.
- (3) A person (other than a member of the Stock Exchange), who acts as an agent or broker in the United Kingdom in transactions in securities, may be required to make a return giving, in relation to any such transactions effected by him in the period specified in the notice, such particulars as may be so specified.
- (4) No person shall be required under subsection (2) or (3) above to include in a return particulars of any transaction effected more than three years before the service of the notice requiring him to make the return.
- (5) In order to obtain for the purposes of sections 710 to 727A particulars relating to securities, the Board or an inspector may by notice require any person in whose name any securities are registered to state whether or not he is the beneficial owner of those securities and, if he is not the beneficial owner of them or any of them, to furnish the name and address of the person or persons on whose behalf the securities are registered in his name.
- (6) In this section “*market maker*”, in relation to securities, means a person who—
- (a) holds himself out at all normal times in compliance with the rules of the Stock Exchange as willing to buy and sell securities of the kind concerned at a price specified by him; and
- (b) is recognised as doing so by the Council of the Stock Exchange.
- (7) The Board may by regulations provide that—
- (a) subsections (2), (3) and (6)(a) above shall have effect as if references to the Stock Exchange were to any recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000) or to any of those exchanges specified in the regulations; and
- (b) subsection (6)(b) shall have effect as if the reference to the Council of the Stock Exchange were to the investment exchange concerned.
- (8) Regulations under subsection (7) above shall apply in relation to transactions effected on or after such day as may be specified in the regulations.
### Other transfers of securities
#### Sale and repurchase of securities
##### 729
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of income arising from securities
##### 730
- (1) Where in any chargeable period the owner of any shares (“the owner”) sells or transfers the right to receive any distribution payable (whether before or after the sale or transfer) in respect of the shares without selling or transferring the shares, then, for all the purposes of the Tax Acts, that distribution, whether it would or would not be chargeable to tax apart from the provisions of this section—
- (a) shall be treated as the income of the owner or, in a case where the owner is not the beneficial owner of the shares and some other person (“a beneficiary”) is beneficially entitled to the income arising from the shares, the income of the beneficiary, and
- (b) shall be treated as the income of the owner or beneficiary for that chargeable period, . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) This section does not have effect in relation to a sale or transfer if the proceeds of the sale or transfer are chargeable to tax.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where—
- (a) the shares are of such a character that the distribution payable in respect thereof may be paid without deduction of income tax, and
- (b) the owner or beneficiary does not show that the proceeds of any sale or other realisation of the right to receive the distribution which is deemed to be his income by virtue of this section have been charged to income tax under Chapter 13 of Part 4 of ITTOIA 2005 (sales of foreign dividend coupons),
then that distribution shall be charged to income tax.
- (4A) The income tax chargeable by virtue of subsection (4) above shall, subject to subsection (5) below, be charged on the full amount of the distribution in the year of assessment.
- (4B) The person liable for any tax chargeable by virtue of subsection (4) above is the owner or beneficiary, but he shall be entitled to credit for any tax which the distribution is shown to have borne.
- (5) But, in any case where, if the distribution had been relevant foreign income, the computation of tax would have been made by reference to the amount received in the United Kingdom, the income tax chargeable by virtue of subsection (4) above shall be computed on the full amount of the sums which have been or will be received in the United Kingdom in the year of assessment or any subsequent year in which the owner remains the owner of the shares.
- (6) In relation to corporation tax, subsections (4) and (5) above shall not apply but, subject to the provisions of the Tax Acts about distributions, the owner or beneficiary shall, in respect of any distribution which is deemed to be his income by virtue of this section, be chargeable to corporation tax under Case VI of Schedule D unless he shows that the proceeds of any sale or other realisation of the right to receive that distribution have been charged to tax by virtue of section 18(3B).
- (7) In this section—
- “*distribution*”, in relation to shares in a company,—has the same meaning as it has in the Corporation Tax Acts (see section 209), butalso includes any amount that would be a distribution if the company paying it were resident in the United Kingdom;
- “*shares*” means shares in a company.
- (8) The Board may by notice require any person to furnish them within such time as they may direct (not being less than 28 days), in respect of all shares of which he was the owner at any time during the period specified in the notice, with such particulars as they consider necessary for the purposes of this section . . . .
### Purchase and sale of securities
#### Application and interpretation of sections 732 to 734
##### 731
- (1) In this section “*the relevant provisions*” means sections 732, 733, 734 and this section.
- (2) Subject to subsections (2A) to (10) below, the relevant provisions apply to cases of a purchase by a person (“the first buyer”) of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (“the interest”) is receivable by the first buyer.
- (2A) The relevant provisions do not apply where the first buyer is required under the arrangements for the purchase of the securities to make to the person from whom he purchased the securities, not later than the date on which he subsequently sells the securities, a payment of an amount representative of the interest, or is treated by virtue of section 737A(5) as required to make such a payment.
- (2B) Subject to subsection (2E) below, where there is a repo agreement in relation to any securities—
- (a) neither—
- (i) the purchase of the securities by the interim holder from the original owner, nor
- (ii) the repurchase of the securities by the original owner,
shall be a purchase of those securities for the purposes of subsection (2) above; and
- (b) neither—
- (i) the sale of the securities by the original owner to the interim holder, nor
- (ii) the sale by the interim holder under which the securities are bought back by the original owner,
shall be taken for the purposes of subsection (2) above to be a subsequent sale of securities previously purchased by the seller.
- (2C) Accordingly, where there is a repo agreement, the securities repurchased by the original owner shall be treated for the purposes of subsection (2) above (to the extent that that would not otherwise be the case) as if they were the same as, and were purchased by the original owner at the same time as, the securities sold by him to the interim holder.
- (2D) For the purposes of subsections (2B) and (2C) above there is a repo agreement in relation to any securities if there is an agreement in pursuance of which a person (“*the original owner*”) sells the securities to another (“*the interim holder*”) and the original owner—
- (a) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement,
- (b) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises, or
- (c) under that agreement or any related agreement, is entitled, in pursuance of any obligation arising on a person’s becoming entitled to receive an amount in respect of the redemption of those securities, to receive from the interim holder an amount equal to the amount of the entitlement.
- (2E) Subsections (2B) and (2C) above do not apply if—
- (a) the agreement or agreements under which the arrangements are made for the sale and repurchase of the securities are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) any of the benefits or risks arising from fluctuations, before the securities are repurchased, in the market value of the securities in question accrues to or falls on the interim holder.
- (2F) Section 730B applies for the purposes of subsections (2B) to (2E) above as it applies for the purposes of section 730A.
- (3) The relevant provisions do not apply where—
- (a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or
- (b) that time exceeded one month and the purchase and sale were each effected at the current market price, and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The reference in subsection (3) above to the first buyer taking steps to dispose of the securities shall be construed—
- (a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,
- (b) in any other case, as a reference to his selling them.
- (4A) For the purposes of subsection (3) above, where a purchase or sale is effected as a direct result of the exercise of a qualifying option, it shall be treated as effected at the current market price if the terms under which the first buyer acquired the option, or, as the case may be, became subject to it, were arm’s length terms.
- (4B) For the purposes of subsection (4A) above an option is a “*qualifying option*” if it would be a traded option or financial option as defined in subsection (8) of section 144 of the 1992 Act were the reference in paragraph (b) of that subsection to the time of the abandonment or other disposal a reference to the time of exercise.
- (4C) In subsection (4A) above the reference to arm’s length terms is to terms—
- (a) agreed between persons dealing at arm’s length, or
- (b) not so agreed, but nonetheless such as might reasonably be expected to have been agreed between persons so dealing.
- (5) For the purposes of the relevant provisions, a sale of securities similar to, and of the like nominal amount as, securities previously bought (“the original securities”) shall be equivalent to a sale of the original securities, and subsection (4) above shall apply accordingly; and where the first buyer bought parcels of similar securities at different times a subsequent sale of any of the securities shall, so far as may be, be related to the last to be bought of the parcels, and then to the last but one, and so on.
- (6) A person shall be under no greater liability to tax by virtue of subsection (5) above than he would have been under if instead of selling the similar securities he had sold the original securities.
- (7) Where at the time when a trade is, or is deemed to be, set up and commenced , or when a trade is subject to a relevant change, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section—
- (a) as having been sold at that time in the open market by the person to whom they belonged immediately before that time, and
- (b) as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade.
- (7A) For the purposes of subsection (7) above a trade is subject to a relevant change—
- (a) when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on, or
- (b) when a company starts to be within the charge to income tax under Chapter 2 of Part 2 of ITTOIA 2005 in respect of the trade.
- (8) Subject to subsection (7) above, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.
- (9) For the purposes of the relevant provisions—
- “*interest*” includes a qualifying distribution and any dividend which is not a qualifying distribution . . . ;
- “*person*” includes any body of persons, and references to a person entitled to any exemption from tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;
- “*securities*” includes stocks and shares, except securities which are securities for the purposes of sections 710 to 728.
- (9A) In applying references in the relevant provisions to interest in relation to a qualifying distribution . . . —
- (a) “*gross interest*” means the qualifying distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it, and
- (b) “*net interest*” means the qualifying distribution exclusive of any such tax credit.
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of the relevant provisions, securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred; and for the purposes of this subsection, rights guaranteed by the Treasury shall be treated as rights against the Treasury.
#### Dealers in securities
##### 732
- (1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealing in securities, then, in computing for any of the purposes of the Tax Acts the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with section 735.
- (1A) Subsection (1) above shall not apply if the interest receivable by the first buyer falls to be taken into account either—
- (a) by virtue of section 366(1) of ITTOIA 2005 in computing profits chargeable to income tax under Chapter 2 of Part 2 of that Act, or
- (b) by virtue of section 95(1) of this Act in computing profits chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (1) above shall not apply if the securities are overseas securities bought by the first buyer . . . in the ordinary course of his trade as a dealer in securities and the following conditions are satisfied, namely—
- (a) the interest is brought into account in computing for the purposes of the Tax Acts the profits arising from or loss sustained in the trade, and
- (b) where credit against tax would fall to be allowed in respect of the interest under section 788 or 790, the first buyer elects that credit shall not be so allowed.
In this subsection “overseas securities” means securities issued—
- (a) by a government or public or local authority of a territory outside the United Kingdom; or
- (b) by any other body of persons not resident in the United Kingdom.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Persons entitled to exemptions
##### 733
- (1) If the first buyer is entitled under any enactment to an exemption from tax which, apart from this subsection, would extend to the interest, then the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with section 735.
- (2) If the first buyer is so entitled and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to income tax, and section 349(1) shall apply accordingly.
#### Persons other than dealers in securities
##### 734
- (1) If the first buyer carries on a trade not falling within section 732, then in ascertaining whether any or what repayment of income tax is to be made to him under section 380 or 381 by reference to any loss sustained in the trade and the amount of his income for the year of assessment his income for which includes the interest, there shall be left out of account—
- (a) the appropriate amount in respect of the interest, as determined in accordance with section 735, and
- (b) any tax paid on that amount.
- (2) Where the first buyer is a company which does not carry on a trade falling within section 732—
- (a) the appropriate amount in respect of the interest, as determined in accordance with section 735(2), and
- (b) any tax paid in respect of or deducted from that amount,
shall be disregarded except that, for the purposes of corporation tax on chargeable gains, the appropriate proportion of the net interest receivable by the first buyer as mentioned in section 735(2) shall be treated as if it were a capital distribution within the meaning of section 122(5)(b) of the 1992 Act received in respect of the holding of the securities concerned.
- (3) In applying references in this section to interest in relation to a qualifying distribution, references to any tax paid on or in respect of an amount shall be construed as references to so much of any related tax credit as is attributable to that amount; and for this purpose “*related tax credit*”, in relation to an amount, means the tax credit to which the recipient of the distribution of which that amount is a proportion is entitled.
#### Meaning of “appropriate amount in respect of” interest
##### 735
- (1) For the purposes of section 732 the appropriate amount in respect of the interest is the appropriate proportion of the net interest receivable by the first buyer.
- (2) For the purposes of sections 733 and 734 the appropriate amount in respect of the interest is the gross amount corresponding with the appropriate proportion of the net interest receivable by the first buyer.
- (3) For the purposes of this section the appropriate proportion , in relation to securities listed in the Official List of the Stock Exchange, is the proportion which—
- (a) the period beginning with the date on which the securities were , in accordance with announcements made by The Stock Exchange, first to be dealt in without carrying rights to the interest payment last payable before the interest receivable by the first buyer, and ending with the day before the day on which the first buyer bought the securities, bears to—
- (b) the period beginning with that date and ending with the day before the first date after the purchase by the first buyer on which the securities are , in accordance with such announcements, first to be dealt in without carrying rights to the interest receivable by the first buyer.
- (4) Where the interest receivable by the first buyer was the first interest payment payable in respect of the securities, paragraphs (a) and (b) of subsection (3) above shall have effect with the substitution, for references to the date on which the securities were first to be dealt in as mentioned in paragraph (a), of the beginning of the period for which the interest was payable; except that where the capital amount of the securities was not fully paid at the beginning of that period and one or more instalments of capital were paid during that period—
- (a) the interest shall be treated as divided into parts, calculated by reference to the amount of the interest attributable to the capital paid at or before the beginning of that period and the amount thereof attributable to each such instalment, and
- (b) treating each of those parts as interest payable for that period or, where the part was calculated by reference to any such instalment, as interest payable for the part of that period beginning with the payment of the instalment, there shall be calculated, in accordance with the preceding provisions of this section, the amount constituting the appropriate proportion of each part, and
- (c) the appropriate proportion of the interest for the purposes of this section shall be the proportion thereof constituted by the sum of those amounts.
- (5) In relation to securities not listed in the Official List of The Stock Exchange, subsection (3) above shall have effect as it has effect in relation to securities which are so listed but with the substitution for the periods therein mentioned of such periods as in the opinion of the Commissioners having jurisdiction in the matter, correspond therewith in the case of the securities in question.
### Miscellaneous provisions relating to securities
#### Company dealing in securities: distribution materially reducing value of holding
##### 736
- (1) Subsection (2) below applies where a company has, as a dealing company, a holding in another company resident in the United Kingdom (being a body corporate), and—
- (a) the holding amounts to, or is an ingredient in a holding amounting to, 10 per cent. of all holdings of the same class in that company, and
- (b) a distribution is, or two or more distributions are, made in respect of the holding, and
- (c) the value (at any accounting date or immediately before realisation or appropriation) of any security comprised in the holding is materially reduced below the value of the security at the time when it was acquired, and the whole or any part of this reduction is attributable to any distribution falling within paragraph (b) above;
and in relation to any security comprised in the holding, the company having the holding is in subsection (2) below referred to as “*the dealing company*” and so much of any reduction in the value of the security as is attributable to any distribution falling within paragraph (b) above is in that subsection referred to as “the relevant reduction”.
- (2) Where this subsection applies, an amount equal to the relevant reduction in the value of a security comprised in the holding—
- (a) shall, if and so long as the security is not realised or appropriated as mentioned below, be added to the value of the security for the purposes of any valuation;
- (b) shall be treated, on any realisation of the security in the course of trade, as a trading receipt of the dealing company or, in the event of a partial realisation, shall be so treated to an appropriate extent, and
- (c) shall be treated as a trading receipt of the dealing company if the security is appropriated in such circumstances that a profit on the sale of the security would no longer form part of the dealing company’s trading profits.
- (3) References in this section to a holding in a company refer to a holding of securities by virtue of which the holder may receive distributions made by the company, but so that—
- (a) a company’s holdings of different classes in another company shall be treated as separate holdings, and
- (b) holdings of securities which differ in the entitlements or obligations they confer or impose shall be regarded as holdings of different classes.
- (4) For the purposes of subsection (2) above—
- (a) all a company’s holdings of the same class in another company are to be treated as ingredients constituting a single holding, and
- (b) a company’s holding of a particular class shall be treated as an ingredient in a holding amounting to 10 per cent. of all holdings of that class if the aggregate of that holding and other holdings of that class held by connected persons amounts to 10 per cent. of all holdings of that class;
and section 839 shall have effect in relation to paragraph (b) above as if, in subsection (7) of that section, after the words “or exercise control of” in each place where they occur there were inserted the words “ or to acquire a holding in ”.
- (5) Where this section applies in relation to a distribution which consists of or includes interest to which section 732 applies, any reduction under that section in the price paid for the securities in respect of which the distribution is made shall be adjusted in such manner as seems appropriate to the Board to take account of subsection (2) above.
- (6) For the purposes of this section “*security*” includes a share or other right and a company is a “dealing company” in relation to a holding if a profit on a sale of the holding would be taken into account in computing the company’s trading profits.
#### Manufactured dividends: treatment of tax deducted
##### 737
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
#### Power to amend sections 732, 735 and 737
##### 738
- (1) The Board may by regulations provide for all or any of the following—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) that for section 735(3) and (5) (which refer to the Stock Exchange Daily Official List) there shall be substituted such provisions as the Board think fit to take account of recognised investment exchanges.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section “*recognised investment exchange*”has the meaning given by section 285(1)(a) of the Financial Services and Markets Act 2000.
### CHAPTER III — TRANSFER OF ASSETS ABROAD
#### Prevention of avoidance of income tax
##### 739
- (1) Subject to section 747(4)(b), the following provisions of this section shall have effect for the purpose of preventing the avoiding by individuals ordinarily resident in the United Kingdom of liability to income tax by means of transfers of assets by virtue or in consequence of which, either alone or in conjunction with associated operations, income becomes payable to persons resident or domiciled outside the United Kingdom.
- (1A) Nothing in subsection (1) above shall be taken to imply that the provisions of subsections (2) and (3) below apply only if—
- (a) the individual in question was ordinarily resident in the United Kingdom at the time when the transfer was made; or
- (b) the avoiding of liability to income tax is the purpose, or one of the purposes, for which the transfer was effected.
- (2) Where by virtue or in consequence of any such transfer, either alone or in conjunction with associated operations, such an individual has, within the meaning of this section, power to enjoy, whether forthwith or in the future, any income of a person resident or domiciled outside the United Kingdom which, if it were income of that individual received by him in the United Kingdom, would be chargeable to income tax by deduction or otherwise, that income shall, whether it would or would not have been chargeable to income tax apart from the provisions of this section, be deemed to be income of that individual for all purposes of the Income Tax Acts.
- (3) Where, whether before or after any such transfer, such an individual receives or is entitled to receive any capital sum the payment of which is in any way connected with the transfer or any associated operation, any income which, by virtue or in consequence of the transfer, either alone or in conjunction with associated operations, has become the income of a person resident or domiciled outside the United Kingdom shall, whether it would or would not have been chargeable to income tax apart from the provisions of this section, be deemed to be income of that individual for all purposes of the Income Tax Acts.
- (4) In subsection (3) above “*capital sum*” means, subject to subsection (5) below—
- (a) any sum paid or payable by way of loan or repayment of a loan, and
- (b) any other sum paid or payable otherwise than as income, being a sum which is not paid or payable for full consideration in money or money’s worth.
- (5) For the purposes of subsection (3) above, there shall be treated as a capital sum which an individual receives or is entitled to receive any sum which a third person receives or is entitled to receive at the individual’s direction or by virtue of the assignment by him of his right to receive it.
- (6) Income shall not by virtue of subsection (3) above be deemed to be that of an individual for any year of assessment by reason only of his having received a sum by way of loan if that sum has been wholly repaid before the beginning of that year.
#### Liability of non-transferors
##### 740
- (1) This section has effect where—
- (a) by virtue or in consequence of a transfer of assets, either alone or in conjunction with associated operations, income becomes payable to a person resident or domiciled outside the United Kingdom; and
- (b) an individual ordinarily resident in the United Kingdom who is not liable to tax under section 739 by reference to the transfer receives a benefit provided out of assets which are available for the purpose by virtue or in consequence of the transfer or of any associated operations.
- (2) Subject to the provisions of this section, the amount or value of any such benefit as is mentioned in subsection (1) above, if not otherwise chargeable to income tax in the hands of the recipient, shall—
- (a) to the extent to which it falls within the amount of relevant income of years of assessment up to and including the year of assessment in which the benefit is received, be treated for all the purposes of the Income Tax Acts as the income of the individual for that year and be charged to income tax on that individual for that year;
- (b) to the extent to which it is not by virtue of this subsection treated as his income for that year and falls within the amount of relevant income of the next following year of assessment, be treated for those purposes as his income for the next following year and be charged to income tax on him for that year,
and so on for subsequent years, taking the reference in paragraph (b) to the year mentioned in paragraph (a) as a reference to that and any other year before the subsequent year in question.
- (3) Subject to subsection (7) below and section 744(1), the relevant income of a year of assessment, in relation to an individual, is any income which arises in that year to a person resident or domiciled outside the United Kingdom and which by virtue or in consequence of the transfer or associated operations referred to in subsection (1) above can directly or indirectly be used for providing a benefit for the individual or for enabling a benefit to be provided for him.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) An individual who is domiciled outside the United Kingdom shall not, in respect of any benefit not received in the United Kingdom, be chargeable to tax under this section by reference to relevant income which is such that if he had received it he would not, by reason of his being so domiciled, have been chargeable to income tax in respect of it ; and sections 833 and 834 of ITTOIA 2005 shall apply for the purposes of this subsection as they would apply for the purposes of section 832 (remittance basis) of that Act if the benefit were relevant foreign income.
- (6) Where—
- (a) the whole or part of the benefit received by an individual in a year of assessment is a capital payment to which section 87 or 89(2) of, or paragraph 8 of Schedule 4C to, the 1992 Act applies (chargeable gains: gains attributed to beneficiaries) (because not falling within the amount of relevant income referred to in paragraph (a) of subsection (2) above); and
- (b) chargeable gains are by reason of that payment treated under either of those sections , or that paragraph, as accruing to him in that or a subsequent year,
paragraph (b) of that subsection shall apply in relation to any year of assessment (“a year of charge”) after one in which chargeable gains have been so treated as accruing to him as if a part of the amount or value of the benefit corresponding to the amount of those gains had been treated under that subsection as his income for a year of assessment before the year of charge.
- (7) This section applies irrespective of when the transfer or associated operations referred to in subsection (1) above took place, but applies only to relevant income arising on or after 10th March 1981.
#### Exemption from sections 739 and 740
##### 741
- (1) Sections 739 and 740 shall not apply if the individual shows in writing or otherwise to the satisfaction of the Board either—
- (a) that the purpose of avoiding liability to taxation was not the purpose or one of the purposes for which the transfer or associated operations or any of them were effected; or
- (b) that the transfer and any associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation.
The jurisdiction of the Special Commissioners on any appeal shall include jurisdiction to review any relevant decision taken by the Board in exercise of their functions under this section.
- (2) This section is subject to sections 741B and 741C (application of this section and section 741A etc).
#### Interpretation of sections 739 to 741
##### 742
- (1) For the purposes of this Chapter“*an associated operation*” means, in relation to any transfer, an operation of any kind effected by any person in relation to any of the assets transferred or any assets representing, whether directly or indirectly, any of the assets transferred, or to the income arising from any such assets, or to any assets representing, whether directly or indirectly, the accumulations of income arising from any such assets.
It is immaterial whether the operation is effected before, after, or at the same time as the transfer.
- (1A) The income that becomes payable to, or has become income of, a person resident or domiciled outside the United Kingdom that is referred to in section 739(1) or (3) or section 740(1) includes any income which becomes payable to, or has become income of, the person by virtue or in consequence of—
- (a) the transfer,
- (b) one or more associated operations, or
- (c) the transfer and one or more associated operations.
- (1B) The income which an individual has power to enjoy, as mentioned in section 739(2), includes any income which he has power to enjoy by virtue or in consequence of—
- (a) the transfer,
- (b) one or more associated operations, or
- (c) the transfer and one or more associated operations.
- (2) An individual shall, for the purposes of section 739, be deemed to have power to enjoy income of a person resident or domiciled outside the United Kingdom if—
- (a) the income is in fact so dealt with by any person as to be calculated, at some point of time, and whether in the form of income or not, to enure for the benefit of the individual; or
- (b) the receipt or accrual of the income operates to increase the value to the individual of any assets held by him or for his benefit; or
- (c) the individual receives or is entitled to receive, at any time, any benefit provided or to be provided out of that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the associated operations on that income and on any assets which directly or indirectly represent that income; or
- (d) the individual may, in the event of the exercise or successive exercise of one or more powers, by whomsoever exercisable and whether with or without the consent of any other person, become entitled to the beneficial enjoyment of the income; or
- (e) the individual is able in any manner whatsoever, and whether directly or indirectly, to control the application of the income.
- (3) In determining whether an individual has power to enjoy income within the meaning of subsection (2) above—
- (a) regard shall be had to the substantial result and effect of the transfer and any associated operations, and
- (b) all benefits which may at any time accrue to the individual (whether or not he has rights at law or in equity in or to those benefits) as a result of the transfer and any associated operations shall be taken into account irrespective of the nature or form of the benefits.
- (4) Subsection (5) below applies where a person resident or domiciled outside the United Kingdom throughout any chargeable period in which an interest period (or part of it) falls would, at the end of the interest period, have been treated under section 714(2) as receiving annual profits or gains or annual profits or gains of a greater amount if he had been resident or domiciled in the United Kingdom during a part of each such chargeable period.
- (5) Sections 739 to 741 shall have effect as if the amount which the person would be treated as receiving or the additional amount (as the case may be) were income becoming payable to him; and, accordingly, any reference in those sections to income of (or payable or arising to) such a person shall be read as including a reference to such an amount.
- (6) Where income of a person resident or domiciled outside the United Kingdom throughout any chargeable period in which an interest period (or part of it) falls consists of interest—
- (a) which falls due at the end of the interest period, and
- (b) which would have been treated under section 714(5) as reduced by an allowance or an allowance of a greater amount if he had been resident or domiciled in the United Kingdom during a part of each such chargeable period,
then for the purposes of sections 739 to 741, the interest shall be treated as being reduced by the amount of the allowance or by the additional amount (as the case may be).
- (7) In subsections (4) to (6) above “*interest period*” has the meaning given by section 711.
- (8) For the purposes of sections 739 to 741, any body corporate incorporated outside the United Kingdom . . . shall be treated as if it were resident outside the United Kingdom whether it is so resident or not.
- (9) For the purposes of sections 739 to 741—
- (a) a reference to an individual shall be deemed to include the spouse or civil partner of the individual;
- (b) “*assets*” includes property or rights of any kind and “*transfer*”, in relation to rights, includes the creation of those rights;
- (c) “*benefit*” includes a payment of any kind;
- (d) *references to income of a person resident or domiciled outside the United Kingdom shall, where the amount of the income of a company for any year or period has been apportioned under section* 423,*include references to so much of the income of the company for that year or period as is equal to the amount so apportioned to that person, and that amount shall be treated as increased by such proportion of itself as corresponds to the rate of advance corporation tax applicable to a distribution made at the end of the accounting period to which the apportionment relates*,
- (e) references to assets representing any assets, income or accumulations of income include references to shares in or obligations of any company to which, or obligations of any other person to whom, those assets, that income or those accumulations are or have been transferred.
- (9A) Where the trustees of a settlement are treated, by virtue of section 685E(7), as neither resident nor ordinarily resident in the United Kingdom, then for the purposes of this Chapter they shall be treated as resident and domiciled outside the United Kingdom.
- (10) *Any amount which by virtue of subsection* (9)(d)*above is treated as the income of any person for the purposes of sections* 739*to* 741*shall also be treated for those purposes as payable to that person*.
#### Supplemental provisions
##### 743
- (1) Income tax at the basic rate , the lower rate or the dividend ordinary rate shall not be charged by virtue of section 739 in respect of any income to the extent that it has borne tax at that rate by deduction or otherwise but, subject to that, income to which section 739 applies shall be charged to income tax.
- (1ZA) The charge to income tax under subsection (1) above operates on income falling within subsection (1A) below by treating the income as if it were income to which section 1A applies by virtue of subsection (2)(b) of that section.
- (1A) Income falls within this subsection if it is—
- (a) income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
- (b) income chargeable under Chapter 4 of that Part (dividends from non-UK resident companies);
- (c) income chargeable under Chapter 5 of that Part (stock dividends from UK resident companies);
- (d) income chargeable under Chapter 6 of that Part (release of loan to participator in close company); or
- (e) a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).
- (1B) In subsection (1A) “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.
- (2) In computing the liability to income tax of an individual chargeable by virtue of section 739, the same deductions and reliefs shall be allowed as would have been allowed if the income deemed to be his by virtue of that section had actually been received by him.
- (3) An individual who is domiciled outside the United Kingdom shall not be chargeable to tax in respect of any income deemed to be his by virtue of that section if he would not, by reason of his being so domiciled, have been chargeable to tax in respect of it if it had in fact been his income.
- (4) Where an individual has been charged to income tax on any income deemed to be his by virtue of section 739 and that income is subsequently received by him, it shall be deemed not to form part of his income again for the purposes of the Income Tax Acts.
- (5) In any case where an individual has for the purposes of that section power to enjoy income of a person abroad by reason of his receiving any such benefit as is referred to in section 742(2)(c), then notwithstanding anything in subsection (1) above, the individual shall be chargeable to income tax by virtue of section 739 for the year of assessment in which the benefit is received on the whole of the amount or value of that benefit except in so far as it is shown that the benefit derives directly or indirectly from income on which he has already been charged to tax for that or a previous year of assessment.
#### No duplication of charge
##### 744
- (1) No amount of income shall be taken into account more than once in charging tax under the provisions of sections 739 and 740; and where there is a choice as to the persons in relation to whom any amount of income can be so taken into account—
- (a) it shall be so taken into account in relation to such of them, and if more than one in such proportions respectively, as appears to the Board to be just and reasonable; and
- (b) the jurisdiction of the Special Commissioners on any appeal against an assessment charging tax under those provisions shall include jurisdiction to review any relevant decision taken by the Board under this subsection.
- (2) In subsection (1) above references to an amount of income taken into account in charging tax are—
- (a) in the case of tax which under section 739 is charged on income, to the amount of that income;
- (b) in the case of tax charged under that section by virtue of section 743(5), to an amount of the income out of which the benefit is provided equal to the amount or value of the benefit charged;
- (c) in the case of tax charged under section 740, to the amount of relevant income taken into account under subsection (2) of that section in charging the benefit.
#### Power to obtain information
##### 745
- (1) The Board may by notice require any person to furnish them within such time as they may direct (not being less than 28 days) with such particulars as they think necessary for the purposes of this Chapter.
- (2) The particulars which a person must furnish under this section, if he is required by such a notice so to do, include particulars—
- (a) as to transactions with respect to which he is or was acting on behalf of others;
- (b) as to transactions which in the opinion of the Board it is proper that they should investigate for the purposes of this Chapter notwithstanding that, in the opinion of the person to whom the notice is given, no liability to tax arises under this Chapter; and
- (c) as to whether the person to whom the notice is given has taken or is taking any, and if so what, part in any, and if so what, transactions of a description specified in the notice.
- (3) Notwithstanding anything in subsection (2) above, a solicitor shall not be deemed for the purposes of paragraph (c) of that subsection to have taken part in a transaction by reason only that he has given professional advice to a client in connection with that transaction, and shall not, in relation to anything done by him on behalf of his client, be compellable under this section, except with the consent of his client, to do more than state that he is or was acting on behalf of a client, and give the name and address of the client and also—
- (a) in the case of anything done by the solicitor in connection with the transfer of any asset by or to an individual ordinarily resident in the United Kingdom to or by any such body corporate as is mentioned in subsection (4) below, or in connection with any associated operation in relation to any such transfer, the names and addresses of the transferor and the transferee or of the persons concerned in the associated operations, as the case may be;
- (b) in the case of anything done by the solicitor in connection with the formation or management of any such body corporate as is mentioned in subsection (4) below, the name and address of the body corporate;
- (c) in the case of anything done by the solicitor in connection with the creation, or with the execution of the trusts, of any settlement by virtue or in consequence of which income becomes payable to a person resident or domiciled outside the United Kingdom, the names and addresses of the settlor and of that person.
- (4) The bodies corporate mentioned in subsection (3) above are bodies corporate resident or incorporated outside the United Kingdom . . . which are, or if resident in the United Kingdom would be, close companies, but not companies whose business consists wholly or mainly of the carrying on of a trade or trades.
- (5) Nothing in this section shall impose on any bank the obligation to furnish any particulars of any ordinary banking transactions between the bank and a customer carried out in the ordinary course of banking business, unless the bank has acted or is acting on behalf of the customer in connection with the formation or management of any such body corporate as is mentioned in subsection (4) above or in connection with the creation, or with the execution of the trusts, of any such settlement as is mentioned in subsection (3)(c) above.
- (5A) In this section “*bank*” has the meaning given by section 840A.
- (6) In this section “*settlement*” and “*settlor*” have the meanings given by section 620 of ITTOIA 2005.
#### Persons resident in the Republic of Ireland
##### 746
- (1) In relation to amounts which by virtue of the lease premium rules would, in the case of a person resident in the Republic of Ireland and not resident in the United Kingdom, be included in his income if he were not resident in the Republic of Ireland, sections 739, 742(1) to (3), 743 and 745 shall apply—
- (a) as if his income included those amounts; and
- (b) as if references to an individual included references to any person (and so that in accordance with section 9 those sections then apply for corporation tax as well as for income tax);
but section 741 shall not apply in any such case.
- (2) Corporation tax chargeable by virtue of subsection (1)(b) above shall be charged under Case VI of Schedule D.
- (3) In this section “*the lease premium rules*” means any provision of sections 277 to 285 of ITTOIA 2005 or sections 34 to 36 of this Act.
### CHAPTER IV — CONTROLLED FOREIGN COMPANIES
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
##### 747
- (1) If . . . in any accounting period a company—
- (a) is resident outside the United Kingdom, and
- (b) is controlled by persons resident in the United Kingdom, and
- (c) is subject to a lower level of taxation in the territory in which it is resident,
. . . the provisions of this Chapter shall apply in relation to that accounting period.
- (1A) A company which would not, apart from this subsection, fall to be regarded as controlled by persons resident in the United Kingdom shall be taken for the purposes of this Chapter to be so controlled if—
- (a) there are two persons who, taken together, control the company;
- (b) one of those persons is resident in the United Kingdom and is a person in whose case the 40 per cent test in section 755D(3) is satisfied; and
- (c) the other is a person in whose case the 40 per cent test in section 755D(4) is satisfied.
- (1B) In determining, for the purposes of any provision of this Chapter except subsection (1)(a) above, whether a company is a person resident in the United Kingdom, section 249 of the Finance Act 1994 (under which a company is treated as non-resident if it is so treated for double taxation relief purposes) shall be disregarded.
- (2) A company which falls within paragraphs (a) to (c) of subsection (1) above is in this Chapter referred to as a “*controlled foreign company*”.
- (3) Subject to section 748, where the provisions of this Chapter apply in relation to an accounting period of a controlled foreign company, the chargeable profits of that company for that period and its creditable tax (if any) for that period shall each be apportioned in accordance with section 752 among the persons (whether resident in the United Kingdom or not) who had an interest in that company at any time during that accounting period.
- (4) Where, on such an apportionment of a controlled foreign company’s chargeable profits for an accounting period as is referred to in subsection (3) above, an amount of those profits is apportioned to a company resident in the United Kingdom then, subject to subsection (5) below—
- (a) a sum equal to corporation tax at the appropriate rate on that apportioned amount of profits, less the portion of the controlled foreign company’s creditable tax for that period (if any) which is apportioned to the resident company, shall be chargeable on the resident company as if it were an amount of corporation tax chargeable on that company; and
- (b) if, apart from this paragraph, section 739 would deem any sum forming part of the company’s chargeable profits for that accounting period to be the income of an individual for the purposes of the Income Tax Acts, that section shall not apply to such portion of that sum as corresponds to the portion of those chargeable profits which is apportioned to companies which are resident in the United Kingdom and which, by virtue of paragraph (a) above, have a liability to tax in respect thereof;
and for the purposes of paragraph (a) above “*the appropriate rate*” means the rate of corporation tax applicable to profits of that accounting period of the resident company in which ends the accounting period of the controlled foreign company which is mentioned in subsection (1) above or, if there is more than one such rate, the average rate over the whole of that accounting period of the resident company.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Tax shall not, by virtue of subsection (4) above, be chargeable on a company resident in the United Kingdom unless, on the apportionment in question, the aggregate of—
- (a) the amount of the controlled foreign company’s chargeable profits for the accounting period in question which is apportioned to the resident company, and
- (b) any amounts of those chargeable profits which are apportioned to persons who are connected or associated with the resident company,
is at least 25 per cent. of the total of those chargeable profits.
- (6) In relation to a company resident outside the United Kingdom—
- (a) any reference in this Chapter to its chargeable profits for an accounting period is a reference to the amount which, on the assumptions in Schedule 24, would be the amount of the total profits of the company for that period on which, after allowing for any deductions available against those profits, corporation tax would be chargeable; and
- (b) any reference in this Chapter to profits does not include a reference to chargeable gains but otherwise (except as provided by paragraph (a) above) has the same meaning as it has for the purposes of corporation tax.
#### Limitations on direction-making power
##### 748
- (1) No apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company if—
- (a) in respect of that period the company pursues, within the meaning of Part 1 of Schedule 25, an acceptable distribution policy; or
- (b) throughout that period the company is, within the meaning of Part II of that Schedule, engaged in exempt activities; or
- (c) the public quotation condition set out in Part III of that Schedule is fulfilled with respect to that period; or
- (d) the chargeable profits of the accounting period do not exceed £50,000 or, if the accounting period is less than 12 months, a proportionately reduced amount; or
- (e) as respects the accounting period, the company is, within the meaning of regulations made by the Board for the purposes of this paragraph, resident in a territory specified in the regulations and satisfies—
- (i) such conditions with respect to its income or gains as may be so specified; and
- (ii) such other conditions (if any) as may be so specified.
- (1A) Regulations under paragraph (e) of subsection (1) above may—
- (a) make different provision for different cases or with respect to different territories;
- (b) make provision having effect in relation to accounting periods of controlled foreign companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Board may think fit.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Notwithstanding that none of paragraphs (a) to (e) of subsection (1) above applies to an accounting period of a controlled foreign company, no apportionment under section 747(3) falls to be made as regards that accounting period if it is the case that—
- (a) in so far as any of the transactions the results of which are reflected in the profits arising in that accounting period, or any two or more transactions taken together, the results of at least one of which are so reflected, achieved a reduction in United Kingdom tax, either the reduction so achieved was minimal or it was not the main purpose or one of the main purposes of that transaction or, as the case may be, of those transactions taken together to achieve that reduction, and
- (b) it was not the main reason or, as the case may be, one of the main reasons for the company’s existence in that accounting period to achieve a reduction in United Kingdom tax by a diversion of profits from the United Kingdom,
and Part IV of Schedule 25 shall have effect with respect to the preceding provisions of this subsection.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) This section is subject to section 748A.
#### Residence and interest
##### 749
- (1) Subject to subsections (2) to (4) and (6) below, in any accounting period in which a company is resident outside the United Kingdom, it shall be regarded for the purposes of this Chapter as resident in that territory in which, throughout that period, it is liable to tax by reason of domicile, residence or place of management.
- (2) If, in the case of any company,—
- (a) there are in any accounting period two or more territories falling within subsection (1) above, and
- (b) no election or designation made under paragraph (d) or (e) of subsection (3) below in relation to an earlier accounting period of the company has effect by virtue of section 749A(1) in relation to that accounting period,
subsection (3) below shall apply with respect to that company and that accounting period.
- (3) Where this subsection applies, the company shall in that accounting period be regarded for the purposes of this Chapter as resident in only one of those territories, namely—
- (a) if, throughout the accounting period, the company’s place of effective management is situated in one of those territories only, in that territory;
- (b) if, throughout the accounting period, the company’s place of effective management is situated in two or more of those territories, in that one of them in which, at the end of the accounting period, the greater amount of the company’s assets is situated;
- (c) if neither paragraph (a) nor paragraph (b) above applies, in that one of the territories falling within subsection (1) above in which, at the end of the accounting period, the greater amount of the company’s assets is situated;
- (d) if—
- (i) paragraph (a) above does not apply, and
- (ii) neither paragraph (b) nor paragraph (c) above produces one, and only one, of those territories,
in that one of them (if any) which is specified in an election made in relation to that accounting period by any one or more persons who together have a majority assessable interest in the company in that accounting period; and
- (e) if, in a case falling within paragraph (d) above, the time by which any election under that paragraph in relation to that accounting period must be made in accordance with section 749A(3)(b) expires without such an election having been made, in that one of those territories which the Board justly and reasonably designates in relation to that accounting period.
- (4) If, in the case of any company,—
- (a) there are in any accounting period two or more territories falling within subsection (1) above, and
- (b) an election or designation made under paragraph (d) or (e) of subsection (3) above in relation to an earlier accounting period of the company has effect by virtue of section 749A(1) in relation to the accounting period mentioned in paragraph (a) above,
the company shall in that accounting period be regarded for the purposes of this Chapter as resident in that one of those territories which is the subject of the election or designation.
- (5) If, in the case of any company, there is in any accounting period no territory falling within subsection (1) above, then, for the purposes of this Chapter, it shall be conclusively presumed that the company is in that accounting period resident in a territory in which it is subject to a lower level of taxation.
- (6) In any case where it becomes necessary for the purposes of subsection (3) above to determine in which of two or more territories the greater amount of a company’s assets is situated at the end of an accounting period—
- (a) account shall be taken only of those assets which, immediately before the end of that period, are situated in those territories; and
- (b) the amount of them shall be determined by reference to their market value at that time.
- (7) This section is without prejudice to the provision that may be made in regulations under section 748(1)(e).
- (8) For the purposes of this section, one or more persons together have a “majority assessable interest" in a controlled foreign company in an accounting period of the company if—
- (a) each of them has an assessable interest in the company in that accounting period; and
- (b) it is likely that, were an apportionment of the chargeable profits of the company for that accounting period made under section 747(3), the aggregate of the amounts which would be apportioned to them is greater than 50 per cent. of the aggregate of the amounts which would be apportioned to all the persons who have an assessable interest in the company in that accounting period.
- (9) For the purposes of subsection (8) above, a person has an “assessable interest" in a controlled foreign company in an accounting period of the company if he is one of the persons who it is likely would be chargeable to tax under section 747(4)(a) on an apportionment of the chargeable profits and creditable tax (if any) of the company for that accounting period under section 747(3).
#### Territories with a lower level of taxation
##### 750
- (1) Without prejudice to subsection (5) of section 749, a company which, by virtue of any of subsections (1) to (4) of that section, is to be regarded as resident in a particular territory outside the United Kingdom shall be considered to be subject to a lower level of taxation in that territory if , after giving effect to subsections (1A) and (1B) below, the amount of tax (“the local tax”) which is paid under the law of that territory in respect of the profits of the company which arise in any accounting period is less than three-quarters of the corresponding United Kingdom tax on those profits.
- (1A) If in the case of that accounting period there is any income, or any income and any expenditure, of the company—
- (a) which is brought into account in determining the profits of the company in respect of which tax is paid under the law of that territory, but
- (b) which does not also fall to be brought into account in determining the chargeable profits of the company,
the local tax shall be treated for the purposes of this Chapter as reduced to what it would have been had that income and any such expenditure not been so brought into account.
- (1B) If—
- (a) under the law of that territory any tax (“the company's tax”) falls to be paid by the company in respect of profits of the company arising in that accounting period,
- (b) under that law, any repayment of tax, or any payment in respect of a credit for tax, is made to a person other than the company, and
- (c) that payment or repayment is directly or indirectly in respect of the company's tax,
the local tax shall be treated for the purposes of this Chapter as reduced (or further reduced) by the amount of that payment or repayment.
- (2) For the purposes of this Chapter, the amount of the corresponding United Kingdom tax on the profits arising in an accounting period of a company resident outside the United Kingdom is the amount of corporation tax which, on the assumptions set out in Schedule 24 and subject to subsection (3) below, would be chargeable in respect of the chargeable profits of the company for that accounting period.
- (3) In determining the amount of corporation tax which, in accordance with subsection (2) above, would be chargeable in respect of the chargeable profits of an accounting period of a company resident outside the United Kingdom—
- (a) it shall be assumed for the purposes of Schedule 24 that an apportionment under section 747(3) falls to be made as regards that period; and
- (b) there shall be disregarded so much of any relief from corporation tax in respect of income as would be attributable to the local tax and would fall to be given by virtue of any provision of Part XVIII . . . ; and
- (c) there shall be deducted from what would otherwise be the amount of that corporation tax—
- (i) any amount which (on the assumptions set out in Schedule 24) would fall to be set off against corporation tax by virtue of section 7(2); and
- (ii) any amount of income tax or corporation tax actually charged in respect of any of those chargeable profits.
- (4) The references in subsection (3)(c) above to an amount falling to be set off or an amount actually charged do not include so much of any such amount as has been or falls to be repaid to the company whether on the making of a claim or otherwise.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods and creditable tax
##### 751
- (1) For the purposes of this Chapter, an accounting period of a company resident outside the United Kingdom shall begin—
- (a) whenever the company comes under the control of persons resident in the United Kingdom;
- (b) whenever the company . . . commences to carry on business unless an accounting period of the company has previously begun as respects which an apportionment under section 747(3) falls or has fallen to be made; and
- (c) whenever an accounting period of the company ends without the company then ceasing either to carry on business or to have any source of income whatsoever.
- (2) For the purposes of this Chapter, an accounting period of a company resident outside the United Kingdom shall end if and at the time when—
- (a) the company ceases to be under the control of persons resident in the United Kingdom; or
- (b) the company becomes, or ceases to be, liable to tax in a territory; or
- (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the company ceases to have any source of income whatsoever;
and for the purposes of paragraph (b) above “*liable to tax*” means liable to tax by reason of domicile, residence or place of management.
- (3) Without prejudice to subsections (1) and (2) above, subsections (3), (5) and (7) of section 12 shall apply for the purposes of this Chapter as they apply for the purposes of corporation tax, but with the omission of so much of those provisions as relates to a company coming or ceasing to be within the charge to corporation tax.
- (4) Where it appears to the Board that the beginning or end of any accounting period of a company resident outside the United Kingdom is uncertain, the Board may by notice specify as an accounting period of the company such period, not exceeding 12 months, as appears to the Board to be appropriate, and that period shall be treated for the purposes of this Chapter as an accounting period of the company unless the notice is subsequently amended under subsection (5) below.
- (5) If, on further facts coming to the knowledge of the Board after the giving of a notice under subsection (4) above, it appears to the Board that any accounting period specified in the notice is not the true accounting period, the Board shall amend the notice so as to specify the true period.
- (5A) Any notice under subsection (4) above, and notice of any amendment of such a notice under subsection (5) above, shall be given to every person who has an assessable interest (as defined in section 749(9)) in the company in the accounting period in question.
- (6) In this Chapter, in relation to an accounting period of a controlled foreign company as regards which an apportionment under section 747(3) falls to be made, the creditable tax means the aggregate of—
- (a) the amount of any relief from corporation tax in respect of income which (on the assumptions set out in Schedule 24 and assuming the company to be liable for corporation tax on the chargeable profits of that accounting period) would fall to be given to the company by virtue of any provision of Part XVIII in respect of foreign tax attributable to any income which is brought into account in determining those chargeable profits; and
- (b) any amount which (on those assumptions) would fall to be set off against corporation tax on those chargeable profits by virtue of section 7(2); and
- (c) the amount of any income tax or corporation tax actually charged in respect of the chargeable profits of that accounting period, less any of that tax which has been or falls to be repaid to the company, whether on the making of a claim or otherwise.
#### Apportionment of chargeable profits and creditable tax
##### 752
- (1) This section applies in any case where an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company.
- (2) Where—
- (a) the persons who have relevant interests in the controlled foreign company at any time in the relevant accounting period have those interests by virtue only of directly or indirectly holding ordinary shares of the company,
- (b) each of those persons satisfies the condition that he is either—
- (i) resident in the United Kingdom throughout that accounting period, or
- (ii) resident in the United Kingdom at no time in that accounting period, and
- (c) no company which has an intermediate interest in the controlled foreign company at any time in the relevant accounting period has that interest otherwise than by virtue of directly or indirectly holding ordinary shares of the controlled foreign company,
subsection (3) below shall apply.
- (3) Where this subsection applies, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made among the persons who have relevant interests in the company at any time in that period in direct proportion to the percentage of the issued ordinary shares of the controlled foreign company which, in accordance with section 752B, each of those relevant interests represents.
- (4) Where subsection (3) above does not apply, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made on a just and reasonable basis among the persons who have relevant interests in the company at any time in that period.
#### Notices and appeals
##### 753
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Assessment, recovery and postponement of tax
##### 754
- (1) Subject to the following provisions of this section, the provisions of section 747(4)(a) relating to the charging of a sum as if it were an amount of corporation tax shall be taken as applying, subject to the provisions of the Taxes Acts, and to any necessary modifications, all enactments applying generally to corporation tax, including those relating to company tax returns, those relating to the assessing, collecting and receiving of corporation tax, those conferring or regulating a right of appeal and those concerning administration, penalties, interest on unpaid tax and priority of tax in cases of insolvency under the law of any part of the United Kingdom.
- (1A) Accordingly (but without prejudice to subsection (1) above) the Management Act shall have effect as if—
- (a) any reference to corporation tax included a reference to a sum chargeable under section 747(4)(a) as if it were an amount of corporation tax; and
- (b) any reference to profits of a company included a reference to an amount of chargeable profits of a controlled foreign company which falls to be apportioned to a company under section 747(3).
- (2) For the purposes of the Taxes Acts, any sum chargeable on a company under section 747(4)(a) is chargeable for the accounting period of the company in which ends that one of the controlled foreign company’s accounting periods the chargeable profits of which give rise to that sum.
- (2A) Where—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company, and
- (b) the apportionment falls to be made in accordance with section 752(4) on a just and reasonable basis, and
- (c) a company tax return is made or amended using for the apportionment a particular basis adopted by the company making the return,
the Board may determine that another basis is to be used for the apportionment.
- (2B) For the purposes of subsection (2A) above, the Board may by notice require the company making the return—
- (a) to produce to them such documents in the company’s power or possession, and
- (b) to provide them with such information, in such form,
as they may reasonably require for the purpose of determining the basis which is to be used for making the apportionment.
- (2C) The provisions of paragraphs 27 to 29 of Schedule 18 to the Finance Act 1998 (notice to produce documents etc for the purposes of enquiry: supplementary provisions and penalty) shall apply in relation to a notice under subsection (2B) above.
- (2D) Once the Board have determined under subsection (2A) above the basis to be used for the apportionment, matters shall proceed as if that were the only basis allowed by the Tax Acts.
- (2E) A determination under subsection (2A) above may be questioned on an appeal against an amendment, made under paragraph 30 or 34(2) of Schedule 18 to the Finance Act 1998, of the company’s company tax return, but only on the ground that the basis of apportionment determined by the Board is not just and reasonable.
- (3) Where any appeal—
- (a) under paragraph 34(3) of Schedule 18 to the Finance Act 1998 against an amendment of a company tax return, or
- (b) under paragraph 48 of that Schedule against a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule),
involves any question concerning the application of this Chapter in relation to any particular person, that appeal shall be to the Special Commissioners.
- (3A) Where—
- (a) any such question as is mentioned in subsection (3) above falls to be determined by the Special Commissioners for the purposes of any proceedings before them, and
- (b) the question is one whose resolution is likely to affect the liability of more than one person under this Chapter in respect of the controlled foreign company concerned,
subsection (3B) below shall apply.
- (3B) Where this subsection applies—
- (a) each of the persons whose liability under this Chapter in respect of the controlled foreign company concerned is likely to be affected by the resolution of the question shall be entitled to appear and be heard by the Special Commissioners, or to make representations to them in writing;
- (b) the Special Commissioners shall determine that question separately from any other questions in those proceedings; and
- (c) their determination on that question shall have effect as if made in an appeal to which each of those persons was a party.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Schedule 26 shall have effect with respect to the reliefs which may be claimed by a company resident in the United Kingdom which has a liability for tax in respect of an amount of chargeable profits; and no reliefs other than those provided for by that Schedule shall be allowed against any such liability.
- (6) In any case where—
- (a) the whole or any part of the tax chargeable on a company (“the chargeable company”) by virtue of section 747(4)(a) is not paid before the date on which it is due and payable in accordance with this Act or, as the case may be, the Management Act; and
- (b) the Board serve a notice of liability to tax under this subsection on another company (“the responsible company”) which is resident in the United Kingdom and holds or has held (whether directly or indirectly) the whole or any part of the same interest in the controlled foreign company as is or was held by the chargeable company,
the whole or, as the case may be, the corresponding part of the tax chargeable on the chargeable company or, as the case may be, so much of it as remains unpaid shall be payable by the responsible company upon service of the notice.
- (7) Where a notice of liability is served under subsection (6) above—
- (a) the whole, or (as the case may be) the corresponding part, of any interest due on the tax chargeable on the chargeable company and not paid; and
- (b) any interest accruing due on that tax after the date of service,
shall be payable by the responsible company (so far as referable to tax payable by the responsible company by virtue of the notice).
- (8) In any case where—
- (a) a notice of liability is served on the responsible company under subsection (6) above, and
- (b) the relevant tax and any interest payable by the responsible company under subsection (7) above is not paid by that company before the expiry of the period of three months beginning on the date of service of the notice,
that tax and interest may, without prejudice to the right of recovery from the responsible company, be recovered from the chargeable company.
- (9) In this section “*the Taxes Acts*” has the same meaning as in the Management Act.
#### Information relating to controlled foreign companies
##### 755
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation and construction of Chapter IV
##### 756
- (1) In this Chapter—
- “*company tax return*” means a return required to be made under Schedule 18 to the Finance Act 1998;
- “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades.
- (2) For the purposes of this Chapter—
- (a) section 839 applies; and
- (b) subsection (10) of section 783 applies as it applies for the purposes of that section.
- (3) The following provisions of Part XI apply for the purposes of this Chapter as they apply for the purposes of that Part—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) section 417(7) to (9);
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
### CHAPTER V — OFFSHORE FUNDS
### Material interests in non-qualifying offshore funds
#### Disposal of material interests in non-qualifying offshore funds
##### 757
- (1) This Chapter applies to a disposal by any person of an asset if—
- (a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which is or has at any material time been a non-qualifying offshore fund; or
- (b) at the time of the disposal, the asset constitutes an interest in a company resident in the United Kingdom or in a unit trust scheme, the trustees of which are at that time resident in the United Kingdom and at a material time after 31st December 1984 the interest was a material interest in a non-qualifying offshore fund;
and for the purpose of determining whether the asset disposed of falls within paragraph (b) above, section 127 of the 1992 Act (equation of original shares and new holding) shall have effect as it has effect for the purposes of that Act.
- (2) Subject to the following provisions of this section and section 758, there is a disposal of an asset for the purposes of this Chapter if there would be such a disposal for the purposes of the 1992 Act.
- (3) Notwithstanding anything in paragraph (b) of subsection (1) of section 62 of the 1992 Act (general provisions applicable on death: no deemed disposal by the deceased) where a person dies and the assets of which he was competent to dispose include an asset which is or has at any time been a material interest in a non-qualifying offshore fund, then, for the purposes of this Chapter, other than section 758—
- (a) immediately before the acquisition referred to in paragraph (a) of that subsection, that interest shall be deemed to be disposed of by the deceased for such a consideration as is mentioned in that subsection; but
- (b) nothing in this subsection affects the determination, in accordance with subsection (1) above, of the question whether that deemed disposal is one to which this Chapter applies.
- (4) Subject to subsection (3) above, section 62 of the 1992 Act applies for the purposes of this Chapter as it applies for the purposes of that Act, and the reference in that subsection to the assets of which a deceased person was competent to dispose shall be construed in accordance with subsection (10) of that section.
- (5) Section 135 of the 1992 Act (exchange of securities for those in another company treated as not involving a disposal) does not apply for the purposes of this Chapter to the extent that—
- (a) the interest in the entity that is company A for the purposes of that section that is exchanged is or was at a material time an interest in a non-qualifying offshore fund, and
- (b) the interest in the entity that is company B for those purposes that is exchanged is not an interest in such a fund.
In a case where that section would apply apart from this subsection, the exchange in question (of interests in or of an entity that are or were at a material time interests in a non-qualifying offshore fund) shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the exchange.
- (6) Section 136 of the 1992 Act (scheme of reconstruction involving issue of securities treated as exchange not involving disposal) does not apply for the purposes of this Chapter to the extent that—
- (a) the interest in the entity that is company A for the purposes of that section that is exchanged is or was at a material time an interest in a non-qualifying offshore fund, and
- (b) the interest in the entity that is company B for those purposes that is exchanged is not an interest in such a fund.
In a case where that section would apply apart from this subsection, the deemed exchange in question (of interests in or of an entity that are or were at a material time interests in a non-qualifying offshore fund) shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the deemed exchange.
- (7) For the purposes of this section—
- (a) a material time, in relation to the disposal of an asset, is any time on or after the earliest date on which any relevant consideration was given for the acquisition of the asset or, if that date is earlier than 1st January 1984, any time on or after 1st January 1984; and
- (b) “*relevant consideration*” means consideration which, assuming the application to the disposal of Chapter III of Part II of the 1992 Act, would fall to be taken into account in determining the amount of the gain or loss accruing on the disposal, whether that consideration was given by or on behalf of the person making the disposal or by or on behalf of a predecessor in title of his whose acquisition cost represents, directly or indirectly, the whole or any part of the acquisition cost of the person making the disposal.
#### Offshore funds operating equalisation arrangements
##### 758
- (1) For the purposes of this Chapter, an offshore fund operates equalisation arrangements if, and at a time when, arrangements are in existence which have the result that where—
- (a) a person acquires by way of initial purchase a material interest in the fund at some time during a period relevant to the arrangements; and
- (b) the fund makes a distribution for a period which begins before the date of his acquisition of that interest;
the amount of that distribution which is paid to him (assuming him still to retain that interest) will include a payment of capital which is debited to an account maintained under the arrangements (“the equalisation account”) and which is determined by reference to the income which had accrued to the fund at the date of his acquisition.
- (2) For the purposes of this section, a person acquires an interest in an offshore fund by way of initial purchase if—
- (a) his acquisition is by way of subscription for or allotment of new shares, units or other interests issued or created by the fund; or
- (b) his acquisition is by way of direct purchase from the persons concerned with the management of the fund and their sale to him is made in their capacity as managers of the fund.
- (3) Without prejudice to section 757(1), this Chapter applies, subject to the following provisions of this section, to a disposal by any person of an asset if—
- (a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which at that time is operating equalisation arrangements; and
- (b) the fund is not and has not at any material time (within the meaning of section 757(7)) been a non-qualifying offshore fund; and
- (c) the proceeds of the disposal do not fall to be taken into account as a trading receipt.
- (4) This Chapter does not, by virtue of subsection (3) above, apply to a disposal if—
- (a) it takes place during such a period as is mentioned in subsection (1)(a) above; and
- (b) throughout so much of that period as precedes the disposal, the income of the offshore fund concerned has been of such a nature as is referred to in paragraph 3(1) of Schedule 27.
- (5) An event which, apart from section 127 of the 1992 Act (reorganisations etc.), would constitute a disposal of an asset shall constitute such a disposal for the purpose of determining whether, by virtue of subsection (3) above, there is a disposal to which this Chapter applies.
- (6) The reference in subsection (5) above to section 127 of the 1992 Act includes a reference to that section as applied by any provision of Chapter 2 of Part 4 of that Act.
- (7) The Treasury may make provision by regulations as to the application of the provisions of this section in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (8) Regulations under subsection (7) may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
#### Material interests in offshore funds
##### 759
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Subject to the following provisions of this section, a person’s interest in an offshore fund is a material interest if, at the time when he acquired the interest, it could reasonably be expected that, at some time during the period of seven years beginning at the time of his acquisition, he would be able to realise the value of the interest (whether by transfer, surrender or in any other manner).
- (3) For the purposes of subsection (2) above, a person is at any time able to realise the value of an interest if at that time he can realise an amount which is reasonably approximate to that portion which the interest represents (directly or indirectly) of the market value at that time of the assets of the fund.
- (4) For the purposes of subsections (2) and (3) above—
- (a) a person is able to realise a particular amount if he is able to obtain that amount either in money or in the form of assets to the value of that amount; and
- (b) if at any time an interest in an offshore fund has a market value which is substantially greater than the portion which the interest represents, as mentioned in subsection (3) above, of the market value at that time of the assets concerned, the ability to realise such a market value of the interest shall not be regarded as an ability to realise such an amount as is referred to in that subsection.
- (5) An interest in an offshore fund is not a material interest if—
- (a) it is an interest in respect of any loan capital or debt issued or incurred for money which, in the ordinary course of a business of banking, is lent by a person carrying on that business; or
- (b) it is a right arising under a policy of insurance.
- (6) Shares in a company that is not resident in the United Kingdom(an “overseas company”) do not constitute a material interest in an offshore fund if—
- (a) the shares are held by a company and the holding of them is necessary or desirable for the maintenance and development of a trade carried on by the company or a company associated with it; and
- (b) the shares confer at least 10 per cent. of the total voting rights in the overseas company and a right, in the event of a winding-up, to at least 10 per cent. of the assets of that company remaining after the discharge of all liabilities having priority over the shares; and
- (c) not more than ten persons hold shares in the overseas company and all the shares in that company confer both voting rights and a right to participate in the assets on a winding-up; and
- (d) at the time of its acquisition of the shares, the company had such a reasonable expectation as is referred to in subsection (2) above by reason only of the existence of—
- (i) an arrangement under which, at some time within the period of seven years beginning at the time of acquisition, that company may require the other participators to purchase its shares; or
- (ii) provisions of either an agreement between the participators or the constitution of the overseas company under which the company will be wound up within a period which is, or is reasonably expected to be, shorter than the period referred to in subsection (2) above; or
- (iii) both such an arrangement and such provisions;
and in this paragraph “*participators*” means the persons holding shares falling within paragraph (c) above.
- (7) For the purposes of subsection (6)(a) above, a company is associated with another company if one of them has control of the other within the meaning of section 416 or both of them are under the control, within the meaning of that section, of the same person or persons.
- (8) An interest in a company that is not resident in the United Kingdom is not a material interest in an offshore fund at any time when the following conditions are satisfied, namely—
- (a) that the holder of the interest has the right to have the company wound up; and
- (b) that, in the event of a winding up, the holder is, by virtue of the interest and any other interest which he then holds in the same capacity, entitled to more than 50 per cent. of the assets remaining after the discharge of all liabilities having priority over the interest or interests concerned.
- (9) The market value of any asset for the purposes of this Chapter shall be determined in like manner as it would be determined for the purposes of the 1992 Act except that, in the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 272(5) of that Act (meaning of “*market value*” in relation to rights of unit holders in a unit trust scheme) shall apply with any necessary modifications for determining the market value of the interest for the purposes of this Chapter.
#### Non-qualifying offshore funds
##### 760
- (1) For the purposes of this Chapter, an offshore fund is a non-qualifying fund except during an account period of the fund in respect of which the fund is certified by the Board as a distributing fund.
- (2) An offshore fund shall not be certified as a distributing fund in respect of any account period unless, with respect to that period, the fund pursues a full distribution policy, within the meaning of Part I of Schedule 27.
- (3) Subject to Part II of that Schedule, an offshore fund shall not be certified as a distributing fund in respect of any account period if, at any time in that period—
- (a) more than 5 per cent. by value of the assets of the fund consists of interests in other offshore funds; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this Chapter, an account period of an offshore fund shall begin—
- (a) whenever the fund begins to carry on its activities; and
- (b) whenever an account period of the fund ends without the fund then ceasing to carry on its activities.
- (9) For the purposes of this Chapter, an account period of an offshore fund shall end on the first occurrence of any of the following—
- (a) the expiration of 12 months from the beginning of the period;
- (b) an accounting date of the fund or, if there is a period for which the fund does not make up accounts, the end of that period; and
- (c) the fund ceasing to carry on its activities.
- (10) For the purposes of this Chapter—
- (a) an account period of an offshore fund which is a company that is not resident in the United Kingdom shall end if, and at the time when, the company ceases to be resident outside the United Kingdom; and
- (b) an account period of an offshore fund which is a unit trust scheme of which the trustees are not resident in the United Kingdom shall end if, and at the time when, the trustees of the scheme become resident in the United Kingdom.
- (10A) For the purposes of this Chapter, in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C,
references to an account period of the offshore fund are to an account period of the umbrella fund or the main fund (as the case may be).
- (11) The provisions of Part III of Schedule 27 shall have effect with respect to the procedure for and in connection with the certification of an offshore fund as a distributing fund, and the supplementary provisions in Part IV of that Schedule shall have effect.
### Charge to tax of offshore income gains
#### Charge to income tax or corporation tax of offshore income gain
##### 761
- (1) If a disposal to which this Chapter applies gives rise in accordance with section 758 or Schedule 28 to an offshore income gain, then, subject to the provisions of this section, the amount of that gain—
- (a) shall be treated for all the purposes of the Tax Acts as income arising at the time of the disposal to the person making the disposal, and
- (b) shall be charged—
- (i) to income tax for the year of assessment in which the disposal is made, or
- (ii) to corporation tax as a profit or gain under Case VI of Schedule D for the accounting period in which the disposal is made.
- (1A) The income tax charged by virtue of subsection (1)(b)(i) above shall be charged on the full amount of the income treated as arising in the year of assessment.
- (2) Subject to subsection (3) below, sections 2(1), 10 and 10Bof the 1992 Act (persons chargeable to tax in respect of chargeable gains) and section 11(2A)(c) shall have effect in relation to income tax or corporation tax in respect of offshore income gains as they have effect in relation to capital gains tax or corporation tax in respect of chargeable gains.
- (3) In the application of sections 10 and 10Bof the 1992 Act in accordance with subsection (2) above, paragraphs (a) and (b) of subsection (1) of section 10 (which define the assets on the disposal of which chargeable gains are taxable) shall have effect with the omission of the words “situated in the United Kingdom and” and paragraphs (a) and (b) of subsection (1) of section 10B (which make similar provision in relation to corporation tax) shall have effect with the omission of the words “situated in the United Kingdom and”.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In the case of individuals resident or ordinarily resident but not domiciled in the United Kingdom, section 12 of the 1992 Act (which provides for taxation on a remittance basis) shall have effect in relation to income tax chargeable by virtue of subsection (1) above on an offshore income gain as it has effect in relation to capital gains tax in respect of gains accruing to such individuals from the disposal of assets situated outside the United Kingdom.
- (6) A charity shall be exempt from tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes; but if property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with Schedule 28) accruing being treated as an offshore income gain not accruing to a charity.
- In this subsection “*charity*” has the same meaning as in section 506 and “*market value*” has the same meaning as in the 1992 Act.
- (7) In any case where—
- (a) a disposal to which this Chapter applies is a disposal of settled property, within the meaning of the 1992 Act, and
- (b) at the time of the disposal referred to in paragraph (a) above the trustees of the settlement are neither resident nor ordinarily resident in the United Kingdom for the purposes of the 1992 Act,
subsection (1) above shall not apply in relation to any offshore income gain to which the disposal gives rise.
#### Offshore income gains accruing to persons resident or domiciled abroad
##### 762
- (1) Section 13 of the 1992 Act (chargeable gains accruing to certain non-resident companies) shall have effect in relation to offshore income gains subject to the following modifications—
- (a) for any reference to a chargeable gain there shall be substituted a reference to an offshore income gain;
- (b) for the reference in subsection (7) to capital gains tax there shall be substituted a reference to income tax or corporation tax; and
- (c) paragraphs (b) and (c) of subsection (5) and subsection (8) shall be omitted.
- (2) Subject to subsections (3) and (4) below, sections 87 to 90 and 96 to 98 of the 1992 Act (gains of non-resident settlements) shall have effect in relation to offshore income gains subject to the following modifications—
- (a) for any reference to chargeable gains, other than the reference in section 87(6), there shall be substituted a reference to offshore income gains;
- (b) in section 87(2) of the 1992 Act for the words “tax under section 2(2)” there shall be substituted the words “ income tax by virtue of section 761 of the Taxes Act ”;
- (c) in section 87(7) the reference to tax shall be construed as a reference to income tax or corporation tax; and
- (d) sections 87(10) and 97(6) shall be omitted.
- (3) In section 87(6) of the 1992 Act, both as it applies apart from subsection (2) above and as applied by subsection (2) above, the reference to chargeable gains shall be construed as including a reference to offshore income gains.
- (4) If, in any year of assessment—
- (a) under subsection (3) of section 87 of the 1992 Act, as it applies apart from subsection (2) above, a chargeable gain falls to be attributed to a beneficiary, and
- (b) under that subsection, as applied by subsection (2) above, an offshore income gain also falls to be attributed to him,
subsection (4) of that section (gains attributed in proportion to capital payments received) shall have effect as if it required offshore income gains to be attributed before chargeable gains.
- (5) Subject to subsection (6) below, for the purpose of determining whether an individual ordinarily resident in the United Kingdom has a liability for income tax in respect of an offshore income gain which arises on a disposal to which this Chapter applies where the disposal is made by a person resident or domiciled outside the United Kingdom—
- (a) sections 739 and 740 shall apply as if the offshore income gain arising to the person resident or domiciled outside the United Kingdom constituted income becoming payable to him, and
- (b) any reference in those sections to income of (or payable or arising to) such a person accordingly includes a reference to the offshore income gain arising to him by reason of the disposal to which this Chapter applies.
- (6) To the extent that an offshore income gain is treated, by virtue of subsection (1) or subsection (2) above, as having accrued to any person resident or ordinarily resident in the United Kingdom, that gain shall not be deemed to be the income of any individual for the purposes of section 739 or 740 above or any provision of Chapter 5 of Part 5 of ITTOIA 2005.
#### Deduction of offshore income gain in determining capital gain
##### 763
- (1) The provisions of this section apply where a disposal to which this Chapter applies gives rise to an offshore income gain; and, if that disposal also constitutes the disposal of the interest concerned for the purposes of the 1992 Act, then that disposal is in the following provisions of this section referred to as the 1992 Act disposal.
- (2) So far as relates to an offshore income gain which arises on a material disposal (within the meaning of Part I of Schedule 28), subsections (3) and (4) below shall have effect in relation to the 1992 Act disposal in substitution for section 37(1) of that Act (deduction of consideration chargeable to tax on income).
- (3) Subject to the following provisions of this section, in the computation of the gain accruing on the 1992 Act disposal, a sum equal to the offshore income gain shall be deducted from the sum which would otherwise constitute the amount or value of the consideration for the disposal.
- (4) Where the 1992 Act disposal is of such a nature that, by virtue of section 42 of that Act (part disposals) an apportionment falls to be made of certain expenditure, no deduction shall be made by virtue of subsection (3) above in determining, for the purposes of the fraction in subsection (2) of that section, the amount or value of the consideration for the disposal.
- (5) If the 1992 Act disposal forms part of a transfer to which section 162 of that Act applies (roll-over relief on transfer of business in exchange wholly or partly for shares) then, for the purposes of subsection (4) of that section (determination of the amount of the deduction from the gain on the old assets) “B” in the fraction in that subsection (the value of the whole of the consideration received by the transferor in exchange for the business) shall be taken to be what it would be if the value of the consideration other than shares so received by the transferor were reduced by a sum equal to the offshore income gain.
- (6) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 757(5) or (6) or 758(5), the 1992 Act shall have effect as if an amount equal to the offshore income gain to which the disposal gives rise were given (by the person making the exchange concerned) as consideration for the new holding, within the meaning of section 128 of that Act (consideration given or received for new holding on a reorganisation).
- (6A) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 762A (exchange of interests of different classes), the 1992 Act shall have effect as if an amount equal to the offshore income gain to which that disposal gives rise were given (by the person making the exchange) as consideration for the new holding (within the meaning of section 128 of that Act (consideration given or received for new holding on a reorganisation)).
- (7) In any case where—
- (a) a disposal to which this Chapter applies by virtue of subsection (3) of section 758 is made otherwise than to the offshore fund concerned or the persons referred to in subsection (2)(b) of that section; and
- (b) subsequently, a distribution which is referable to the asset disposed of is paid either to the person who made the disposal or to a person connected with him; and
- (c) the disposal gives rise (in accordance with Part II of Schedule 28) to an offshore income gain;
then, for the purposes of the Tax Acts, the amount of the first distribution falling within paragraph (b) above shall be taken to be reduced or, as the case may be, extinguished by deducting therefrom an amount equal to the offshore income gain referred to in paragraph (c) above and, if that amount exceeds the amount of that first distribution, the balance shall be set against the second and, where necessary, any later distribution falling within paragraph (b) above, until the balance is exhausted.
- (8) Section 839 shall apply for the purposes of subsection (7)(b) above.
#### Offshore income gains of trustees
##### 764
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER VI — MISCELLANEOUS
### Migration etc. of company
#### Migration etc.of companies
##### 765
- (1) Subject to the provisions of this section and section 765A, all transactions of the following classes shall be unlawful unless carried out with the consent of the Treasury, that is to say—
- (a) *for a body corporate resident in the United Kingdom to cease to be so resident; or*
- (b) *for the trade or business or any part of the trade or business of a body corporate so resident to be transferred from that body corporate to a person not so resident; or*
- (c) for a body corporate resident in the United Kingdom to cause or permit a body corporate not so resident over which it has control to create or issue any shares or debentures; or
- (d) except for the purpose of enabling a person to be qualified to act as a director, for a body corporate so resident to transfer to any person, or cause or permit to be transferred to any person, any shares or debentures of a body corporate not so resident over which it has control, being shares or debentures which it owns or in which it has an interest.
- (2) Nothing in subsection (1)(c) above shall apply to the giving to the bankers of the body corporate not resident in the United Kingdom of any security for the payment of any sum due or to become due from it to them by reason of any transaction entered into with it by them in the ordinary course of their business as bankers.
- (3) Nothing in subsection (1)(c) above shall apply to the giving by the body corporate not resident in the United Kingdom to an insurance company of any security for the payment of any sum due or to become due from that body corporate to that company by reason of any transaction entered into with that body corporate by that company in the ordinary course of that company’s business by way of investment of its funds.
- (4) Any consent granted by the Treasury under this section—
- (a) may be given either specially (that is to say, so as to apply only to specified transactions of or relating to a specified body corporate) or generally (that is to say, so as not only so to apply); and
- (b) may, if given generally, be revoked by the Treasury; and
- (c) may in any case be absolute or conditional; and
- (d) shall be published in such a way as to give any person entitled to the benefit of it an adequate opportunity of getting to know of it, unless in the opinion of the Treasury publication is not necessary for that purpose.
#### Offences under section 765
##### 766
- (1) Any person who, whether within or outside the United Kingdom, does or is a party to the doing of any act which to his knowledge amounts to or results in, or forms part of a series of acts which together amount to or result in, or will amount to or result in, something which is unlawful under section 765(1) shall be guilty of an offence under this section.
- (2) In any proceedings in respect of such an offence against a director of the body corporate in question (that is to say, the body corporate which is or was resident in the United Kingdom) or against any person who was purporting to act in that capacity—
- (a) it shall be presumed that he was a party to every act of that body corporate unless he proves that it was done without his consent or connivance; and
- (b) it shall, unless the contrary is proved, be presumed that any act which in fact amounted to or resulted in, or formed part of a series of acts which together amounted to or resulted in or would amount to or result in, something which is unlawful under section 765(1) was to his knowledge such an act.
- (3) Any person who is guilty of an offence under this section shall be liable on conviction on indictment—
- (a) to imprisonment for not more than two years or to a fine, or to both; or
- (b) where the person in question is a body corporate which is or was resident in the United Kingdom, to a fine not exceeding an amount equal to three times the corporation tax, capital gains tax and income tax paid or payable which is attributable to the income, profits or gains (including chargeable gains) arising in the 36 months immediately preceding the commission of the offence, or £10,000, whichever is the greater;
and proceedings in respect of such an offence alleged to have been committed by a person may be taken before the appropriate court in the United Kingdom having jurisdiction in the place where that person is for the time being.
- (4) No proceedings for an offence under this section shall be instituted, in England or Wales, except by or with the consent of the Attorney General, or in Northern Ireland, except by or with the consent of the Attorney General for Northern Ireland.
#### Interpretation and commencement of sections 765 and 766
##### 767
- (1) *A body corporate shall be deemed for the purposes of sections* 765*and* 766*to be resident or not to be resident in the United Kingdom according as the central management and control of its trade or business is or is not exercised in the United Kingdom.*
- (2) *If it is shown that it has been established as between the Crown and a body corporate for any income tax or corporation tax purpose that the body corporate was resident or ordinarily resident in the United Kingdom for any year of assessment or other period, it shall be presumed, except so far as the contrary is proved, that that body corporate was resident in the United Kingdom for the purposes of sections* 765*and* 766*at the beginning of that year of assessment or other period and that it continued to be so resident at all times thereafter.*
- (3) *Where the functions of a body corporate consist wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed for the purposes of this section and sections* 765*and* 766*to be a business carried on by the body corporate.*
- (4) *Notwithstanding anything in the preceding provisions of this section or in sections* 765*and* 766,*in no event shall a mere transfer of assets by a body corporate not resulting in a substantial change in the character or extent of the trade or business of that body corporate be treated for the purposes of sections* 765*and* 766*as a transfer of part of its trade or business*.
- (5) In this section and in sections 765 and 766—
- “*share*”, “*debenture*” and “*director*” have, in relation to any body corporate, the meanings respectively assigned to them by Part XXVI of the Companies Act 1985 in relation to a company;
- “*control*” (except in the expression “*central management and control*”) has, in relation to a body corporate, the meaning given by section 840;
- “*transfer*”, in relation to shares or debentures, includes a transfer of any beneficial interest therein;
- “*insurance company*” means a body corporate lawfully carrying on business as an insurer, whether in the United Kingdom or elsewhere; and
- “*funds*” in relation to an insurance company means the funds held by it in connection with that business;
*and a body corporate shall not be deemed for the purposes of this section and sections* 765*and* 766*to cease to be resident in the United Kingdom by reason only that it ceases to exist*.
- (6) This section and sections 765 and 766 shall come into force on 6th April 1988 to the exclusion of section 482 of the 1970 Act (which is re-enacted by those sections); but any offence committed before 6th April 1988 shall not be punishable under section 766 and neither this subsection nor any other provision of this Act shall prevent any such offence from being punishable as if this Act had not been passed.
### Change in ownership of company
#### Change in ownership of company: disallowance of trading losses
##### 768
- (1) If—
- (a) within any period of three years there is both a change in the ownership of a company and (either earlier or later in that period, or at the same time) a major change in the nature or conduct of a trade carried on by the company, or
- (b) at any time after the scale of the activities in a trade carried on by a company has become small or negligible, and before any considerable revival of the trade, there is a change in the ownership of the company,
no relief shall be given under section 393 by setting a loss incurred by the company in an accounting period beginning before the change of ownership against any income or other profits of an accounting period ending after the change of ownership.
- (2) In applying this section to the accounting period in which the change of ownership occurs, the part ending with the change of ownership, and the part after, shall be treated as two separate accounting periods, and the profits or losses of the accounting period shall be apportioned to the two parts.
- (3) The apportionment under subsection (2) above shall be on a time basis according to the respective lengths of those parts except that if it appears that that method would work unreasonably or unjustly such other method shall be used as appears just and reasonable.
- (4) In subsection (1) above “*major change in the nature or conduct of a trade*” includes—
- (a) a major change in the type of property dealt in, or services or facilities provided, in the trade; or
- (b) a major change in customers, outlets or markets of the trade;
and this section applies even if the change is the result of a gradual process which began outside the period of three years mentioned in subsection (1)(a) above.
- (5) In relation to any relief available under section 343 to a successor company, subsection (1) above shall apply as if any loss sustained by a predecessor company had been sustained by a successor company and as if the references to a trade included references to the trade as carried on by a predecessor company.
- (6) Where relief in respect of a company’s losses has been restricted under this section then, notwithstanding section 577(3) of the Capital Allowances Act, in applying the provisions of that Act about balancing charges to the company by reference to any event after the change of ownership of the company, any allowance or deduction falling to be made in taxing the company’s trade for any chargeable period before the change of ownership shall be disregarded unless the profits or gains of that chargeable period or of any subsequent chargeable period before the change of ownership were sufficient to give effect to the allowance or deduction.
- (7) In applying subsection (6) above it shall be assumed that any profits or gains are applied in giving effect to any such allowance or deduction in preference to being set off against any loss which is not attributable to such an allowance or deduction.
- (8) Where the operation of this section depends on circumstances or events at a time after the change of ownership (but not more than three years after), an assessment to give effect to the provisions of this section shall not be out of time if made within six years from that time, or the latest of those times.
- (9) Any person in whose name any shares, stock or securities of a company are registered shall, if required by notice by an inspector given for the purposes of this section, state whether or not he is the beneficial owner of those shares or securities and, if not the beneficial owner of those shares or securities of any of them, shall furnish the name and address of the person or persons on whose behalf those shares, stock or securities are registered in his name.
#### Rules for ascertaining change in ownership of company
##### 769
- (1) For the purposes of sections 767A, 767AA, 767C, 768, 768A, 768B , 768C and 768D there is a change in the ownership of a company—
- (a) if a single person acquires more than half the ordinary share capital of the company; or
- (b) if two or more persons each acquire a holding of 5 per cent. or more of the ordinary share capital of the company, and those holdings together amount to more than half the ordinary share capital of the company; or
- (c) if two or more persons each acquire a holding of the ordinary share capital of the company, and the holdings together amount to more than half the ordinary share capital of the company, but disregarding a holding of less than 5 per cent. unless it is an addition to an existing holding and the two holdings together amount to 5 per cent. or more of the ordinary share capital of the company.
- (2) In applying subsection (1) above—
- (a) the circumstances at any two points of time with not more than three years between may be compared, and a holder at the later time may be regarded as having acquired whatever he did not hold at the earlier time, irrespective of what he has acquired or disposed of in between;
- (b) to allow for any issue of shares or other reorganisation of capital, the comparison may be made in terms of percentage holdings of the total ordinary share capital at the respective times, so that a person whose percentage holding is greater at the later time may be regarded as having acquired a percentage holding equal to the increase;
- (c) to decide for the purposes of subsection (1)(b) or (c) above if any person has acquired a holding of at least 5 per cent., or a holding which makes at least 5 per cent. when added to an existing holding, acquisitions by, and holdings of, two or more persons who are connected persons within the meaning of section 839 shall be aggregated as if they were acquisitions by, and holdings of, one and the same person;
- (d) any acquisition of shares under the will or on the intestacy of a deceased person , and any gift of shares which is unsolicited and made without regard to the provisions of sections 767A, 767AA, 768, 768A, 768B , 768C and 768D, . . . shall be left out of account.
- (2A) Where—
- (a) persons, whether company members or not, possess extraordinary rights or powers under the articles of association or under any other document regulating the company, and
- (b) because of that fact ownership of the ordinary share capital may not be an appropriate test of whether there has been a change in the ownership of the company,
then, in considering whether there has been a change in the ownership of the company for the purposes of section 767A , 767AA or 767C, holdings of all kinds of share capital, including preference shares, or of any particular category of share capital, or voting power or any other kind of special power may be taken into account instead of ordinary share capital.
- (3) Where, because persons, whether company members or not, possess extraordinary rights or powers under the articles of association or under any other document regulating the company, ownership of the ordinary share capital may not be an appropriate test of whether there has been a major change in the persons for whose benefit the losses may ultimately enure, then, in considering whether there has been a change in the ownership of the company for the purposes of section 768 , 768A or 768D, holdings of all kinds of share capital, including preference shares, or of any particular category of share capital, or voting power or any other special kind of power, may be taken into account instead of ordinary share capital.
- (3A) Subsection (3) above shall apply for the purposes of sections 768B and 768C as if the reference to the benefit of losses were a reference to the benefit of deductions.
- (4) Where section 768, 768A, 768B , 768C or 768D has operated to restrict relief by reference to a change of ownership taking place at any time, no transaction or circumstances before that time shall be taken into account in determining whether there is any subsequent change of ownership.
- (5) A change in the ownership of a company shall be disregarded for the purposes of sections 767A, 767AA, 767C, 768, 768A, 768B , 768C and 768D if—
- (a) immediately before the change the company is the 75 per cent. subsidiary of another company, and
- (b) (although there is a change in the direct ownership of the company) that other company continues after the change to own the first-mentioned company as a 75 per cent. subsidiary.
- (6) If there is a change in the ownership of a company, including a change occurring by virtue of the application of this subsection but not a change which is to be disregarded under subsection (5) above, then—
- (a) in a case falling within subsection (1)(a) above, the person mentioned in subsection (1)(a) shall be taken for the purposes of this section to acquire at the time of the change any relevant assets owned by the company;
- (b) in a case falling within subsection (1)(b) above but not within subsection (1)(a) above, each of the persons mentioned in subsection (1)(b) shall be taken for the purposes of this section to acquire at the time of the change the appropriate proportion of any relevant assets owned by the company; and
- (c) in any other case, each of the persons mentioned in paragraph (c) of subsection (1) above (other than any whose holding is disregarded under that paragraph) shall be taken for the purposes of this section to acquire at the time of the change the appropriate proportion of any relevant assets owned by the company.
- (6A) In subsection (6) above—
- “*the appropriate proportion*”, in relation to one of two or more persons mentioned in subsection (1)(b) or (c) above, means a proportion corresponding to the proportion which the percentage of the ordinary share capital acquired by him bears to the percentage of that capital acquired by all those persons taken together; and
- “*relevant assets*”, in relation to a company, means—
- (a) any ordinary share capital of another company, and
- (b) any property or rights which under subsection (3) above may be taken into account instead of ordinary share capital of another company.
- (6B) Notwithstanding that at any time a company (“the subsidiary company”) is a 75 per cent. subsidiary of another company (“the parent company”) it shall not be treated at that time as such a subsidiary for the purposes of this section unless, additionally, at that time—
- (a) the parent company would be beneficially entitled to not less than 75 per cent. of any profits available for distribution to equity holders of the subsidiary company; and
- (b) the parent company would be beneficially entitled to not less than 75 per cent. of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (6C) Schedule 18 shall apply for the purposes of subsection (6B) above as it applies for the purposes of section 413(7).
- (7) For the purposes of this section—
- (a) references to ownership shall be construed as references to beneficial ownership, and references to acquisition shall be construed accordingly;
- (b) *a company shall be deemed to be a* 75*per cent. subsidiary of another company if and so long as not less than three-quarters of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies*;
- (c) *the amount of ordinary share capital of one company owned by a second company through another company or other companies or partly directly and partly through another company or other companies, shall be determined in accordance with subsections* (5)*to* (10)*of section* 838;*and*
- (d) “*shares*” includes stock.
- (8) If any acquisition of ordinary share capital or other property or rights taken into account in determining that there has been a change of ownership of a company was made in pursuance of a contract of sale or option or other contract, or the acquisition was made by a person holding such a contract, then the time when the change in the ownership of the company took place shall be determined as if the acquisition had been made when the contract was made with the holder or when the benefit of it was assigned to him so that, in the case of a person exercising an option to purchase shares, he shall be regarded as having purchased the shares when he acquired the option.
- (9) Subsection (8) above shall not apply in relation to section 767A , 767AA or 767C.
### Transactions between associated persons
#### Sales etc. at an undervalue or overvalue
##### 770
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions by petroleum companies
##### 771
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information for purposes of section 770, and appeals
##### 772
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 770 and 771
##### 773
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions between dealing company and associated company
##### 774
- (1) Subject to the provisions of this section, where—
- (a) a dealing company becomes entitled to a deduction, in computing the profits or gains of the company for tax purposes for any period, in respect of the depreciation in the value of any right subsisting against an associated company, being a non-dealing company; or
- (b) a dealing company makes any payment to such an associated company, being a payment in respect of which the dealing company is entitled to a deduction in computing its profits or gains for tax purposes for any period;
and the depreciation or payment is not brought into account in computing the profits or gains of the non-dealing company, that company shall be deemed to have received on the last day of the period income of an amount equal to the amount of the deduction and shall be chargeable to tax in respect thereof (in the case of corporation tax, under Case VI of Schedule D).
- (2) Where the non-dealing company is carrying on a trade, the income referred to in subsection (1) above shall, if the company so elects, not be so chargeable but shall be deemed to have been a receipt of the trade, or, if the company is carrying on more than one trade, to have been a receipt of such one of the trades as the company may choose.
- (3) Where the non-dealing company is carrying on, or was formed to carry on a trade, then if—
- (a) either—
- (i) the right subsisting against it was a right to the repayment of moneys lent for meeting expenditure which has proved (in whole or in part) abortive, or
- (ii) the payment to the company was made for meeting such expenditure, and
- (b) that expenditure is such that the company is not entitled in respect of it to any allowance or deduction in computing losses or gains,
subsection (1) above shall not apply in so far as the expenditure proved abortive.
- (4) For the purposes of this section—
- (a) “*company*” includes any body corporate;
- (b) “*dealing company*” means a company dealing in securities, land or buildings and includes any company whose profits on the sale of securities, land or buildings are part of its trading profits;
- (c) “*non-dealing company*” means any company which is not a dealing company;
- (d) two or more companies shall be treated as associated companies if one has control of the other or others, or any person has control of both or all of them;
- (e) references to a company (“the first company”) having control of another company (“the second company”) shall be construed as references to the first company having control of the second company either by itself or in conjunction with any person having control over the first company, and “*control*” has the meaning given by section 840;
- (f) “*securities*” includes shares and stock.
- (5) Where it appears to the Board that by reason of any transaction or transactions a person may by virtue of this section have incurred any liability to tax, the Board may by notice served on him require him, within such time not less than 28 days as may be specified in the notice, to furnish information in his possession with respect to the transaction or any of the transactions, being information as to matters, specified in the notice, which are relevant to the question whether he has incurred any such liability to tax.
### Other provisions
#### Sale by individual of income derived from his personal activities
##### 775
- (1) Subject to subsection (7) below, this section has effect where—
- (a) transactions or arrangements are effected or made to exploit the earning capacity of an individual in any occupation by putting some other person in a position to enjoy all or any part of the profits or gains or other income, or of the receipts, derived from the individual’s activities in that occupation, or anything derived directly or indirectly from any such income or receipts; and
- (b) as part of, or in connection with, or in consequence of, the transactions or arrangements any capital amount is obtained by the individual for himself or for any other person; and
- (c) the main object or one of the main objects of the transactions was the avoidance or reduction of liability to income tax.
- (2) Any such capital amount shall for all the purposes of the Income Tax Acts be treated as being earned income of the individual which arises when the capital amount is receivable . . . .
- (2A) Any such earned income shall be charged to income tax on the individual and the tax so charged shall be charged on the full amount of the earned income treated as arising in the year of assessment.
- (3) In this section—
- (a) references to any occupation are references to any activities of any of the kinds pursued in any profession or vocation, irrespective of whether the individual is engaged in a profession or vocation, or is employed by or holds office under some other person; and
- (b) references in subsection (1) above to income or receipts include references to payments for any description of copyright or licence or franchise or other right deriving its value from the activities, including past activities, of the individual.
- (4) This section shall not apply to a capital amount obtained from the disposal—
- (a) of assets (including any goodwill) of a profession or vocation, or of a share in a partnership which is carrying on a profession or vocation, or
- (b) of shares in a company,
in so far as the value of what is disposed of, at the time of disposal, is attributable to the value of the profession or vocation as a going concern, or as the case may be to the value of the company’s business, as a going concern.
- (5) If the value of the profession, vocation or business as a going concern is derived to a material extent from prospective income or receipts derived directly or indirectly from the individual’s activities in the occupation, and for which, when all capital amounts are disregarded, the individual will not have received full consideration, whether as a partner in a partnership or as an employee or otherwise, subsection (4) above shall not exempt the part of the capital amount so derived.
- (6) In subsections (4) and (5) above references to the company’s business include references to the business of any other company in which it holds shares directly or indirectly.
- (7) Where on any occasion an individual obtains a capital amount consisting of any property or right which derives substantially the whole of its value from the activities of the individual, or (as in the case where the individual acquires a stock option and subsequently exercises the stock option) there are two or more occasions on which an individual obtains a capital amount consisting of any such property or right, then—
- (a) tax under this section shall not be charged on any such occasion, but
- (b) without prejudice to the generality of the provisions of this section or section 777, tax under this section shall be charged on the occasion when the capital amount, or any such capital amount, is sold or otherwise realised, and shall be so charged by reference to the proceeds of sale or the realised value.
- (8) For the purposes of subsection (1)(b) above the cases where an individual obtains any capital amount for some other person include cases where the individual has put some other person in a position to receive the capital amount by providing that other person with something of value derived, directly or indirectly, from the individual’s activities in the occupation.
- (9) This section shall apply to all persons, whether resident in the United Kingdom or not, if the occupation of the individual is carried on wholly or partly in the United Kingdom.
#### Transactions in land: taxation of capital gains
##### 776
- (1) This section is enacted to prevent the avoidance of tax by persons concerned with land or the development of land.
- (2) This section applies wherever—
- (a) land, or any property deriving its value from land, is acquired with the sole or main object of realising a gain from disposing of the land; or
- (b) land is held as trading stock; or
- (c) land is developed with the sole or main object of realising a gain from disposing of the land when developed;
and any gain of a capital nature is obtained from the disposal of the land—
- (i) by the person acquiring, holding or developing the land, or by any connected person, or
- (ii) where any arrangement or scheme is effected as respects the land which enables a gain to be realised by any indirect method, or by any series of transactions, by any person who is a party to, or concerned in, the arrangement or scheme;
and this subsection applies whether any such person obtains the gain for himself or for any other person.
- (3) Where this section applies, the whole of any such gain shall for all the purposes of the Tax Acts be treated—
- (a) as being income which arises when the gain is realised . . . ; and
- (b) subject to the following provisions of this section, as being income of the person by whom the gain is realised.
- (3A) The gain treated as income shall be charged—
- (a) to income tax for the year of assessment in which the gain is realised, or
- (b) to corporation tax as profits or gains under Case VI of Schedule D for the accounting period in which the gain is realised.
- (3B) The income tax charged by virtue of subsection (3A)(a) shall be charged on the full amount of the income treated as arising in the year of assessment; and the person liable for any tax so charged is the person whose income it is.
- (4) For the purposes of this section—
- (a) land is disposed of if, by any one or more transactions, or by any arrangement or scheme, whether concerning the land or property deriving its value from the land, the property in the land, or control over the land, is effectually disposed of; and
- (b) references in subsection (2) above to the acquisition or development of property with the sole or main object of realising the gain from disposing of the land shall be construed accordingly.
- (5) For those purposes—
- (a) where, whether by a premature sale or otherwise, a person directly or indirectly transmits the opportunity of making a gain to another person, that other person’s gain is obtained for him by the first-mentioned person; and
- (b) any number of transactions may be regarded as constituting a single arrangement or scheme if a common purpose can be discerned in them, or if there is other sufficient evidence of a common purpose.
- (6) For the purposes of this section, such method of computing a gain shall be adopted as is just and reasonable in the circumstances, taking into account the value of what is obtained for disposing of the land, and allowing only such expenses as are attributable to the land disposed of; and in applying this subsection—
- (a) where a freehold is acquired and the reversion is retained on disposal, account may be taken of the way in which the profits under Part 2 of ITTOIA 2005 or Case I of Schedule D of a person dealing in land are computed in such a case; or
- (b) account may be taken of the adjustments to be made in computing such profits under section 158 of ITTOIA 2005 or (as the case may be) subsections (2) and (3) of section 99 above.
- In the application of this subsection to Scotland, “*freehold*” means the interest of the owner, and “*reversion*” means the interest of the landlord in property subject to a lease.
- (7) Subsection (2)(c) above shall not apply to so much of any gain as is fairly attributable to the period, if any, before the intention to develop the land was formed, and which would not fall under paragraph (a) or (b) of that subsection; and in applying this subsection account shall be taken of the treatment under Part 2 of ITTOIA 2005 or Case I of Schedule D of a person who appropriates land as trading stock.
- (8) If all or any part of the gain accruing to any person is derived from value, or an opportunity of realising a gain, provided directly or indirectly by some other person, whether or not put at the disposal of the first-mentioned person, subsection (3)(b) above shall apply to the gain, or that part of it, with the substitution of that other person for the person by whom the gain was realised.
- (9) This section shall not apply to a gain accruing to an individual which by virtue of sections 222 to 226 of the 1992 Act (private residences) is exempt from capital gains tax, or which would be so exempt but for the provisions of section 224(3) of that Act (residences acquired partly with a view to making a gain).
- (10) Where—
- (a) there is a disposal of shares in—
- (i) a company which holds land as trading stock; or
- (ii) a company which owns directly or indirectly 90 per cent. or more of the ordinary share capital of another company which holds land as trading stock; and
- (b) all the land so held is disposed of—
- (i) in the normal course of its trade by the company which held it, and
- (ii) so as to procure that all opportunity of profit in respect of the land arises to that company,
then this section shall not by virtue of subsection (2)(i) above apply to any gain to the holder of shares as being a gain on property deriving value from that land (but without prejudice to any liability under subsection (2)(ii) above).
- (11) Where a person who considers that paragraph (a) or (c) of subsection (2) above may apply as respects a gain of a capital nature which that person has obtained from the disposal of land, or which he would obtain from a proposed disposal of land, supplies to the inspector to whom he makes his return of income written particulars showing how the gain has arisen or would arise—
- (a) the inspector shall, within 30 days from his receipt of the particulars, notify that person whether or not he is satisfied that, in the circumstances as described in the particulars, the gain will not, or would not, be chargeable to tax on that person under this section; and
- (b) if the inspector notifies that person that he is so satisfied, the gain shall not be chargeable on that person under this section.
- (12) If the particulars given under this section with respect to the gain are not such as to make full and accurate disclosure of all facts and considerations relating thereto which are material to be known to the inspector, any notification given by the inspector under subsection (11) above shall be void.
- (13) In this section—
- (a) references to the land include references to all or any part of the land, and “*land*” includes buildings, and any estate or interest in land or buildings;
- (b) references to property deriving its value from land include—
- (i) any shareholding in a company, or any partnership interest, or any interest in settled property, deriving its value directly or indirectly from land, and
- (ii) any option, consent or embargo affecting the disposition of land;
and for the purposes of this section any question whether a person is connected with another shall be determined in accordance with section 839.
- (14) This section shall apply to all persons, whether resident in the United Kingdom or not, if all or any part of the land in question is situated in the United Kingdom.
#### Provisions supplementary to sections 775 and 776
##### 777
- (1) This section has effect to supplement sections 775 and 776, and those sections and this section are together referred to as the relevant provisions.
- (2) In applying the relevant provisions account shall be taken of any method, however indirect, by which—
- (a) any property or right is transferred or transmitted; or
- (b) the value of any property or right is enhanced or diminished;
and accordingly the occasion of the transfer or transmission of any property or right, however indirect, and the occasion when the value of any property or right is enhanced, may be an occasion when, under sections 775 and 776, tax becomes chargeable.
- (3) Subsection (2) above applies in particular—
- (a) to sales, contracts and other transactions made otherwise than for full consideration or for more than full consideration; and
- (b) to any method by which any property or right, or the control of any property or right, is transferred or transmitted by assigning share capital or other rights in a company or any partnership or interest in settled property; and
- (c) to the creation of any option or consent or embargo affecting the disposition of any property or right, and to the consideration given for the option, or for the giving of the consent or the release of the embargo; and
- (d) to the disposal of any property or right on the winding up, dissolution or termination of any company, partnership or trust.
- (4) In ascertaining for the purposes of the relevant provisions the intentions of any person, the objects and powers of any company, partners or trustees, as set out in any memorandum, articles of association or other document, shall not be conclusive.
- (5) In order to ascertain whether and to what extent the value of any property or right is derived from any other property or right, value may be traced through any number of companies, partnerships and trusts, and the property held by any company, partnership or trust shall be attributed to the shareholders, partners or beneficiaries at each stage in such manner as is appropriate in the circumstances.
- (6) In applying the relevant provisions—
- (a) any expenditure or receipt or consideration or other amount may be apportioned by such method as is just and reasonable in the circumstances;
- (b) all such valuations shall be made as are appropriate to give effect to sections 775 and 776.
- (7) For the purposes of the relevant provisions (and in particular for the purpose of the reference in section 775 to an individual putting some other person in a position to enjoy income or receipts) partners, or the trustees of settled property, or personal representatives, may be regarded as persons distinct from the individuals or other persons who are for the time being partners or trustees or personal representatives.
- (8) Where a person is assessed to tax under the relevant provisions in respect of consideration receivable by another person—
- (a) he shall be entitled to recover from that other person any part of that tax which he has paid; and
- (b) if any part of that tax remains unpaid at the expiration of six months from the date when it became due and payable, it shall be recoverable from that other person as though he were the person assessed, but without prejudice to the right to recover it from the person actually assessed;
and for the purposes of paragraph (a) above the Board or an inspector shall on request furnish a certificate specifying the amount of income in respect of which tax has been paid, and the amount of tax so paid; and the certificate shall be conclusive evidence of any facts stated in it.
- (9) If it appears to the Board that any person entitled to any consideration or other amount taxable under sections 775 and 776 is not resident in the United Kingdom, the Board may direct that section 349(1) shall apply to any payment forming part of that amount as if it were an annual payment charged with tax under Chapter 7 of Part 5 of ITTOIA 2005 (annual payments not otherwise charged) or Case III of Schedule D, but without prejudice to the final determination of the liability of that person, including any liability under subsection (8)(b) above.
- (10) Sections 775 and 776 have effect subject to Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) and to any other provision of the Tax Acts deeming income to belong to a particular person.
- (11) Where under section 776(2)(c) any person is charged to tax on the realisation of a gain, and the computation of the gain proceeded on the footing that the land or some other property was appropriated at any time as trading stock, that land or other property shall be treated on that footing also for the purposes of section 161 of the 1992 Act (property becoming or ceasing to be stock in trade).
- (12) Where under section 775(1)(b) or 776(8) the person charged to tax is a person other than the person for whom the capital amount was obtained or the person by whom the gain was realised, and the tax has been paid, then, for the purposes of sections 37 and 39 of the 1992 Act (profits taxable as income excluded from tax on capital gains), the person for whom the capital amount was obtained or the person by whom the gain was realised shall be regarded as having been charged to that tax.
- (13) For the purposes of the relevant provisions—
- “*capital amount*” means any amount, in money or money’s worth, which, apart from the sections 775 and 776, does not fall to be included in any computation of income for purposes of the Tax Acts, and other expressions including the word “*capital*” shall be construed accordingly;
- “*company*” includes any body corporate; and
- “*share*” includes stock;
and any amount in money or money’s worth shall not be regarded as having become receivable by some person until that person can effectively enjoy or dispose of it.
#### Power to obtain information
##### 778
- (1) The Board or an inspector may by notice require any person to furnish them within such time as the Board or the inspector may direct (not being less than 30 days) with such particulars as the Board or the inspector think necessary for the purposes of sections 775 and 776.
- (2) The particulars which a person must furnish under this section, if he is required by a notice from the Board or the inspector so to do, include particulars—
- (a) as to transactions or arrangements with respect to which he is or was acting on behalf of others;
- (b) as to transactions or arrangements which in the opinion of the Board or the inspector should properly be investigated for the purposes of sections 775 and 776 notwithstanding that, in the opinion of the person to whom the notice is given, no liability to tax arises under those sections; and
- (c) as to whether the person to whom the notice is given has taken or is taking any, and if so what, part in any, and if so what, transactions or arrangements of a description specified in the notice.
- (3) Notwithstanding anything in subsection (2) above, a solicitor—
- (a) shall not be deemed for the purposes of paragraph (c) of that subsection to have taken part in any transaction or arrangement by reason only that he has given professional advice to a client in connection with the transaction or arrangement, and
- (b) shall not, in relation to anything done by him on behalf of a client, be compellable under this section, except with the consent of his client, to do more than state that he is or was acting on behalf of a client, and give the name and address of his client.
#### Sale and lease-back: limitation on tax reliefs
##### 779
- (1) If land or any estate or interest in land is transferred from one person to another and—
- (a) as a result of a lease of the land or any part of the land granted at that time or subsequently by the transferee to the transferor, or
- (b) as a result of any other transaction or series of transactions affecting the land or any estate or interest in the land,
the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to pay any rent under a lease of the land or any part of the land, this section shall apply to all rent due under the lease from the transferor, or from any person who is associated with the transferor.
- (2) If—
- (a) land or any estate or interest in land is transferred from one person to another, and
- (b) as a result of any transaction or series of transactions affecting the land or any estate or interest in the land, the transferor, or any person who is associated with the transferor, becomes liable at the time of the transfer or subsequently to make any payment (other than rent under a lease) for which any relevant tax relief is available, being a payment by way of rentcharge on the land or any part of the land or a payment in any other way connected with the land,
then this section shall apply to all such payments under the rentcharge or other transaction due from the transferor, or from any person who is associated with the transferor.
- (3) The references in subsections (1) and (2) above to the transfer of an estate or interest in land include references to—
- (a) the granting of a lease or any other transaction involving the creation of a new estate or interest in the land;
- (b) the transfer of the lessee’s interest under a lease by surrender or forfeiture of the lease; and
- (c) any transaction or series of transactions affecting land or an estate or interest in land, such that some person is the owner, or one of the owners, before and after the carrying out of the transaction or transactions, but another person becomes or ceases to become one of the owners;
and in relation to any such transaction or series of transactions any person who is an owner before the carrying out of the transaction or transactions, and is not the sole owner thereafter, shall be regarded for the purposes of this section as a transferor.
- (4) A deduction by way of any relevant tax relief, being a deduction in respect of rent or of any other payment to which this section applies, shall not exceed the commercial rent for the period for which the rent or other payment is made of the land in respect of which that payment is made.
- (5) If—
- (a) under subsection (4) above part of a payment which would otherwise be allowable as a deduction by way of any relevant tax relief is not so allowable, and
- (b) one or more subsequent payments are made by the transferor, or a person who is associated with the transferor, under the lease or other transaction,
that part of the first-mentioned payment may be carried forward and treated for the purposes of any such deduction by way of tax relief as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.
- (6) For the purposes of subsection (4) above—
- (a) if more than one payment is made for the same period the payments shall be taken together;
- (b) if payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together;
- (c) the preceding references to payments include references to parts of payments which under subsection (5) above are treated as if made at a time subsequent to that at which they were made, and to the extent that a part of a payment so carried forward under that subsection is not so allowable as a deduction by way of tax relief, it may again be carried forward under that subsection;
- (d) so much of any payment as is in respect of services or the use of assets or rates usually borne by the tenant shall be excluded, and in determining the amount to be so excluded provisions in any lease or agreement fixing the payments or parts of payments which are in respect of services or the use of assets may be overridden.
- (7) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment was made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).
- (8) For the purposes of making a comparison under subsection (4) above between a payment consisting of rent under a lease (“the actual lease”), or such payments taken together, and the commercial rent of the land, “*commercial rent*” shall mean the rent which might be expected to be paid under a lease of the land negotiated in the open market at the time when the actual lease was created, being a lease which is of the same duration as the actual lease, which is, as respects liability for maintenance and repairs, subject to the terms and conditions of the actual lease and which provides for rent payable at uniform intervals and—
- (a) at a uniform rate, or
- (b) if the rent payable under the actual lease is rent at a progressive rate (and such that the amount of rent payable for any year is never less than the amount payable for any previous year), a rent which progresses by gradations proportionate to those provided by the actual lease.
- (9) For the purpose of making a comparison under subsection (4) above between a payment which does not consist of rent under a lease (or such a payment taken together with other payments) and the commercial rent of the land, “*commercial rent*” shall mean the rent which might be expected to be paid under a tenant’s repairing lease negotiated in the open market at the time when the transaction was effected under which the payment or payments became due, being—
- (a) where the period over which payments are to be made under that transaction is not less than 200 years, or the obligation to make such payments is perpetual, a lease for 200 years; and
- (b) where that period is less than 200 years, a lease which is of the same duration as that period.
- (10) In this section references to rent under a lease include references to
- (a) rent which the person entitled to the lease is under subsection (4), (5) or (6) of section 37 or under section 37A or under section 87 or 87A treated, for any purpose, as paying in respect of land comprised in the lease, and
- (b) expenses which the tenant under the lease is treated as incurring in respect of the land subject to the lease under sections 61 to 67 or 292 to 297 of ITTOIA 2005,
and such rent shall be treated for the purposes of this section as having been paid from day to day as it has become due and such expenses shall be treated for those purposes as having been paid as soon as they have been incurred.
- (11) For the purposes of this section the following persons shall be deemed to be associated with one another, that is—
- (a) the transferor in any such transaction as is described in subsection (1) or (2) above, and the transferor in another such transaction, if those two persons are acting in concert, or if the two transactions are in any way reciprocal, and any person who is an associate of either of those associated transferors;
- (b) any two or more bodies corporate participating in, or incorporated for the purposes of, a scheme for the reconstruction of any body or bodies corporate or for the amalgamation of any two or more bodies corporate;
- (c) any persons who are associates as defined in section 783(10).
- (12) In this section—
- “*asset*” means any description of property or rights other than land or an interest in land;
- “*lease*” includes an underlease, sublease or any tenancy or licence, and any agreement for a lease, underlease, sublease or tenancy or licence and, in the case of land outside the United Kingdom, any interest corresponding to a lease as so defined; and in relation to such land, expressions in this section relating to interests in land and their disposition shall be construed accordingly;
- “*rent*” includes any payment made under a lease; and
- “*tenant’s repairing lease*” means a lease where the lessee is under an obligation to maintain and repair the whole, or substantially the whole, of the premises comprised in the lease.
- (13) For the purposes of this section the following are deductions by way of relevant tax relief, that is to say—
- (a) a deduction in computing profits or gains chargeable under Schedule A . . . ;
- (aa) a deduction in calculating the profits of a UK property business;
- (b) a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax;
- (c) a deduction in computing profits or gains chargeable under Case VI of Schedule D, or in computing any loss for which relief is allowable under section . . . 396;
- (ca) a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 836B applies, or in computing any loss for which relief is allowable under section 392;
- (d) a deduction under section 75 or 76;
- (e) a deduction from earnings allowed under section 336 of ITEPA 2003 (expenses) or allowable in computing losses in an employment for tax purposes;
- (f) a deduction allowable for tax purposes in computing profits or gains or losses arising from woodlands.
- (14) This section shall not apply if the transfer described in subsection (1) or (2) above was on or before 14th April 1964.
#### Sale and lease-back: taxation of consideration received
##### 780
- (1) If, in any case where a person (“the lessee”) who is a lessee of land under a lease having not more than 50 years to run (“the original lease”) is entitled in respect of the rent under the lease to a deduction by way of tax relief which is a relevant tax relief for the purposes of section 779—
- (a) the lessee assigns the original lease to another person, or surrenders it to his landlord, for a consideration which apart from this section would not be taxable otherwise than as capital in the hands of the lessee, and
- (b) there is granted or assigned to the lessee another lease (“the new lease”) of or including the whole or any part of the land which was the subject of the original lease for a term not exceeding 15 years;
then, subject to the following provisions of this section, the provisions of this Act providing for deductions or allowances by way of tax relief in respect of payments of rent shall apply in relation to the rent under the new lease, and for the purposes of the Tax Acts a proportion of the consideration received by the lessee shall be treated not as a capital receipt but in accordance with subsection (3) below.
- (2) For the purposes of this section—
- (a) if the aggregate of the rent payable under the new lease in respect of any rental period ending on a date falling before the 15th anniversary of the date on which the term of the new lease begins is greater than the aggregate of the rent payable under the new lease in respect of the period of equal duration beginning on the day following that date, then unless the term of the new lease would be treated as ending on an earlier date by virtue of paragraph (b) below, that term shall be treated as ending on that date;
- (b) if under the terms of the new lease—
- (i) the lessor of the lessee has power to determine the new lease at a time before the expiry of the term for which it was granted, or
- (ii) the lessee has power to vary his obligations under the new lease so as to reduce the rent which he would otherwise have to pay or in any other manner beneficial to him,
- (3) Subject to the following provisions of this section, the proportion of the consideration received by the lessee as mentioned in subsection (1) above, or of any instalment of that consideration, which for the purposes of the Tax Acts is to be treated not as a capital receipt but in accordance with this subsection shall be determined by the formula—
$$16-N15$where N is the term of the new lease expressed in years or, if that term is less than a year, where N is 1; and that proportion shall be treated for the purposes of the Tax Acts—$
- (a) as a receipt of a trade, profession or vocation, if the rent payable by the lessee under the new lease is allowable as a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax and if the consideration is received by the lessee in the course of that trade, profession or vocation; and
- (b) in any other case, as an amount chargeable to tax in accordance with subsection (3A).
- (3A) The amount shall be charged—
- (a) to income tax, or
- (b) to corporation tax as a profit or gain under Case VI of Schedule D.
- (3B) The income tax charged by virtue of subsection (3A)(a) above shall be charged on the full amount of the proportion of the consideration concerned arising in the year of assessment; and the person liable for any tax so charged is the lessee.
- (4) In any case where the property which is the subject of the new lease does not include the whole of the property which was the subject of the original lease, the consideration received by the lessee shall be treated for the purposes of subsection (3) above as reduced to that portion of the consideration which is reasonably attributable to such part of the property which was the subject of the original lease as consists of, or is included in, the property which is the subject of the new lease.
- (5) *Schedule* 2*shall have effect for the purposes of giving relief, on a claim being made in that behalf, from any increase in an individual’s liability to income tax which is attributable to any amount being treated, by virtue of subsection* (3)*above, as an income receipt for a single year of assessment rather than as a series of such receipts during the term of the new lease; and in the application of that Schedule by virtue of this subsection for the definitions of “chargeable sum” and “relevant period” there shall be substituted the following definitions*—
> - *“*chargeable sum*” means the amount in respect of which, by virtue of subsection* (3)*above, the claimant is chargeable to income tax for the year of assessment;*
> *“*relevant period*”, in relation to any chargeable sum, means the term of the new lease.*
- (6) Where by agreement with his landlord, the lessee varies the terms of the original lease in such a manner that, in return for such a consideration as is specified in subsection (1)(a) above, the lessee undertakes to pay, during a period ending not later than 15 years after the date on which the consideration, or if the consideration is paid in instalments, the last such instalment, is paid to the lessee, a rent greater than that payable under the original lease, he shall be treated for the purposes of this section—
- (a) as having surrendered the original lease for that consideration, and
- (b) as having been granted a new lease for a term not exceeding 15 years but otherwise on the terms of the original lease as so varied.
- (7) References in this section to the lessee (other than in subsection (1)(a) above) include references to a person who is a partner or associate of the lessee or an associate of a partner of the lessee; and for the purposes of this section the expression “*associate*” shall be construed in accordance with 783(10).
- (8) Subject to subsection (7) above, expressions used in this section have the meanings assigned to them by section 24, and in subsection (2)(a) above “*rental period*” means a period in respect of which a payment of rent falls to be made, and for the purposes of that subsection, in a case where the rental period is a quarter or a month, each such period shall be treated as of equal duration.
- (9) The preceding provisions of this section shall not apply if the lessee had, before 22nd June 1971, a right enforceable at law or in equity to the grant of the new lease, but in any case where, apart from this subsection, those provisions would apply, no part of the rent paid under the new lease shall be treated as a payment of capital, and the provisions of this Act providing for deductions or allowances by way of tax relief in respect of payments of rent shall apply accordingly.
#### Assets leased to traders and others
##### 781
- (1) Subject to section 782, where—
- (a) a deduction by way of tax relief which is one of the kinds listed in subsection (4) below is allowable in respect of a payment made under a lease of an asset of any description, and
- (b) before, at or after the time when the payment is made, either—
- (i) the person who made the payment has obtained or obtains a capital sum in respect of the lessee’s interest in the lease, or
- (ii) the lessor’s interest in the lease, or any other interest in the asset, has belonged to an associate of the person who made the payment, and that associate has obtained a capital sum in respect of that interest,
the person obtaining that sum shall be charged to tax (in the case of corporation tax, under Case VI of Schedule D) for the chargeable period in which the sum is obtained on an amount equal to the amount of the payment in respect of which tax relief is so allowed.
- (2) A person shall not be assessed to tax under subsection (1) above on any amount to the extent to which it exceeds the capital sum by reference to which he is so assessed.
- (3) Subsection (1) above shall not apply to payments under a lease created on or before 14th April 1964.
- (4) The kinds of deductions by way of tax relief to which subsection (1) above applies are as follows—
- (a) a deduction in computing profits or losses of a trade, profession or vocation for the purposes of tax;
- (ab) a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 836B applies, or in computing any loss for which relief is allowable under section 392;
- (b) a deduction in computing profits or gains chargeable under Case VI of Schedule D, or in computing any loss for which relief is allowable under section . . . 396;
- (c) a deduction under section 75 or 76;
- (d) a deduction from earnings allowed under section 336 of ITEPA 2003 (expenses) or allowable in computing losses in an employment for tax purposes;
- (e) a deduction allowable for tax purposes in computing profits or gains or losses arising from woodlands.
- (5) Where—
- (a) the deduction by way of tax relief mentioned in subsection (1)(a) above is a deduction in computing, for income tax purposes, profits or gains or losses of a trade, profession or vocation, or arising from woodlands, and
- (b) any part of the payments made under the lease by the person obtaining the capital sum is a payment in respect of which a deduction is not allowed for the reason that the whole or any part of the period in which the payment would fall to be allowed is not a period on the profits of which income tax falls to be computed in respect of the trade, profession or vocation,
for the reference in subsection (2) above to the amount of the capital sum there shall be substituted a reference to that amount after deducting the amount of the payment in respect of which a deduction is not allowed for that reason.
- (6) So far as in respect of a capital sum any part of a payment allowed as a deduction by way of tax relief of a kind to which this section applies is taken into account in making an assessment under subsection (1) above, that part of the payment shall be left out of account in determining whether any and if so what amount should be assessed by reference to any other capital sum; and the order in which this subsection is applied shall be the order in which the capital sums are obtained.
- (7) There shall be made all such adjustments of tax, whether by way of making assessments or by repayment of tax, as are required after the making of any such payment as is described in subsection (1) above to give effect to the charge under that subsection in respect of a sum obtained before the making of the payment.
- (8) Notwithstanding anything in the Tax Acts limiting the time within which an assessment may be made or a claim for relief may be admitted any such adjustment may be made, by making an assessment or otherwise, at any time within the period specified in subsection (8A) below.
- (8A) The period mentioned in subsection (8) above is—
- (a) in the case of adjustments with respect to income tax, the period ending with the fifth anniversary of the 31st January next following the year of assessment in which the payment was made;
- (b) in the case of adjustments with respect to corporation tax, the period of six years beginning at the end of the accounting period in which the payment was made.
- (9) This section shall not apply if the capital sum obtained in respect of the lessee’s interest in a lease constituting a hire-purchase agreement for machinery or plant is a sum which is required to be brought into account as the whole or part of the disposal value of the machinery or plant under section 68 of the Capital Allowances Act.
#### Leased assets: special cases
##### 782
- (1) This section shall apply, and section 781 shall not apply, to payments—
- (a) which are allowable by way of deductions in computing the profits or losses of a trade, and
- (b) which are made under a lease of an asset which at any time before the creation of the lease was used for the purposes—
- (i) of that trade; or
- (ii) of another trade carried on by the person who at that time or later was carrying on the first-mentioned trade;
and when so used was owned by the person carrying on the trade in which it was being used.
- (1A) This section does not apply to a payment if or to the extent that, in the case of the lessee, it falls to be regarded in accordance with Chapter 6A of Part 2 of the Capital Allowances Act as a payment under a lease which is a long funding finance lease for the purposes of that Part.
- (2) Subject to the following provisions of this section, the deduction allowable in computing the profits or losses of the trade for the purposes of tax as respects any such payment shall not exceed the commercial rent of the asset for the period for which the payment was made.
- (3) If under subsection (2) above part of a payment which would otherwise be allowable as a deduction is not so allowable, and one or more subsequent payments are made by the same person under the same lease, that part of the first-mentioned payment may be carried forward and treated for the purposes of computing the profits or losses of the trade for the purposes of tax as if it were made at the time when the next of those subsequent payments was made, and so made for the period for which that subsequent payment was made.
- (4) For the purposes of subsection (2) above—
- (a) if more than one payment is made for the same period the payments shall be taken together;
- (b) if the payments are made for periods which overlap, the payments shall be apportioned, and the apportioned payments which belong to the common part of the overlapping periods shall be taken together;
- (c) the preceding references to payments include references to parts of payments which under subsection (3) above are treated as if made at a time subsequent to that at which they were made;
and to the extent that a part of a payment carried forward under subsection (3) above is not allowable as a deduction it may again be carried forward under that subsection.
- (5) A payment made for a period all of which falls more than one year after the payment is made shall be treated for the purposes of this section as made for that period of one year beginning with the date on which the payment is made, and a payment for a period part of which falls after the end of that year shall be treated for those purposes as if a corresponding part of the payment was made for that year (and no part for any later period).
- (6) For the purpose of making a comparison under subsection (2) above between a payment, or payments taken together, and the commercial rent of the asset, “*commercial rent*” shall mean the rent which might at the relevant time be expected to be paid under a lease of the asset for the remainder of the anticipated normal working life of the asset, being a rent payable at uniform intervals and at a uniform rate which would afford a reasonable return for its market value at the relevant time, having regard to the terms and conditions of the lease; and in this subsection—
- “*anticipated normal working life*” means, in the case of any asset, the period which might be expected, when the asset is first put into use, to be going to elapse before it is finally put out of use as being unfit for further use, it being assumed that the asset is going to be used in the normal manner and to the normal extent, and is going to be so used throughout that period; and
- “*the relevant time*” means the time when the lease was created under which the payment was made with which the commercial rent is to be compared.
- (7) If the asset is used at the same time partly for the purposes of the trade and partly for other purposes the commercial rent as defined in subsection (6) above shall be determined by reference to what would be paid for such a partial use of the asset.
- (8) This section shall not apply in relation to payments made under a lease created on or before 14th April 1964.
- (9) In this section references to the person carrying on a trade are references to the person carrying on the trade for the time being, and where at any time a person succeeds to a trade which until that time was carried on by another person, and by virtue of section 18 of ITTOIA 2005 or section 337(1) above (companies beginning or ceasing to carry on trade) the trade is to be treated as discontinued, the trade shall, nonetheless, be treated as the same trade for the purposes of this section.
- (10) In this section references to a trade include references to a profession or vocation.
#### Leased assets: supplemental
##### 783
- (1) References in section 781 to a sum obtained in respect of the lessee’s interest in a lease of an asset, or in respect of any other interest in an asset include—
- (a) in the case of a lessee’s interest, references to sums representing the consideration in money or money’s worth obtained on a surrender of the rights to the lessor, or on an assignment of the lease, or on creating a sublease or any other interest out of the lease; and
- (b) references to any insurance moneys payable in respect of the asset, so far as payable to the owner of the interest in the asset.
- (2) Such references also include references to sums representing money or money’s worth obtained by the person entitled to the interest by a transaction or series of transactions disposing of the asset, or of an interest in the asset, and in particular transactions which comprise arrangements under which the rights of the lessee under a lease of the asset are merged in any way with the rights of the lessor, or with any other rights as respects the asset, so far as the money or money’s worth so obtained is attributable to the rights of the lessee under the lease.
- (3) References in section 781 to sums obtained in respect of any interest in an asset include references to money or money’s worth so obtained in any transaction (including a transaction of the kind described in subsection (1) or (2) above) by way of consideration received by a person who is an associate of the person entitled to the interest in the asset.
- (4) If an interest in the asset is disposed of by any person to a person who is his associate, the person disposing of the interest shall (unless in fact he obtains a greater sum) be treated for the purposes of section 781 as having obtained in respect of the interest—
- (a) the value of the interest in the open market; or
- (b) the value of the interest to the person to whom it is, in effect, transferred;
whichever is the greater.
- (5) For the purposes of subsections (3) and (4) above a disposition may be direct or indirect and may be effected by any such transaction as is described in subsection (2) above.
- (6) For the purposes of sections 781 and 784 and this section any sum obtained by any persons carrying on a trade, profession or vocation in partnership in respect of an interest in an asset which is and continues to be used for the purposes of the trade, profession or vocation shall be regarded as apportionable between them in the shares in which they are then entitled to the profits of the trade, profession or vocation.
- (7) Subject to subsection (6) above, for those purposes a sum obtained by persons jointly entitled to an interest in an asset shall be apportionable according to their respective interests in the rights.
- (8) For those purposes, any payment in respect of which a deduction is allowable by way of tax relief which is made by persons carrying on a trade, profession or vocation in partnership shall be apportioned in such manner as may be just.
- (9) Where under this section any sum or payment falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever period) of two or more persons, any question which arises as to the manner in which the sum or payment is to be apportioned shall be determined, for the purposes of tax of all those persons—
- (a) in a case where the same body of General Commissioners have jurisdiction with respect to all those persons, by those Commissioners unless all those persons agree that it shall be determined by the Special Commissioners;
- (b) in a case where different bodies of Commissioners have jurisdiction with respect to those persons, by such of those bodies as the Board may direct unless all those persons agree that it shall be determined by the Special Commissioners; and
- (c) in any other case, by the Special Commissioners;
and any such Commissioners shall determine the question in like manner as if it were an appeal, except that all those persons shall be entitled to appear and be heard by the Commissioners who are to make the determination or to make representations to them in writing.
- (10) For the purposes of this section and in construing the expressions “*associate*” and “*associated*” in section 781 and this section, the following persons shall be deemed to be associated with each other, that is to say—
- (a) any individual and that individual’s spouse or civil partner, and any relative, or spouse or civil partner of a relative, of that individual or that individual’s spouse or civil partner (“*relative*” meaning, for this purpose, brother, sister, ancestor or lineal descendant);
- (b) any person in his capacity of trustee of a settlement and any individual who in relation to the settlement is a settlor, and any person associated with that individual (“*settlement*” and “*settlor*” having, for this purpose, the meanings given by section 620 of ITTOIA 2005);
- (c) any person and a body of persons of which that person, or persons associated with him, or that person and persons associated with him, has or have control;
- (d) any two or more bodies of persons associated with the same person by virtue of paragraph (c) above;
- (e) in relation to a disposal by joint owners, the joint owners and any person associated with any of them.
- (11) In subsection (10) above “*body of persons*” includes a partnership and “*control*” has the meaning given by section 840.
#### Leased assets subject to hire-purchase agreements
##### 784
- (1) In the application of section 781 to a lease which constitutes a hire-purchase agreement, for the reference in subsection (2) of that section to the amount of the capital sum there shall, where that capital sum was obtained in respect of the lessee’s interest in the lease constituting the hire-purchase agreement, be substituted references to the amount of the capital sum (adjusted, if necessary, under subsection (5) of that section) after deducting any capital expenditure which was incurred by the person obtaining the capital sum in providing the lessee’s interest.
- (2) In subsection (1) above “*capital expenditure which was incurred by the person obtaining the capital sum in providing the lessee’s interest*” means—
- (a) so much of any payment made under the lease by the person obtaining the capital sum (or, where the capital sum was obtained by the personal representatives of a deceased person, so made by that deceased person) as is not a payment in respect of which a deduction is allowable by way of tax relief which is one of the kinds listed in subsection (4) of section 781, plus
- (b) where the lessee’s interest was assigned to the person obtaining the capital sum, any capital payment made by that person as consideration for the assignment.
- (3) If the amount to be deducted in pursuance of subsection (1) above exceeds the amount of the capital sum from which it is to be deducted, no charge shall arise under section 781(1) in respect of the capital sum.
- (4) If the capital sum represents the consideration for part only of the lessee’s interest in the lease which constitutes a hire-purchase agreement, the amount to be deducted under subsection (1) above shall be such proportion of the capital expenditure which is still unallowed as is reasonable having regard to the degree to which the capital expenditure has contributed to the value of what is disposed of in return for the capital sum.
- (5) If more than one capital sum is, or is to be regarded as, obtained by the same person in respect of the lessee’s interest in the lease which constitutes a hire-purchase agreement, then, so far as in respect of one of those capital sums any deduction is made in respect of capital expenditure in pursuance of subsection (1) above that capital expenditure shall be left out of account in applying subsections (1) and (3) above to any other such capital sum; and the order in which this subsection is applied shall be the order in which the capital sums are obtained.
- (6) In this section—
- “*hire-purchase agreement*” means an agreement, other than a conditional sale agreement, under which—
- (a) goods are bailed or, in Scotland, hired in return for periodical payments by the person to whom they are bailed or hired, and
- (b) the property in the goods will pass to that person if the terms of the agreement are complied with and one or more of the following occurs—
- (i) the exercise of an option to purchase by that person;
- (ii) the doing of any other specified act by any party to the agreement;
- (iii) the happening of any other specified event; and
#### Meaning of “asset”, “capital sum” and “lease” for purposes of sections 781 to 784
##### 785
- In sections 781 to 784—“*asset*” means any description of property or rights other than land or an interest in land;“*capital sum*” means any sum of money, or any money’s worth, except so far as it or any part of it is to be treated for the purposes of tax as a receipt to be taken into account in computing the profits or losses of a trade, profession or vocation, or profits or gains or losses arising from woodlands, or is, apart from section 781, chargeable to income tax under or by virtue of any provision to which section 836B applies or to corporation tax under Case VI of Schedule D; and“*lease*”, in relation to an asset, means any kind of agreement or arrangement under which payments are made for the use of, or otherwise in respect of, an asset, and includes, in particular, any agreement or arrangement all or any of the payments under which represent instalments of, or payments towards, a purchase price.
#### Transactions associated with loans or credit
##### 786
- (1) This section applies as respects any transaction effected with reference to the lending of money or the giving of credit, or the varying of the terms on which money is lent or credit is given, or which is effected with a view to enabling or facilitating any such arrangement concerning the lending of money or the giving of credit.
- (2) Subsection (1) above has effect whether the transaction is effected between the lender or creditor and the borrower or debtor, or between either of them and a person connected with the other or between a person connected with one and a person connected with the other.
- (3) If the transaction provides for the payment of any relevant annual payment, the payment shall be treated for all the purposes of the Tax Acts as if it were a payment of annual interest.
- (3A) In subsection (3) “*relevant annual payment*” means a payment which is not interest but is—
- (a) an annuity or other annual payment falling within Part 5 of ITTOIA 2005 and chargeable to income tax otherwise than as relevant foreign income; or
- (b) an annuity or other annual payment chargeable to corporation tax under Case III of Schedule D.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) If under the transaction a person assigns, surrenders or otherwise agrees to waive or forego income arising from any property (without a sale or transfer of the property) then, without prejudice to the liability of any other person, he shall be chargeable—
- (a) to income tax, or
- (b) to corporation tax under Case VI of Schedule D,
on a sum equal to the amount of income assigned, surrendered, waived or foregone.
- (5ZA) But subsection (5) above does not apply if the person mentioned in that subsection is, as a result of section 774B or 774D (structured finance arrangements), chargeable to tax on the amount of income assigned, surrendered, waived or forgone.
- (5A) Income tax charged by virtue of subsection (5)(a) above shall be charged on the full amount of the income assigned, surrendered, waived or forgone in the year of assessment.
- (6) If credit is given for the purchase price of any property, and the rights attaching to the property are such that, during the subsistence of the debt, the purchaser’s rights to income from the property are suspended or restricted, he shall be treated for the purposes of subsection (5) above as if he had surrendered a right to income of an amount equivalent to the income which he has in effect foregone by obtaining the credit.
- (7) The amount of any income payable subject to deduction of income tax shall be taken for the purposes of subsection (5) above as the amount before deduction of tax.
- (8) References in this section to connected persons shall be construed in accordance with section 839.
#### Restriction of relief for payments of interest
##### 787
- (1) Relief shall not be given to any person under any provision of the Tax Acts in respect of any payment of interest if a scheme has been effected or arrangements have been made (whether before or after the time when the payment is made) such that the sole or main benefit that might be expected to accrue to that person from the transaction under which the interest is paid was the obtaining of a reduction in tax liability by means of any such relief.
- (1A) This section has effect in relation to Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) but taking the reference in subsection (1) above to giving relief to any person in respect of any payment of interest as including a reference to the bringing into account by any person in accordance with that Chapter of any debit in respect of interest (whether a payment or not); and other references in this section to relief shall be construed accordingly.
- (2) In this section “*relief*” means relief by way of deduction in computing profits or gains or deduction or set off against income or total profits.
- (3) Where the relief is claimed by virtue of section 403—
- (a) in respect of a deficit to which section 83 of the Finance Act 1996 applies (non-trading deficit on loan relationships), or
- (b) in respect of trading losses, in a case where in computing those losses debits in respect of loan relationships are treated under section 82(2)(b) of that Act as expenses of the trade which are deductible in computing the profits of the trade,
any question under this section as to what benefit might be expected to accrue from the transaction in question shall be determined by reference to the claimant company and the surrendering company taken together.
## PART XVIII — DOUBLE TAXATION RELIEF
### CHAPTER I — THE PRINCIPAL RELIEFS
#### Relief by agreement with other countries
##### 788
- (1) If Her Majesty by Order in Council declares that arrangements specified in the Order have been made in relation to any territory outside the United Kingdom with a view to affording relief from double taxation in relation to—
- (a) income tax,
- (b) corporation tax in respect of income or chargeable gains, and
- (c) any taxes of a similar character to those taxes imposed by the laws of that territory,
and that it is expedient that those arrangements should have effect, then those arrangements shall have effect in accordance with subsection (3) below.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have effect in relation to income tax and corporation tax in so far as they provide—
- (a) for relief from income tax, or from corporation tax in respect of income or chargeable gains; or
- (b) for charging the income arising from sources, or chargeable gains accruing on the disposal of assets, in the United Kingdom to persons not resident in the United Kingdom; or
- (c) for determining the income or chargeable gains to be attributed—
- (i) to persons not resident in the United Kingdom and their agencies, branches or establishments in the United Kingdom; or
- (ii) to persons resident in the United Kingdom who have special relationships with persons not so resident; or
- (d) for conferring on persons not resident in the United Kingdom the right to a tax credit under section 397(1) of ITTOIA 2005 in respect of qualifying distributions made to them by companies which are so resident.
- (4) The provisions of Chapter II of this Part shall apply where arrangements which have effect by virtue of this section provide that tax payable under the laws of the territory concerned shall be allowed as a credit against tax payable in the United Kingdom.
- (5) For the purposes of this section and, subject to section 795(3), Chapter II of this Part in its application to relief under this section, any amount of tax which would have been payable under the law of a territory outside the United Kingdom but for a relief to which this subsection applies given under the law of that territory shall be treated as having been payable; and references in this section and that Chapter to double taxation, to tax payable or chargeable, or to tax not chargeable directly or by deduction shall be construed accordingly.
- (6) Except in the case of a claim for an allowance by way of credit in accordance with Chapter II of this Part, a claim for relief under subsection (3)(a) above shall be made to the Board.
- (7) Where—
- (a) under any arrangements which have effect by virtue of this section, relief may be given, either in the United Kingdom or in the territory in relation to which the arrangements are made, in respect of any income or chargeable gains, and
- (b) it appears that the assessment to income tax or corporation tax made in respect of the income or chargeable gains is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given under the arrangements,
any such assessments may be made as are necessary to ensure that the total amount of the income or chargeable gains is assessed, and the proper credit, if any, is given in respect thereof, and, where the income is, or the chargeable gains are, entrusted to any person in the United Kingdom for payment, any such assessment may be made on the recipient of the income or gains, and, in the case of an assessment to corporation tax in respect of income, may be assessed under Case VI of Schedule D.
- (8) Any arrangements to which effect is given under this section may include provision for relief from tax for periods before the passing of this Act, or before the making of the arrangements, and provisions as to income or chargeable gains which is or are not subject to double taxation, and the preceding provisions of this section shall have effect accordingly.
- (9) Any Order in Council made under this section revoking an earlier such Order in Council may contain such transitional provisions as appear to Her Majesty to be necessary or expedient.
- (10) An Order under this section is not to be submitted to Her Majesty in Council unless a draft of the Order has been laid before and approved by a resolution of the House of Commons.
#### Arrangements made under old law
##### 789
- (1) Notwithstanding section 793(2), any arrangements made in relation to the profits tax under section 347 of the Income Tax Act 1952 or any earlier enactment corresponding to that section shall, except in so far as arrangements made after the passing of the Finance Act 1965 provide otherwise, have effect in relation to corporation tax and income and gains chargeable to corporation tax as they are expressed to have effect in relation to the profits tax and profits chargeable to the profits tax, with the substitution of accounting periods for chargeable accounting periods (and not as they had effect in relation to income tax).
- (2) In so far as any arrangements made before 30th March 1971 provide for the exemption of any income from surtax they shall have effect, unless otherwise modified by subsequent arrangements, as if they provided for that income —
- (a) to bear income tax at the basic rate or, where that income is income to which section 1A applies, at the lower rate; and
- (b) to be disregarded for the purpose of computing total income, except in so far as the computation affects the matters mentioned in section 835(5).
- (3) Any reference in the Tax Acts (including this Part) to arrangements under or by virtue of section 788 includes a reference to arrangements having effect by virtue of this section.
#### Unilateral relief
##### 790
- (1) To the extent appearing from the following provisions of this section, relief from income tax and corporation tax in respect of income and chargeable gains shall be given in respect of tax payable under the law of any territory outside the United Kingdom by allowing that tax as a credit against income tax or corporation tax, notwithstanding that there are not for the time being in force any arrangements under section 788 providing for such relief.
- (2) Relief under subsection (1) above is referred to in this Part as “*unilateral relief*”.
- (3) Unilateral relief shall be such relief as would fall to be given under Chapter II of this Part if arrangements in relation to the territory in question containing the provisions specified in subsections (4) to (10C) below were in force by virtue of section 788, but subject to any particular provision made with respect to unilateral relief in that Chapter; and any expression in that Chapter which imports a reference to relief under arrangements for the time being having effect by virtue of that section shall be deemed to import also a reference to unilateral relief.
- (4) Credit for tax paid under the law of the territory outside the United Kingdom and computed by reference to income arising or any chargeable gain accruing in that territory shall be allowed against any United Kingdom income tax or corporation tax computed by reference to that income or gain (profits from, or remuneration for, personal or professional services performed in that territory being deemed for this purpose to be income arising in that territory).
- (5) Subsection (4) above shall have effect subject to the following modifications, that is to say—
- (a) where the territory is the Isle of Man or any of the Channel Islands, the limitation to income or gains arising in the territory shall not apply;
- (b) where arrangements in relation to the territory are for the time being in force by virtue of section 788, credit for tax paid under the law of the territory shall not be allowed by virtue of subsection (4) above in the case of any income or gains if any credit for that tax is allowable under those arrangements in respect of that income or those gains; and
- (c) credit shall not be allowed by virtue of subsection (4) above for overseas tax on a dividend paid by a company resident in the territory unless—
- (i) the overseas tax is directly charged on the dividend, whether by charge to tax, deduction of tax at source or otherwise, and the whole of it represents tax which neither the company nor the recipient would have borne if the dividend had not been paid; or
- (ii) the dividend is paid to a company within subsection (6) below; or
- (iii) the dividend is paid to a company to which section 802(1) applies and is a dividend of the kind described in that subsection.
- (6) Where a dividend paid by a company resident in the territory is paid to a company falling within subsection (6A) below which either directly or indirectly controls, or is a subsidiary of a company which directly or indirectly controls—
- (a) not less than 10 per cent. of the voting power in the company paying the dividend; or
- (b) less than 10 per cent. of the voting power in the company paying the dividend if—
- (i) it has been reduced below that percentage on or after 1st April 1972; or
- (ii) it has been acquired on or after that date in exchange for voting power in another company in respect of which relief under this subsection by virtue of paragraph (a) above was due prior to the exchange;
and the company receiving the dividend shows that the conditions specified in subsection (7) below are satisfied;
any tax in respect of its profits paid under the law of the territory by the company paying the dividend shall be taken into account in considering whether any, and if so what, credit is to be allowed in respect of the dividend.
- (6A) A company falls within this subsection if—
- (a) it is resident in the United Kingdom; or
- (b) it is resident outside the United Kingdom but the dividend mentioned in subsection (6) above forms part of the profits of a permanent establishment of the company’s in the United Kingdom.
- (7) The conditions referred to in subsection (6)(b) above are as follows—
- (a) that the reduction below the 10 per cent. limit (and any further reduction) or, as the case may be, the exchange (and any reduction thereafter) could not have been prevented by any reasonable endeavours on the part of the company receiving the dividend and was due to a cause or causes not reasonably foreseeable by it when control of the relevant voting power was acquired; and
- (b) no reasonable endeavours on the part of that company could have restored or, as the case may be, increased the voting power to not less than 10 per cent.
- (8) In subsection (7) above references to the company receiving the dividend include references—
- (a) to any company of which it is a subsidiary within the meaning of section 792(2); and
- (b) where prior to the reduction or exchange the voting power in question was controlled otherwise than directly by the company receiving the dividend, to each other company relevant for determining whether that voting power was controlled as required by subsection (6)(a) above.
- (9) In subsection (7) above “*the relevant voting power*” means the voting power by virtue of which relief was due under subsection (6)(a) above prior to the reduction or exchange or, where control of the whole of that voting power was not acquired at the same time, that part of the voting power of which control was last acquired.
- (10) In any case in which relief in respect of a dividend is due by virtue of subsection (6)(b) above, there shall be taken into account, as if it were tax payable under the law of the territory in which the company paying the dividend is resident, any tax that would be so taken into account under section 801 if the company paying the dividend and the company receiving it were related to each other within the meaning of section 801(5).
- (10A) In any case where—
- (a) under the law of the territory outside the United Kingdom, an amount of tax (“*the spared tax*”) would, but for a relief, have been payable by a company resident in that territory (“*company A*”) in respect of any of its profits,
- (b) company A pays a dividend out of those profits to another company resident in that territory (“*company B*”),
- (c) company B, out of profits which consist of or include the whole or part of that dividend, pays a dividend to a company resident in the United Kingdom (“*company C*”), and
- (d) the circumstances are such that, had company B been resident in the United Kingdom, it would have been entitled, under arrangements made in relation to the territory outside the United Kingdom and having effect by virtue of section 788, to a relief to which subsection (5) of that section applies in respect of the spared tax,
subsection (10B) below shall apply.
- (10B) In any case falling within subsection (10A) above, the spared tax shall be taken into account for the purposes of—
- (a) the other provisions of this section, and
- (b) subject to section 795(3), Chapter II of this Part in its application to relief under this section in relation to the dividend paid to company C,
as if it had been payable and paid; and references in this section and that Chapter to double taxation, to tax payable or chargeable, or to tax not chargeable directly or by deduction shall be construed accordingly.
- (10C) Except as provided by subsection (10B) above, in relation to any dividend paid—
- (a) to a company resident in the United Kingdom,
- (b) by a company resident in the territory outside the United Kingdom,
credit by virtue of section 801 does not fall to be given by virtue of this section in respect of tax which would have been payable under the law of that or any other territory outside the United Kingdom but for a relief (notwithstanding any arrangements made in relation to that or any other territory outside the United Kingdom which have effect by virtue of section 788 and provide for a relief to which subsection (5) of that section applies).
- (11) Where—
- (a) unilateral relief may by given in respect of any income or chargeable gain, and
- (b) it appears that the assessment to income tax or corporation tax made in respect of the income or chargeable gain is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,
any such assessments may be made as are necessary to ensure that the total amount of the income or chargeable gain is assessed, and the proper credit, if any, is given in respect thereof, and, where the income is, or the chargeable gain is, entrusted to any person in the United Kingdom for payment, any such assessment may be made on the recipient of the income or gain, and, in the case of an assessment to corporation tax in respect of income, may be assessed under Case VI of Schedule D.
- (12) In this section and in Chapter II of this Part in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the United Kingdom include only references—
- (a) to taxes which are charged on income and which correspond to United Kingdom income tax, and
- (b) to taxes which are charged on income or chargeable gains and which correspond to United Kingdom corporation tax;
but for this purpose tax under the law of any such territory shall not be treated as not corresponding to income tax or corporation tax by reason only that it is payable under the law of a province, state or other part of a country, or is levied by or on behalf of a municipality or other local body.
#### Power to make regulations for carrying out section 788
##### 791
The Board may from time to time make regulations generally for carrying out the provisions of section 788 or any arrangements having effect thereunder, and may in particular by those regulations provide—
- (a) for securing that relief from taxation imposed by the laws of the territory to which any such arrangements relate does not enure for the benefit of persons not entitled to such relief; and
- (b) for authorising, in cases where tax deductible from any payment has, in order to comply with any such arrangements, not been deducted, and it is discovered that the arrangements did not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.
### CHAPTER II — RULES GOVERNING RELIEF BY WAY OF CREDIT
### General
#### Interpretation of credit code
##### 792
- (1) In this Chapter, except where the context otherwise requires—
- “*arrangements*” means any arrangements having effect by virtue of section 788;
- “*foreign tax*” means, in relation to any territory, arrangements in relation to which have effect by virtue of section 788, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements (other than special withholding tax within the meaning of Chapter 7 of Part 3 of the Finance Act 2004);
- “*the United Kingdom taxes*” means income tax and corporation tax;
- “*underlying tax*” means, in relation to any dividend, tax which is not chargeable in respect of that dividend directly or by deduction; and
- “*unilateral relief*” means relief under section 790.
- (2) For the purposes of this Chapter one company is a subsidiary of another if the other company controls, directly or indirectly, not less than 50 per cent. of the voting power in the first company.
- (3) Any reference in this Chapter to foreign tax shall be construed in relation to credit to be allowed under any arrangements as a reference only to tax chargeable under the laws of the territory in relation to which the arrangements were made.
#### Reduction of United Kingdom taxes by amount of credit due
##### 793
- (1) Subject to the provisions of this Chapter, where under any arrangements credit is to be allowed against any of the United Kingdom taxes chargeable in respect of any income or chargeable gain, the amount of the United Kingdom taxes so chargeable shall be reduced by the amount of the credit.
- (2) Nothing in subsection (1) above authorises the allowance of credit against any United Kingdom tax against which credit is not allowable under the arrangements.
#### Requirement as to residence
##### 794
- (1) Subject to subsection (2) below, credit shall not be allowed under any arrangements against any of the United Kingdom taxes for any chargeable period unless the person in respect of whose income or chargeable gains the United Kingdom tax is chargeable is resident in the United Kingdom for that period.
- (2) Credit may be allowed by way of unilateral relief—
- (a) for tax paid under the law of the Isle of Man or any of the Channel Islands, if the person in question is, for the chargeable period in question, resident either in the United Kingdom or in the Isle of Man or any of the Channel Islands, as the case may be;
- (b) for tax paid under the law of any territory and computed by reference to income from an office or employment the duties of which are performed wholly or mainly in that territory, against income tax on employment income and computed by reference to that income, if the person in question is for the year of assessment in question resident either in the United Kingdom or that territory; and
- (bb) for tax paid under the law of any territory outside the United Kingdom in respect of the income or chargeable gains of a branch or agency in the United Kingdom of a person who is not resident in the United Kingdom, where the following conditions are fulfilled, namely—
- (i) that the territory under whose law the tax was paid is not one in which the person is liable to tax by reason of domicile, residence or place of management; and
- (ii) that the amount of relief claimed does not exceed (or is by the claim expressly limited to) that which would have been available if the branch or agency had been a person resident in the United Kingdom and the income or gains in question had been income or gains of that person.
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Computation of income subject to foreign tax
##### 795
- (1) Where credit for foreign tax falls under any arrangements to be allowed in respect of any income and income tax is payable by reference to the amount received in the United Kingdom, the amount received shall be treated for the purposes of income tax as increased by —
- (a) the amount of the foreign tax in respect of the income, including in the case of a dividend any underlying tax which under the arrangements is to be taken into account in considering whether any and if so what credit is to be allowed in respect of the dividend , and
- (b) the amount of any special withholding tax levied in respect of the income.
- (2) Where credit for foreign tax falls under any arrangements to be allowed in respect of any income or gain and subsection (1) above does not apply, then, in computing the amount of the income or gain for the purposes of income tax or corporation tax—
- (a) no deduction shall be made for foreign tax or special withholding tax, whether in respect of the same or any other income or gain; and
- (b) the amount of the income shall, in the case of a dividend, be treated as increased by—
- (i) any underlying tax which, under the arrangements, is to be taken into account in considering whether any and if so what credit is to be allowed in respect of the dividend , and
- (ii) any underlying tax which, by virtue of section 799(1)(b) or section 799(1B)(b), does not fall to be so taken into account.
- (3) The amount of any income or gain shall not be treated as increased under this section by reference to any foreign tax which, although not payable, falls to be taken into account for the purposes of section 788(5).
- (3A) The amount of any income or gain shall not be increased under subsection (2)(b)(i) above by so much of any underlying tax—
- (a) as represents an increase under section 801(4B); or
- (b) as represents relievable underlying tax (within the meaning of sections 806A to 806J) arising in respect of another dividend and treated as underlying tax under those sections.
- (4) Subsections (2) and (3) above have effect for the purposes of corporation tax notwithstanding anything in —
- (a) section 80(5) of the Finance Act 1996 (matters to be brought into account in the case of loan relationships only under Chapter II of Part IV of that Act) ; or
- (b) paragraph 1(3) of Schedule 29 to the Finance Act 2002 (matters to be brought into account in respect of intangible fixed assets only under that Schedule).
- (5) In this section—
- (a) “*special withholding tax*” has the same meaning as in Chapter 7 of Part 3 of the Finance Act 2004 (see section 107(3) of that Act); and
- (b) references to special withholding tax are to special withholding tax in respect of which a claim has been made under that Chapter.
@@ -19332,7 +15372,7 @@
##### 796
- (1) The amount of the credit for foreign tax which, under any arrangements, is to be allowed to a person against income tax for any year of assessment shall not exceed the difference between the amounts of income tax which would be borne by him for the year (no credit being allowed for foreign tax but allowing for the making of any other income tax reduction under the Income Tax Acts)—
- (1) The amount of the credit for foreign tax which, under any arrangements, is to be allowed to a person against income tax for any year of assessment shall not exceed the difference between the amounts of income tax which would be borne by him for the year (no credit being allowed for foreign tax but allowing for the making of any other income tax reduction under the Income Tax Acts, except a reduction under section 26 of FA 2005)—
- (a) if he were charged to tax on his total income for the year, computed in accordance with section 795; and
@@ -19340,7 +15380,9 @@
- (2) Where credit for foreign tax is to be allowed in respect of income from more than one source, subsection (1) above shall be applied successively to the income from each source, but so that on each successive application, paragraph (a) shall apply to the total income exclusive of the income to which the subsection has already been applied.
- (3) Without prejudice to subsections (1) and (2) above, the total credit for foreign tax to be allowed to a person against income tax for any year of assessment under all arrangements having effect by virtue of section 788 shall not exceed the total income tax payable by him for that year of assessment, less any income tax which he is entitled to charge against any other person.
- (2A) See section 29(2) and (3) of ITA 2007 (tax reductions limited by reference to tax liability) for further limits on the total amount of credit for foreign tax to be allowed to a person against income tax.
- (3) Without prejudice to subsections (1) and (2) above, the total credit for foreign tax to be allowed to a person against income tax for any year of assessment under all arrangements having effect by virtue of section 788 shall not exceed the total income tax payable by him for that year of assessment, less the total amount of the tax treated under section 414 of ITA 2007 (gift aid) as deducted from gifts made by him in that year.
#### Limits on credit: corporation tax
@@ -19572,7 +15614,7 @@
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) In subsection (1) above “*bank*” means a company carrying on, in the United Kingdom or elsewhere, any trade which includes the receipt of interest or dividends, and section 839 applies for the purposes of that subsection.
- (10) In subsection (1) above “*bank*” means a company carrying on, in the United Kingdom or elsewhere, any trade which includes the receipt of interest or dividends, and , for the purposes of that subsection, whether a company is connected with a bank is determined in accordance with section 839.
### Miscellaneous rules
@@ -19610,13 +15652,13 @@
- (5B) The person chargeable in respect of the income (if any) arising in the subsequent year from the same source as the original income shall—
- (a) if the amount given by paragraph (a) of subsection (5A) above exceeds that given by paragraph (b) of that subsection, be treated as having received in that year a payment chargeable to income tax of an amount such that income tax on it at the basic rate is equal to the excess and be liable for any tax so chargeable; and
- (a) if the amount given by paragraph (a) of subsection (5A) above exceeds that given by paragraph (b) of that subsection, be chargeable for that year to an amount of income tax equal to the excessand be liable for any tax so chargeable; and
- (b) if the amount given by paragraph (b) of subsection (5A) above exceeds that given by paragraph (a) of that subsection, be allowed for that year under this Part an amount of credit equal to the excess.
- (5C) For the purposes of subsections (5) to (5B) above, it shall be assumed that, where an amount is deducted by virtue of section 220 of ITTOIA 2005, each of the overlap profits included in the aggregate of such profits contributes to that amount in the proportion which that overlap profit bears to that aggregate.
- (6) Any payment which a person is treated by virtue of subsection (5) above as having received shall not on that account constitute income of his for any of the purposes of the Income Tax Acts other than that subsection and in particular no part thereof shall constitute profits or gains brought into charge to income tax for the purposes of section 348.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Any claim for relief by way of credit under subsection (1) above against income tax for any year of assessment shall be made on or before the fifth anniversary of the 31st January next following that year or, where there is more than one year of assessment in respect of which such relief may be given, on or before the fifth anniversary of the 31st January next following the later of them.
@@ -19688,31 +15730,31 @@
- (1) In any case where—
- (a) a person is treated under section 714(2) as receiving annual profits or gains on the day an interest period ends; and
- (b) assuming that, in the chargeable period in which the day falls, he were to become entitled to any interest on the securities concerned, he would be liable in respect of the interest to tax chargeable under ITTOIA 2005 on relevant foreign income; and
- (a) a person is treated under section 628(5) of ITA 2007 as making accrued income profits in an interest period; and
- (b) assuming that, in the tax year in which the accrued income profits are treated as made by virtue of section 617(2) of that Act, he were to become entitled to any interest on the securities concerned, he would be liable in respect of the interest to tax chargeable under ITTOIA 2005 on relevant foreign income; and
- (c) he is liable under the law of a territory outside the United Kingdom to tax in respect of interest payable on the securities at the end of the interest period or he would be so liable if he were entitled to that interest,
credit of an amount equal to the relevant proportion of the profits or gains shall be allowed against any United Kingdom income tax or corporation tax computed by reference to the profits or gains, and shall be treated as if it were allowed under section 790(4).
credit of an amount equal to the relevant proportion of the accrued income profits shall be allowed against any United Kingdom income tax . . . computed by reference to the accrued income profits, and shall be treated as if it were allowed under section 790(4).
- (2) In any case where—
- (a) a person is entitled to credit against United Kingdom tax under section 790(4) or any corresponding provision of arrangements under section 788; and
- (b) the tax is computed by reference to income consisting of interest which falls due on securities at the end of an interest period and which is treated as reduced by virtue of section 714(5);
- (b) the tax is computed by reference to income consisting of interest which falls due on securities at the end of an interest period and as respects which the person is entitled to an exemption from liability to income tax under section 679 of ITA 2007;
then the amount of that credit shall be a proportion of the amount it would be apart from this subsection, and the proportion is to be found by applying the formula—
$$I-RI$where—is the amount of the interest; andR is the amount by which it is treated as reduced.$
$$I-RI$where—is the amount of the interest; and R is the amount of the exemption.$
- (3) Where the person entitled to the credit is an individual, subsection (2) above does not apply unless the interest arises from securities to which the person either became or ceased to be entitled during the interest period.
- (4) Where section 811(1) applies to any income and, if credit were allowable in respect of it the credit would be reduced by virtue of subsection (2) above, section 811(1) shall have effect in relation to the income as if the reference to any sum paid in respect of tax on it were a reference to the amount which would be the amount of the credit if it were allowable and subsection (2) above applied.
- (5) Sections 710 and 711 shall apply for the interpretation of this section.
- (6) This section does not apply for the purposes of corporation tax.
- (5) Expressions used in this section and in Chapter 2 of Part 12 of ITA 2007 (accrued income profits) have the same meaning as in that Chapter.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restriction on deduction of interest or dividends from trading income
@@ -19726,7 +15768,7 @@
- (1) In any case where—
- (a) a payment made by the trustees of a settlement falls to be treated as a net amount in accordance with section 687(2) and the income arising under the settlement includes any taxed overseas income, and
- (a) income tax is treated under section 494 of ITA 2007 as having been paid in relation to a payment made by the trustees of a settlement and the income arising under the settlement includes any taxed overseas income, and
- (b) the trustees certify that—
@@ -19752,9 +15794,9 @@
- (2) Subsection (1) above—
- (a) shall not apply to income the tax on which is to be computed by reference to the amount of income received in the United Kingdom; . . .
- (b) shall not affect section 278(3); . . . and
- (a) shall not apply to income the tax on which is to be computed by reference to the amount of income received in the United Kingdom; . . . and
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -19947,9 +15989,9 @@
- (2A) The obligation as to secrecy imposed by any enactment shall not prevent the Board, or any authorised Revenue and Customs official, from disclosing information required to be disclosed under the Arbitration Convention in pursuance of a request made by an advisory commission set up under that Convention; and “*the Arbitration Convention*” here has the meaning given by section 815B(4).
- (3) Where a person beneficially entitled to income from any securities as defined by section 24 of the Management Act (information as to income from securities) is resident in a territory to which arrangements having effect under section 788 with respect to income tax or corporation tax relate, section 24(3) of that Act shall not exempt any bank from the duty of disclosing to the Board particulars relating to the income of that person.
- (3A) In this section “*bank*” has the meaning given by section 840A.
- (3) Where a person beneficially entitled to income from any securities as defined by section 24 of the Management Act (information as to income from securities) is resident in a territory to which arrangements having effect under section 788 with respect to income tax or corporation tax relate, section 24(3) of that Act shall not exempt any bank (within the meaning of that subsection) from the duty of disclosing to the Board particulars relating to the income of that person.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The obligation as to secrecy imposed by any enactments with regard to income tax or corporation tax shall not prevent the disclosure, to any authorised officer of any country to which a declaration made under section 514 of the 1970 Act (agreements about shipping etc.) relates, of such facts as may be necessary to enable relief to be duly given in accordance with the arrangements specified in the declaration.
@@ -19975,35 +16017,13 @@
##### 818
- (1) It is hereby declared that any provision made before or after the passing of this Act, whether orally or in writing, for the payment of interest “less tax”, or using words to that effect, is to be construed, in relation to interest payable without deduction of tax, as if the words “less tax”, or the equivalent words, were not included.
- (2) In relation to relevant interest which is payable without deduction of tax, any provision, made before or after the passing of this Act, whether orally or in writing, and however worded, for the payment of interest at such a rate (“*the gross rate*”) as shall, after the deduction of income tax, be equal to a stated rate, shall be construed as if it were a provision requiring the payment of interest at the gross rate.
- (3) In subsection (2) “*relevant interest*” means—
- (a) interest on which the recipient is chargeable to income tax, which falls within Chapter 2 of Part 4 of ITTOIA 2005 but which is not relevant foreign income, or
- (b) interest on which the recipient is chargeable to corporation tax under Case III of Schedule D.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Old references to standard rate tax
##### 819
- (1) Where any provision, however worded, contained in an instrument (of whatever nature) made on or after 3rd September 1939 or in a will or codicil taking effect on or after that date provides for the payment, whether periodically or otherwise—
- (a) of a stated amount free of income tax other than surtax; or
- (b) of an amount which, after deduction of income tax at the standard rate, is equal to a stated amount;
it shall have effect as follows.
- (2) If it is such a provision as is mentioned in subsection (1)(a) above it shall have effect as if it provided for the payment of the stated amount free of income tax other than such as exceeds the amount to which the person to whom the payment is made would be liable if all income tax not chargeable at the starting ratewere charged at the basic rate, or (so far as applicable in accordance with section 1A) the lower rate or the dividend ordinary rate, to the exclusion of the higher rate and the dividend upper rate.
- (3) If it is such a provision as is mentioned in subsection (1)(b) above it shall have effect as if it provided for the payment of an amount which after deduction of income tax at the basic rate is equal to the stated amount.
- (4) Any instrument however worded conferring on any person a right to receive a dividend or interest the amount of which depends on the standard rate of income tax shall have effect as if instead of referring to the standard rate it referred to the basic rate.
- (5) Any reference in a statutory instrument made under the Tax Acts to the standard rate of income tax shall have effect as if it were a reference to the basic rate.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Income Tax Acts from year to year
@@ -20035,9 +16055,9 @@
- (3) Subsection (2) above shall apply with respect to—
- (a) any payment for or in respect of copyright to which section 536 applies or of public lending right to which that section applies by virtue of section 537; and
- (aa) any payment for or in respect of a right in a design to which section 537B applies; and;
- (a) any payment to which section 906 of ITA 2007 applies (certain royalties etc where usual place of abode of owner is abroad), and
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any royalty or other sum paid in respect of the user of a patent; . . .
@@ -20071,7 +16091,7 @@
##### 823
- Where under the provisions of the Income Tax Acts an individual—is entitled to claim relief from income tax (other than relief in respect of life insurance premiums), by repayment or otherwise, in respect of—any amount which is paid or borne by him out of his income or which is allowable or may be deducted from his income; orany reduction of an assessment relating to his income or any part of his income; orany adjustment or set-off with regard to a loss; andclaims that relief for any year of assessment,any relief granted shall not extend so as to make the total income tax paid or payable by him for that year less than it would have been if the amount in respect of which relief is claimed had been deducted in computing his total income for that year and the amount of any other deductions or reliefs to which he is entitled for that year had been determined accordingly.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Repayment supplements: individuals and others
@@ -20463,21 +16483,21 @@
##### 828
- (1) Subject to subsections (2) and (5) below, any power of the Treasury or the Board to make any order or regulations under this Act or under any other provision of the Tax Acts (including enactments passed after this Act) shall be exercisable by statutory instrument.
- (2) Subsection (1) above shall not apply in relation to any power conferred by section 841(1)(b) or 841Aor section 178(5) of the Finance Act 1989.
- (3) Subject to subsections (4) and (5) below and to any other provision to the contrary, any statutory instrument containing any order or regulations made by the Treasury or the Board under this Act or under any other provision of the Tax Acts (including enactments passed after this Act) shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (4) Subsection (3) above shall not apply in relation to an order or regulations made under section 1(6), 79B(5),257C, . . . . . . . . . 582A(1),590C(6) 658(3) 791 or 840A(1)(d) or paragraph 7 of Schedule 14 or section 82(4)(d) of the Capital Allowances Act or—
- (1) Subject to subsections (2) and (5) below, any power of the Treasury or the Board to make any order or regulations under this Act or under any provision of the Corporation Tax Acts not contained in this Act (including enactments passed after this Act) shall be exercisable by statutory instrument.
- (2) Subsection (1) above shall not apply in relation to any power conferred by section . . . 841Aor section 178(5) of the Finance Act 1989.
- (3) Subject to subsections (4) and (5) below and to any other provision to the contrary, any statutory instrument containing any order or regulations made by the Treasury or the Board under this Act or under any provision of the Corporation Tax Acts not contained in this Act (including enactments passed after this Act) shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (4) Subsection (3) above shall not apply in relation to an order or regulations made under section . . . 79B(5),. . . . . . . . . . . . . . . 590C(6) 658(3) 791 or 840A(1)(d) or paragraph 7 of Schedule 14 . . . or—
- (a) if any other Parliamentary procedure is expressly provided;
- (b) if the order in question is an order appointing a day for the purposes of any provision of the Tax Acts, being a day as from which the provision will have effect, with or without amendments, or will cease to have effect.
- (5) Nothing in this section applies in relation to any of the following (in relation to which section 717 of ITEPA 2003 or section 873 of ITTOIA 2005 applies)—
- (a) any power of the Treasury or the Board to make any order or regulations under ITEPA 2003 or ITTOIA 2005;
- (5) Nothing in this section applies in relation to any of the following (in relation to which section 570B of the Capital Allowances Act or section 717 of ITEPA 2003 . . . applies)—
- (a) any power of the Treasury or the Board to make any order or regulations under the Capital Allowances Act or ITEPA 2003 . . . ;
- (b) any statutory instrument containing any order or regulations made by the Treasury or the Board under either of those Acts.
@@ -20491,21 +16511,13 @@
##### 829
- (1) Subject to subsections (2) and (3) below, all the provisions of the Income Tax Acts relating to the assessment, charge, deduction and payment of income tax shall apply in relation to public offices and departments of the Crown.
- (2) Nothing in those provisions of the Income Tax Acts shall require the payment by any such office or department of any tax which would be ultimately borne by the Crown unless it is tax which would not have been so borne but for a failure by a public office or department of the Crown to make a deduction required by virtue of subsection (1) above.
- (2A) Subsections (1) and (2) above have effect in relation to Chapter 3 of Part 3 of the Finance Act 2004 (sub-contractors in the construction industry) as if the whole of any deduction required to be made under section 61 of that Act were in all cases a deduction of income tax.
- (3) Subsection (1) above shall not apply to public offices and departments of any country, state, province or colony within section 320(3)(b) or (c) and nothing in subsection (1) above shall exempt any government from taxation to which it is liable in connection with any office or department by virtue of section 25 of the Finance Act 1925 (liability in respect of trading operations of Dominion governments and others).
- (4) No letters patent granted or to be granted by the Crown to any person, city, borough or town corporate of any liberty, privilege or exemption from subsidies, tolls, taxes, assessments or aids, and no statute which grants any salary, annuity or pension to any person free of any taxes, deductions or assessments, shall be construed or taken to exempt any person, city, borough or town corporate, or any inhabitant of any city, borough or town corporate, from income tax, and all non-obstantes in any such letters patent or statute made or to be made to the contrary effect shall be void.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Territorial sea and designated areas
##### 830
- (1) The territorial sea of the United Kingdom shall for all purposes of income tax and corporation tax (including the following provisions of this section) be deemed to be part of the United Kingdom.
- (1) The territorial sea of the United Kingdom shall for all purposes of . . . corporation tax (including the following provisions of this section) be deemed to be part of the United Kingdom.
- (2) In this section—
@@ -20541,6 +16553,8 @@
- “*ITTOIA 2005*” means the Income Tax (Trading and Other Income) Act 2005;
- “*ITA 2007*” means the Income Tax Act 2007;
- “*the Management Act*” means the Taxes Management Act 1970;
- “*the 1968 Act*” means the Capital Allowances Act 1968;
@@ -20563,7 +16577,7 @@
##### 832
- (1) In the Tax Acts, except in so far as the context otherwise requires—
- (1) In the Corporation Tax Acts, except in so far as the context otherwise requires—
- “*Act*” includes an Act of the Parliament of Northern Ireland and a Measure of the Northern Ireland Assembly;
@@ -20571,7 +16585,7 @@
- “*authorised unit trust*” has the meaning given by section 468(6);
- “*basic rate*”, in relation to the charging of income tax for any year of assessment, means the rate of income tax determined in pursuance of section 1(2)(a), and any reference to the basic rate limit shall be construed in accordance with section 1(3);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*the Board*” means the Commissioners of Inland Revenue;
@@ -20609,25 +16623,25 @@
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*higher rate*”, in relation to the charging of income tax for any year of assessment, means any rate of income tax determined in pursuance of section 1(2)(b),*and any reference to any higher rate band shall be construed in accordance with section* 1(3) ;
- “*industrial assurance business*” means any such business carried on before the day appointed for the coming into force of section 167(4) of the Finance Act 1996 as was industrial assurance business within the meaning given by section 1(2) of the Industrial Assurance Act 1923 or Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*inspector*” means any inspector of taxes;
- “*interest*” means both annual or yearly interest and interest other than annual or yearly interest;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*international accounting standards*” has the meaning given by section 50(2) of the Finance Act 2004;
- “*investment LLP*” and “*property investment LLP*” have the meaning given by section 842B;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*local authority association*” has the meaning given by section 519;
- “*lower rate*”, in relation to the charging of income tax for any year of assessment, means the rate of income tax specified in or determined in pursuance of section 1A(1B);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*market garden land*” means land in the United Kingdom occupied as a nursery or garden for the sale of the produce (other than land used for the growth of hops) and “*market gardening*” shall be construed accordingly;
- “*notice*” means notice in writing or in a form authorised (in relation to the case in question) by directions under section 118 of the Finance Act 1998;
- “*notice*” means notice in writing . . . ;
- “*offshore installation*” has the meaning given by section 837C;
@@ -20635,57 +16649,59 @@
- “*ordinary share capital*”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company;
- “*overseas property business*”—for the purposes of income tax, has the meaning given by Chapter 2 of Part 3 of ITTOIA 2005;for the purposes of corporation tax, has the meaning given by section 70A(4);
- “*overseas property business*”—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . has the meaning given by section 70A(4);
- “*period of account*”—in relation to a person, means any period for which the person draws up accounts, andin relation to a trade, profession, vocation or other business means any period for which accounts of the business are drawn up;
- “*permanent establishment*”, in relation to a company, has the meaning given by section 148 of the Finance Act 2003;
- “*preference dividend*” means a dividend payable on a preferred share or preferred stock at a fixed rate per cent. or, where a dividend is payable on a preferred share or preferred stock partly at a fixed rate per cent. and partly at a variable rate, such part of that dividend as is payable at a fixed rate per cent.;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*property investment LLP*” has the meaning given by section 842B;
- “*qualifying distribution*” has the meaning given by section 14(2);
- “*qualifying policy*” means a policy of insurance which is a qualifying policy for the purposes of Chapter I of Part VII;
- “*the rate applicable to trusts*” shall be construed in accordance with section 686(1A);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*registered pension scheme*” has the meaning given by section 150(2) of the Finance Act 2004;
- “*relevant foreign income*” has the meaning given by subsections (1) to (3) of section 830 of ITTOIA 2005 but also includes, for any purpose mentioned in any provision listed in subsection (4) of that section, income treated as relevant foreign income for that purpose by that provision;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*Schedule A business*” means any business the profits or gains of which are chargeable to corporation tax under Schedule A, including the business in the course of which any transaction is by virtue of paragraph 1(2) of that Schedule to be treated as entered into;
- “*scheme administrator*”, in relation to a pension scheme, has the meaning given by section 270 of the Finance Act 2004 (but see also sections 271 to 274 of that Act);
- “*starting rate*”, in relation to the charging of income tax for any year of assessment, means the rate of income tax determined in pursuance of section 1(2)(aa), and any reference to the starting rate limit shall be construed in accordance with section 1(2A);
- “*the dividend ordinary rate*” shall be construed in accordance with section 1B(2);
- “*the dividend trust rate*” shall be construed in accordance with section 686(1A);
- “*the dividend upper rate*” shall be construed in accordance with section 1B(2);
- “*step-child*”, in relation to a civil partner, shall be construed in accordance with section 246 of the Civil Partnership Act 2004;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*tax credit*” means—a tax credit under section 231 for the purposes of corporation tax; anda tax credit under section 397(1) of ITTOIA 2005 for the purposes of income tax;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*tax credit*” means—a tax credit under section 231 . . . ; and. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*trade*” includes every trade, manufacture, adventure or concern in the nature of trade;
- “*UK generally accepted accounting practice*” has the meaning given by section 50(4) of the Finance Act 2004;
- “*UK property business*” has the meaning given by Chapter 2 of Part 3 of ITTOIA 2005;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*unit holder*” has the meaning given by section 468(6);
- “*unit trust scheme*” has the meaning given by section 469;
- “*unit trust scheme*” has the same meaning as in the Income Tax Acts (see section 1007 of ITA 2007);
- “*year of assessment*” means, with reference to any income tax, the year for which such tax was granted by any Act granting income tax;
@@ -20705,85 +16721,21 @@
(and also does not apply where the context otherwise requires because some other definition of “*company*” applies).
- (2A) Chapter 2 of Part 9 of ITA 2007 (which relates to settlements and trustees) applies for the purposes of the Corporation Tax Acts as it applies for the purposes of the Income Tax Acts.
- (3) Except so far as the context otherwise requires, in the Tax Acts, and in any enactment passed after 12th March 1970 which by any express provision is to be construed as one with the Tax Acts, the Corporation Tax Acts or the Income Tax Acts, “tax”, where neither income tax nor corporation tax is specified, means either of those taxes.
- (4) Subsection (3) above is without prejudice to the provisions of section 9 which apply income tax law for certain purposes of corporation tax, and accordingly the employment of “income tax” rather than “tax” in any provision of the Tax Acts is not a conclusive indication that that provision is not applied to corporation tax by that section.
- (4A) Any reference in the Tax Acts to franked investment income received by a company apply to any such income received by another person on behalf of or in trust for the company, but not to any such income received by the company on behalf of or in trust for another person.
- (5) In the Tax Acts any reference to a child, however expressed, shall be construed as including a reference to an adopted child.
- (4A) Any reference in the Corporation Tax Acts to franked investment income received by a company apply to any such income received by another person on behalf of or in trust for the company, but not to any such income received by the company on behalf of or in trust for another person.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Income Tax Acts
##### 833
- (1) In the Income Tax Acts references to profits or gains shall not include references to chargeable gains.
- (2) References in the Income Tax Acts to the retail prices index are references to the general index of retail prices (for all items) published by the Office for National Statistics; and if that index is not published for a month which is relevant for the purposes of any provision of those Acts that provision shall be construed as referring to any substituted index or index figures published by that Office.
- (3) For the purposes of any provision of the Income Tax Acts (other than sections 535 to 537 of ITTOIA 2005. . . ) requiring income of any description to be treated as the highest part of a person’s income, his income shall be calculated without regard to—
- (a) any payment or other benefit charged to tax under Chapter 3 of Part 6 of ITEPA 2003 (payments and other benefits on termination of employment); or
- (b) any amount included in his total income by virtue of section 465 of ITTOIA 2005which is a sum in relation to which section 530 of that Act applies; *or*
- (c) *any chargeable sum as defined in paragraph* 2*of Schedule* 2 .
- (4) Subject to subsections (5) to (6) below, in the Income Tax Acts “*earned income*” means, in relation to any individual—
- (a) any income charged to tax under ITEPA 2003 except—
- (i) payments that meet the conditions in section 623 of that Act (return of surplus employee additional voluntary contributions); and
- (ii) jobseeker’s allowance (to which Chapter 3 of Part 10 of that Act applies);
- (b) any income from any property which is attached to or forms part of the general earnings from any employment; and
- (c) any income which is charged under Part 2 of ITTOIA 2005 (trading income) and is immediately derived by the individual from the carrying on or exercise by him of his trade, profession or vocation, either as an individual or, in the case of a partnership, as a partner personally acting in the partnership.
- (5) Without prejudice to the generality of the provisions of subsection (4) above, in the Income Tax Acts, except so far as is otherwise expressly provided, “*earned income*” also includes, in relation to any individual —
- (a) income to which subsection (5A) applies, and
- (b) income to which subsection (5B) applies.
- (5A) This subsection applies to income arising to the individual if—
- (a) it is charged to tax under section 583 of ITTOIA 2005 (income from disposals of know-how), and
- (b) the individual, alone or jointly, devised the know-how in question.
- (5B) This subsection applies to income arising to the individual if—
- (a) it is patent income, and
- (b) the individual, alone or jointly, devised the invention for which the patent in question was granted.
This is subject to subsection (5C).
- (5C) If—
- (a) any part of the rights in respect of the patent, or of any rights out of which they were granted, has at any time belonged to any other person, and
- (b) any part of the income is properly attributable to the rights which have belonged to that other person,
subsection (5B) does not apply to that part of the income (and so it is not earned income).
- (5D) In subsection (5B) “*patent income*” means—
- (a) royalties or other sums paid in respect of the use of a patent charged to tax under section 579 of ITTOIA 2005,
- (b) amounts on which tax is payable under section 587 or 593 of ITTOIA 2005, and
- (c) amounts on which tax is payable under—
- (i) section 472(5) of the Capital Allowances Act (patent allowances: balancing charges), or
- (ii) paragraph 100 of Schedule 3 to that Act (balancing charges in respect of pre-1st April 1986 expenditure on the purchase of patent rights).
- (5E) References in subsection (5C) to the rights in respect of the patent are to any right to do or authorise the doing of anything which would, but for the right, be an infringement of the patent.
- (6) The provisions of this section are without prejudice to any other provision of the Income Tax Acts directing income to be treated as earned income.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts
@@ -20811,7 +16763,9 @@
- “*loan relationship*” has the same meaning as it has for the purposes of Chapter II of Part IV of the Finance Act 1996;“*non-trading deficit*”, in relation to a company’s loan relationships, shall be construed in accordance with section 82 of the Finance Act 1996;
- “*statutory insolvency arrangement*” means—a voluntary arrangement that has taken effect under or as a result of the Insolvency Act 1986, Schedule 4 or 5 to the Bankruptcy (Scotland) Act 1985 or the Insolvency (Northern Ireland) Order 1989,a compromise or arrangement that has taken effect under section 425 of the Companies Act 1985 or Article 418 of the Companies (Northern Ireland) Order 1986, orany arrangement or compromise of a kind corresponding to any of those mentioned in paragraph (a) or (b) above that has taken effect under or by virtue of the law of a country or territory outside the United Kingdom.
- “*statutory insolvency arrangement*” means—a voluntary arrangement that has taken effect under or as a result of the Insolvency Act 1986, Schedule 4 or 5 to the Bankruptcy (Scotland) Act 1985 or the Insolvency (Northern Ireland) Order 1989,a compromise or arrangement that has taken effect under section 425 of the Companies Act 1985 or Article 418 of the Companies (Northern Ireland) Order 1986, orany arrangement or compromise of a kind corresponding to any of those mentioned in paragraph (a) or (b) above that has taken effect under or by virtue of the law of a country or territory outside the United Kingdom;
- “*venture capital trust*” has the same meaning as in Part 6 of ITA 2007.
- (2) Section 6(4) shall also apply for the purposes of the following provisions of this Act, that is to say—
@@ -20833,71 +16787,25 @@
##### 835
- (1) In the Income Tax Acts “*total income*”, in relation to any person, means the total income of that person from all sources estimated in accordance with the provisions of the Income Tax Acts.
- (2) Any person who, on his own behalf or on behalf of another person, delivers a statement of the amount of his or that other person’s total income shall observe the rules and directions contained in section 836.
- (3) Where deductions reduce a person’s total income and the order in which they are made or in which income of different descriptions is reduced thereby may affect his liability to income tax the deductions shall be made and treated as reducing income in accordance with subsections (4) and (5) below.
- (4) Subject to any express provisions of the Income Tax Acts, any deductions allowable in computing a person’s total income or to be made from a person’s total income shall be treated as reducing income of different descriptions in the order which will result in the greatest reduction of his liability to income tax.
- (5) Deductions from total income under Chapter I of Part VII shall be made after any other deductions and shall not affect the amount to be taken as a person’s total income for the purposes of section 257(5) , 257A(5) or 274*nor the amount determining whether a person is entitled to relief under section* 263*or by how much relief under that section is reduced*.
- (6) In estimating the total income of any person—
- (a) any income which is chargeable with income tax by way of deduction at the basic rate or the lower rate in force for any year or which for the purposes of Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.) comprises an amount which is equal to a tax credit calculated by reference to the tax credit fraction shall be deemed to be income of that year; and
- (b) any deductions which are allowable on account of sums payable under deduction of income tax at the basic rate in force for any year out of the property or profits of that person shall be allowed as deductions in respect of that year;
notwithstanding that the income or sums, as the case may be, accrued or will accrue in whole or in part before or after that year.
- (7) Where an assessment has become final and conclusive for the purposes of income tax for any year of assessment—
- (a) that assessment shall also be final and conclusive in estimating total income; and
- (b) no allowance or adjustment of liability, on the ground of diminution of income or loss, shall be taken into account in estimating total income unless that allowance or adjustment has previously been made on an application under the special provisions of the Income Tax Acts relating thereto.
- (8) Subsection (7) above shall apply in relation to—
- (a) any relief under section 353;
- (b) any relief by reason of the operation of an election for the herd basis under Schedule 5; and
- (c) any allowance given effect under section 258 or 479 of the Capital Allowances Act;
as it applies in relation to allowances or adjustments on the ground of diminution of income or loss.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Returns of total income
##### 836
The following rules and directions shall be observed in delivering returns of total income under section 835(2)—
- First - Declaration of the amount of profits or gains returned, or for which the person in question has been or is liable to be assessed.
- Second - Declaration of the amount of rents, interest, annuities or other annual payments, in respect of which the person in question is liable to allow the tax, with the names of the respective persons by whom such payments are to be made, distinguishing the amount of each payment.
- Third - Declaration of the amount of annuities or other annual payments (not being interest) to be made out of the property or profits or gains assessed on the person in question, distinguishing each source.
- Fourth - Statement of the amount of income derived according to the three preceding declarations.
- Fifth - Statement of any tax which the person in question may be entitled to deduct, retain or charge against any other person.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Annual value” of land
##### 837
- (1) For the purposes of, and subject to, the provisions of the Tax Acts which apply this section, the annual value of land shall be taken to be the rent which might reasonably be expected to be obtained on a letting from year to year if the tenant undertook to pay all usual tenant’s rates and taxes, and if the landlord undertook to bear the costs of the repairs and insurance, and the other expenses, if any, necessary for maintaining the subject of the valuation in a state to command that rent.
- (2) Section 23 of the General Rate Act 1967 (adjustment of gross value by reference to provision of or payment for services etc.) shall apply for the purposes of subsection (1) above, and in relation to land in Scotland or Northern Ireland shall apply as if it extended to the whole of the United Kingdom.
- (3) Where any question arises as to the annual value of land it shall be determined by the General Commissioners and those Commissioners shall hear and determine the question in like manner as an appeal.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Subsidiaries
##### 838
- (1) For the purposes of the Tax Acts a body corporate shall be deemed to be—
- (1) For the purposes of the Corporation Tax Acts a body corporate shall be deemed to be—
- (a) a “51 per cent. subsidiary” of another body corporate if and so long as more than 50 per cent. of its ordinary share capital is owned directly or indirectly by that other body corporate;
@@ -20957,7 +16865,7 @@
##### 839
- (1) For the purposes of, and subject to, the provisions of the Tax Acts which apply this section, any question whether a person is connected with another shall be determined in accordance with the following provisions of this section (any provision that one person is connected with another being taken to mean that they are connected with one another).
- (1) For the purposes of, and subject to, the provisions of the Corporation Tax Acts which apply this section, any question whether a person is connected with another shall be determined in accordance with the following provisions of this section (any provision that one person is connected with another being taken to mean that they are connected with one another).
- (2) A person is connected with an individual if that person is the individual’s spouse or civil partner, or is a relative, or the spouse or civil partner of a relative, of the individual or of the individual’s spouse or civil partner.
@@ -20983,7 +16891,13 @@
- (a) “*settlement*” has the same meaning as in section 620 of ITTOIA 2005,
- (b) “*trustee*”, in relation to a settlement in relation to which there would be no trustees apart from this paragraph, means any person in whom the settled property or its management is for the time being vested, and
- (b) “*trustee*”, in relation to a settlement in relation to which there would be no trustees apart from this paragraph, means any person—
- (i) in whom the property comprised in the settlement is for the time being vested, or
- (ii) in whom the management of that property is for the time being vested,
and
- (c) “principal settlement” and “sub-fund settlement” have the meaning given by paragraph 1 of Schedule 4ZA to the 1992 Act.
@@ -21011,7 +16925,7 @@
##### 840
For the purposes of, and subject to, the provisions of the Tax Acts which apply this section, “*control*”, in relation to a body corporate, means the power of a person to secure—
For the purposes of, and subject to, the provisions of the Corporation Tax Acts which apply this section, “*control*”, in relation to a body corporate, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or
@@ -21023,27 +16937,15 @@
##### 841
- (1) In the Tax Acts “*recognised stock exchange*” means—
- (a) the Stock Exchange; and
- (b) any such stock exchange outside the United Kingdom as is for the time being designated for the purposes of this section as a recognised stock exchange by order made by the Board.
- (2) An order made by the Board under this section—
- (a) may designate a stock exchange by name, or by reference to any class or description of stock exchanges including a class or description framed by reference to any authority or approval given in a country outside the United Kingdom;
- (b) may contain such transitional and other supplemental provisions as appear to the Board to be necessary or expedient;
- (c) may be varied or revoked by a subsequent order so made.
- (3) The Board may by regulations make provision securing that enactments in the Tax Acts containing references to the Stock Exchange have effect, for such purposes and subject to such modifications as may be prescribed by the regulations, in relation to all other recognised investment exchanges (within the meaning of the Financial Services and Markets Act 2000), or in relation to such of those exchanges as may be prescribed.
- (1) In the Corporation Tax Acts “*recognised stock exchange*” has the same meaning as in the Income Tax Acts (see section 1005 of ITA 2007).
- (3) The Board may by regulations make provision securing that enactments in the Corporation Tax Acts containing references to the Stock Exchange have effect, for such purposes and subject to such modifications as may be prescribed by the regulations, in relation to all other recognised investment exchanges (within the meaning of the Financial Services and Markets Act 2000), or in relation to such of those exchanges as may be prescribed.
#### Investment trusts
##### 842
- (1) In the Tax Acts “*investment trust*” means, as respects any accounting period, a company which is not a close company and which is approved for the purposes of this section for that accounting period by the Board, and the Board shall not approve any company unless it is shown to their satisfaction—
- (1) In the Corporation Tax Acts“*investment trust*” means, as respects any accounting period, a company which is not a close company and which is approved for the purposes of this section for that accounting period by the Board, and the Board shall not approve any company unless it is shown to their satisfaction—
- (aa) that the company is resident in the United Kingdom; and
@@ -23613,6 +19515,14 @@
- (b) a policy issued by a friendly society in the course of tax exempt life or endowment business (as defined in section 466).
- (1A) In sub-paragraph (1)(a) “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
- (2) Subject to paragraph 3(2) below, if a policy to which this paragraph applies was issued before the passing of the Finance Act 1976 (29th July 1976), section 266 shall have effect in relation to it as if subsections (2)(b), (3)(a), (b) and (d) were omitted; and if a policy to which this paragraph applies was issued after the passing of that Act, subsection (2)(b) of that section shall have effect in relation to it as if it permitted the insurance to be on the life of the individual’s parent or grandparent or, subject to sub-paragraph (3) below, on the life of the individual’s child or grandchild.
- (3) Relief may be given in respect of premiums under a policy of insurance on the life of an individual’s child or grandchild which was or is issued after the passing of the Finance Act 1976 (29th July 1976), as if subsection (3)(d) of section 266 were omitted, but may be given only if the annual amount of the premiums, together with that of any relevant premiums, does not exceed £52 if the policy was issued in respect of an insurance made before 25th March 1982 or £64 in any other case.
@@ -23653,7 +19563,7 @@
##### 6
- (1) Where in any year of assessment the relief to which a person is entitled under section 266, otherwise than in accordance with subsections (6) and (7) of that section, has not been fully given in accordance with that section and the preceding provisions of this Schedule, he may claim relief for the difference, and relief for the difference shall then be given by a payment made by the Board or by discharge or repayment of tax or partly in one such manner and partly in another; and where relief so given to any person exceeds that to which he is entitled under section 266, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (1) Where in any year of assessment the relief to which a person is entitled under section 266, otherwise than in accordance with subsection (7) of that section, has not been fully given in accordance with that section and the preceding provisions of this Schedule, he may claim relief for the difference, and relief for the difference shall then be given by a payment made by the Board or by discharge or repayment of tax or partly in one such manner and partly in another; and where relief so given to any person exceeds that to which he is entitled under section 266, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (2) The Management Act shall apply to any assessment under this paragraph as if it were an assessment to tax for the year of assessment in which the relief was given . . . .
@@ -23718,6 +19628,14 @@
- (b) on or before 31st March 1984 the policy was prepared for issue by the company or society concerned; and
- (c) on or before 31st March 1984 and in accordance with the normal business practice of the company or society a permanent record of the preparation of the policy was made in any book or by any other means kept or instituted by the company or society for the purpose.
- (3A) In sub-paragraph (3) “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
- (4) Subject to sub-paragraph (8) below, for the purposes of section 266(3)(c) a policy of life insurance which was issued in respect of an insurance made on or before 13th March 1984 shall be treated as issued in respect of an insurance made after that date if the policy is varied after that date so as to increase the benefits secured or to extend the term of the insurance.
@@ -25308,11 +21226,11 @@
##### 8
Certificates of deposit as defined for corporation tax purposes in section 56(5) above and for income tax purposes in section 552(2) of ITTOIA 2005.
Certificates of deposit as defined in section 56(5).
##### 9
- (1) Any loan or other investment as to which the Board are satisfied, on a claim made to them in that behalf, that the loan or other investment is made for the benefit of the charity and not for the avoidance of tax (whether by the charity or any other person).
- (1) Any loan or other investment as to which the Board are satisfied, on a claim made to them in that behalf, that the loan or other investment is made for the benefit of the charitable company and not for the avoidance of tax (whether by the charitable company or any other person).
- (2) The reference in sub-paragraph (1) above to a loan includes a loan which is secured by a mortgage or charge of any kind over land.
@@ -25324,11 +21242,11 @@
- (a) a loan made to another charity for charitable purposes only; or
- (b) a loan to a beneficiary of the charity which is made in the course of carrying out the purposes of the charity; or
- (b) a loan to a beneficiary of the charitable company which is made in the course of carrying out the purposes of the charitable company; or
- (c) money placed on current account with a bank otherwise than as part of such an arrangement as is mentioned in paragraph 7(2) above; or
- (d) any other loan as to which the Board are satisfied, on a claim made to them in that behalf, that the loan is made for the benefit of the charity and not for the avoidance of tax (whether by the charity or by some other person).
- (d) any other loan as to which the Board are satisfied, on a claim made to them in that behalf, that the loan is made for the benefit of the charitable company and not for the avoidance of tax (whether by the charitable company or by some other person).
- (2) In this paragraph “*bank*” has the meaning given by section 840A.
@@ -27780,10843 +23698,9229 @@
## SCHEDULE 31
#### Application of lower rate to income from savings and distributions.
#### The charge to income tax.
##### 1A
- (1) Subject to sections 469(2) , 686 and 720(5), so much of any person’s total income for any year of assessment as—
- (a) comprises income to which this section applies, and
- (b) in the case of an individual, is not
- (i) savings income falling within section 1(2)(aa), or
- (ii) income falling within section 1(2)(b),
shall, by virtue of this section, be charged for that year at the rate applicable in accordance with subsection (1A) below, instead of at the rate otherwise applicable to it in accordance with section 1(2)(aa) and (a).
- (1AA) In subsection (1)(b)(i) above “*savings income*” means income to which this section applies other than—
- (a) income chargeable under Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc., stock dividends from UK resident companies and loans to participators), or
- (b) dividends chargeable under Chapter 4 of Part 4 of that Act (dividends from non-UK resident companies) or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).
- (1A) The rate applicable in accordance with this subsection is—
- (a) in the case of income chargeable under Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005, the dividend ordinary rate;
- (b) in the case of dividends chargeable under Chapter 4 of Part 4 of that Act or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act, the dividend ordinary rate; and
- (c) in the case of any other income, the lower rate.
- (1B) In relation to any year of assessment for which income tax is charged the lower rate is 20 per cent. or such other rate as Parliament may determine.
- (2) Subject to subsection (4) below, this section applies to the following income—
- (a) any income (other than relevant foreign income) chargeable under—
- (i) Chapter 2 of Part 4 of ITTOIA 2005 (charge on interest);
- (ii) Chapter 7 of that Part of that Act (charge on purchased life annuity payments) other than income from annuities specified in section 718(2) of that Act; or
- (iii) Chapter 8 of that Part of that Act (charge on profits from deeply discounted securities);
- (aa) any amount chargeable to tax . . . by virtue of section 714, 716 or 723;
- (b) any income chargeable under Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005; . . .
- (c) subject to subsection (4) below, any income falling within subsection (3) below; and
- (d) any amount included in an individual’s total income by virtue of section 465 of ITTOIA 2005 (gains from contracts for life insurance etc.).
- (3) The income which falls within this subsection is any relevant foreign income which—
- (a) would fall within subsection (2)(a) but for the exclusion of relevant foreign income;
- (b) is a dividend chargeable under Chapter 4 of Part 4 of ITTOIA 2005; or
- (c) is a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act.
- (4) This section does not apply to—
- (a) any relevant foreign income which is charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis); . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 1B
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#### Advance corporation tax and qualifying distributions.
##### 8A
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##### 11AA
- (1) This section provides for determining for the purposes of corporation tax the amount of the profits attributable to a permanent establishment in the United Kingdom of a company that is not resident in the United Kingdom (“*the non-resident company*”).
- (2) There shall be attributed to the permanent establishment the profits it would have made if it were a distinct and separate enterprise, engaged in the same or similar activities under the same or similar conditions, dealing wholly independently with the non-resident company.
- (3) In applying subsection (2)—
- (a) it shall be assumed that the permanent establishment has the same credit rating as the non-resident company, and
- (b) it shall also be assumed that the permanent establishment has such equity and loan capital as it could reasonably be expected to have in the circumstances specified in that subsection.
No deduction may be made in respect of costs in excess of those that would have been incurred on those assumptions.
- (4) There shall be allowed as deductions any allowable expenses incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the United Kingdom or elsewhere.
- “*Allowable expenses*” means expenses of a kind in respect of which a deduction would be allowed for corporation tax purposes if incurred by a company resident in the United Kingdom.
- (5) The Board may by regulations make provision as to the application of subsection (2) in relation to insurance companies.
The regulations may, in particular, make provision in place of subsection (3)(b) as to the basis on which, in the case of insurance companies, capital is to be attributed to a permanent establishment in the United Kingdom. In this subsection “*insurance company*” has the meaning given by section 431(2).
- (6) Schedule A1 to this Act contains provisions supplementing the provisions of this section.
##### 13ZA
- (1) In determining for the purposes of section 13(7) whether one body corporate is a 51 per cent subsidiary of another, that other shall be treated as not being the owner of any share capital—
- (a) which it owns indirectly, and
- (b) which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt.
- (2) Notwithstanding that at any time a company (“*the subsidiary company*”) is a 51 per cent subsidiary of another company (“*the parent company*”) it shall not be treated at that time as such a subsidiary for the purposes of section 13(7) unless, additionally, at that time—
- (a) the parent company would be beneficially entitled to more than 50 per cent of any profits available for distribution to equity holders of the subsidiary company, and
- (b) the parent company would be beneficially entitled to more than 50 per cent of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (3) For the purposes of section 13(7) and this section—
- (a) “*trading or holding company*” means a trading company or a company the business of which consists wholly or mainly in the holding of shares or securities of trading companies that are its 90 per cent subsidiaries;
- (b) “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- (c) a company is owned by a consortium if 75 per cent or more of the ordinary share capital of the company is beneficially owned between them by companies of which none—
- (i) beneficially owns less than 5 per cent of that capital,
- (ii) would be beneficially entitled to less than 5 per cent of any profits available for distribution to equity holders of the company, or
- (iii) would be beneficially entitled to less than 5 per cent of any assets of the company available for distribution to its equity holders on a winding up,
and those companies are called the members of the consortium.
- (4) Schedule 18 (equity holders and assets etc. available for distribution) applies for the purposes of subsections (2) and (3)(c) above as it applies for the purposes of section 413(7).
##### 13AA
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##### 13AB
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##### 13A
- (1) A close company is for the purposes of section 13(1) . . . a “*close investment-holding company*” unless it complies with subsection (2) below.
- (2) A company (“*the relevant company*”) complies with this subsection in any accounting period if throughout that period it exists wholly or mainly for any one or more of the following purposes—
- (a) the purpose of carrying on a trade or trades on a commercial basis,
- (b) the purpose of making investments in land or estates or interests in land in cases where the land is, or is intended to be, let to persons other than—
- (i) any person connected with the relevant company, or
- (ii) any person who is the spouse or civil partner of an individual connected with the relevant company, or is a relative, or the spouse or civil partner of a relative, of such an individual or of the spouse or civil partner of such an individual,
- (c) the purpose of holding shares in and securities of, or making loans to, one or more companies each of which is a qualifying company or a company which—
- (i) is under the control of the relevant company or of a company which has control of the relevant company, and
- (ii) itself exists wholly or mainly for the purpose of holding shares in or securities of, or making loans to, one or more qualifying companies,
- (d) the purpose of co-ordinating the administration of two or more qualifying companies,
- (e) the purpose of a trade or trades carried on on a commercial basis by one or more qualifying companies or by a company which has control of the relevant company, and
- (f) the purpose of the making, by one or more qualifying companies or by a company which has control of the relevant company, of investments as mentioned in paragraph (b) above.
- (3) For the purposes of subsection (2) above, a company is a “*qualifying company*”, in relation to the relevant company, if it—
- (a) is under the control of the relevant company or of a company which has control of the relevant company, and
- (b) exists wholly or mainly for either or both of the purposes mentioned in subsection (2)(a) or (b) above.
- (4) Where a company is wound up, it shall not be treated as failing to comply with subsection (2) above in the accounting period that (by virtue of subsection (7) of section 12) begins with the time which is for the purposes of that subsection the commencement of the winding up, if it complied with subsection (2) above in the accounting period that ends with that time.
- (5) In this section—
- “*control*” shall be construed in accordance with section 416, and
- “*relative*” has the meaning given by section 839(8).
- (6) Section 839 shall apply for the purposes of this section.
#### Rates of tax applicable to distribution income etc.
##### 21A
- (1) Except as otherwise expressly provided, the profits of a Schedule A business are computed in the same way as the profits of a trade are computed for the purposes of Case I of Schedule D.
- (2) The following provisions apply in accordance with subsection (1)—
- section 72 (apportionment);
- the provisions of Chapter V of Part IV (computational provisions relating to the Schedule D charge), except as mentioned in subsection (4) below;
- section 577 (business entertainment expenses);
- section 577A (expenditure involving crime);
- sections 579 and 580 (redundancy payments);
- section 588 (training courses for employees);
- section 589A (counselling services for employees);
- section 73(2) of the Finance Act 1988 (consideration for restrictive undertakings);
- section 43 of the Finance Act 1989 (Schedule D: computation);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- sections 42 and 46(1) and (2) of the Finance Act 1998 (provisions as to computation of profits and losses);
- sections 196 to 200 of the Finance Act 2004 (registered pension schemes);
- section 246 of that Act (employer-financed retirement benefits schemes).
- (3) Section 74(1)(d) of this Act (disallowance of provisions for future repairs) applies in relation to a Schedule A business as if the reference to premises occupied for the purposes of the trade were to premises held for the purposes of the Schedule A business.
- (4) The following provisions in Chapter V of Part IV of this Act do not apply, or are excepted from applying, in accordance with subsection (1)—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 87 (treatment of premiums taxed as rent),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 98 (tied premises: receipts and expenses treated as those of trade).
- (5) Part 1 of Schedule 22 to the Finance Act 2001 (deduction for capital expenditure on remediation of contaminated land) applies in accordance with subsection (1), and the other Parts of that Schedule (further provision as to relief for remediation of contaminated land) have effect in relation to a Schedule A business in accordance with their provisions.
##### 21B
The following provisions apply for the purposes of Schedule A in relation to a Schedule A business as they apply for the purposes of Case I of Schedule D in relation to a trade—
- sections 103 to 106 . . . and 110 (post-cessation receipts and expenses, etc.) , with any reference to a trade within the charge to income tax being read as a reference to a UK property business;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 337(1) (effect of company beginning or ceasing to carry on trade);
- section 401(1) (pre-trading expenditure);
- section 64 of and Schedule 22 to the Finance Act 2002 (change of accounting basis).
##### 21C
- (1) The following provisions have effect for the purpose of applying the charge to corporation tax under Schedule A in relation to mutual business.
- (2) The transactions or relationships involved in mutual business are treated as if they were transactions or relationships between persons between whom no relationship of mutuality existed.
- (3) Any surplus arising from the business is regarded as a profit (and any deficit as a loss) if it would be so regarded if the business were not mutual.
- (4) The company to which the profit arises is the company which would satisfy that description if the business were not mutual business.
- (5) Nothing in this section affects the operation of section 488 (co-operative housing associations).
##### 31ZA
- (1) This section applies if—
- (a) a company carries on a Schedule A business in relation to land which consists of or includes a dwelling-house,
- (b) the company incurs expenditure in acquiring and installing an energy-saving item in the dwelling-house or in a building containing the dwelling-house (see subsections (5) to (7)),
- (c) the expenditure is incurred before 1st April 2015,
- (d) a deduction for the expenditure is not prohibited by the wholly and exclusively rule but would otherwise be prohibited by the capital prohibition rule (see subsection (8)), and
- (e) no allowance under the Capital Allowances Act may be claimed in respect of the expenditure.
- (2) In calculating the profits of the Schedule A business, a deduction for the expenditure is allowed.
- (3) But any deduction is subject to—
- (a) section 31ZB (restrictions on the relief), and
- (b) any provision made by regulations under section 31ZC.
- (4) If, on a just and reasonable apportionment of any expenditure, part of the expenditure would qualify for the relief (but the remainder would not), a deduction is allowed for that part.
- (5) “*Energy-saving item*” means an item of an energy-saving nature of such description as is for the time being specified in regulations made by the Treasury.
- (6) The Treasury may by regulations provide for an item to be an energy-saving item only if it satisfies such conditions as may be—
- (a) specified in, or
- (b) determined in accordance with,
the regulations.
- (7) The conditions may include conditions imposed by reference to information or documents issued by any body, person or organisation.
- (8) In this section—
- “*the capital prohibition rule*” means the rule in section 74(1)(f) or (g) (capital expenditure), as applied by section 21A, and
- “*the wholly and exclusively rule*” means the rule in section 74(1)(a) or (e) (expenses not wholly and exclusively for trade and unconnected losses), as applied by section 21A.
#### Schedule E.
##### 31ZB
- (1) This section restricts deductions that would otherwise be allowable under section 31ZA.
- (2) No deduction is allowed if, when the energy-saving item is installed, the dwelling-house—
- (a) is in the course of construction, or
- (b) is comprised in land in which the company does not have an interest or is in the course of acquiring an interest or further interest.
- (3) No deduction is allowed in respect of expenditure in an accounting period if—
- (a) the Schedule A business consists of or includes the commercial letting of furnished holiday accommodation for the purposes of section 503, and
- (b) the dwelling-house constitutes some or all of that accommodation for the accounting period.
- (4) No deduction is allowed in respect of expenditure treated by section 401 (as applied by section 21B) as incurred on the date on which the company starts to carry on the Schedule A business unless the expenditure was incurred not more than 6 months before that date.
- (5) No deduction is allowed in respect of expenditure incurred in acquiring and installing the energy-saving item in a building containing the dwelling-house in so far as the expenditure is not for the benefit of the dwelling-house.
##### 31ZC
- (1) In relation to any deduction under section 31ZA, the Treasury may make regulations for—
- (a) restricting or reducing the amount of expenditure for which the deduction is allowable,
- (b) excluding entitlement to the deduction in such cases as may be specified in, or determined in accordance with, the regulations,
- (c) determining who is (and is not) entitled to the deduction if different persons have different interests in land that consists of or includes the whole or part of a building containing one or more dwelling-houses,
- (d) making apportionments if the Schedule A business is carried on by persons in partnership or an interest in land is beneficially owned by persons jointly or in common.
- (2) The apportionments that may be made include apportionments to persons within the charge to income tax.
- (3) Regulations under this section may—
- (a) make different provision for different cases, and
- (b) contain incidental, supplemental, consequential and transitional provision and savings (including provision as to appeals in relation to apportionments mentioned in subsection (1)(d)).
##### 31A
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##### 31B
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#### Schedule A.
### Connected persons
##### 33A
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##### 33B
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##### 37A
- (1) This section applies if—
- (a) in calculating the amount that falls to be treated as a receipt of a UK property business under Chapter 4 of Part 3 of ITTOIA 2005 (“*the ITTOIA receipt*”), there is a reduction under section 288 of that Act by reference to a taxed receipt, and
- (b) the taxed receipt is the amount chargeable on the superior interest for the purposes of section 37.
- (2) Section 37(4) shall apply for the period in respect of which the ITTOIA receipt arose only if the appropriate fraction of the amount chargeable on the superior interest exceeds the amount of the ITTOIA receipt given by the formula in section 277, 279, 280, 281 or 282 of ITTOIA 2005, as the case may be.
- (3) Section 37(4) shall then apply as if the amount chargeable on the superior interest were reduced in the proportion which that excess bears to that appropriate fraction.
- (4) Subsection (5) applies if—
- (a) the ITTOIA receipt is in respect of a lease granted out of the taxed lease,
- (b) the taxed lease is the head lease for the purposes of section 37, and
- (c) the lease granted as mentioned in paragraph (a) does not extend to the whole of the premises subject to the head lease.
- (5) Section 37(4) and subsections (2) and (3) above shall be applied separately to the part of the premises subject to the lease and to the remainder of the premises, but as if for any reference to the amount chargeable on the superior interest there were a reference to that amount proportionately adjusted.
- (6) For the purposes of this section the appropriate fraction of the amount chargeable on the superior interest is the fraction—
$$AB$where—A is the period in respect of which the ITTOIA receipt arose, andB is the period in respect of which the amount chargeable on the superior interest arose for the purposes of section 37.$
- (7) For the purposes of this section the period in respect of which an ITTOIA receipt arose is its receipt period (within the meaning of Chapter 4 of Part 3 of ITTOIA 2005 (see section 288(6))).
- (8) In this section the following expressions have the same meaning as in Chapter 4 of Part 3 of ITTOIA 2005—
- “reduction under section 288 by reference to a taxed receipt” (see section 290(6) of that Act),
- “taxed lease” (see section 287(4) of that Act), and
- “taxed receipt” (see section 287(4) of that Act).
- (9) In the application of this section to Scotland, references to a lease granted out of a taxed lease are to be construed as references to a sublease of land subject to the taxed lease.
#### Section 37(4) and reductions in receipts under ITTOIA 2005
##### 42A
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### Rent factoring
##### 43A
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##### 43B
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##### 43C
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##### 43D
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##### 43E
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##### 43F
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##### 43G
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##### 51AA
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##### 51A
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##### 51B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schedule F.
##### 56A
- (1) This section applies where there is an arrangement under which—
- (a) there is a right to receive an amount (with or without interest)
in pursuance of a deposit of money,
- (b) when the right comes into existence there is no certificate of deposit in respect of the right, and
- (c) the person for the time being entitled to the right is entitled to call for the issue of a certificate of deposit in respect of the right.
- (2) In such a case—
- (a) the right shall be treated as not falling within section 56(1)(b), and
- (b) if there is a disposal or exercise of the right before such time (if any) as a certificate of deposit is issued in respect of it, section 56(2) shall apply to it by virtue of this paragraph.
- (3) In the application of section 56 by virtue of this section—
- (a) subsection (2) shall have effect as if the words from “(whether” to “person)” read “(whether by the person originally entitled to the right or by some other person)”, and
- (b) subsection (3) shall have effect as if the words “stated in a certificate of deposit” read “under an arrangement”.
- (4) In this section “*certificate of deposit*” has the meaning given by section 56(5).
##### 62A
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##### 63A
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##### 65A
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##### 68A
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##### 68B
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##### 68C
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##### 70A
- (1) This section applies where a company is chargeable to corporation tax under Case V of Schedule D in respect of income which—
- (a) arises from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land outside the United Kingdom, and
- (b) is not income to which section 70(2) applies (income from a trade or vocation).
- (2) The provisions of Schedule A apply to determine whether income falls within subsection (1)(a) above as they would apply to determine whether the income fell within paragraph 1(1) of that Schedule if—
- (a) the land in question were in the United Kingdom, or
- (b) a caravan or houseboat which is to be used at a location outside the United Kingdom were to be used at a location in the United Kingdom.
- (3) Any provision of the Taxes Acts which deems there to be a Schedule A business in the case of land in the United Kingdom applies where the corresponding circumstances arise with respect to land outside the United Kingdom so as to deem there to be a business within subsection (1)(a) above.
- (4) All businesses and transactions carried on or entered into by a particular company or partnership, so far as they are businesses or transactions the income from which is chargeable to tax under Case V of Schedule D in accordance with this section, are treated for the purposes of the charge to tax under Case V as, or as entered into in the course of carrying on, a single business (an “overseas property business").
- (5) The income from an overseas property business shall be computed for the purposes of Case V of Schedule D in accordance with the rules applicable to the computation of the profits of a Schedule A business.
Those rules apply separately in relation to—
- (a) an overseas property business, and
- (b) any actual Schedule A business of the company chargeable,
as if each were the only Schedule A business carried on by that company.
- (6) Sections 503 and 504 of this Act . . . do not apply to the profits or losses of an overseas property business.
- (7) Where under this section rules expressed by reference to domestic concepts of law apply in relation to land outside the United Kingdom, they shall be interpreted so as to produce the result that most closely corresponds with the result produced for Schedule A purposes in relation to land in the United Kingdom.
##### 75A
- (1) This section has effect for the purpose of determining the accounting period to which expenses of management are referable for the purposes of section 75(1).
- (2) Where—
- (a) expenses of management are debited in accounts drawn up by a company for a period of account,
- (b) the treatment of those expenses in those accounts is in accordance with generally accepted accounting practice, and
- (c) the period of account coincides with an accounting period,
the expenses of management are referable to that accounting period.
- (3) Where—
- (a) expenses of management are debited in accounts drawn up by a company for a period of account, and
- (b) the treatment of those expenses in those accounts is in accordance with generally accepted accounting practice, but
- (c) the period of account does not coincide with an accounting period,
subsection (4) below applies.
- (4) Where this subsection applies, the expenses of management—
- (a) shall be apportioned between any accounting periods that fall within the period of account, and
- (b) are referable to an accounting period to the extent that they are so apportioned to it.
- (5) An apportionment under subsection (4) above shall be in accordance with section 834(4) (time basis) unless it appears that that method would work unreasonably or unjustly, in which case such other method shall be used as appears just and reasonable.
- (6) Where—
- (a) expenses of management are not referable to an accounting period by virtue of subsections (2) to (5) above, but
- (b) accounts are drawn up by the company for a period of account, and
- (c) if the expenses of management had been treated in those accounts in accordance with generally accepted accounting practice, they would fall to be debited in those accounts,
the expenses of management are referable to the accounting period to which they would have been referable in accordance with subsections (2) to (5) above if they had been so debited in those accounts.
- (7) Where expenses of management are not referable to an accounting period by virtue of subsections (2) to (6) above, they are referable to the accounting period to which they would be referable in accordance with subsections (2) to (5) above on the assumptions in subsection (8) below.
- (8) Those assumptions are—
- (a) that for each accounting period that does not coincide with, or fall within, any period of account, there is a period of account that coincides with that accounting period, and
- (b) that so much of the expenses of management as would fall to be debited in accordance with generally accepted accounting practice in accounts drawn up by the company for any such deemed period of account are so debited.
- (9) This section is without prejudice to any other provision of the Corporation Tax Acts which provides for amounts to be treated for the purposes of section 75 as expenses of management referable to an accounting period.
- (10) Any reference in this section to expenses of management being debited in accounts is a reference to those expenses being brought into account, in accordance with generally accepted accounting practice, as a debit—
- (a) in the company’s profit and loss account or income statement, or
- (b) in a statement of total recognised gains and losses , statement of changes in equity or other statement of items brought into account in computing the company’s profits and losses for accounting purposes.
For this purpose “*debit*” means an amount which for accounting purposes reduces a profit, or increases a loss, for a period of account.
#### Restrictions on relief
##### 75B
- (1) This section applies in any case where the following conditions are satisfied—
- (a) a credit is brought into account by a company in a period of account (the “reversal period”) which ends on or after the commencement date,
- (b) the credit reverses (in whole or in part) a debit brought into account in a previous period of account of the company (whenever ending),
- (c) the debit (in whole or in part) represents expenses of management deductible under section 75(1) for an accounting period of the company (“the period of deductibility”),
- (d) the expenses of management were so deductible for that period otherwise than by virtue of section 75(9) (carry forward of unrelieved excess),
- (e) the period of deductibility ends before, or at the same time as, the reversal period,
- (f) the reversal period does not coincide with an accounting period beginning before the commencement date.
- (2) In any such case, subsection (4) or (5) below (as the case may be) shall apply in relation to the reversal amount.
- (3) In this section “*the reversal amount*” means so much of the credit as—
- (a) reverses so much of the debit as represents the expenses of management, and
- (b) does not represent sums otherwise taken into account in determining for the purposes of corporation tax the profits and losses of the company for the relevant accounting period or any earlier accounting period.
For this purpose the relevant accounting period is the latest accounting period of the company that falls wholly or partly within the reversal period.
- (4) If the reversal period coincides with an accounting period of the company beginning on or after the commencement date, the reversal amount shall be dealt with for that period in accordance with subsection (7) below.
- (5) If the reversal period does not coincide with an accounting period of the company—
- (a) the reversal amount shall be apportioned between any accounting periods that fall within the reversal period, and
- (b) any amount so apportioned to an accounting period beginning on or after the commencement date shall be dealt with for that period in accordance with subsection (7) below.
- (6) An apportionment under subsection (5) above shall be in accordance with section 834(4) (time basis) unless it appears that that method would work unreasonably or unjustly, in which case such other method shall be used as appears just and reasonable.
- (7) Where an amount falls to be dealt with in accordance with this subsection for an accounting period—
- (a) it shall, so far as possible, be applied in reducing or further reducing (but not below nil) the company’s expenses of management deductible for that period otherwise than by virtue of section 75(9) (carry forward of unrelieved excess), and
- (b) so much of the amount as cannot be so applied shall be regarded as income of the company chargeable under Case VI of Schedule D for that accounting period.
- (8) In subsection (1) above “*brought into account*”, in relation to a period of account of a company, means brought into account in accordance with generally accepted accounting practice in determining, for accounting purposes, profit and loss for that period of account.
- (9) If (apart from this subsection) an accounting period does not coincide with, or fall within, any period of account, it shall be assumed for the purposes of this section that there is a period of account of the company that coincides with that accounting period.
- (10) It shall be assumed for the purposes of this section that, in determining for accounting purposes profit and loss for any period of account of any company, amounts fall to be brought into account in accordance with generally accepted accounting practice.
- (11) For the purposes of this section a credit reverses a debit in whole or in part in any case where the sum represented in whole or in part by the debit is paid and then in whole or in part repaid (as well as in a case where the sum represented by the debit is never paid).
- (12) In this section—
- “*the commencement date*” means 1st April 2004;
- “*credit*” means an amount which for accounting purposes increases or creates a profit, or reduces a loss, for a period of account;
- “*debit*” means an amount which for accounting purposes reduces a profit, or increases or creates a loss, for a period of account.
#### Relief for rent etc. not paid.
##### 76A
- (1) In computing the amount of the profits to be charged to corporation tax under Case I of Schedule D arising from a trade carried on by an authorised person (other than an investment company)—
- (a) to the extent that it would not be deductible apart from this section, any sum expended by the authorised person in paying a levy may be deducted as an allowable expense;
- (b) any payment which is made to the authorised person as a result of a repayment provision is to be treated as a trading receipt.
- (2) “Levy” means—
- (a) a payment required under rules made under section 136(2) of the Financial Services and Markets Act 2000 (“the Act of 2000”);
- (b) a levy imposed under the Financial Services Compensation Scheme;
- (c) a payment required under rules made under section 234 of the Act of 2000;
- (d) a payment required under scheme rules in accordance with paragraph 15(1) of Schedule 17 to the Act of 2000;
- (e) a payment required in accordance with the standard terms fixed under paragraph 18 of Schedule 17 to the Act of 2000 other than an award which is not an award of costs under cost rules.
- (3) “Repayment provision” means—
- (a) any provision made by virtue of section 136(7) or 214(1)(e) of the Act of 2000;
- (b) any provision by scheme rules for fees to be refunded in specified circumstances.
- (4) “*Authorised person*” has the same meaning as in the Act of 2000.
- (5) “Scheme rules” means the rules referred to in paragraph 14(1) of Schedule 17 to the Act of 2000.
- (6) “Costs rules” means—
- (a) rules made under section 230 of the Act of 2000;
- (b) provision relating to costs contained in the standard terms fixed under paragraph 18 of Schedule 17 to the Act of 2000.
##### 76B
- (1) For the purposes of section 75 any sums paid by a company with investment business—
- (a) by way of a levy, or
- (b) as a result of an award of costs under costs rules,
shall be treated as part of its expenses of management.
- (2) For the purposes of corporation tax, if a payment is made to a company with investment business as a result of a repayment provision, the company shall be charged to tax under Case VI of Schedule D on the amount of that payment.
- (3) “*Levy*” has the meaning given in section 76A(2).
- (4) “Costs rules” has the meaning given in section 76A(6).
- (5) “*Repayment provision*” has the meaning given in section 76A(3).
#### Disposal or exercise of rights in pursuance of deposits.
##### 79A
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to a training and enterprise council, business link organisation or a local enterprise company, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or profession for the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the council, organisation or company concerned or from any other person.
- (4) In any case where—
- (a) relief has been given under subsection (1) above in respect of a contribution made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D, or if the company is not chargeable to corporation tax under either of those Cases for that period under Case VI of Schedule D, on an amount equal to the value of that benefit.
- (5) In this section—
- (aa) “*business link organisation*” means any person authorised by or on behalf of the Secretary of State to use a service mark (within the meaning of the Trade Marks (Amendment) Act 1984) designated by the Secretary of State for the purposes of this paragraph
- (a) “*training and enterprise council*” means a body with which the Secretary of State has made an agreement (not being one which has terminated) under which it is agreed that the body shall carry out the functions of a training and enterprise council, and
- (b) “*local enterprise company*” means a company with which an agreement (not being one which has terminated) under which it is agreed that the company shall carry out the functions of a local enterprise company has been made by . . . Scottish Enterprise or Highlands and Islands Enterprise.
- (6) Section 839 applies for the purposes of subsections (3) and (4) above.
- (7) This section applies to contributions made on or after 1st April 1990 or, in the case of a contribution to a business link organisation, 30th November 1993. . . .
##### 79B
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to a designated urban regeneration company, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or professionfor the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business, any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the urban regeneration company concerned or from any other person.
- (4) In any case where—
- (a) relief has been given under subsection (1) above in respect of a contribution made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) In this section “*urban regeneration company*” means any body of persons (whether corporate or unincorporate) which the Treasury by order designates as an urban regeneration company for the purposes of this section.
- (6) The Treasury may only make an order under subsection (5) above designating a body as an urban regeneration company for the purposes of this section if they consider that each of the criteria in subsection (7) below is satisfied in the case of the body.
- (7) The criteria are that—
- (a) the sole or main function of the body is to co-ordinate the regeneration of a specific urban area in the United Kingdom;
- (b) the body is expected to seek to perform that function by creating a plan for the development of that area and endeavouring to secure that the plan is carried into effect;
- (c) in co-ordinating the regeneration of that area, the body is expected to work together with some or all of the public or local authorities which exercise functions in relation to the whole or part of that area.
- (8) An order under subsection (5) above may be framed so as to take effect on a date earlier than the making of the order, but not earlier than—
- (a) 1st April 2003, in the case of the first order under that subsection, or
- (b) three months before the date on which the order is made, in the case of any subsequent order.
- (9) Section 839 (connected persons) applies for the purposes of this section.
- (10) This section applies to contributions made on or after 1st April 2003.
##### 82A
- (1) Notwithstanding anything in section 74, where a company carrying on a trade incurs expenditure not of a capital nature on research and development—
- (a) related to that trade, and
- (b) directly undertaken by the company or on the company's behalf,
the expenditure incurred may be deducted as an expense in computing the profits of the trade for the purposes of corporation tax.
- (2) For this purpose expenditure on research and development does not include expenditure incurred in the acquisition of rights in, or arising out of, research and development.
Subject to that, it includes all expenditure incurred in carrying out, or providing facilities for carrying out, research and development.
- (3) The reference in subsection (1) above to research and development related to a trade includes—
- (a) research and development which may lead to or facilitate an extension of that trade;
- (b) research and development of a medical nature which has a special relation to the welfare of workers employed in that trade.
- (4) The same expenditure may not be taken into account under this section in relation to more than one trade.
- (5) In this section “*research and development*” has the meaning given by section 837A and includes oil and gas exploration and appraisal.
##### 82B
- (1) Notwithstanding anything in section 74, where a company carrying on a trade—
- (a) pays any sum to an Association in the case of which exemption may be claimed under section 508 and which has as its object the undertaking of research and development which may lead to or facilitate an extension of the class of trade to which the trade carried on by the company belongs, or
- (b) pays any sum to be used for scientific research related to that class of trade to any such university, college research institute or other similar institution as is for the time being approved for the purposes of this section by the Secretary of State,
the sum paid may be deducted as an expense in computing the profits of the trade for the purposes of corporation tax.
- (2) In this section “*scientific research*” means any activities in the fields of natural or applied science for the extension of knowledge.
- (3) The reference in subsection (1)(b) above to scientific research related to a class of trade includes—
- (a) scientific research which may lead to or facilitate an extension of trades of that class;
- (b) scientific research of a medical nature which has a special relation to the welfare of workers employed in trades of that class.
- (4) If a question arises under this section whether, or to what extent, any activities constitute or constituted scientific research, the Board shall refer the question for decision to the Secretary of State.
The decision of the Secretary of State is final.
- (5) The same expenditure may not be taken into account under this section in relation to more than one trade.
##### 83A
- (1) This section applies where a company carrying on a trade or profession gives an article falling within subsection (2) below to—
- (a) a charity within the meaning of section 506, or
- (b) a body listed in section 507(1).
- (2) An article falls within this subsection if—
- (a) it is an article manufactured, or of a class or description sold, by the company in the course of its trade; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) For the purposes of subsection (1)(b) above and any other provisions of the Income Tax Acts (other than sections 535 to 537 of ITTOIA 2005)—
- (a) so much of any person’s income as comprises income to which this section applies shall be treated as the highest part of his income; and
- (b) so much of that part as consists of—
- (i) income chargeable under Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 (if any), and
- (ii) dividends chargeable under Chapter 4 of Part 4 of that Act (if any) or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act (if any),
shall be treated as the highest part of that part.
- (6) Subsection (5) above shall have effect subject to section 833(3) but shall otherwise have effect notwithstanding any provision requiring income of any description to be treated for the purposes of the Income Tax Acts (other than sections 535 to 537 of ITTOIA 2005) as the highest part of a person’s income.
- (6A) Where income tax at the basic rate has been borne on income chargeable at the lower rate any necessary repayment of tax shall be made on the making of a claim.
- (3) Subject to subsection (4) below, where this section applies in the case of the gift of an article—
- (a) no amount shall be required, in consequence of the the company's disposal of that article from trading stock, to be brought into account for corporation tax purposes as a trading receipt of the company; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In any case where—
- (a) relief is given under subsection (3) above or section 63(2) of the Capital Allowances Act in respect of the gift of an article made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to the making of that gift,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) Section 839 applies for the purposes of this section.
##### 84A
- (1) Subsection (2) below applies where—
- (a) a company incurs expenditure on establishing a share option scheme which the Board approve and under which no employee or director obtains rights before such approval is given, or
- (b) a company incurs expenditure on establishing a profit sharing scheme which the Board approve and under which the trustees acquire no shares before such approval is given.
- (2) In such a case the expenditure—
- (a) shall be deducted in computing for the purposes of Schedule D or Part 2 of ITTOIA 2005 the profits of a trade carried on by the company, or
- (b) if the company is one with investment business, shall be treated as expenses of management deductible under section 75 to the extent that it otherwise would not be, or
- (c) if the company is one in relation to which section 76 applies, shall be treated for the purposes of that section as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section to the extent that it otherwise would not be.
- (3) In a case where—
- (a) subsection (2) above applies, and
- (b) the approval is given after the end of the period of nine months beginning with the day following the end of the period of account in which the expenditure is incurred,
for the purpose of applying subsection (2) above the expenditure shall be treated in accordance with subsection (3ZA) below.
- (3ZA) Where this subsection applies—
- (a) in applying subsection (2)(a) above, the expenditure shall be treated as incurred in the period of account in which the approval is given (and not the period of account mentioned in subsection (3)(b) above),
- (b) in applying subsection (2)(b) or (c) above, the expenditure shall be treated as referable to the accounting period in which the approval is given.
- (3A) In this section, “*share option scheme*” means—
- (a) an SAYE option scheme within the meaning of the SAYE code (see section 516(4) of ITEPA 2003 (approved SAYE option schemes)), or
- (b) a CSOP scheme within the meaning of the CSOP code (see section 521(4) of that Act (approved CSOP schemes)).
- (4) References in this section to approving are to approving under Schedule 9 to this Act or under Schedule 3 or 4 to ITEPA 2003 (approved SAYE option schemes and approved CSOP schemes).
- (5) This section applies where the expenditure is incurred on or after 1st April 1991.
##### 85A
- (1) Subsection (2) below applies where a company incurs expenditure on establishing a qualifying employee share ownership trust.
- (2) In such a case the expenditure—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade carried on by the company,. . .
- (b) if the company is a company with investment business, shall be treated as expenses of management deductible under section 75 to the extent that it otherwise would not be, or
- (c) if the company is one in relation to which section 76 applies, shall be treated for the purposes of that section as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section to the extent that it otherwise would not be.
- (3) In a case where—
- (a) subsection (2) above applies, and
- (b) the trust is established after the end of the period of nine months beginning with the day following the end of the period of account in which the expenditure is incurred,
for the purpose of applying subsection (2) above, the expenditure shall be treated in accordance with subsection(3A) below.
- (3A) Where this subsection applies—
- (a) in applying subsection (2)(a) above, the expenditure shall be treated as incurred in the period of account in which the trust is established (and not the period of account mentioned in subsection (3)(b) above),
- (b) in applying subsection (2)(b) or (c) above, the expenditure shall be treated as referable to the accounting period in which the trust is established.
- (4) In this section “*qualifying employee share ownership trust*” shall be construed in accordance with Schedule 5 to the Finance Act 1989.
- (5) For the purposes of this section the trust is established when the deed under which it is established is executed.
- (6) This section applies where the expenditure is incurred on or after 1st April 1991.
##### 85B
Schedule 4AA (which provides for deductions relating to approved share incentive plans) shall have effect.
##### 86A
- (1) This section applies where—
- (a) a company (the employer) is liable to make to any individual payments from which income tax falls to be deducted under PAYE regulations, and
- (b) the employer withholds sums from those payments in accordance with an approved scheme and pays the sums to an approved agent.
- (1A) In subsection (1)(b) “*approved scheme*” and “*approved agent*” have the same meaning as in section 714 of ITEPA 2003.
- (2) Any relevant expenditure incurred by the employer on or after 16th March 1993—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade or profession carried on by the employer, or
- (b) if the employer is a company with investment business, shall be treated as expenses of management deductible under section 75.
- (3) Relevant expenditure is expenditure incurred in making to the agent any payment in respect of expenses which have been or are to be incurred by the agent in connection with his functions under the scheme.
#### Case V income from land outside UK: corporation tax.
##### 87A
- (1) This section applies if—
- (a) a lease has been granted out of the interest referred to in section 87(4),
- (b) in calculating the amount that falls to be treated as a receipt of a UK property business under Chapter 4 of Part 3 of ITTOIA 2005 in respect of the lease, there is a reduction under section 288 of that Act by reference to a taxed receipt, and
- (c) the taxed receipt is the amount chargeable for the purposes of section 87.
- (2) Section 37A (section 37(4) and reductions in receipts under ITTOIA 2005) shall apply for modifying the operation of section 87(2) and (3) as it applies for modifying the operation of section 37(4).
- (3) In this section the following expressions have the same meaning as in Chapter 4 of Part 3 of ITTOIA 2005—
- “reduction under section 288 by reference to a taxed receipt” (see section 290(6) of that Act), and
- “taxed receipt” (see section 287(4) of that Act).
#### Appeals against determinations under sections 34 to 36 or Chapter 4 of Part 3 of ITTOIA 2005.
##### 88A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88D
- (1) This section applies to debts to which the following provisions do not apply—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships, etc);
- (b) Schedule 26 to the Finance Act 2002 (derivative contracts);
- (c) Schedule 29 to that Act (intangible fixed assets).
- (2) In calculating the profits of a company's trade for the purposes of corporation tax, no deduction is allowed in respect of a debt owed to the company, except—
- (a) by way of impairment loss, or
- (b) to the extent that the debt is released wholly and exclusively for the purposes of that trade as part of a statutory insolvency arrangement.
- (3) In this section “*debt*” includes an obligation or liability that falls to be discharged otherwise than by the payment of money.
- (4) In this section “*trade*” has the meaning given by section 6(4).
##### 91A
- (1) This section applies where on or after 6th April 1989 a company makes a site restoration payment in the course of carrying on a trade.
- (2) Subject to subsection (3) below, for the purposes of . . . corporation tax the payment shall be allowed as a deduction in computing the profits of the trade for the period of account in which the payment is made.
- (3) Subsection (2) above shall not apply to so much of the payment as—
- (a) represents expenditure which has been allowed as a deduction in computing the profits of the trade for any period of account preceding the period of account in which the payment is made, or
- (b) represents capital expenditure in respect of which an allowance has been, or may be, made under the enactments relating to capital allowances.
- (4) For the purposes of this section a site restoration payment is a payment made—
- (a) in connection with the restoration of a site or part of a site, and
- (b) in order to comply with any condition of a relevant licence, or any condition imposed on the grant of planning permission to use the site for the carrying out of waste disposal activities, or any relevant obligation.
- (5) For the purposes of this section waste disposal activities are the collection, treatment, conversion and final depositing of waste materials, or any of those activities.
- (6) For the purposes of this section a relevant icence is—
- (a) a disposal licence under Part I of the Control of Pollution Act 1974 or Part II of the Pollution Control and Local Government (Northern Ireland) Order 1978, or
- (b) a waste management licence under Part II of the Environmental Protection Act 1990 or any corresponding provision for the time being in force in Northern Ireland, or
- (ba) a permit under regulations under section 2 of the Pollution Prevention and Control Act 1999, or a permit under regulations under Article 4 of the Environment (Northern Ireland) Order 2002, or
- (ba) a permit granted under regulations under section 2 of the Pollution Prevention and Control Act 1999, or a permit under regulations under Article 4 of the Environment (Northern Ireland) Order 2002, or
- (c) any authorisation under the Radioactive Substances Act 1960 or the Radioactive Substances Act 1993 for the disposal of radioactive waste or any nuclear site licence under the Nuclear Installations Act 1965.
- (7) For the purposes of this section a relevant obligation is—
- (a) an obligation arising under an agreement made under—
- (i) section 106 of the Town and Country Planning Act 1990, as originally enacted;
- (ii) section 75 of the Town and Country Planning (Scotland) Act 1997;
- (b) a planning obligation entered into under section 106 of the Act of 1990, as substituted by section 12 of the Planning and Compensation Act 1991, or under section 299A of the Act of 1990;
- (c) an obligation arising under or under an agreement made under any provision—
- (i) corresponding to section 106 of the Town and Country Planning Act 1990, as originally enacted or as substituted by the Act of 1991 or to section 299A of the Act of 1990; and
- (ii) for the time being in force in Northern Ireland.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 91B
- (1) This section applies where a company—
- (a) incurs, in the course of carrying on a trade, site preparation expenditure in relation to a waste disposal site (the site in question),
- (b) holds, at the time the company first deposits waste materials on the site in question, a relevant licence which is then in force,
- (c) makes a claim for relief under this section in such form as the Board may direct, and
- (d) submits such plans and other documents (if any) as the Board may require;
and it is immaterial whether the expenditure is incurred before or after the coming into force of this section.
- (2) In computing the profits of the trade for a period of account ending after 5th April 1989, the allowable amount shall be allowed as a deduction for the purposes of . . . corporation tax.
- (3) In relation to a period of account (the period in question) the allowable amount shall be determined in accordance with the formula—
$(A-B)×CC+D$
- (4) A is the site preparation expenditure incurred by the company at any time before the beginning of, or during, the period in question—
- (a) in relation to the site in question, and
- (b) in the course of carrying on the trade;
but this subsection is subject to subsections (5) and (9) below.
- (5) A does not include any expenditure—
- (a) which has been allowed as a deduction in computing for the purposes of corporation tax or income tax the profits of the trade for any period of account preceding the period in question, or
- (b) which constitutes capital expenditure in respect of which an allowance has been, or may be, made for the purposes of corporation tax or income tax under the enactments relating to capital allowances.
- (6) B is an amount equal to any amount allowed as a deduction under this section or section 165 of ITTOIA 2005 (relief for income tax purposes), if allowed—
- (a) in computing the profits of the trade for any period of account preceding the period in question, and
- (b) as regards expenditure incurred in relation to the site in question;
and if different amounts have been so allowed as regards different periods, B is the aggregate of them.
- (7) C is the volume of waste materials deposited on the site in question during the period in question; but if the period is one beginning before 6th April 1989 C shall be reduced by the volume of any waste materials deposited on the site during the period but before that date.
- (8) D is the capacity of the site in question not used up for the deposit of waste materials, looking at the state of affairs at the end of the period in question.
- (9) Where any of the expenditure which would be included in A (apart from this subsection) was incurred before 6th April 1989, A shall be reduced by an amount determined in accordance with the formula—
$E×FF+G$
- (10) For the purposes of subsection (9) above—
- (a) E is so much of the initial expenditure (that is, the expenditure which would be included in A apart from subsection (9) above) as was incurred before 6th April 1989,
- (b) F is the volume of waste materials deposited on the site in question before 6th April 1989, and
- (c) G is the capacity of the site in question not used up for the deposit of waste materials, looking at the state of affairs immediately before 6th April 1989.
- (10A) For the purposes of this section any expenditure incurred for the purposes of a trade by a company about to carry it on shall be treated as if it had been incurred by that company on the first day on which it does carry it on and in the course of doing so.
- (11) For the purposes of this section—
- (a) a waste disposal site is a site used (or to be used) for the disposal of waste materials by their deposit on the site,
- (b) in relation to such a site, site preparation expenditure is expenditure on preparing the site for the deposit of waste materials (and may include expenditure on earthworks),
- (c) in relation to such a site, “*capacity*” means capacity expressed in volume,
- (d) “*relevant licence*” has the same meaning as in section 91A, . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 91BA
- (1) This section applies where—
- (a) site preparation expenditure has been incurred in relation to a waste disposal site,
- (b) that expenditure was incurred by a person in the course of carrying on a trade, and
- (c) on or after 21st March 2000—
- (i) that person (“*the predecessor*”) ceases to carry on that trade, or ceases to carry it on so far as it relates to that site, and
- (ii) another person that is a company (“*the successor*”) begins to carry on that trade, or to carry on in the course of a trade the activities formerly carried on by the predecessor in relation to that site.
- (2) If the conditions specified in the following provisions of this section are met, then, for the purposes of section 91B above—
- (a) the trade carried on by the successor shall be treated as the same trade as that carried on by the predecessor, and
- (b) allowances shall be made to the successor (and not to the predecessor) as if everything done to or by the predecessor had been done to or by the successor.
- (3) The first condition is that the whole of the site in question is transferred to the successor.
Provided the successor holds an estate or interest in the whole of the site, it need not be the same as that held by the predecessor.
- (4) The second condition is that the successor, at the time it first deposits waste material at the site, holds a relevant licence in respect of the site which is then in force.
- (5) Expressions used in this section have the same meaning as in section 91B.
##### 91C
Where—
- (a) a company carrying on a trade incurs expenditure on mineral exploration and access as defined in section 396(1) of the Capital Allowances Act in an area or group of sands in which the presence of mineral deposits in commercial quantities has already been established, and
- (b) if the presence in that area or group of sands of mineral deposits in commercial quantities had not already been established, that expenditure would not have been allowed to be deducted in computing the profits of the trade for the purposes of corporation tax,
that expenditure shall not be so deducted.
### Payments for restrictive undertakings
##### 76ZA
- (1) This section applies if a payment—
- (a) is treated as earnings of an employee by virtue of section 225 of ITEPA 2003 (payments for restrictive undertakings), and
- (b) is made, or treated as made for the purposes of section 226 of that Act (valuable consideration given for restrictive undertakings), by a company in relation to which section 76 applies.
- (2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.
### Seconded employees
##### 76ZB
- (1) This section applies if a company to which section 76 applies makes the services of a person employed for the purposes of the company's life assurance business available to—
- (a) a charity, or
- (b) an educational establishment,
on a basis that is stated and intended to be temporary.
- (2) Expenses of the employer that are attributable to the employee's employment during the period of the secondment are treated as expenses payable which fall to be brought into account at Step 1 in section 76(7).
- (3) In this section—
- “*educational establishment*” has the same meaning as in section 70 of CTA 2009, and
- “*the period of the secondment*” means the period for which the employee's services are made available to the charity or educational establishment.
### Counselling and retraining expenses
##### 76ZC
- (1) This section applies if—
- (a) a company carrying on life assurance business (“*the employer*”) incurs counselling expenses,
- (b) the expenses are incurred in relation to a person (“*the employee*”) who holds or has held an office or employment under the employer, and
- (c) the relevant conditions are met.
- (2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).
- (3) In this section “*counselling expenses*” means expenses incurred—
- (a) in the provision of services to the employee in connection with the cessation of the office or employment,
- (b) in the payment or reimbursement of fees for such provision, or
- (c) in the payment or reimbursement of travelling expenses in connection with such provision.
- (4) In this section “*the relevant conditions*” means—
- (a) conditions A to D for the purposes of section 310 of ITEPA 2003 (employment income exemptions: counselling and other outplacement services), and
- (b) in the case of travel expenses, condition E for those purposes.
##### 76ZD
- (1) This section applies if—
- (a) a company carrying on life assurance business (“*the employer*”) incurs training course expenses,
- (b) they are incurred in relation to a person (“*the employee*”) who holds or has held an office or employment under the employer, and
- (c) the relevant conditions are met.
- (2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).
- (3) In this section—
- “*retraining course expenses*” means expenses incurred in the payment or reimbursement of retraining course expenses within the meaning given by section 311(2) of ITEPA 2003, and
- “*the relevant conditions*” means—the conditions in subsections (3) and (4) of section 311 of ITEPA 2003 (employment income exemptions: retraining courses), andin the case of travel expenses, the conditions in subsection (5) of that section.
##### 76ZE
- (1) This section applies if—
- (a) an employer's liability to corporation tax for an accounting period is determined on the assumption that it is entitled by virtue of section 76ZD to bring an amount into account in determining the amount of a deduction to be made under section 76, and
- (b) without section 76ZD the employer would not have been so entitled.
- (2) If, subsequently—
- (a) the condition in section 311(4)(a) of ITEPA 2003 is not met because of the employee's failure to begin the course within the period of one year after ceasing to be employed, or
- (b) the condition in section 311(4)(b) of ITEPA 2003 is not met because of the employee's continued employment or re-employment,
an assessment of an amount or further amount of corporation tax due as a result of the condition not being met may be made under paragraph 41 of Schedule 18 to FA 1998.
- (3) Such an assessment must be made before the end of the period of 6 years immediately following the end of the accounting period in which the failure to meet the condition occurred.
- (4) If subsection (2) applies, the employer must give an officer of Revenue and Customs a notice containing particulars of—
- (a) the employee's failure to begin the course,
- (b) the employee's continued employment, or
- (c) the employee's re-employment,
within 60 days of coming to know of it.
- (5) If an officer of Revenue and Customs has reason to believe that the employer has failed to give such a notice, the officer may by notice require the employer to provide such information as the officer may reasonably require for the purposes of this section about—
- (a) the failure to begin the course,
- (b) the continued employment, or
- (c) the re-employment.
- (6) A notice under subsection (5) may specify a time (not less than 60 days) within which the required information must be provided.
### Redundancy payments etc
##### 76ZF
- (1) Sections 76ZG to 76ZI apply if—
- (a) a company to which section 76 applies (“*the employer*”) makes a redundancy payment or an approved contractual payment to another person (“*the employee*”), and
- (b) the payment is in respect of the employee's employment wholly in the employer's life assurance business or partly in the employer's life assurance business and partly in one or more other capacities.
- (2) For the purposes of this section and sections 76ZG to 76ZH “*redundancy payment*” means a redundancy payment payable under—
- (a) Part 11 of the Employment Rights Act 1996, or
- (b) Part 12 of the Employment Rights (Northern Ireland) Order 1996.
- (3) For the purposes of this section and those sections—
- “*contractual payment*” means a payment which, under an agreement, an employer is liable to make to an employee on the termination of the employee's contract of employment, and
- a contractual payment is “*approved*” if, in respect of that agreement, an order is in force under—section 157 of the Employment Rights Act 1996, orArticle 192 of the Employment Rights (Northern Ireland) Order 1996.
##### 76ZG
- (1) This section applies if the payment is in respect of the employee's employment wholly in the employer's life assurance business.
- (2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.
- (3) The amount brought into account by virtue of this section for an approved contractual payment must not exceed the amount which would have been due to the employee if a redundancy payment had been payable.
- (4) If the payment is referable to an accounting period beginning after the business has permanently ceased to be carried on, it is treated as referable to the last accounting period in which the business was carried on.
##### 76ZH
- (1) This section applies if the payment is in respect of the employee's employment with the employer—
- (a) partly in the employer's life assurance business, and
- (b) partly in one or more other capacities.
- (2) The amount of the redundancy payment, or the amount which would have been due if a redundancy payment had been payable, is to be apportioned on a just and reasonable basis between—
- (a) the employment in the life assurance business, and
- (b) the employment in the other capacities.
- (3) The part of the payment apportioned to the employment in the life assurance business is treated as a payment in respect of the employee's employment wholly in the life assurance business for the purposes of section 76ZG.
##### 76ZI
- (1) This section applies if the employer's business, or part of it, ceases (permanently) to be carried on and the employer makes a payment to the employee in addition to—
- (a) the redundancy payment, or
- (b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
- (2) If—
- (a) the additional payment would not otherwise be regarded as expenses payable for the purposes of section 76, but
- (b) that is only because the business, or the part of the business, has ceased to be carried on,
the additional payment is regarded as expenses payable for the purposes of section 76.
- (3) So far as the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it is not to be so regarded for the purposes of that subsection (or of subsection (2) above so far as relating to section 76).
- (4) The amount treated under this section as expenses payable for the purposes of section 76 is limited to 3 times the amount of—
- (a) the redundancy payment, or
- (b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
- (5) If the payment is referable to an accounting period beginning after the business or the part of the business has ceased to be carried on, it is treated as referable to the last accounting period in which the business, or the part concerned, was carried on.
##### 76ZJ
- (1) This section applies if—
- (a) a redundancy payment or an approved contractual payment is payable by a company to which section 76 applies (“*the employer*”), and
- (b) a payment to which subsection (2) applies is made in respect of the payment.
- (2) This subsection applies to—
- (a) payments made by the Secretary of State under section 167 of the Employment Rights Act 1996, and
- (b) payments made by the Department for Employment and Learning under Article 202 of the Employment Rights (Northern Ireland) Order 1996.
- (3) So far as the employer reimburses the Secretary of State or Department for the payment, sections 76ZG to 76ZI apply as if the payment were—
- (a) a redundancy payment, or
- (b) an approved contractual payment,
made by the employer.
### Contributions to local enterprise organisations or urban regeneration companies
##### 76ZK
- (1) This section applies if a company to which section 76 applies (“*the contributor*”) incurs expenses in making a contribution (whether in cash or in kind)—
- (a) to a local enterprise organisation, or
- (b) to an urban regeneration company.
- (2) The expenses are treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 1 in section 76(7).
- (3) But if, in connection with the making of the contribution, the contributor or a connected person—
- (a) receives a disqualifying benefit of any kind, or
- (b) is entitled to receive such a benefit,
the amount treated in accordance with subsection (2) is restricted to the amount of the expenses less the value of the benefit.
- (4) For this purpose it does not matter whether a person receives, or is entitled to receive, the benefit—
- (a) from the local enterprise organisation or urban regeneration company concerned, or
- (b) from anyone else.
- (5) Subsection (6) applies if—
- (a) an amount has been brought into account in accordance with subsection (2), and
- (b) the contributor or a connected person receives a disqualifying benefit that is in any way attributable to the contribution.
- (6) The contributor is to be treated as receiving, when the benefit is received, an amount—
- (a) which is equal to the value of the benefit (so far as not brought into account in determining the amount of the deduction), and
- (b) to which the charge to corporation tax on income applies.
- (7) In this section—
- “*disqualifying benefit*” means a benefit the expenses of obtaining which, if incurred by the contributor directly in a transaction at arm's length, would not be expenses payable for the purposes of section 76,
- “*local enterprise organisation*” has the meaning given by section 83 of CTA 2009,
- “*urban regeneration company*” has the meaning given by section 86 of CTA 2009.
- (8) Section 839 (“connected person”) applies for the purposes of subsections (3) and (5).
### Unpaid remuneration
##### 76ZL
- (1) This section applies if—
- (a) an amount is charged in respect of employees' remuneration in the accounts for a period of a company to which section 76 applies,
- (b) the amount would apart from this section be brought into account under section 76 as expenses payable, and
- (c) the remuneration is not paid before the end of the period of 9 months immediately following the end of the period of account.
- (2) If the remuneration is paid after the end of that period of 9 months, the amount is brought into account for the period of account in which it is paid.
- (3) But—
- (a) subsection (2) is subject to section 86 of FA 1989 (spreading of relief for acquisition expenses), and
- (b) in interpreting that section the remuneration is treated as expenses payable which fall to be included at Step 1 in section 76(7) for the period of account in which the remuneration is paid.
- (4) The amount is not brought into account under section 76 as expenses payable if it is not paid.
##### 76ZM
- (1) For the purposes of section 76ZL an amount charged in the accounts in respect of employees' remuneration includes an amount for which provision is made in the accounts with a view to its becoming employees' remuneration.
- (2) For the purposes of section 76ZL it does not matter whether an amount is charged for—
- (a) particular employments, or
- (b) employments generally.
- (3) If the profits of the company are calculated before the end of the 9 month period mentioned in section 76ZL(1)(c)—
- (a) it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but
- (b) if the remuneration is subsequently paid before the end of that period, nothing in this subsection prevents the calculation being revised and any tax return being amended accordingly.
- (4) For the purposes of this section and section 76ZL remuneration is paid when it—
- (a) is treated as received by an employee for the purposes of ITEPA 2003 by section 18 or 19 of that Act (receipt of money and non-money earnings), or
- (b) would be so treated if it were not exempt income.
- (5) In this section and section 76ZL—
- “*employee*” includes an office-holder and “*employment*” therefore includes an office, and
- “*remuneration*” means an amount which is or is treated as earnings for the purposes of Parts 2 to 7 of ITEPA 2003.
### Car or motor cycle hire
##### 76ZN
- (1) Subsection (2) applies if—
- (a) in calculating the corporation tax to which a company is liable for an accounting period, an amount representing expenses incurred on the hiring of a car or motor cycle can be brought into account under section 76 as expenses payable,
- (b) the car or motor cycle is not a qualifying hire car or motor cycle, and
- (c) the retail price of the car or motor cycle when new exceeds £12,000.
- (2) The amount that would otherwise be capable of being brought into account as expenses payable is reduced by multiplying the amount by the fraction—
$$£12,000+RP2×RP$where RP is the retail price of the car or motor cycle when new.$
- (3) Subsection (4) applies if an amount is reduced as a result of subsection (2), or a corresponding provision, and—
- (a) subsequently—
- (i) there is a rebate (however described) of the hire charges, or
- (ii) a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency agreement, and
- (b) an amount is brought into account in respect of the rebate or release.
- (4) For the purposes of subsection (3)(b) an amount is brought into account in respect of a rebate of hire charges or the release of a debt if—
- (a) the amount of a reversal representing the rebate or release falls to be deducted under Step 4 in section 76(7), or
- (b) (in the case of a rebate of hire charges) an amount representing the rebate is chargeable under section 85(1) of the Finance Act 1989 (c. 26).
- (5) The amount that would otherwise be deductible as mentioned in subsection (4)(a) or chargeable as mentioned in subsection (4)(b) is reduced by multiplying it by the fraction set out in subsection (2).
- (6) In this section “*corresponding provision*” means—
- (a) section 56(2) of CTA 2009 (car or motor cycle hire: trade profits and property income),
- (b) section 1251(2) of CTA 2009 (car or motor cycle hire: companies with investment business), and
- (c) section 48(2) of ITTOIA 2005 (car or motor cycle hire: trade profits and property income).
- (7) The power under section 74(4) of CAA 2001 to increase or further increase the sums of money specified in Chapter 8 of Part 2 of CAA 2001 includes the power to increase or further increase the sum of money specified in subsection (1)(c) or (2).
- (8) In this section “*car or motor cycle*” and “*qualifying hire car or motor cycle*” have the meanings given by section 57 of CTA 2009.
##### 76ZO
- (1) Section 76ZN does not apply to expenses incurred on the hiring of a car with low CO₂ emissions, or an electrically-propelled car, if—
- (a) the car was first registered on or after 17 April 2002, and
- (b) the period of hire begins before 1 April 2013 under a contract entered into before that date.
- (2) For this purpose—
- “*car with low CO₂ emissions*” has the meaning given by section 45D of CAA 2001, and
- “*electrically-propelled car*” has the meaning given by that section.
##### 95ZA
- (1) If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly section 208 does not apply in relation to those distributions).
- (2) A company (“company A”) receives a “relevant distribution” if—
- (a) it receives a distribution made by a company resident in the United Kingdom (“company B”),
- (b) the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution,
- (c) a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and
- (d) either—
- (i) the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or
- (ii) the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days.
- (3) In this section “*relevant insurance business*” means any kind of insurance business other than life assurance business.
- (4) Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i).
- (5) Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding.
##### 95A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Relief for post-cessation expenditure
##### 109A
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### Change of residence
##### 110A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenses of insurance companies
### Limited liability partnerships
##### 118ZA
- (1) For corporation tax purposes, where a limited liability partnership carries on a trade, profession or other business with a view to profit—
- (a) all the activities of the partnership are treated as carried on in partnership by its members (and not by the partnership as such),
- (b) anything done by, to or in relation to the partnership for the purposes of, or in connection with, any of its activities is treated as done by, to or in relation to the members as partners, and
- (c) the property of the partnership is treated as held by the members as partnership property.
References in this subsection to the activities of the limited liability partnership are to anything that it does, whether or not in the course of carrying on a trade, profession or other business with a view to profit.
- (2) For all purposes, except as otherwise provided, in the Corporation Tax Acts—
- (a) references to a partnership include a limited liability partnership in relation to which subsection (1) above applies,
- (b) references to members of a partnership include members of such a limited liability partnership,
- (c) references to a company do not include such a limited liability partnership, and
- (d) references to members of a company do not include members of such a limited liability partnership.
- (3) Subsection (1) above continues to apply in relation to a limited liability partnership which no longer carries on any trade, profession or other business with a view to profit—
- (a) if the cessation is only temporary, or
- (b) during a period of winding up following a permanent cessation, provided—
- (i) the winding up is not for reasons connected in whole or in part with the avoidance of tax, and
- (ii) the period of winding up is not unreasonably prolonged,
but subject to subsection (4) below.
- (4) Subsection (1) above ceases to apply in relation to a limited liability partnership—
- (a) on the appointment of a liquidator or (if earlier) the making of a winding-up order by the court, or
- (b) on the occurrence of any event under the law of a country or territory outside the United Kingdom corresponding to an event specified in paragraph (a) above.
##### 118ZB
Section 118 has effect in relation to a member of a limited liability partnership as in relation to a limited partner, but subject to sections 118ZC and 118ZD.
##### 118ZC
- (1) Subsection (3) of section 118 does not have effect in relation to a member of a limited liability partnership.
- (2) But, for the purposes of . . . section 118, such a member’s contribution to a trade at any time (“*the relevant time*”) is the greater of—
- (a) the amount subscribed by it, and
- (b) the amount of its liability on a winding up.
- (3) The amount subscribed by a member of a limited liability partnership is the amount which it has contributed to the limited liability partnership as capital, less so much of that amount (if any) as—
- (a) it has previously, directly or indirectly, drawn out or received back,
- (b) it so draws out or receives back during the period of five years beginning with the relevant time,
- (c) it is or may be entitled so to draw out or receive back at any time when it is a member of the limited liability partnership, or
- (d) it is or may be entitled to require another person to reimburse to it.
- (4) The amount of the liability of a member of a limited liability partnership on a winding up is the amount which—
- (a) it is liable to contribute to the assets of the limited liability partnership in the event of the partnership's being wound up, and
- (b) it remains liable so to contribute for the period of at least five years beginning with the relevant time (or until the partnership is wound up, if that happens before the end of that period).
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118ZD
- (1) Where amounts relating to a trade carried on by a member of a limited liability partnership are, in any one or more accounting periods, prevented from being given or allowed by section . . . 118 as it applies otherwise than by virtue of this section (the member's“total unrelieved loss”), subsection (2) applies in each subsequent accounting period in which—
- (a) the member carries on the trade as a member of the limited liability partnership, and
- (b) any of the member's total unrelieved loss remains outstanding.
- (2) Sections 393A(1) and 403 (and section 118 as it applies in relation to those sections) shall have effect in the subsequent accounting period as if—
- (a) any loss sustained or incurred by the member in the trade in that accounting period were increased by an amount equal to so much of the member's total unrelieved loss as remains outstanding in that period, or
- (b) (if no loss is so sustained or incurred) a loss of that amount were so sustained or incurred.
- (3) To ascertain whether any (and, if so, how much) of a member’s total unrelieved loss remains outstanding in the subsequent accounting period, deduct from the amount of the member's total unrelieved loss the aggregate of—
- (a) any relief given under any provision of the Corporation Tax Acts (otherwise than as a result of subsection (2)) in respect of the member's total unrelieved loss in that or any previous accounting period, and
- (b) any amount given or allowed in respect of the member's total unrelieved loss as a result of subsection (2) in any previous accounting period (or which would have been so given or allowed had a claim been made).
### Non-active general partners and non-active members of limited liability partnerships
##### 118ZE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118ZF
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amounts reversing expenses of management deducted: charge to tax
##### 118ZG
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##### 118ZH
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##### 118ZI
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##### 18ZJ
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##### 118ZK
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### Partnerships exploiting films
##### 118ZL
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##### 118ZM
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### Partners: meaning of “contribution to the trade”
#### Levies and repayments under the Financial Services and Markets Act 2000.
##### 118ZN
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##### 118ZO
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### Chapter VIIA — Paying and collecting agents
##### 118A
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##### 118B
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##### 118C
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##### 118D
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##### 118E
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##### 118F
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##### 118G
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##### 118H
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##### 118I
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##### 118J
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##### 118K
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#### Costs of establishing share option or profit sharing schemes: relief.
##### 126A
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##### 127A
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##### 129A
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##### 129B
- (1) The income which, as income deriving from investments of a description specified in any of the relevant provisions, is eligible for relief from tax by virtue of that provision shall be taken to include any relevant stock lending fee.
- (2) For the purposes of this section the relevant provisions are sections 613(4) and 614(3) and section 186 of the Finance Act 2004.
- (3) In this section “*relevant stock lending fee*”, in relation to investments of any description, means any amount, in the nature of a fee, which is payable in connection with any stock lending arrangement relating to investments which, but for any transfer under the arrangement, would be investments of that description.
- (4) In this section “*stock lending arrangement*” has the same meaning as in section 263B of the 1992 Act.
#### Payments to trustees of approved profit sharing schemes.
#### Application of charges where rights to payments transferred.
#### Paying agents.
##### 140A
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##### 140B
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##### 140C
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##### 140D
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##### 140E
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##### 140F
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##### 140G
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##### 140H
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#### Definitions.
##### 144A
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##### 146A
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##### 151A
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##### 155ZA
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##### 155ZB
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##### 155AA
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##### 155A
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#### Cars available for private use.
##### 156A
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##### 157A
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##### 159AA
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##### 159AB
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##### 159AC
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##### 159A
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##### 161A
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##### 161B
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##### 168A
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##### 168AA
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##### 168AB
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##### 168B
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##### 168C
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##### 168D
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##### 168E
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##### 168F
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##### 168G
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#### Exceptions from tax.
#### Change of scheme employer.
##### 177A
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##### 177B
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### Contributions in respect of share option gains
#### Interpretation of sections 185 and 186 and Schedules 9 and 10.
##### 187A
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### Removal expenses and benefits
##### 191A
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##### 191B
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##### 192A
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#### Foreign pensions.
##### 197A
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##### 197AA
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##### 197AB
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##### 197AC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mileage allowances
##### 197AD
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##### 197AE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Giving effect to mileage allowance relief
##### 197AF
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##### 197AG
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##### 197AH
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mileage allowances
##### 197B
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##### 197C
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##### 197D
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##### 197E
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##### 197F
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### Sporting and recreational facilities
##### 197G
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##### 198A
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##### 200ZA
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##### 200AA
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##### 200A
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##### 200B
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##### 200C
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##### 200D
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##### 200E
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##### 200F
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##### 200G
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##### 200H
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##### 200J
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##### 201AA
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##### 201A
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##### 202A
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##### 202B
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##### 203A
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##### 203B
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##### 203C
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##### 203D
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##### 203E
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##### 203F
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##### 203FA
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##### 203FB
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##### 203G
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##### 203H
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##### 203I
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##### 203J
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##### 203K
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##### 203L
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##### 206A
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##### 207A
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#### PAYE: payment by intermediary.
##### 209A
- (1) Subsection (3AA) of section 209 does not apply in relation to a security issued by a company (the “*issuing company*”) if the security is one which to a significant extent reflects dividends or other distributions in respect of, or fluctuations in the value of, shares in one or more companies each of which is—
- (a) the issuing company; or
- (b) an associated company of the issuing company;
but this subsection is subject to the following provisions of this section.
- (2) Subsection (1) above does not prevent subsection (3AA) of section 209 above from applying in relation to a security if—
- (a) the issuing company is a bank or securities house;
- (b) the security is issued by the issuing company in the ordinary course of its business; and
- (c) the security reflects dividends or other distributions in respect of, or fluctuations in the value of, shares in companies falling within paragraph (a) or (b) of subsection (1) above by reason only that the security reflects fluctuations in a qualifying index.
- (3) In subsection (2)(c) above “*qualifying index*” means an index whose underlying subject matter includes both—
- (a) shares in one or more companies falling within paragraph (a) or (b) of subsection (1) above, and
- (b) shares in one or more companies falling within neither of those paragraphs,
and which is an index such that the shares falling within paragraph (b) above represent a significant proportion of the market value of the underlying subject matter of the index.
- (4) In this section—
- “*bank*” has the meaning given by section 840A;
- “*securities house*” means any person—who is authorised for the purposes of the Financial Services and Markets Act 2000; andwhose business consists wholly or mainly of dealing in financial instruments as principal;and in paragraph (b) above “*financial instrument*” has the meaning given by section 984 of ITA 2007.
- (5) For the purposes of this section a company is an “*associated company*” of another at any time if at that time one has control of the other or both are under the control of the same person or persons.
- (6) For the purposes of subsection (5) above, “*control*”, in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (7) There shall be left out of account for the purposes of subsection (6) above—
- (a) any shares held by a company, and
- (b) any voting power or other powers arising from shares held by a company,
if a profit on a sale of the shares would be treated as a trading receipt of a trade carried on by the company and the shares are not, within the meaning of Chapter 1 of Part 12, assets of an insurance company’s long-term insurance fund (see section 431(2)).
##### 209B
- (1) Subsection (3AA) of section 209 does not at any time apply in relation to a security issued by a company (the “*issuing company*”) if at that time, or any earlier time on or after 17th April 2002, there are or have been any hedging arrangements that relate to some or all of the company’s liabilities under the security.
- (2) Subsection (1) above does not prevent subsection (3AA) of section 209 from applying in relation to a security at any time if—
- (a) conditions 1 to 4 below are satisfied in relation to any such hedging arrangements at that time; and
- (b) at all earlier times on or after 17th April 2002 when there have been hedging arrangements that relate to some or all of the company’s liabilities under the security, conditions 1 to 4 below were satisfied in relation to those hedging arrangements.
- (3) Where subsection (3AA) of section 209 at any time ceases to apply in relation to a security by virtue of this section, subsection (2)(d) of that section shall have effect in relation to the security as from that time as it would have had effect if subsection (3AA) had never applied in relation to the security.
- (4) Condition 1 is that the hedging arrangements do not constitute, include, or form part of, any scheme or arrangement the purpose or one of the main purposes of which is the avoidance of tax (including stamp duty or stamp duty land tax).
- (5) Condition 2 is that the hedging arrangements are such that, where for the purposes of corporation tax a deduction in respect of the security falls to be made at any time by the issuing company, then at that time, or within a reasonable time before or after it, any amounts intended under the hedging arrangements to offset some or all of that deduction arise—
- (a) to the issuing company; or
- (b) to a company which is a member of the same group of companies as the issuing company.
- (6) Condition 3 is that the whole of every amount arising as mentioned in subsection (5) above is brought into charge to corporation tax—
- (a) by a company falling within paragraph (a) or (b) of that subsection, or
- (b) by two or more companies, taken together, each of which falls within paragraph (a) or (b) of that subsection.
- (7) Condition 4 is that for the purposes of corporation tax any deductions in respect of expenses of establishing or administering the hedging arrangements are reasonable, in proportion to the amounts required to be brought into charge to corporation tax by subsection (6) above.
- (8) For the purposes of this section “*hedging arrangements*”, in relation to a security, means any scheme or arrangement for the purpose, or for purposes which include the purpose, of securing that an amount of income or gain accrues, or is received or receivable, whether directly or indirectly, which is intended to offset some or all of the amounts which fall to be brought into account, in accordance with generally accepted accounting practice, in respect of amounts accruing or falling to be paid in accordance with the terms of the security.
- (9) Any reference in this section to two companies being members of the same group of companies is a reference to their being members of the same group of companies for the purposes of Chapter 4 of Part 10 of this Act (group relief).
##### 213A
- (1) A reference in the Corporation Tax Acts to distributions of a company shall not apply to a distribution if—
- (a) it is a distribution consisting of—
- (i) the transfer of part of a business by a company (“the distributing company”) to one or more other companies (“the transferee company or companies”), and
- (ii) the issue of shares by the transferee company or companies to the members of the distributing company, and
- (b) the requirements of either section 140A(1A) of the 1992 Act (division of UK business) or section 140C(1A) of that Act (division of non-UK business) are satisfied in relation to the distribution.
- (2) A distribution to which this section applies is an “*exempt distribution*” for the purposes of sections 214 to 217.
- (3) The expression “*relevant company*” in sections 214 to 217 includes the distributing company and the transferee company or companies.
### Industrial and provident society dividends etc
##### 230A
- (1) This section applies if—
- (a) a dividend or bonus is granted by a registered industrial and provident society, and
- (b) section 132 (deduction for dividends etc granted by industrial and provident societies) of CTA 2009 allows the sum representing the dividend or bonus to be deducted in calculating the profits of a trade.
- (2) The dividend, or the bonus, is not treated as a distribution for the purposes of the Corporation Tax Acts.
##### 231A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 231AA
- (1) A person shall not be entitled to a tax credit under section 231 . . . in respect of a qualifying distribution if—
- (a) he is the borrower under a stock lending arrangement or the interim holder under a repurchase agreement;
- (b) the qualifying distribution is, or is a payment representative of, a distribution in respect of securities to which the arrangement or agreement relates; and
- (c) a manufactured dividend representative of that distribution is paid by that person in respect of securities to which the arrangement or agreement relates.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this section “*stock lending arrangement*” has the same meaning as in section 263B of the 1992 Act and, in relation to any such arrangement, any reference to the borrower, or the securities to which the arrangement relates, shall be construed accordingly.
- (3) For the purposes of this section the cases where there is a repurchase agreement are the following—
- (a) any case falling within subsection (1) of section 730A; and
- (b) any case which would fall within that subsection if the sale price and the repurchase price were different;
and, in any such case, any reference to the interim holder, or the securities to which the agreement relates, shall be construed accordingly.
- (4) For the purposes of this section “*manufactured dividend*” has the same meaning as in paragraph 2 of Schedule 23A (and any reference to a manufactured dividend being paid accordingly includes a reference to a payment falling by virtue of section 736B(2) or 737A(5) to be treated for the purposes of Schedule 23A as if it were made).
##### 231AB
- (1) A person shall not be entitled to a tax credit under section 231 . . . in respect of a qualifying distribution if—
- (a) he is the original owner under a repurchase agreement;
- (b) the qualifying distribution is a manufactured dividend paid to that person by the interim holder under the repurchase agreement in respect of securities to which the agreement relates; and
- (c) the repurchase agreement is not such that the actual dividend which the manufactured dividend represents is receivable otherwise than by the original owner.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this section the cases where there is a repurchase agreement are the following—
- (a) any case falling within subsection (1) of section 730A; and
- (b) any case which would fall within that subsection if the sale price and the repurchase price were different;
and, in any such case, any reference to the original owner, the interim holder, or the securities to which the agreement relates, shall be construed accordingly.
- (3) Subsection (4) of section 231AA applies for the purposes of this section as it applies for the purposes of that section.
##### 231B
- (1) This section applies in any case where—
- (a) a person (“A”) is entitled to a tax credit in respect of a qualifying distribution;
- (b) arrangements subsist such that another person (“B”) obtains, whether directly or indirectly, a payment representing any of the value of the tax credit;
- (c) the arrangements (whether or not made directly between A and B) were entered into for an unallowable purpose; and
- (d) the condition in subsection (2) below is satisfied.
- (2) The condition is that if B had been the person entitled to the tax credit and the qualifying distribution to which it relates, and had received the distribution when it was made, then—
- (a) B would not have been entitled to obtain any payment under section 231(2) or (3) in respect of the tax credit; and
- (b) if B is a company, B could not have used the income consisting of the distribution to frank a distribution actually made in the accounting period in which it would have received the distribution to which the tax credit relates.
- (3) This section does not apply if and to the extent that any other provision of the Tax Acts has the effect of cancelling or reducing the tax advantage which would otherwise be obtained by virtue of the arrangements.
- (4) Where this section applies—
- (a) no claim shall be made under section 231(2) for payment of the amount of the tax credit;
- (b) no claim shall be made under section 397(2) of ITTOIA 2005. . . in respect of the tax credit;
- (c) the income consisting of the distribution in respect of which A is entitled to the tax credit shall not be regarded for the purposes of section 241 as franked investment income; and
- (d) no claim shall be made under section 35 of the Finance (No. 2) Act 1997 (transitional relief) for payment of an amount determined by reference to that distribution.
- (5) For the purposes of this section, the question whether any arrangements were entered into for an “unallowable purpose” shall be determined in accordance with subsections (6) and (7) below.
- (6) Arrangements are entered into for an unallowable purpose if the purposes for which at least one person is a party to the arrangements include a purpose which is not amongst the business or other commercial purposes of that person.
- (7) Where one of the purposes for which a person enters into any arrangements is the purpose of securing that that person or another obtains a tax advantage, that purpose shall be regarded as a business or other commercial purpose of the person only if it is neither the main purpose, nor one of the main purposes, for which the person enters into the arrangements.
- (8) Any reference in this section to a person obtaining a tax advantage includes a reference to a person obtaining a payment representing any of the value of a tax credit in circumstances where, had the person obtaining the payment been entitled to the tax credit and the qualifying distribution to which it relates, that person—
- (a) would not have been entitled to obtain any payment under section 231(2) or (3) in respect of the tax credit; and
- (b) if that person is a company, could not have used the income consisting of the distribution to frank a distribution actually made in the accounting period in which it would have received the distribution to which the tax credit relates.
- (9) If an amount representing any of the value of a tax credit to which a person is entitled is applied at the direction of, or otherwise in favour of, some other person (whether by way of set off or otherwise), the case shall be treated for the purposes of this section as one where that other person obtains a payment representing any of the value of the tax credit.
- (10) In determining for the purposes of subsections (2)(b) and (8)(b) b above whether a company could have used the income consisting of the distribution in question to frank a distribution of the company, the company shall be taken to use its actual franked investment income to frank distributions before using the income consisting of the distribution in question.
- (11) References in this section to using franked investment income to frank a distribution of a company have the same meaning as in Chapter V of Part VI.
- (12) In this section—
- “*arrangements*” means arrangements of any kind, whether in writing or not (and includes a series of arrangements, whether or not between the same parties);
- “*business or other commercial purposes*” includes the efficient management of investments;
- “*franked investment income*” has the same meaning as in Chapter V of Part VI and references to income consisting of a distribution shall be construed accordingly;
- “*tax advantage*” has the meaning given by section 840ZA
#### Section 209(3AA): link to shares of company or associated company
##### 234A
- (1) This section applies where dividend or interest is distributed by a company which is—
- (a) a company within the meaning of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986, or
- (b) a company created by letters patent or by or in pursuance of an Act.
- (2) If the company makes a payment of dividend or interest to any person, and subsection (3) below does not apply, within a reasonable period the company shall send an appropriate statement to that person.
- (3) If the company makes a payment of dividend or interest into a bank or building society account held by any person, within a reasonable period the company shall send an appropriate statement to either—
- (a) the bank or building society concerned, or
- (b) the person holding the account.
- (4) In a case where—
- (a) a statement is received by a person under subsection (2) or (3)(b) above,
- (b) the whole or part of the sum concerned is paid to or on behalf of the person as nominee for another person, and
- (c) the nominee makes a payment of the sum or part to the other person and subsection (5) below does not apply,
within a reasonable period the nominee shall send an appropriate statement to that person.
- (5) In a case where—
- (a) a statement is received by a person under subsection (2) or (3)(b) above,
- (b) the whole or part of the sum concerned is paid to or on behalf of the person as nominee for another person, and
- (c) the nominee makes a payment of the sum or part into a bank or building society account held by the other person,
within a reasonable period the nominee shall send an appropriate statement to either the bank or building society concerned or the other person.
- (6) In the case of a payment of interest which is not a qualifying distribution or part of a qualifying distribution, references in this section to an appropriate statement are to a written statement showing—
- (a) the gross amount which, after deduction of the income tax appropriate to the interest, corresponds to the net amount actually paid,
- (b) the rate and the amount of income tax appropriate to such gross amount,
- (c) the net amount actually paid, and
- (d) the date of the payment.
- (7) In the case of a payment of dividend or interest which is a qualifying distribution or part of a qualifying distribution, references in this section to an appropriate statement are to a written statement showing—
- (a) the amount of the dividend or interest paid,
- (b) the date of the payment, and
- (c) the amount of the tax credit to which a person is entitled in respect of the dividend or interest, or to which a person would be so entitled if he had a right to a tax credit in respect of the dividend or interest.
- (8) In this section “*send*” means send by post.
- (8A) In this section “*bank*” has the meaning given by section 840A.
- (9) If a person fails to comply with subsection (2), (3), (4) or (5) above, the person shall incur a penalty of £60 in respect of each offence, except that the aggregate amount of any penalties imposed under this subsection on a person in respect of offences connected with any one distribution of dividends or interest shall not exceed £600.
- (10) The Board may by regulations provide that where a person is under a duty to comply with subsection (2), (3), (4) or (5) above, the person shall be taken to comply with the subsection if the person either—
- (a) acts in accordance with the subsection concerned, or
- (b) acts in accordance with rules contained in the regulations;
and subsection (9) above shall be construed accordingly.
- (11) Regulations under subsection (10) above may make different provision for different circumstances.
##### 245A
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##### 245B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chapter VA — Foreign Income Dividends
### Election by company paying dividend
#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions.
##### 246A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 246B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Recipient of foreign income dividend
##### 246C
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##### 246D
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### Companies: payments and receipts
##### 246E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 246F
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##### 246G
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##### 246H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Foreign source profit and distributable foreign profit
##### 246I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Matching of dividend with distributable foreign profit
##### 246J
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##### 246K
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##### 246L
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##### 246M
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### Repayment or set-off of advance corporation tax
##### 246N
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##### 246P
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##### 246Q
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##### 246R
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### International headquarters companies
##### 246S
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##### 246T
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##### 246U
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##### 246V
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##### 246W
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### Adjustments
##### 246X
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### Application of this Chapter
##### 246Y
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions.
### Approved share incentive plans
##### 251A
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##### 251B
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##### 251C
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#### Further interpretation of sections 135 to 139.
##### 251D
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##### 256A
- (1) For the purposes of this Chapter an individual's adjusted net income for a year of assessment is calculated as follows.
*Step 1*
Take the amount of the individual's net income for the year of assessment.
*Step 2*
If in the year of assessment the individual makes, or is treated under section 426 of ITA 2007 as making, a gift that is a qualifying donation for the purposes of Chapter 2 of Part 8 of that Act (gift aid) deduct the grossed up amount of the gift.
*Step 3*
If the individual is given relief in accordance with section 192 of FA 2004 (relief at source) in respect of any contribution paid in the year of assessment under a pension scheme, deduct the gross amount of the contribution.
*Step 4*
Add back any relief under section 266 of this Act given by virtue of subsection (7) of that section (payments for life insurance etc) that was deducted in calculating the individual's net income for the year of assessment.
The result is the individual's adjusted net income for the year of assessment.
- (2) The grossed up amount of a gift is the amount of the gift grossed up by reference to the basic rate for the year of assessment.
- (3) The gross amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004.
##### 256B
In this Chapter “*the minimum amount*” means £2,350.
##### 257AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him and whose marriage was entered into before 5th December 2005, and either of them was born before 6th April 1935, he shall (subject to subsection (3A) below) be entitled for that year to a tax reduction calculated by reference to £2,665 . . . .
- (3) If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him and whose marriage was entered into before 5th December 2005, and either of them
- (a) is at any time within that year of the age of 75 or upwards, and
- (b) was born before 6th April 1935,
he shall (subject to subsection (3A) below) be entitled for that year to a tax reduction calculated by reference to £2,705 (instead of to the reduction provided for by subsection . . . (2) above).
- (3A) Subsections (2) and (3) above shall not apply in relation to the claimant for any year of assessment if an election made by the claimant and his wife under section 257AB(1)(c) has effect for that year.
- (4) For the purposes of subsection (3) above a person who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (5) In relation to a claimant whose adjusted net income for the year of assessment exceeds £12,300, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by—
- (a) one half of the excess, less
- (b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section,
. . .
- (5A) The amounts specified in subsections (2) and (3) above shall not by virtue of subsection (5) above be treated as reduced below the minimum amount.
- (6) A man shall not be entitled by virtue of this section to more than one tax reduction for any year of assessment; and in relation to a claim by a man who becomes married in the year of assessment and has not previously in the year been entitled to relief under this section, this section shall have effect as if the amounts specified in subsections (2) and (3) above were reduced by one twelfth for each month of the year ending before the date of the marriage.
- In this subsection “*month*” means a month beginning with the 6th day of a month of the calendar year.
- (6A) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) In this section “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part of that Act if the company were resident in the United Kingdom.
- (9) And, for the meaning of “*relevant foreign income*”, see section 832(1).
##### 1B
- (1) In the case of so much of an individual’s income which consists of—
- (a) income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.) (if any), and
- (b) dividends chargeable under Chapter 4 of Part 4 of that Act (dividends from non-UK resident companies) (if any) or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged) (if any),
as is income falling within section 1(2)(b), income tax shall, by virtue of this subsection, be charged at the dividend upper rate, instead of at the rate otherwise applicable to it in accordance with section 1(2)(b).
- (2) In relation to any year of assessment for which income tax is charged—
- (a) the dividend ordinary rate is 10 per cent., and
- (b) the dividend upper rate is 32.5 per cent.,
or, in either case, such other rate as Parliament may determine.
- (3) In this section “*relevant foreign distribution*” has the same meaning as in section 1A (see subsection (8) of that section).
#### Rates of tax applicable to Schedule F income etc.
##### 8A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 11AA
- (1) This section provides for determining for the purposes of corporation tax the amount of the profits attributable to a permanent establishment in the United Kingdom of a company that is not resident in the United Kingdom (“*the non-resident company*”).
- (2) There shall be attributed to the permanent establishment the profits it would have made if it were a distinct and separate enterprise, engaged in the same or similar activities under the same or similar conditions, dealing wholly independently with the non-resident company.
- (3) In applying subsection (2)—
- (a) it shall be assumed that the permanent establishment has the same credit rating as the non-resident company, and
- (b) it shall also be assumed that the permanent establishment has such equity and loan capital as it could reasonably be expected to have in the circumstances specified in that subsection.
No deduction may be made in respect of costs in excess of those that would have been incurred on those assumptions.
- (4) There shall be allowed as deductions any allowable expenses incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the United Kingdom or elsewhere.
- “*Allowable expenses*” means expenses of a kind in respect of which a deduction would be allowed for corporation tax purposes if incurred by a company resident in the United Kingdom.
- (5) The Board may by regulations make provision as to the application of subsection (2) in relation to insurance companies.
The regulations may, in particular, make provision in place of subsection (3)(b) as to the basis on which, in the case of insurance companies, capital is to be attributed to a permanent establishment in the United Kingdom. In this subsection “*insurance company*” has the meaning given by section 431(2).
- (6) Schedule A1 to this Act contains provisions supplementing the provisions of this section.
##### 13ZA
- (1) In determining for the purposes of section 13(7) whether one body corporate is a 51 per cent subsidiary of another, that other shall be treated as not being the owner of any share capital—
- (a) which it owns indirectly, and
- (b) which is owned directly by a body corporate for which a profit on the sale of the shares would be a trading receipt.
- (2) Notwithstanding that at any time a company (“*the subsidiary company*”) is a 51 per cent subsidiary of another company (“*the parent company*”) it shall not be treated at that time as such a subsidiary for the purposes of section 13(7) unless, additionally, at that time—
- (a) the parent company would be beneficially entitled to more than 50 per cent of any profits available for distribution to equity holders of the subsidiary company, and
- (b) the parent company would be beneficially entitled to more than 50 per cent of any assets of the subsidiary company available for distribution to its equity holders on a winding-up.
- (3) For the purposes of section 13(7) and this section—
- (a) “*trading or holding company*” means a trading company or a company the business of which consists wholly or mainly in the holding of shares or securities of trading companies that are its 90 per cent subsidiaries;
- (b) “*trading company*” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
- (c) a company is owned by a consortium if 75 per cent or more of the ordinary share capital of the company is beneficially owned between them by companies of which none—
- (i) beneficially owns less than 5 per cent of that capital,
- (ii) would be beneficially entitled to less than 5 per cent of any profits available for distribution to equity holders of the company, or
- (iii) would be beneficially entitled to less than 5 per cent of any assets of the company available for distribution to its equity holders on a winding up,
and those companies are called the members of the consortium.
- (4) Schedule 18 (equity holders and assets etc. available for distribution) applies for the purposes of subsections (2) and (3)(c) above as it applies for the purposes of section 413(7).
##### 13AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 13AB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 13A
- (1) A close company is for the purposes of section 13(1) . . . a “*close investment-holding company*” unless it complies with subsection (2) below.
- (2) A company (“*the relevant company*”) complies with this subsection in any accounting period if throughout that period it exists wholly or mainly for any one or more of the following purposes—
- (a) the purpose of carrying on a trade or trades on a commercial basis,
- (b) the purpose of making investments in land or estates or interests in land in cases where the land is, or is intended to be, let to persons other than—
- (i) any person connected with the relevant company, or
- (ii) any person who is the spouse or civil partner of an individual connected with the relevant company, or is a relative, or the spouse or civil partner of a relative, of such an individual or of the spouse or civil partner of such an individual,
- (c) the purpose of holding shares in and securities of, or making loans to, one or more companies each of which is a qualifying company or a company which—
- (i) is under the control of the relevant company or of a company which has control of the relevant company, and
- (ii) itself exists wholly or mainly for the purpose of holding shares in or securities of, or making loans to, one or more qualifying companies,
- (d) the purpose of co-ordinating the administration of two or more qualifying companies,
- (e) the purpose of a trade or trades carried on on a commercial basis by one or more qualifying companies or by a company which has control of the relevant company, and
- (f) the purpose of the making, by one or more qualifying companies or by a company which has control of the relevant company, of investments as mentioned in paragraph (b) above.
- (3) For the purposes of subsection (2) above, a company is a “*qualifying company*”, in relation to the relevant company, if it—
- (a) is under the control of the relevant company or of a company which has control of the relevant company, and
- (b) exists wholly or mainly for either or both of the purposes mentioned in subsection (2)(a) or (b) above.
- (4) Where a company is wound up, it shall not be treated as failing to comply with subsection (2) above in the accounting period that (by virtue of subsection (7) of section 12) begins with the time which is for the purposes of that subsection the commencement of the winding up, if it complied with subsection (2) above in the accounting period that ends with that time.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257AB
- (1) This section applies if —
- (a) the claimant is, for the whole or any part of the year of assessment, living with his spouse or civil partner,
- (b) either the claimant or his spouse or civil partner was born before 6th April 1935,
- (c) the marriage or civil partnership was entered into on or after 5th December 2005 or, if the marriage was entered into before that date, an election for this section to apply has effect for that year, and
- (d) the claimant's net income for that year exceeds that of his spouse or civil partner or, if they have the same amount of net income for that year, the claimant is specified in an election as the person to be entitled to relief under this section for that year.
- (2) The claimant shall be entitled for that year to a tax reduction—
- (a) calculated by reference to £5,975 (if either the claimant or his spouse or civil partner is at any time within that year of the age of 75 or upwards), or
- (b) calculated by reference to £5,905 (in any other case).
- (3) For the purposes of subsection (2)(a) above an individual who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (4) In relation to a claimant whose adjusted net income for the year of assessment exceeds £19,500, subsection (2) above applies as if the amounts specified in it were reduced by—
- (a) one half of the excess, less
- (b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section.
- (5) The amounts specified in subsection (2) above shall not by virtue of subsection (4) above be treated as reduced below the minimum amount.
- (6) An individual shall not be entitled by virtue of this section to more than one tax reduction for any year of assessment.
- (7) In relation to a claim by an individual who —
- (a) becomes a spouse or civil partner in the year of assessment, and
- (b) has not previously in the year been entitled to relief under this section,
this section shall have effect as if the amounts specified in subsection (2) above were reduced by one twelfth for each month of the year ending before the date of the marriage or civil partnership.
- In this subsection “*month*” means a month beginning with the 6th day of a month of the calendar year.
- (8) An election under subsection (1)(c) —
- (a) shall be made jointly by the parties to the marriage,
- (b) shall be made before the first year of assessment for which it is to have effect,
- (c) shall have effect for that and each succeeding year of assessment for which any party to the marriage is entitled to relief under this section, and
- (d) shall be irrevocable.
- (9) An election under subsection (1)(d) —
- (a) shall be made jointly by the parties to the marriage or civil partnership, and
- (b) shall be made on or before the 5th anniversary of the 31st January next following the end of the year of assessment to which the election relates.
- (10) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
#### Credit-tokens.
##### 257BA
- (1) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to a tax reduction under section 257A or 257AB—
- (a) the individual shall be entitled (on making a claim) to a tax reduction calculated by reference to half the minimum amount, and
- (b) the spouse or civil partner's appropriate amount shall be reduced by half the minimum amount.
- (2) An individual and the individual's spouse or civil partner may jointly elect that for any year of assessment for which the individual is entitled to a tax reduction under section 257A or 257AB—
- (a) the individual's spouse or civil partner shall be entitled (on making a claim) to a tax reduction calculated by reference to the minimum amount, and
- (b) the individual's appropriate amount shall be reduced by the minimum amount.
- (3) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to a tax reduction by virtue of an election under subsection (2) above—
- (a) the individual shall be entitled (on making a claim) to a tax reduction calculated by reference to half the minimum amount (in addition to any tax reduction to which the individual is already entitled under section 257A or 257AB), and
- (b) the tax reduction to which the spouse or civil partner is entitled by virtue of that election shall be calculated by reference to half the minimum amount (instead of by reference to the minimum amount).
- (3A) In this section “*the appropriate amount*” means the amount by reference to which the calculation of the tax reduction is to be made.
- (4) An election under this section shall be made by giving notice to the inspector in such form as the Board may determine and—
- (a) subject to subsections (5) and (7) below, shall be made before the first year of assessment for which it is to have effect, and
- (b) shall have effect for that and each succeeding year of assessment for which the individual concerned is entitled to relief under section 257A or 257AB, subject to its withdrawal under subsection (8) below or a subsequent election under this section.
- (5) An election may be made during the first year of assessment for which it is to have effect if that is the year of assessment in which the marriage or civil partnership takes place.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) An election may be made within the first thirty days of the first year of assessment for which it is to have effect if before that year the inspector has been given written notification that it is intended to make the election.
- (8) The person or persons by whom an election was made may withdraw it by giving notice to the inspector in such form as the Board may determine; but the withdrawal shall not have effect until the year of assessment after the one in which the notice is given.
- (9) An individual shall not be entitled by virtue of an election under this section to more than one tax reduction for any year of assessment.
- (10) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
##### 257BB
- (1) Where—
- (a) an individual is entitled to a tax reduction under section 257A or 257AB, but
- (b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,
the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of an election under section 257BA) to a tax reduction equal to the unused part of the individual's MCA tax reductions.
- (1A) The individual's MCA tax reductions are the sum of—
- (a) the tax reduction to which the individual is entitled under section 257A or 257AB, and
- (b) any tax reduction to which the individual is entitled by virtue of an election under section 257BA(3).
- (1B) The unused part of the individual's MCA tax reductions is equal to—
- (a) the individual's MCA tax reductions, less
- (b) the individual's comparable tax liability.
- (2) Subsection (1) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (3) Where—
- (a) an individual is entitled to a tax reduction by virtue of an election under section 257BA, but
- (b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,
the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of section 257A or 257AB) to a tax reduction equal to the unused part of the individual's tax reduction.
- (3AA) The unused part of the individual's tax reduction is equal to—
- (a) the tax reduction to which the individual is entitled by virtue of the election under section 257BA, less
- (b) the individual's comparable tax liability.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (3) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (5) Any notice under subsection (2) or (4) above—
- (a) shall be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (5A) For the purposes of this section, the comparable tax liability of an individual is the amount of the individual's tax left after Step 6 of the calculation in section 23 of ITA 2007, making that calculation with the modifications set out in subsections (5B) and (5C).
- (5B) In making that calculation, do not deduct any tax reduction under—
- (a) section 788 (double taxation arrangements: relief by agreement), or
- (b) section 790(1) (relief for foreign tax where there are no double taxation arrangements).
- (5C) If the individual's entitlement to a tax reduction under section 257A, 257AB, 257BA or this section is extinguished under section 423(4) of ITA 2007 (gift aid: restriction of reliefs) to any extent, deduct from the amount calculated in accordance with subsections (5A) and (5B) the amount by which the tax reduction is reduced.
- (5D) For the purposes of this section a person is treated as being entitled to a tax reduction under section 788 if the person is entitled to credit against income tax under arrangements which have effect under that section.
- (5E) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257B
- (1) Where—
- (a) a man is entitled to relief under section 257A, but
- (b) the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it,
his wife shall be entitled to a deduction from her total income of an amount equal to the excess.
- (2) In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—
- (a) on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or
- (b) under section 289 or
- (c) on account of any payments to which section 593(2) or 639(3) applies,or
- (d) on account of any payments to which section 54(5) of the Finance Act 1989 applies.
, or
- (e) on account of any payments to which section 32(4) of the Finance Act 1991 applies.
- (3) This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given not later than six years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
##### 257C
- (1) If the retail prices index for the month of September preceding a year of assessment is higher than it was for the previous September, then, unless Parliament otherwise determines, sections 256B, 257. . . , 257A and 257AB shall apply for that year as if for each amount specified in them as they applied for the previous year (whether by virtue of this section or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index, and—
- (a) if in the case of an amount specified in sections 257(5) , 257A(5) and 257AB(4) the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple;
- (b) if in the case of any other amount the increase is not a multiple of £10, rounding the increase up to the nearest amount which is such a multiple.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) Subsection (1) above shall not require any change to be made in the amounts deductible or repayable under PAYE regulations during the period beginning with 6th April and ending with 17th May in the year of assessment.
- (3) The Treasury shall in each year of assessment make an order specifying the amounts which by virtue of subsection (1) above will be treated as specified for the following year of assessment in sections 256B, 257. . . , 257A and 257AB.
- (4) *This section shall have effect in relation to reliefs for the year* 1990-91 (*as well as for later years*);*and for that purpose it shall be assumed that sections* 257*and* 257A*applied for the year* 1989-90*as they apply, apart from this section, for the year* 1990-91.
##### 257D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 261A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 266A
- (1) This section applies if—
- (a) pursuant to an employer-financed retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and
- (b) the payment is made under such an insurance or contract as is mentioned in section 266.
This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.
- (2) Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—
- (a) the payment had been made by him, and
- (b) the insurance or contract under which the payment is made had been made with him.
- (3) For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.
- (4) If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.
- (5) The amount treated as paid for or in respect of each employee is—
$$A×BC$where—A is the sum paid,B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, andC is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them.$
- (6) This section does not apply if—
- (a) in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or
- (b) the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.
- (7) Those conditions are—
- (a) that the employment is with a foreign employer, and
- (b) that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.
- (8) In subsection (6)(a) “*earnings charged on remittance*” means earnings which are taxable earnings under—
- (a) section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or
- (b) section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).
- (9) In this section—
- “*employer-financed retirement benefits scheme*”, and
- “*relevant benefits*”,
- have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
#### Supplementary provisions.
##### 282A
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##### 282B
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#### Further interpretation of sections 135 to 139.
##### 289A
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##### 289B
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##### 290A
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#### Credit-tokens.
##### 291A
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##### 291B
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##### 299A
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##### 299B
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##### 300A
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##### 301A
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##### 303AA
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#### Conditional acquisition of shares.
##### 303A
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#### Further interpretation of sections 135 to 139.
##### 304A
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##### 305A
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#### Provisions supplementary to section 138.
#### Approved profit sharing schemes.
##### 326A
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##### 326B
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##### 326BB
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##### 326C
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##### 326D
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##### 327A
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#### Relief for contributions in respect of share option gains.
##### 329AA
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##### 329AB
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##### 329A
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##### 329B
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##### 329C
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##### 331A
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##### 332A
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##### 333A
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##### 333B
- (1) The Treasury may make regulations providing exemption from tax for income from, and chargeable gains in respect of, investments and deposits of so much of an insurance company’s long-term insurance fund as is referable to plan business.
- (2) The Treasury may by regulations modify the effect of section 30(4) of the Finance (No. 2) Act 1997 (which repeals section 231(2) of the Taxes Act 1988 with effect from 6th April 1999) in relation to distributions which—
- (a) are made before 6th April 2004; and
- (b) are received by an insurance company in respect of investments of so much of its long-term insurance fund as is referable to plan business.
- (3) Regulations under this section may make provision for insurance companies that are not resident in the United Kingdom to be treated, in relation to investments of so much of their long-term insurance funds as are referable to plan business—
- (a) as if they were so resident for the purposes of any enactment conferring an entitlement to, or to the payment of, tax credits in respect of investments; and
- (b) as if such other conditions of any entitlement to, or to the payment of, tax credits were also satisfied.
- (4) Regulations under section 333 or this section or Chapter 3 of Part 6 of ITTOIA 2005 (except sections 697 and 698) may include provision which, in relation to insurance companies that are not resident in the United Kingdom—
- (a) requires a person to be appointed to be responsible for securing the discharge of any duties to which such an insurance company is subject under the regulations; and
- (b) confers rights and powers, and imposes liabilities, on a person so appointed;
and, without prejudice to the generality of paragraphs (a) and (b) above, regulations made by virtue of this subsection may include any provision corresponding to any that, in relation to a European institution, may be made under section 697 or 698 of ITTOIA 2005 (requirements concerning foreign plan managers).
- (5) Regulations under this section may provide that an insurance company—
- (a) shall comply with any notice served on it by the Board which requires it, within a prescribed period, to make available for the Board’s inspection documents (of a prescribed kind) relating to, or to matters connected with, its past or present plan business; and
- (b) shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about its past or present plan business or any matters connected with it.
- (6) Any power of the Treasury under this section to make provision by regulations in relation to insurance companies shall include power by regulations to make such corresponding provision in relation to friendly societies as the Treasury think fit.
- (7) Regulations under this section may—
- (a) for purposes connected with any exemption from tax conferred by virtue of subsection (1) above, apply or modify any provision made by or under the Tax Acts;
- (b) make different provision for different cases;
- (c) include such incidental, supplemental, consequential and transitional provision as the Treasury may consider appropriate.
- (8) Without prejudice to the generality of the powers conferred by subsection (7) above, the provision that may be made in connection with an exemption from tax conferred by virtue of subsection (1) above shall include provision for section 436 to apply (with any such modifications as may be prescribed) in relation to plan business as it applies in relation to pension business.
- (9) In this section—
- “*friendly society*” has the same meaning as in Chapter II of Part XII;
- “insurance company” means an undertaking carrying on the business of effecting or carrying out contracts of insurance and, for the purposes of this definition, “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*long-term insurance fund*” has the same meaning as in Chapter I of Part XII;
- “*plan business*”, in relation to an insurance company, means the business of the company that is attributable to the making of investments with that company under plans for which provision is made by regulations under Chapter 3 of Part 6 (except sections 697 and 698) of ITTOIA 2005 (income from individual investment plans)
- “*prescribed*” means prescribed by regulations under this section;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 338B
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##### 337A
- (1) For the purposes of corporation tax, subject to any provision of the Corporation Tax Acts expressly authorising a deduction—
- (a) a company’s profits shall be computed without any deduction in respect of dividends or other distributions, and
- (b) a company’s income from any source shall be computed without any deduction in respect of charges on income.
- (2) In computing a company’s income from any source for the purposes of corporation tax—
- (a) no deduction shall be made in respect of interest except in accordance with Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships); and
- (b) no deduction shall be made in respect of losses from intangible fixed assets within Schedule 29 to the Finance Act 2002 except in accordance with that Schedule.
##### 338A
- (1) This section defines what payments or other amounts are “*charges on income*” for the purposes of corporation tax.
This section has effect subject to any express exceptions in the Corporation Tax Acts.
- (2) Subject to the following provisions of this section, the following (and only the following) are charges on income—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) qualifying donations within the meaning of section 339 (qualifying donations to charity);
- (c) amounts allowed as charges on income under section 587B(2)(a)(ii) (gifts of shares etc to charity).
- (3) No payment that is deductible in computing profits or any description of profits for the purposes of corporation tax shall be treated as a charge on income.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 339A
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##### 342A
- (1) In this section—
- (a) references to the relevant event, in relation to a company in administration, are references—
- (i) to the administrator sending a notice in respect of the company under paragraph 84(1) of Schedule B1 to the Insolvency Act 1986 (company moving from administration to dissolution), or
- (ii) in the case of a company which enters administration otherwise than under that Act, to the doing of any other act for a like purpose, and
- (b) references to a company’s final year are references to the financial year in which the relevant event occurs, and references to the company’s penultimate year are references to the last financial year preceding its final year.
- (2) Subject to subsections (3) and (4)—
- (a) corporation tax shall be charged on the profits of the company arising in the administration in its final year at the rate of corporation tax fixed or proposed for the penultimate year, but
- (b) where the corporation tax charged on the company’s income included in those profits falls to be calculated or reduced in accordance with section 13, it shall be so calculated or reduced in accordance with such rate or fraction fixed or proposed for the penultimate year as is applicable under that section.
- (3) If, before the relevant event, any of the rates or fractions mentioned in subsection (2) has been fixed or proposed for the final year, that subsection shall have effect in relation to that rate or fraction as if for the references to the penultimate year there were substituted references to the final year.
- (4) If, in the case of the company’s final accounting period, the income (if any) which consists of interest received or receivable by the company under section 826 does not exceed £2,000, that income shall not be subject to corporation tax.
- (5) In subsection (4) “*the company’s final accounting period*” means the last accounting period of the company before the relevant event.
- (6) An assessment on the company’s profits for an accounting period in which the company is in administration shall not be invalid because made before the end of the accounting period.
- (7) In making an assessment after the company enters administration and before the date of the relevant event, the administrator may act on an assumption as to when that date will fall so far as it governs section 12(3).
- (8) The assumption of the wrong date shall not alter the company’s final and penultimate year and, if the right date is later—
- (a) an accounting period shall end on the date assumed and a new accounting period shall begin, and
- (b) thereafter, section 12(3) shall apply as if the company had entered administration at the beginning of that new accounting period.
- (9) Subsections (7) and (9) of section 342 apply in relation to this section as they apply in relation to that section, except that in subsection (7) of that section the reference to the completion of the winding up is to be read as a reference to the relevant event.
- (10) Where the company entered administration before its final year, paragraphs (a) and (b) of subsection (2) (but not subsection (3)) apply in relation to the company’s profits arising at any time in its penultimate year.
#### Foreign pensions.
#### P.A.Y.E.: meaning of payment.
##### 343ZA
- (1) This section applies where—
- (a) a company (“the predecessor”) ceases to carry on a trade,
- (b) another company (“*the successor*”) begins to carry on the activities of that trade as its trade or as part of its trade,
- (c) in the accounting period in which the predecessor ceases to carry on the trade the predecessor would (apart from this section) be entitled under Part 2 of the Capital Allowances Act to a balancing allowance in respect of the trade, and
- (d) the predecessor's ceasing to carry on the trade is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor to that balancing allowance.
- (2) This section also applies where—
- (a) a company (“the predecessor”) ceases to carry on part of a trade,
- (b) another company (“*the successor*”) begins to carry on the activities of that part of the trade as its trade or as part of its trade, and
- (c) the predecessor's ceasing to carry on the part of the trade mentioned in paragraph (a) is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor, on cessation of the trade, to a balancing allowance in respect of the trade under Part 2 of the Capital Allowances Act.
- (3) This section does not apply where section 343 applies.
- (4) Where this section applies, the Corporation Tax Acts have effect subject to section 343(2), but as if the words “and are subject to section 343A (company reconstructions involving business of leasing plant or machinery)” were omitted.
- (5) Where this section applies because of subsection (1), and the successor carries on the activities of the trade the predecessor ceased to carry on as part of the successor's trade, for the purposes of section 343(2) that part of the successor's trade is to be treated as a separate trade carried on by the successor.
- (6) Where this section applies because of subsection (2), for the purposes of section 343(2)—
- (a) that part of the trade which the predecessor ceased to carry on is to be treated as a separate trade carried on by the predecessor, and
- (b) where the successor carries on the activities of that part of the trade as part of its trade, that part of the successor's trade is to be treated as a separate trade carried on by the successor.
- (7) Where subsection (5) or (6) applies, such apportionment of receipts, expenses, assets and liabilities is to be made as may be just.
- (8) Section 343(10) applies to an apportionment under subsection (7) as it applies to an apportionment under section 343(9).
##### 343A
- (1) This section applies if the trade is or forms part of a business of leasing plant or machinery which the predecessor or the successor carries on on the day of cessation.
- (2) If, on the day of cessation, both the predecessor and the successor carry on the trade otherwise than in partnership, section 343(2) does not apply unless—
- (a) the principal company or companies of the predecessor immediately before the cessation are the same as the principal company or companies of the successor immediately afterwards, and
- (b) if any such principal company is a consortium principal company, the relevant fraction in relation to the predecessor immediately before the cessation is the same as the relevant fraction in relation to the successor immediately afterwards (irrespective of whether the members of each consortium are the same).
- (3) If, on the day of cessation, the predecessor or the successor carries on the trade in partnership, section 343(2) does not apply unless—
- (a) the predecessor ceases to carry on the whole of its trade, and
- (b) that trade is a business of leasing plant or machinery which the predecessor carries on in partnership on the day of cessation.
- (4) In any case where section 343(2) does not apply as a result of this section, the plant or machinery belonging to the trade shall be treated for the purposes of the Corporation Tax Acts as sold by the predecessor to the successor on the day of the cessation for an amount equal to its market value as at that day.
- (5) In this section—
- “*control*” shall be construed in accordance with section 416, and
- “*relative*” has the meaning given by section 839(8).
- (6) Section 839 shall apply for the purposes of this section.
#### Rates of tax applicable to distribution income etc.
##### 21A
- (1) Except as otherwise expressly provided, the profits of a Schedule A business are computed in the same way as the profits of a trade are computed for the purposes of Case I of Schedule D.
- (2) The following provisions apply in accordance with subsection (1)—
- section 72 (apportionment);
- the provisions of Chapter V of Part IV (computational provisions relating to the Schedule D charge), except as mentioned in subsection (4) below;
- section 577 (business entertainment expenses);
- section 577A (expenditure involving crime);
- sections 579 and 580 (redundancy payments);
- section 588 (training courses for employees);
- section 589A (counselling services for employees);
- section 73(2) of the Finance Act 1988 (consideration for restrictive undertakings);
- section 43 of the Finance Act 1989 (Schedule D: computation);
- “business of leasing plant or machinery”—has the same meaning as in Part 2 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc) (if the business is carried on otherwise than in partnership), andhas the same meaning as in Part 3 of that Schedule (if the business is carried on in partnership),
- “*consortium principal company*” means a company which is a principal company as a result of paragraph 12 of that Schedule,
- “*market value*”, in relation to plant or machinery, is to be construed in accordance with paragraph 41(8) of that Schedule,
- “*plant or machinery*” has the same meaning as in Part 2 of the Capital Allowances Act,
- “*principal company*” is to be construed in accordance with paragraph 11 or (as the case may be) 12 of Schedule 10 to the Finance Act 2006, and
- “*relevant fraction*” has the same meaning as in paragraph 12 of that Schedule.
#### Expenses necessarily incurred and defrayed from official emoluments.
#### Application of lower rate to company distributions.
#### Section 209(3AA): link to shares of company or associated company
##### 347A
- (1) A payment to which this section applies shall not, for the purposes of corporation tax, form part of the income of—
- (a) any company to which it is made, or
- (b) any other company.
- (2) This section applies to any annual payment made by an individual which would otherwise be within the charge to tax under Case III of Schedule D except—
- (a) a payment of interest;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) a payment made for bona fide commercial reasons in connection with the individual’s trade, profession or vocation; and
- (d) a payment to which section 125(1) applies.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) This section applies to a payment made by personal representatives (within the meaning given in section 701(4)) where—
- (a) the deceased would have been liable to make the payment if he had not died, and
- (b) this section would have applied to the payment if he had made it.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) References in subsection (2) . . . above to an individual include references to a Scottish partnership in which at least one partner is an individual.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 347B
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#### No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement.
##### 349ZA
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##### 349A
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#### Information relating to distributions.
##### 349B
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##### 349C
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##### 349D
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##### 349E
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##### 350A
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##### 356A
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##### 356B
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##### 356C
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##### 356D
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#### Information relating to distributions.
##### 357A
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##### 357B
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##### 357C
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##### 360A
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#### Procedure for making election.
#### Returns.
##### 367A
- (1) Sections 353 and 365 have effect as if—
- (a) purchase and resale arrangements involved the making of a loan, and
- (b) alternative finance return were interest.
- (2) Section 366 has effect accordingly.
- (3) In this section—
- “*alternative finance return*” has the meaning given in sections 564I to 564L of ITA 2007, and
- “*purchase and resale arrangements*” means arrangements to which section 564C of ITA 2007 applies.
#### Interpretation of Part VI.
##### 374A
- (1) This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . . . .
- (5) If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted.
##### 375A
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##### 376A
- (1) The Board shall maintain, and publish in such manner as they consider appropriate, a register for the purposes of section 376(4).
- (1A) The following are entitled to be registered—
- (a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000—
- (i) to accept deposits; or
- (ii) to effect or carry out contracts of general insurance;
- (b) a 90 per cent subsidiary of a person mentioned in—
- (i) section 376(4)(e); or
- (ii) paragraph (a) above;
- (c) any other body whose activities and objects appear to the Board to qualify it for registration.
- (2) If the Board are satisfied that an applicant for registration is entitled to be registered, they may register the applicant generally or in relation to any description of loan specified in the register, with effect from such date as may be so specified; and a body which is so registered shall become a qualifying lender in accordance with the terms of its registration.
- (3) The registration of any body may be varied by the Board—
- (a) where it is general, by providing for it to be in relation to a specified description of loan, or
- (b) where it is in relation to a specified description of loan, by removing or varying the reference to that description of loan,
and where they do so, they shall give the body written notice of the variation and of the date from which it is to have effect.
- (4) If it appears to the Board at any time that a body which is registered under this section would not be entitled to be registered if it applied for registration at that time, the Board may by written notice given to the body cancel its registration with effect from such date as may be specified in the notice.
- (5) The date specified in a notice under subsection (3) or (4) above shall not be earlier than the end of the period of 30 days beginning with the date on which the notice is served.
- (6) Any body which is aggrieved by the failure of the Board to register it under this section, or by the variation or cancellation of its registration, may, by notice given to the Board before the end of the period of 30 days beginning with the date on which the body is notified of the Board’s decision, require the matter to be determined by the Special Commissioners; and the Special Commissioners shall thereupon hear and determine the matter in like manner as an appeal.
### Losses from UK property business or overseas property business
##### 379A
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##### 379B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “adjusted net income”
##### 384A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Losses from Schedule A business or overseas property business
##### 392A
- (1) Where a company incurs a Schedule A loss in an accounting period, the loss shall be set off for the purposes of corporation tax against the company’s total profits for that period.
- (2) To the extent that a company’s Schedule A loss cannot be set off under subsection (1), it shall, if the company continues to carry on the Schedule A business in the succeeding accounting period, be carried forward to that period and be treated for the purposes of this section as a Schedule A loss of that period.
- (3) Where a company with investment business—
- (a) ceases to carry on a Schedule A business, but
- (b) continues to be a company with investment business,
any Schedule A loss that cannot be used under the preceding provisions shall be carried forward to the succeeding accounting period and be treated for the purposes of section 75 as if it were expenses of management deductible for that period.
- (4) In this section—
- (a) a “*Schedule A loss*” means a loss incurred by a company in a Schedule A business carried on by it; and
- (b) “*company with investment business*” has the same meaning as in Part IV.
- (5) The preceding provisions of this section apply to a Schedule A business only to the extent that it is carried on—
- (a) on a commercial basis, or
- (b) in the exercise of statutory functions.
- (6) For the purposes of subsection (5)(a)—
- (a) a business or part is not carried on on a commercial basis unless it is carried on with a view to making a profit, but if it is carried on so as to afford a reasonable expectation of profit it is treated as carried on with a view to making a profit; and
- (b) if there is a change in the manner in which a business or part is carried on, it is treated as having been carried on throughout an accounting period in the way in which it was being carried on by the end of the period.
- (7) In subsection (5)(b) “*statutory functions*” means functions conferred by or under any enactment (including an enactment contained in a local or private Act).
##### 392B
- (1) Where in any accounting period a company incurs a loss in an overseas property business (whether carried on by it solely or in partnership)—
- (a) the loss shall be carried forward to the succeeding accounting period and set against any profits of the business for that period,
- (b) if there are no profits of the business for that period, or if the profits for that period are exceeded by the amount of the loss, the loss or the remainder of it shall be carried forward again and set against any profits of the business for the next succeeding accounting period,
and so on.
- (2) Subsections (5) to (7) of section 392A apply in relation to relief under subsection (1) above and an overseas property business as they apply in relation to relief under section 392A(1) to (3) and a Schedule A business.
##### 393A
- (1) Subject to section 492(3), where in any accounting period ending on or after 1st April 1991 a company carrying on a trade incurs a loss in the trade, then, subject to subsection (3) below, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against profits (of whatever description)—
- (a) of that accounting period, and
- (b) if the company was then carrying on the trade and the claim so requires, of preceding accounting periods falling wholly or partly within the period specified in subsection (2) below;
and, subject to that subsection and to any relief for an earlier loss, the profits of any of those accounting periods shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this subsection against profits of a later accounting period.
- (2) The period referred to in paragraph (b) of subsection (1) is (subject to subsection (2A) below) the period of twelve months immediately preceding the accounting period in which the loss is incurred; but the amount of the reduction that may be made under that subsection in the profits of an accounting period falling partly before the beginning of that period shall not exceed a part of those profits proportionate to the part of the accounting period falling within that period.
- (2A) This section shall have effect in relation to any loss to which this subsection applies as if, in subsection (2) above, the words “three years” were substituted for the words “twelve months”.
- (2B) Where a company ceases to carry on a trade at any time, subsection (2A) above applies to the following—
- (a) the whole of any loss incurred in that trade by that company in an accounting period beginning twelve months or less before that time; and
- (b) the part of any loss incurred in that trade by that company in an accounting period ending, but not beginning, in that twelve months which is proportionate to the part of that accounting period falling within those twelve months.
- (2C) Where—
- (a) a loss is incurred by a company in a ring fence trade carried on by that company, and
- (b) the accounting period in which the loss is incurred is an accounting period for which an allowance under section 164 of the Capital Allowances Act (abandonment expenditure incurred before cessation of ring fence trade) is made to that company,
subsection (2A) above applies to so much of the amount of that loss not falling within subsection (2B) above as does not exceed the amount of that allowance.
- (3) Subsection (1) above shall not apply to trades falling within Case V of Schedule D; and a loss incurred in a trade in any accounting period shall not be relieved under that subsection unless—
- (a) the trade is one carried on in the exercise of functions conferred by or under any enactment (including an enactment contained in a local or private Act), or
- (b) for that accounting period the trade was being carried on on a commercial basis and with a view to the realisation of gain in the trade or in any larger undertaking of which the trade formed part;
but this subsection is without prejudice to section 397.
- (4) For the purposes of subsection (3) above—
- (a) where at any time a trade is carried on so as to afford a reasonable expectation of gain, it shall be treated as being carried on at that time with a view to the realisation of gain; and
- (b) where in an accounting period there is a change in the manner in which a trade is being carried on, it shall be treated as having throughout the accounting period been carried on in the way in which it was being carried on by the end of that period.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subject to subsection (7A) below, where a company ceases to carry on a trade, subsection (9) of section 393 shall apply in computing for the purposes of this section a loss in the trade in an accounting period ending with the cessation, or ending at any time in the twelve months immediately preceding the cessation, as it applies in computing a loss in an accounting period for the purposes of subsection (1) of that section.
- (7A) For the purposes of this section where—
- (a) subsection (7) above has effect for computing the loss for any accounting period, and
- (b) that accounting period is one beginning before the beginning of the twelve months mentioned in that subsection,
the part of that loss that is not the part falling within subsection (2B)(b) above shall be treated as reduced (without any corresponding increase in the part of the loss that does fall within subsection (2B)(b) above) by an amount equal to so much of the aggregate of the charges on income treated as expenses by virtue of subsection (7) above as is proportionate to the part of the accounting period that does not fall within those twelve months.
- (8) Relief shall not be given by virtue of subsection (1)(b) above in respect of a loss incurred in a trade so as to interfere with any relief under section 338 in respect of payments made wholly and exclusively for the purposes of that trade.
- (9) For the purposes of this section—
- (a) the amount of a loss incurred in a trade in an accounting period shall be computed in the same way as trading income from the trade in that period would have been computed;
- (b) “*trading income*” means, in relation to any trade, the income which falls or would fall to be included in respect of the trade in the total profits of the company; and
- (c) references to a company carrying on a trade refer to the company carrying it on so as to be within the charge to corporation tax in respect of it.
- (10) A claim under subsection (1) above may only be made within the period of two years immediately following the accounting period in which the loss is incurred or within such further period as the Board may allow.
- (11) In any case where—
- (a) by virtue of section 165 of the Capital Allowances Act (abandonment expenditure within 3 years of ceasing ring fence trade) the qualifying expenditure of the company for the chargeable period related to the cessation of its ring fence trade is treated as increased by any amount, or
- (b) by virtue of section 416 of that Act (expenditure on restoration within 3 years of ceasing to trade) any expenditure is treated as qualifying expenditure incurred by the company on the last day of trading,
then, in relation to any claim under subsection (1) above to the extent that it relates to an increase falling within paragraph (a) above or to expenditure falling within paragraph (b) above, subsection (10) above shall have effect with the substitution of “five years” for “two years”.
- (12) In this section “*ring fence trade*” has the same meaning as in section 162 of the Capital Allowances Act.
##### 393B
- (1) This section applies if these conditions are met—
- (a) a company makes a claim under section 393A(1) requiring that a loss incurred in a ring fence trade be set off against profits;
- (b) section 393A(2A) applies in relation to that claim (three year set off period) by virtue of—
- (i) section 393A(2B) (loss precedes cessation of trade), or
- (ii) section 393A(2C) (loss arises in year when general decommissioning expenditure incurred); and
- (c) the loss incurred in the ring fence trade that may be set off under section 393A (“L”) exceeds the profits against which L may be set off under section 393A (“P”).
- (2) The profits of the ring fence trade of an accounting period are to be relieved under subsection (3) if that period—
- (a) falls wholly or partly before the three year set off period, and
- (b) ends on or after 17 April 2002.
- (3) Subject to any relief for an earlier loss, those profits of that accounting period shall be treated as reduced by—
- (a) the amount by which L exceeds P, or
- (b) so much of that amount as cannot be relieved under this subsection against profits of the ring fence trade of a later accounting period.
- (4) Subsection (3) is subject to subsection (5) in the case of an accounting period that falls partly (but not wholly) before the three year set off period.
- (5) The amount of the reduction of the profits of the ring fence trade that may be made under subsection (3) shall not exceed a part of those profits proportionate to the part of the accounting period that falls before the three year set off period.
- (6) Subsection (3) is subject to subsection (7) in the case of an accounting period that begins before 17 April 2002 and ends on or after that date.
- (7) The amount of the reduction of the profits of the ring fence trade that may be made under subsection (3) shall not exceed a part of those profits proportionate to the part of the accounting period that falls after 16 April 2002.
- (8) In this section—
- “*ring fence*” has the same meaning as in section 162 of the Capital Allowances Act;
- “*three year set off period*” means the period of three years that applies to the claim under section 393A(1) by virtue of section 393A(2A) and section 393A(2B) or (2C).
#### Children’s tax credit.
##### 403ZA
- (1) For the purposes of section 403 a trading loss means a loss incurred by the surrendering company in the surrender period in carrying on a trade, computed as for the purposes of section 393A(1).
- (2) That section does not apply to a trading loss which would be excluded from section 393A(1) by—
- (a) section 393A(3) (foreign trades and certain trades not carried on with a view to gain), or
- (b) section 397 (farming and market gardening: restriction on loss relief).
- (3) Where a company owned by a consortium—
- (a) has in any relevant accounting period incurred a trading loss, and
- (b) has profits (of whatever description) of that accounting period against which that loss could be set off under section 393A(1),
the amount of the loss available to a member of the consortium on a consortium claim shall be determined on the assumption that the company has made a claim under section 393A(1) requiring the loss to be so set off.
- (4) Where the company mentioned in subsection (3) is a group/consortium company, the amount of the loss available under that subsection shall be determined before any reduction is made under section 405(1) to (3).
##### 403ZB
- (1) For the purposes of section 403 excess capital allowances means capital allowances falling to be made to the surrendering company for the surrender period to the extent that they are to be given effect under section 260 of the Capital Allowances Act (special leasing: excess allowance).
- (2) In determining the amount of the allowances falling to be made for the surrender period, no account shall be taken of any allowances carried forward from an earlier period.
- (3) The amount of the company’s income of the relevant class means its amount before deduction of—
- (a) losses of any other period, or
- (b) capital allowances.
##### 403ZC
- (1) For the purposes of section 403 a non-trading deficit on its loan relationships means a deficit of the surrendering company to which section 83 of the Finance Act 1996 applies.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZD
- (1) References in section 403 to charges on income, Schedule A losses and management expenses shall be construed as follows.
- (2) Charges on income means the aggregate of the amounts paid by the surrendering company in the surrender period by way of charges on income.
- (3) A Schedule A loss means a loss incurred by the surrendering company in the surrender period in a Schedule A business carried on by the company.
It does not include—
- (a) an amount treated as such a loss by section 392A(2) (losses carried forward from earlier period), or
- (b) a loss which would be excluded from section 392A by subsection (5) of that section (certain businesses not carried on with a view to gain).
- (4) Management expenses means the aggregate of the amounts deductible under section 75(1) (expenses of management of company with investment business) by the surrendering company for this period.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) A non-trading loss on intangible fixed assets means a non-trading loss on intangible fixed assets, within the meaning of Schedule 29 to the Finance Act 2002, for the surrender period.
It does not include so much of any such loss as is attributable to an amount being carried forward under paragraph 35(3) of that Schedule (amounts carried forward from earlier periods).
##### 403ZE
- (1) For the purposes of section 403 the surrendering company’s gross profits of the surrender period means its profits for that period—
- (a) without any deduction in respect of such losses, allowances and other amounts as are mentioned in paragraph (a) or (b) of subsection (1) of that section, and
- (b) without any deduction falling to be made—
- (i) in respect of losses, allowances or other amounts of any other period (whether or not of a description within subsection (1) of that section), or
- (ii) by virtue of section 75(9) or 392A(3) (other amounts carried forward).
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403A
- (1) The amount which, on a claim for group relief, may be set off against the total profits of the claimant company for an accounting period (“*the claim period*”), and accordingly the amount to which any consent required in respect of that claim may relate, shall not exceed whichever is the smaller of the following amounts—
- (a) the unused part of the surrenderable amount for the overlapping period; and
- (b) the unrelieved part of the claimant company’s total profits for the overlapping period.
- (2) For the purposes of any claim for group relief—
- (a) the unused part of the surrenderable amount for the overlapping period is the surrenderable amount for that period reduced by the amount of any prior surrenders attributable to the overlapping period; and
- (b) the unrelieved part of the claimant company’s total profits for the overlapping period is the amount of its total profits for that period reduced by the amount of any previously claimed group relief attributable to the overlapping period.
- (3) For the purposes of any claim for group relief—
- (a) the surrenderable amount for the overlapping period is so much of the surrenderable amount for the accounting period of the surrendering company to which the claim relates as is attributable, on an apportionment in accordance with section 403B, to the overlapping period;
- (b) the surrenderable amount for an accounting period of the surrendering company is the total amount for that accounting period of the losses and other amounts which (disregarding this section and section 403C) are available in that company’s case for set off by way of group relief; and
- (c) the amount of the claimant company’s total profits for the overlapping period is so much of its total profits for the claim period as is attributable, on an apportionment in accordance with section 403B, to the overlapping period.
- (4) In relation to any claim for group relief (“*the relevant claim*”) the amount of the prior surrenders attributable to the period which is the overlapping period in the case of the relevant claim is equal to the aggregate amount (if any) produced by—
- (a) taking the amount of every claim for group relief (whether a group claim or a consortium claim) which—
- (i) has been made before the relevant claim,
- (ii) was made in respect of the whole or any part of the amount which, in relation to the relevant claim, is the surrenderable amount for the accounting period of the surrendering company to which the claim relates, and
- (iii) has not been withdrawn;
- (b) treating the amount of group relief which (having regard to the provisions of this section) is allowable under each such claim as an amount of relief for the period which is the overlapping period in the case of that claim;
- (c) determining how much of each amount treated in accordance with paragraph (b) above as an amount of relief for a particular period is attributable, on an apportionment in accordance with section 403B, to the period (if any) which is common to both—
- (i) that period; and
- (ii) the period which is the overlapping period in the case of the relevant claim;
and
- (d) aggregating all the amounts determined under paragraph (c) above in respect of the previously made claims.
- (5) In relation to any claim for group relief (“*the relevant claim*”), the amount of previously claimed group relief attributable to the period which is the overlapping period in the case of that claim is the aggregate amount produced by—
- (a) taking the amount of every claim for group relief (whether a group claim or a consortium claim) which—
- (i) has been made before the relevant claim,
- (ii) was a claim to set off an amount by way of group relief against the claimant company’s total profits for the period which, in relation to the relevant claim, is the claim period, and
- (iii) has not been withdrawn;
- (b) treating the amount of group relief which (having regard to the provisions of this section) is allowable under each such claim as an amount of relief for the period which is the overlapping period in the case of that claim;
- (c) determining how much of each amount treated in accordance with paragraph (b) above as an amount of relief for a particular period is attributable, on an apportionment in accordance with section 403B, to the period (if any) which is common to both—
- (i) that period; and
- (ii) the period which is the overlapping period in the case of the relevant claim;
and
- (d) aggregating all the amounts determined under paragraph (c) above in respect of the previously made claims.
- (6) For the purposes of this section the amount of group relief allowable on any claim (“*the finalised claim*”) shall fall to be determined as at the time when that claim ceases to be capable of being withdrawn as if—
- (a) every claim that became incapable of being withdrawn before that time were a claim made before the finalised claim; and
- (b) every claim that remains capable of being withdrawn at that time were a claim made after the finalised claim.
- (7) Subject to subsection (6) above and without prejudice to any power to withdraw and resubmit claims, where (but for this subsection) more than one claim for group relief would be taken for the purposes of subsections (4) and (5) above to have been made at the same time, those claims shall be deemed, instead, to have been made—
- (a) in such order as the company or companies making them may, by notice to any officer of the Board, elect or, as the case may be, jointly elect; and
- (b) if there is no such election, in such order as an officer of the Board may direct.
- (8) In this section “*the overlapping period*”, in relation to a claim for group relief, means (subject to subsection (9) below and section 406(3) and (7)) the period which is common to both—
- (a) the claim period; and
- (b) the accounting period of the surrendering company to which the claim relates.
- (9) For the purposes of this section any time in the period which, in relation to any claim for group relief, is common to both the accounting periods mentioned in subsection (8) above but which is a time when the qualifying conditions were not satisfied—
- (a) shall be treated as not comprised in the period which is the overlapping period in the case of that claim; and
- (b) shall be treated instead, in relation to each of those accounting periods, as if it constituted a part of that accounting period which was not common to both periods.
- (10) For the purposes of subsection (9) above the qualifying conditions are satisfied in relation to any claim for group relief at the following times, that is to say—
- (a) if (or so far as) the claim is a group claim for the surrender of any loss or other amount other than a qualifying overseas loss, whenever the conditions in paragraphs (a) to (c) of section 402(2) are satisfied;
- (ab) if (or so far as) the claim is a group claim for the surrender of a qualifying overseas loss, whenever the condition specified in section 402(2A) is satisfied; and
- (b) if the claim is a consortium claim, whenever the conditions specified in section 402(3) for the making of that claim and the condition specified in section 402(3B) are satisfied in the case of the claimant company and the surrendering company.
- (11) For the purposes of subsection (10) above a “*qualifying overseas loss*” means a loss or other amount that is available for surrender by way of group relief in accordance with sections 403F and 403G and Schedule 18A (relief in respect of overseas losses of non-resident companies).
##### 403B
- (1) Subject to subsection (2) below, where an apportionment falls to be made under section 403A for the purpose of determining how much of an amount for any period (“*the first period*”) is attributable to any other period (“*the second period*”) which comprises the whole or a part of the first period—
- (a) the whole of that amount shall be attributed to the second period if the first and second periods begin and end at the same times; and
- (b) in any other case, the apportionment shall be made on a time basis according to how much of the first period coincides with the second period.
- (2) Where the circumstances of a particular case are such that the making on the time basis mentioned in subsection (1)(b) above of some or all of the apportionments to be made in that case would work in a manner that would be unjust or unreasonable in relation to any person, those apportionments shall be made instead (to the extent only that is necessary in order to avoid injustice and unreasonableness) in such other manner as may be just and reasonable.
##### 403C
- (1) In the case of a consortium claim the amount that may be set off against the total profits of the claimant company is limited by this section.
- (2) Where the claimant company is a member of the consortium, the amount that may be set off against the total profits of that company for the overlapping period is limited to the relevant fraction of the surrenderable amount.
That fraction is whichever is the lowest in that period of the following percentages—
- (a) the percentage of the ordinary share capital of the surrendering company that is beneficially owned by the claimant company;
- (b) the percentage to which the claimant company is beneficially entitled of any profits available for distribution to equity holders of the surrendering company; and
- (c) the percentage to which the claimant company would be beneficially entitled of any assets of the surrendering company available for distribution to its equity holders on a winding-up.
If any of those percentages have fluctuated in that period, the average percentage over the period shall be taken.
- (3) Where the surrendering company is a member of the consortium, the amount that may be set off against the total profits of the claimant company for the overlapping period is limited to the relevant fraction of the claimant company’s total profits for the overlapping period.
That fraction is whichever is the lowest in that period of the following percentages—
- (a) the percentage of the ordinary share capital of the claimant company that is beneficially owned by the surrendering company;
- (b) the percentage to which the surrendering company is beneficially entitled of any profits available for distribution to equity holders of the claimant company; and
- (c) the percentage to which the surrendering company would be beneficially entitled of any assets of the claimant company available for distribution to its equity holders on a winding-up.
If any of those percentages have fluctuated in that period, the average percentage over the period shall be taken.
- (4) In any case where the claimant or surrendering company is a subsidiary of a holding company which is owned by a consortium, for the references in subsection (2) or (3) above to the claimant or surrendering company there shall be substituted references to the holding company.
- (5) Expressions used in this section and in section 403A have the same meanings in this section as in that section.
- (6) Schedule 18 has effect for supplementing this section.
##### 403D
- (1) In determining for the purposes of this Chapter the amounts for any accounting period of the losses and other amounts available for surrender by way of group relief by a non-resident company carrying on a trade in the United Kingdom through a permanent establishment, no loss or other amount shall be treated as so available (but see also subsection (11) below) except in so far as—
- (a) it is attributable to activities of that company the income and gains from which for that period are, or (were there any) would be, brought into account in computing the company’s chargeable profits for that period for corporation tax purposes;
- (b) it is not attributable to activities of the company which are made exempt from corporation tax for that period by any double taxation arrangements; and
- (c) no part of—
- (i) the loss or other amount, or
- (ii) any amount brought into account in computing it,
corresponds to, or is represented in, any amount which, for the purposes of any foreign tax, is (in any period) deductible from or otherwise allowable against non-UK profits of the company or any other person.
- (2) In determining for the purposes of sections 403A and 403C the total profits for an accounting period of a non-resident company, there shall be disregarded—
- (a) amounts not falling to be comprised for corporation tax purposes in the chargeable profits of the company for that accounting period, and
- (b) so far as not falling within paragraph (a) above, any amounts arising from activities which are made exempt from corporation tax for that period by any double taxation arrangements.
- (3) In this section “*non-UK profits*”, in relation to any person, means amounts which—
- (a) are taken for the purposes of any foreign tax to be the amount of the profits, income or gains on which (after allowing for deductions) that person is charged with that tax, and
- (b) are not amounts corresponding to, and are not represented in, the total profits (of that or any other person) for any accounting period,
or amounts taken into account in computing such amounts.
- (4) Subsection (2) above applies for the purposes of subsection (3)(b) above as it applies for the purposes of sections 403A and 403C.
- (5) For the purposes of this section an amount shall not be taken to be an amount which for the purposes of any foreign tax is deductible from or otherwise allowable against any non-UK profits of any person by reason only that it is—
- (a) an amount of profits brought into account for the purpose of being excluded from the profits that are non-UK profits of that person by reference to that foreign tax; or
- (b) an amount brought into account in computing the amount of any profits falling to be so excluded.
- (6) So much of the law of any territory outside the United Kingdom as for the purposes of any foreign tax makes the deductibility of any amount dependent on whether or not it is deductible for tax purposes in the United Kingdom shall be disregarded for the purposes of this section.
- (7) For the purposes of this section activities of a company are made exempt from corporation tax for any period by double taxation arrangements if the effect of any such arrangements is that the income and gains (if any) arising for that period from those activities is to be disregarded in computing the company’s chargeable profits.
- (8) In this section “*double taxation arrangements*” means any arrangements having effect by virtue of section 788.
- (9) In this section “*foreign tax*” means any tax chargeable under the law of any territory outside the United Kingdom which—
- (a) is charged on income and corresponds to United Kingdom income tax; or
- (b) is charged on income or chargeable gains or both and corresponds to United Kingdom corporation tax;
but for the purposes of this section a tax shall not be treated as failing to correspond to income tax or corporation tax by reason only that it is chargeable under the law of a province, state or other part of a country, or is levied by or on behalf of a municipality or other local body.
- (10) In determining for the purposes of this section whether any activities are made exempt from corporation tax for any period by any double taxation arrangements any requirement that a claim is made before effect is given to any provision of the arrangements shall be disregarded.
- (11) Any loss or other amount that is available for surrender by way of group relief in accordance with this section is in addition to any loss or other amount that is so available in accordance with sections 403F and 403G and Schedule 18A (relief in respect of overseas losses of non-resident companies).
##### 403E
- (1) In determining, for the purposes of this Chapter, the amounts for any accounting period of the losses and other amounts available for surrender by way of group relief by any company resident in the United Kingdom (“*the resident company*”), a loss or other amount shall be treated as not so available in so far as it—
- (a) is attributable to an overseas permanent establishment of that company, and
- (b) is a loss or other amount falling within subsection (2) below.
- (2) Subject to subsection (3) below, a loss or other amount attributable to an overseas permanent establishment falls within this subsection if the whole or any part of it is, or represents, an amount which, for the purposes of foreign tax under the law of the territory where that permanent establishment is situated, is (in any period) deductible from or otherwise allowable against non-UK profits of a person other than the resident company.
- (3) A loss or other amount does not fall within subsection (2) above if it is referable to life assurance business (within the meaning of Chapter I of Part XII) carried on by the resident company.
- (4) The reference in subsections (1) and (2) above to a loss or other amount attributable to an overseas permanent establishment of a company is a reference to the loss or other amount (if any) that would be surrenderable by that company by way of group relief if the amount surrenderable by that company were computed—
- (a) by reference only to that permanent establishment, and
- (b) by the application in relation to that permanent establishment of principles corresponding in all material respects to those applicable for the purposes of corporation tax to the computation of the equivalent losses or other amounts in the case of the UK permanent establishment of a non-resident company.
- (5) In subsection (4)(b) above the reference to the UK permanent establishment of a non-resident company is a reference to any permanent establishment through which a company which is not resident in the United Kingdom carries on a trade in the United Kingdom.
- (6) References in this section to an overseas permanent establishment of a company are references to any permanent establishment through which that company carries on a trade in a territory outside the United Kingdom.
- (7) In this section “*foreign tax*” and “*non-UK profits*” have the same meaning as in section 403D.
- (8) Where the deductibility of any amount for the purposes of any foreign tax is dependent on whether or not that amount, or a corresponding amount, is deductible for tax purposes in the United Kingdom, this section shall have effect as if that amount were deductible for the purposes of that foreign tax if, and only if, the resident company is treated for the purposes of that tax as resident in the territory where that tax is charged.
##### 403F
- (1) This section has effect for determining for the purposes of this Chapter the extent to which a loss or other amount is available for surrender by way of group relief by a non-resident company—
- (a) which is resident in an EEA territory, or
- (b) which is not so resident but which carries on a trade in an EEA territory through a permanent establishment,
in a case where a group claim may be made as a result of the condition in section 402(2A) being satisfied.
- (2) A loss or other amount is not available for surrender by way of group relief by the non-resident company except in so far as, in relation to the EEA territory, the amount meets—
- (a) the equivalence condition,
- (b) the EEA tax loss condition,
- (c) the qualifying loss condition, and
- (d) the precedence condition.
- (3) Part 1 of Schedule 18A determines, in the case of any amount and any EEA territory, the extent to which those conditions are met.
- (4) In so far as a loss or other amount meets those conditions, Part 2 of Schedule 18A applies—
- (a) for calculating the amount of the loss or other amount (if any) that is available for surrender by way of group relief, and
- (b) otherwise for making provision in relation to the application of this Chapter to the non-resident company.
- (5) This section is subject to section 403G (unallowable overseas losses of non-resident companies).
##### 403G
- (1) This section applies in the case of a loss or other amount arising to a non-resident company—
- (a) which is resident in any EEA territory, or
- (b) which is not so resident but which carries on a trade in an EEA territory through a permanent establishment,
where the amount is not attributable for corporation tax purposes to any UK permanent establishment of the non-resident company.
- (2) The amount is not available for surrender by way of group relief by the non-resident company in so far as conditions A and B are met.
- (3) Condition A is that—
- (a) the amount would not qualify for group relief but for any relevant arrangements, or
- (b) the amount would not have arisen to the non-resident company but for any relevant arrangements.
- (4) Condition B is that the main purpose, or one of the main purposes, of the relevant arrangements was to secure that the amount would qualify for group relief.
- (5) In this section references to relevant arrangements, in relation to any amount, are to—
- (a) arrangements made on or after 20th February 2006, or
- (b) arrangements made before that date where the amount would (but for this section) first qualify for group relief on or after that date or (as the case may be) the amount arises on or after that date.
- (6) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*UK permanent establishment*”, in relation to the non-resident company, means any permanent establishment through which it carries on a trade in the United Kingdom.
##### 411ZA
- (1) This section applies if the surrendering company is prevented from obtaining a deduction in respect of an amount by section 520 of CTA 2009 (provision not at arm's length: non-deductibility of relevant return).
- (2) The amount may not be surrendered by way of group relief.
##### 411A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Elections as to transfer of relief under section 257A.
#### Further interpretation of sections 135 to 139.
#### Interpretation.
#### Relief for contributions in respect of share option gains.
#### Exemptions from section 148.
##### 431ZA
- (1) An insurance company may, in its company tax return for the first accounting period of the company beginning on or after 1 January 2008 in which any of the assets of the company's long-term insurance fund would (apart from this section) be foreign business assets, elect that none of the assets of the company's long-term insurance fund are to be regarded for the purposes of this Act as being foreign business assets.
- (2) The election has effect for that accounting period and all subsequent accounting periods of the company.
- (3) An election under subsection (1) is irrevocable.
##### 431A
- (1) The Treasury may by order amend any insurance company taxation provision where it is expedient to do so in consequence of the exercise of any power under the Financial Services and Markets Act 2000, in so far as that Act relates to insurance companies.
- (2) Where any exercise of a power under that Act has effect for a period ending on or before, or beginning before and ending after, the day on which an order containing an amendment in consequence of that exercise is made under subsection (1) above, the power conferred by that subsection includes power to provide for the amendment to have effect in relation to that period.
- (3) The Treasury may by order amend any of the following provisions—
- (a) sections 432ZA, 432A, 432B to 432G and 755A and Schedule 19AA;
- (b) sections 83A, 85, 88 and 89 of the Finance Act 1989;
- (c) section 210A of the Taxation of Chargeable Gains Act 1992.
- (4) An order under subsection (3) above may only be made so as to have effect in relation to periods of account—
- (a) beginning on or after 1st January 2005, and
- (b) ending before 1st October 2006.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Any power conferred by this section to make an order includes power to make—
- (a) different provision for different cases or different purposes, and
- (b) incidental, supplemental, consequential or transitional provision and savings.
- (7) In this section “*insurance company taxation provision*” means any of the following—
- (a) a provision of this Chapter;
- (b) any other provision of the Tax Acts so far as relating to insurance companies.
##### 431AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432A
- (1) This section has effect for determining for the purposes of any provision of the Corporation Tax Acts in relation to any period for which an insurance company carries on business what parts of—
- (a) income arising from the assets of the company’s long-term insurance fund, or
- (b) gains or losses accruing on the disposal of such assets,
are referable to any category of business.
- (1A) If the company carries on only one category of business in the period, all of the income and gains or losses referred to in subsection (1) above shall be referable to that category of business; but if the company carries on more than one category of business in the period, the following provisions shall apply.
- (2) The categories of business referred to in subsections (1) and (1A) above are—
- (a) pension business;
- (b) life reinsurance business;
- (c) overseas life assurance business;
- (d) basic life assurance and general annuity business; and
- (f) long-term business other than life assurance business.
- (3) Income arising from, and gains or losses accruing on the disposal of, assets linked to any category of business (apart from overseas life assurance business) shall be referable to that category of business.
- (4) Income arising from, and gains or losses accruing on the disposal of, assets of the overseas life assurance fund (and no other assets) shall be referable to overseas life assurance business.
- (5) There shall be referable to any category of business (apart from overseas life assurance business) the relevant fraction of any income, gains or losses not directly referable to any category of business.
- (6) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to basic life assurance and general annuity business, is the fraction of which—
- (a) the numerator is the aggregate of—
- (i) the mean of the opening and closing liabilities of that category of business, reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, . . .
- (ii) if there has been a relevant reattribution, the mean of the opening and closing amounts of the shareholders' excess assets, and
- (iii) the mean of the appropriate parts of the opening and closing amounts of the free assets amounts; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by subsection (6A)(a) below in relation to the other categories of business.
- (6A) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to any other category of business other than basic life assurance and general annuity business and overseas life assurance business, is the fraction of which—
- (a) the numerator is the aggregate of—
- (i) the mean of the opening and closing liabilities of the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to the category, and
- (ii) the mean of the appropriate parts of the opening and closing amounts of the free assets amounts; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above
- (ii) the numerators given by that paragraph in relation to the other categories of business; and
- (iii) the numerators given by subsection (6)(a) above in relation to the basic life assurance and general annuity business.
- (7) For the purposes of subsections (5), (6) and (6A) above—
- (a) income, gains or losses are directly referable to a category of business if referable to that category by virtue of subsection (3) or (4) above, . . .
- (b) assets are directly referable to a category of business if income arising from the assets is, and gains or losses accruing on the disposal of the assets are, so referable by virtue of subsection (3) above, and
- (c) amounts are directly referable to basic life assurance and general annuity business if they fall within any of the following provisions—
- (i) sections 438B, 441B and 442A,
- (ii) section 85(2C)(c) of the Finance Act 1989.
- (8) In subsections (6) and (6A) above—
- (a) “*appropriate part*”, in relation to the free assets amount, means—
- (i) where none (or none but an insignificant proportion) of the liabilities of the long-term business are with-profits liabilities, the part of that amount which bears to the whole the proportion A/B where—
A is the amount of the liabilities of the category of business in question;
B is the whole amount of the liabilities of the long-term business; and
- (ii) in any other case the part of the free assets amount which bears to the whole the proportion C/D where—
C is the amount of the with-profits liabilities of the category of business in question;
D is the whole amount of the with-profits liabilities of the long-term business; and
- (b) the amount of the shareholders' excess assets in relation to any period of account of the company is the amount equal to SXA — L27 where—
- (i) SXA is the aggregate amount of the assets shown in its non-participating funds which are attributed to its shareholders as a result of a relevant reattribution; and
- (ii) L27 is the amount (if any) shown in line 27 of Form 19 in its periodical return for the relevant period of account.
- (8A) In this section—
- “*non-participating funds*” means accounts which relate exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus;
- “*reattribution*” in relation to an insurance company which has an inherited estate, means the attribution of assets to shareholders' interests as a result of—an agreement between the company and the relevant regulator as to the amount of that estate and its attribution between shareholders and policy holders; ora decision of the company to specify and identify an amount of assets (otherwise than in connection with a transfer to the company's long-term insurance fund) as attributable only to shareholders' interests;a reattribution is “relevant” if it arises as a result of any of the following—a transfer of business under—section 49 of, or Schedule 2C to, the Insurance Companies Act 1982;an insurance business transfer scheme (within the meaning of section 431(2));a scheme of arrangement under section 425 of the Companies Act 1985;an order under section 68 of the Insurance Companies Act 1982;a waiver under section 148 of the Financial Services and Markets Act 2000;an amendment to the company's memorandum, articles of association or other instrument regulating the company.
- (8B) In subsection (8A) above—
- “*inherited estate*” has the same meaning as it has in the Insurance Prudential Sourcebook; and
- “*relevant regulator*” means the Financial Services Authority, the Treasury or the Secretary of State.
- (9) Where a company carries on overseas life assurance business—
- (a) references in this section to liabilities do not include liabilities of that business, and
- (b) the appropriate part of the free assets amount as defined by paragraph 4(2)(a) of Schedule 19AA shall be left out of account in determining that amount for the purposes of this section.
- (9A) In this section and sections 432C and 432D “*net value*”, in relation to any assets, means the excess of the value of the assets over the value of money debts (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996) attributable to an internal linked fund which are not owed in respect of liabilities.
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432B
- (1) This section and sections 432C to 432F have effect where it is necessary in accordance with section 83 of the Finance Act 1989 to determine what parts of any items brought into account, within the meaning of that section, are referable to life assurance business or any category of life assurance business.
- (2) Where for that purpose reference falls to be made to more than one account recognised for the purposes of that section, the provisions of sections 432C to 432F apply separately in relation to each account.
- (3) Sections 432C and 432D apply where the business with which an account is concerned (“*the relevant business*”) relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus; and sections 432E and 432F apply where the relevant business relates wholly or partly to other policies or contracts.
- (4) The following provisions of this section have effect where sections 432C and 432D—
- (a) apply in relation to any account for a fund in which shareholders' excess assets are held, and
- (b) apply in relation to that account in relation to any period of account beginning on or after 1st January 2005 . . . .
- (5) The part of the amount brought into account as income which is referable in accordance with section 432C to any category of business apart from—
- (a) basic life assurance and general annuity business, and
- (b) overseas life assurance business,
is reduced by the relevant fraction of the shareholders' excess income.
- (6) The part of the amount brought into account as the increase or decrease in the value of assets or as other income which is referable in accordance with section 432D to any category of business apart from basic life assurance and general annuity business is reduced or increased as follows.
- (7) The part of that amount is—
- (a) reduced by the relevant fraction of the shareholders' excess gains, or
- (b) increased by the relevant fraction of the shareholders' excess losses,
as the case may be.
- (8) But if, in relation to the fund in question, an election in accordance with Rule 9.10(c) of the Prudential Sourcebook (Insurers) has effect for the period of account, the following rules apply.
- (8A) In any case where there are adjusted shareholders' excess gains (“amount A”) and an adjusted increase in value of inherited estate assets (“amount B”), the part of the amount mentioned in subsection (6) (“*the relevant amount*”) is reduced by the relevant fraction of the lower of amounts A and B.
- (8B) The difference between amounts A and B is carried forward to the next period of account—
- (a) as shareholders' excess gains (if amount A is the greater amount), or
- (b) as an increase in value of inherited estate assets (if amount B is the greater amount).
- (8C) In any case where there are adjusted shareholders' excess losses (“amount C”) and an adjusted decrease in value of inherited estate assets (“amount D”), the relevant amount is increased by the relevant fraction of the lower of amounts C and D.
- (8D) The difference between amounts C and D is carried forward to the next period of account—
- (a) as shareholders' excess losses (if amount C is the greater amount), or
- (b) as a decrease in value of inherited estate assets (if amount D is the greater amount).
- (8E) In any other case—
- (a) the relevant amount is neither reduced nor increased, and
- (b) the adjusted shareholders' excess gains or losses, and the adjusted increase or decrease in value of inherited estate assets, are carried forward to the next period of account as shareholders' excess gains or losses and an increase or decrease in value of inherited estate assets (as the case may be).
- (8F) For the purposes of subsections (8A) to (8E), in relation to any period of account (“*the relevant period*”), the adjusted shareholders' excess gains or losses, and the adjusted increase or decrease in value of inherited estate assets, are determined as follows.
*Step 1*Find the amount of shareholders' excess gains or losses, and the amount of the increase or decrease in value of inherited estate assets, for the relevant period.
*Step 2*Find the amount (if any) of shareholders' excess gains or losses, and the amount (if any) of the increase or decrease in value of inherited estate assets, carried forward to the relevant period (without being taken into account for the purposes of step 3 or 4 in any previous period of account).
*Step 3*This step applies if, for the relevant period, there are shareholders' excess gains or an increase in value of inherited estate assets.In such a case—increase that amount by the amount of any such gains or (as the case may be) of any such increase in value so carried forward to the relevant period, orreduce that amount (but not below nil) by the amount of any shareholders' excess losses or (as the case may be) of any decrease in value of inherited estate assets so carried forward to the relevant period.The resulting amount is the adjusted shareholders' excess gains or (as the case may be) the adjusted increase in value of inherited estate assets for the relevant period.
*Step 4*This step applies if, for the relevant period, there are shareholders' excess losses or a decrease in value of inherited estate assets.In such a case—increase that amount by the amount of any such losses or (as the case may be) of any such decrease in value so carried forward to the relevant period, orreduce that amount (but not above nil) by the amount of any shareholders' excess gains or (as the case may be) of any increase in value of inherited estate assets so carried forward to the relevant period.The resulting amount is the adjusted shareholders' excess losses or (as the case may be) the adjusted decrease in value of inherited estate assets for the relevant period.8GFor the purposes of subsections (8A) to (8F), in relation to any company and any period of account,—“*decrease in value of inherited estate assets*” means so much of the amount of the decrease in value of assets brought into account in line 13 of Form 40 in the periodical return of the company for that period as relates to shareholders' excess assets;“*increase in value of inherited estate assets*” means so much of the amount of the increase in value of assets brought into account in line 13 of Form 40 in the periodical return of the company for that period as relates to shareholders' excess assets.9For the purposes of this section—“*the relevant fraction*”, in relation to a category of business, is the fraction of which—athe numerator is the section 83 net amount referable to the category; andbthe denominator is the section 83 net amount referable to all categories of business apart from basic life assurance and general annuity business and overseas life assurance business;“*the section 83 net amount*” means the net amount (before giving effect to subsections (5) to (8B) above) to be taken into account in accordance with section 83(2) of the Finance Act 1989 (that is to say, the aggregate amount to be taken into account as receipts reduced by the aggregate amount to be taken into account as expenses);“*shareholders' excess gains*” means the amount by which—athe aggregate amount of investment gains and amounts chargeable under Case VI of Schedule D by virtue of section 85(2C)(c) of the Finance Act 1989 for the accounting periods comprised in the period of account exceedsbthe aggregate amount that would be found under paragraph (a) if section 432A(6) were amended in accordance with subsection (10) below;“*shareholders' excess income*” means the amount by which—athe investment income referable to basic life assurance and general annuity business in accordance with section 432A for the accounting periods comprised in the period of account exceedsbthe amount that would be so referable if section 432A(6) were amended in accordance with subsection (10) below;“*shareholders' excess losses*” means the amount by which—ainvestment losses for the accounting periods comprised in the period of account exceedsbthe amount that would be found under paragraph (a) if section 432A(6) were amended in accordance with subsection (10) below.10For the purposes of the definitions of “shareholders' excess gains”, “shareholders' excess income” and “shareholders' excess losses”, the amendments of section 432A(6) mentioned in those definitions are—ain paragraph (a)(ii) the insertion after “the mean of” of “the appropriate parts of”;bin paragraph (a)(ii) the insertion after “assets” of—(and for this purpose the definition of “appropriate part” in subsection (8)(a) below applies in relation to the shareholders' excess assets as it applies in relation to the free assets amount); andcin paragraph (b) the substitution for sub-paragraph (ii) of—iithe numerators that would be given by that paragraph in relation to the other categories of business if this subsection applied in relation to any category of business..11For the purposes of subsection (9)—athe amount of a company's investment gains is the greater of LG + OIG + NTC - NTD and nil where—iLG is the amount of BLAGAB chargeable gains accruing from disposals of assets of the company's long-term insurance fund in each accounting period comprised in the period of account after deducting the aggregate of BLAGAB allowable losses so accruing in the accounting period and in any accounting period to which section 8(1)(b) of the Taxation of Chargeable Gains Act 1992 (company's total profits to include chargeable gains) applies;iaOIG is the amount of offshore income gains accruing in each such accounting period and charged to corporation tax under Case VI of Schedule D by virtue of section 761(1)(b)(ii);iiNTC is the amount of non-trading credits for the period of account which arise to the company from increases in the fair value of the company's loan relationships or from related transactions; andiiiNTD is the amount of non-trading debits for the period of account which arise to the company from decreases in the fair value of the company's loan relationships or from related transactions;b“*investment income*” means the aggregate of—ithe non-trading credits for the period of account which do not arise to the company from increases in the fair value of the company's loan relationships or from related transactions;iaannuities or other annual payments in each accounting period comprised in the period of account that are chargeable under Case III of Schedule D by virtue of paragraph (b) of that Case;iiincome for each such accounting period falling with Schedule A; andiiiincome for each such accounting period falling within Case V of Schedule D; andcthe amount of a company's investment losses is the greater ofLA + NTD – OIG – NTC (where there is an amount LA in the period of account)orNTD – NTC – LG – OIG (where there is an amount LG in the period of account)and nil where—iLA is the amount of the company's BLAGAB allowable losses accruing from disposals of assets of the company's long-term insurance fund in each accounting period comprised in the period of account after deducting BLAGAB chargeable gains so accruing; andiiLG, OIG, NTC and NTD have the same meanings as they have in relation to a company's investment gains.12In subsection (11)—“*BLAGAB allowable losses*” means allowable losses referable in accordance with section 432A to the company's basic life assurance and general annuity business;“*BLAGAB chargeable gains*” means chargeable gains referable in accordance with section 432A to the company's basic life assurance and general annuity business;“*related transaction*” has the meaning given by section 84(5) of the Finance Act 1996.
##### 432C
- (1) To the extent that the amount brought into account as income is attributable to assets linked to pension business, life reinsurance business, basic life assurance and general annuity business or long-term business other than life assurance business, it shall be referable to the category of business concerned.
- (2) To the extent that that amount is attributable to assets of the overseas life assurance fund or land in the United Kingdom linked to overseas life assurance business, it shall be referable to overseas life assurance business.
- (3) There shall be referable to any category of business (apart from overseas life assurance business) the relevant fraction of so much of the amount brought into account as income as is not directly referable to any category of business.
- (4) For the purposes of subsection (3) above “*the relevant fraction*”, in relation to a category of business, is the fraction of which—
- (a) the numerator is the mean of the opening and closing liabilities of the relevant business so far as referable to the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets of the relevant business directly referable to the category; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by that paragraph in relation to the other categories of business.
- (5) For the purposes of subsections (3) and (4) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the part of the amount brought into account as income which is directly referable to a category of business is the part referable to the category by virtue of subsection (1) or (2) above and assets are directly referable to a category of business if such part of the amount brought into account as income as is attributable to them is so referable.
- (6) For the purposes of this section, where a company carries on overseas life assurance business “*liabilities*” does not include liabilities of that business.
##### 432D
- (1) To the extent that the amount brought into account as the increase or decrease in the value of assets or as other income is attributable to assets linked to pension business, life reinsurance business, basic life assurance and general annuity business or long-term business other than life assurance business, or to assets of the overseas life assurance fund which are linked to overseas life assurance business, it shall be referable to the category of business concerned.
- (2) There shall be referable to any category of business the relevant fraction of the amount brought into account as the increase or decrease in the value of assets or as other income except so far as the amount is attributable to assets which are directly referable to any category of business.
- (3) For the purposes of subsection (2) above “the relevant fraction”, in relation to a category of business, is the fraction of which—
- (a) the numerator is the mean of the opening and closing liabilities of the relevant business so far as referable to the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets of the relevant business directly referable to the category; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by that paragraph in relation to the other categories of business.
- (4) For the purposes of subsections (2) and (3) above, the part of the amount brought into account as the increase or decrease in the value of assets or as other income which is directly referable to a category of business is the part referable to the category by virtue of subsection (1) above and assets are directly referable to a category of business if such part of the amount brought into account as the increase or decrease in the value of assets or as other income as is attributable to them is so referable.
##### 432E
- (1) The part of the net amount to be taken into account in accordance with section 83(2) of the Finance Act 1989 (that is to say, the aggregate amount to be taken into account as receipts reduced by the aggregate amount to be taken into account as expenses) which is referable to a particular category of business shall be the amount determined in accordance with subsections (2) and (2A) below or, if greater, the amount determined in accordance with subsection (3) below but subject to section 432G.
- (2) For the purposes of subsection (1) above there shall be determined the amount which is such as to secure—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . that
$$CS-CAS=(S-AS)×CASAS$where—S is the surplus of the relevant business;AS is so much of that surplus as is allocated to persons entitled to the benefits provided for by the policies or contracts to which the relevant business relates;CAS is so much of the surplus so allocated as is attributable to policies or contracts of the category of business concerned; andCS is so much of the surplus of the relevant business as would remain if the relevant business were confined to business of the category concerned.$
- (2A) In a case where an amount or amounts are taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of subsection (2B) of that section or by virtue of section 444ACA(2) , 444AF(2) or 444AK(2) of this Act, the amount determined under subsection (2) above is increased by—
$$CASAS×RP$where—CAS and AS have the same meanings as in subsection (2) above; andRP is the amount or the aggregate of the amounts taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of any of the following provisions—subsection (2B) of that section;section 444ACA(2) of this Act;subsection (2) of section 444AF of this Act (and see subsections (5) and (6) of that section);subsection (2) of section 444AK of this Act (but only for the purposes mentioned in subsection (3) of that section).$
- (3) For the purposes of subsection (1) above there shall also be determined the aggregate of—
- (a) the applicable percentage of what is left of the mean of the opening and closing liabilities of the relevant business so far as referable to the category of business concerned after deducting from it the mean of the opening and closing values of any assets of the relevant business linked to that category of business, and
- (b) the part of the net amount mentioned in subsection (1) above that is attributable to assets linked to that category of business.
- (4) For the purposes of subsection (3) above “*the applicable percentage*”, in any case, is such percentage as may be determined for that case by or in accordance with an order made by the Treasury.
- (5) Where the part of the net amount referable to a particular category or categories of business (“*the subsection (3) category or categories*”) is the amount determined in accordance with subsection (3) above, the amount determined in accordance with subsection (2) above in relation to any other category (“*the relevant category*”) shall be reduced by—
$$XYZ$where—X is the excess of the amount determined in accordance with subsection (3) above in the case of the subsection (3) category (or each of them) over the amount determined in its case (or the case of each of them) in accordance with subsection (2) above;Y is so much of the surplus of the relevant business as is allocated to persons entitled to the benefits provided for by policies or contracts of the relevant category; andZ is so much of the surplus of the relevant business as is allocated to persons entitled to the benefits provided for by policies or contracts of the category (or each of the categories) which is not a subsection (3) category.$
References in this subsection to the amount determined in accordance with subsection (3) above are to that amount after making any deduction required by section 432F.
- (6) Where the category of business concerned is overseas life assurance business—
- (a) if the part of the income brought into account that is attributable to assets of the overseas life assurance fund not linked to overseas life assurance business is greater than the amount arrived at under subsection (3)(a) above, this section shall have effect as if that part of that income were the amount so arrived at; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further interpretation of sections 135 to 139.
#### Interpretation.
##### 434A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the provisions of this Act applicable to Case I of Schedule D—
- (a) the loss resulting from the computation shall be reduced (but not below nil) by the aggregate of—
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) any relevant non-trading deficit for that period on the company’s debtor relationships; and
- (iii) any loss for that period under section 441; and
- (b) if the whole or any part of that loss as so reduced is set off—
- (i) under section 393A, or
- (ii) under section 403(1),
any losses for that period under section 436 or 439B shall be reduced to nil, unless the aggregate of those losses exceeds the total of the amounts set off as mentioned in sub-paragraphs (i) and (ii) above, in which case each of those losses shall be reduced by an amount which bears to that total the proportion which the loss in question bears to that aggregate.
- (2A) The reference in subsection (2)(a)(ii) above to a relevant non-trading deficit for any period on a company’s debtor relationships is a reference to the non-trading deficit on the company’s loan relationships which would be produced by any separate computation made under paragraph 2 of Schedule 11 to the Finance Act 1996 for the company’s basic life assurance and general annuity business if credits and debits given in respect of the company’s creditor relationships (within the meaning of Chapter II of Part IV of that Act) were disregarded.
- (3) In the case of a company carrying on life assurance business, no relief shall be allowable —
- (a) under Chapter II (loss relief) or Chapter IV (group relief) of Part X, or
- (b) in respect of any amount representing a non-trading deficit on the company’s loan relationships that has been computed otherwise than by reference to debits and credits referable to that business,
against the policy holders’ share of the relevant profits for any accounting period.
#### Meaning of “distribution”.
##### 438A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 209(3AA): link to shares of company or associated company
##### 440A
- (1) Subsection (2) below applies where the assets of an insurance company include securities of a class all of which would apart from this section be regarded for the purposes of corporation tax on chargeable gains as one holding.
- (2) Where this subsection applies—
- (a) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of—
- (i) pension business, or
- (ii) life reinsurance business, or
- (iii) basic life assurance and general annuity business,
shall be treated for the purposes of corporation tax as a separate holding linked solely to that business,
- (c) so many of the securities as are included in the overseas life assurance fund shall be treated for those purposes as a separate holding which is an asset of that fund,
- (d) so many of the securities as are included in the company’s long-term insurance fund but do not fall within any of the preceding paragraphs shall be treated for those purposes as a separate holding which is an asset of that fund (but not of any of the descriptions mentioned in those paragraphs, and
- (e) any remaining securities shall be treated for those purposes as a separate holding which is not of any of the descriptions mentioned in the preceding paragraphs.
- (3) Subsection (2) above also applies where the assets of an insurance company include securities of a class and apart from this section some of them would be regarded as a 1982 holding, and the rest as a section 104 holding, for the purposes of corporation tax on chargeable gains.
- (4) In a case within subsection (3) above—
- (a) the reference in any paragraph of subsection (2) above to a separate holding shall be construed, where necessary, as a reference to a separate 1982 holding and a separate section 104 holding, and
- (b) the questions whether such a construction is necessary in the case of any paragraph and, if it is, how many securities falling within the paragraph constitute each of the two holdings shall be determined in accordance with paragraph 12 of Schedule 6 to the Finance Act 1990 and the identification rules applying on any subsequent acquisitions and disposals.
- (5) Section 105 of the 1992 Act shall have effect where subsection (2) above applies as if securities regarded as included in different holdings by virtue of that subsection were securities of different kinds.
- (6) In this section—
- “*1982 holding*” has the same meaning as in section 109 of the 1992 Act;
- “*section 104 holding*” has the same meaning as in section 104(3) of that Act; and
- “*securities*” means shares, or securities of a company, and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed or acquired.
- (7) In a case where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D this section has effect with the modification specified in section 440B(4).
##### 441A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444A
- (1) Subject to subsection (7) below, this section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“the transferor”) to another (“the transferee”).
- (2) Any expenses payable which (assuming the transferor had continued to carry on the business transferred after the transfer) would have fallen to be brought into account by the transferor in determining the deduction for expenses payable to be allowed under section 76 in computing profits for an accounting period following the period which ends with the day on which the transfer takes place shall, instead, be brought into account under and in accordance with that section by the transferee as expenses payable by him (and giving effect in the case of acquisition expenses, to section 86(6) to (9) of the Finance Act 1989).
- (3) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer)—
- (a) would have been available under section 436(3)(c) or 439B(3)(c) to be set off against profits of the transferor for the accounting period following that which ends with the day on which transfer takes place, or
- (b) where the transfer relates to any overseas life assurance business or in connection with the transfer the transferor also transfers the whole or part of any such business, would have been so available under section 441(4)(b),
shall, instead, be treated as a loss of the transferee (and available to be set off against profits of the same category of business as that in which it arose) if the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to the transfer).
- (3ZA) Where subsection (3) above has effect, sections 343(4), (5) and (7) to (12) and 344 apply in relation to the business in which the loss arose construing—
- (a) references to the predecessor and the successor as to (respectively) the transferor and the transferee, and
- (b) references to section 343(3) as to subsection (3) of this section,
except that nothing in section 343(8) to (10) and (12) applies in relation to the transferee.
- (3A) Any subsection (2) excess (within the meaning of section 432F(2)) which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available under section 432F(3) or (4) to reduce a subsection (3) figure (within the meaning of section 432F(1)) of the transferor in an accounting period following that which ends with the day on which transfer takes place—
- (a) shall, instead, be treated as a subsection (2) excess of the transferee, and
- (b) shall be taken into account in the first accounting period of the transferee ending after the date of the transfer (to reduce the subsection (3) figure or, as the case may be, to produce or increase a subsection (2) excess for that period),
in relation to the revenue account of the transferee dealing with or including the business transferred.
- (4) Where acquisition expenses are treated as expenses payable by the transferee by virtue of subsection (2) above, the amount deductible for the first accounting period of the transferee ending after the transfer takes place shall be calculated as if that accounting period began with the day after the transfer.
- (5) Where the transfer is of part only of the transferor’s long-term business, subsection (2), (3) or (3A) above shall apply only to such part of any amount to which it would otherwise apply as is appropriate.
- (6) Any question arising as to the operation of subsection (5) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and transferee shall be entitled to appear and be heard or to make representations in writing.
- (7) Subject to subsection (8) below, this section shall not apply unless the transfer is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to corporation tax.
- (8) Subsection (7) above shall not affect the operation of this section in any case where, before the transfer, the Board have, on the application of the transferee, notified the transferee that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any scheme or arrangements such as are mentioned in that subsection; and subsections (2) to (5) of section 138 of the 1992 Act shall have effect in relation to this subsection as they have effect in relation to subsection (1) of that section.
### Classes of life assurance business
##### 431B
- (1) In this Chapter “*pension business*” means so much of a company’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme or is the reinsurance of such business.
- (2) Where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the company’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the company in which the pension scheme so ceases to be a registered pension scheme.
- (3) Where—
- (a) immediately before 6th April 2006 an annuity contract falls within any of the descriptions of contracts specified in subsection (2) of this section as it had effect immediately before that date, but
- (b) on or after that date the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,
the contract is to be treated for the purposes of this section as having been entered into for such purposes.
##### 431BA
- (1) In this Chapter “*child trust fund business*” means so much of a company's life assurance business as is referable to child trust fund policies (but not including the reinsurance of such business).
- (2) In this section “*child trust fund policy*” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).
##### 431BB
- (1) In this Chapter “*individual savings account business*” means so much of a company's life assurance business as is referable to individual savings account policies (but not including the reinsurance of such business).
- (2) In this section “*individual savings account policy*” means a policy of life insurance which is an investment of a kind specified in regulations made by virtue of section 695(1) of ITTOIA 2005.
##### 431C
- (1) In this Chapter “*life reinsurance business*” means reinsurance of life assurance business other than pension business or business of any description excluded from this section by regulations made by the Board.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
##### 431D
- (1) In this Chapter “*overseas life assurance business*” means life assurance business, other than pension business , life reinsurance business or business of any description excluded from this section by regulations made by the Board, which—
- (a) in the case of life assurance business other than reinsurance business, is business with a policy holder or annuitant not residing in the United Kingdom, and
- (b) in the case of reinsurance business, is—
- (i) reinsurance of life assurance business with a policy holder or annuitant not residing in the United Kingdom, or
- (ii) reinsurance of business within sub-paragraph (i) above or this sub-paragraph.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
- (3) The Board may by regulations—
- (a) make provision as to the circumstances in which a trustee who is a policy holder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not so residing; and
- (b) provide that nothing in Chapter II of Part XIII or Chapter 9 of Part 4 of ITTOIA 2005 shall apply to a policy or contract which constitutes overseas life assurance business by virtue of any such provision as is mentioned in paragraph (a) above.
- (4) Regulations under subsection (1) or (3) above may contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431E
- (1) The Board may by regulations make provision for giving effect to section 431D.
- (2) Such regulations may, in particular—
- (a) provide that, in such circumstances as may be prescribed, any prescribed issue as to whether business is or is not overseas life assurance business (or overseas life assurance business of a particular kind) shall be determined by reference to such matters (including the giving of certificates or undertakings, the giving or possession of information or the making of declarations) as may be prescribed,
- (b) require companies to obtain certificates, undertakings, information or declarations from policy holders or annuitants, or from trustees or other companies, for the purposes of the regulations,
- (c) make provision for dealing with cases where any issue such as is mentioned in paragraph (a) above is (for any reason) wrongly determined, including provision allowing for the imposition of charges to tax (with or without limits on time) on the insurance company concerned or on the policy holders or annuitants concerned,
- (d) require companies to supply information and make available books, documents and other records for inspection on behalf of the Board, and
- (e) make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.
- (3) The regulations may—
- (a) make different provision for different cases, and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431EA
In this Chapter “*gross roll-up business*” means business of any of the following kinds—
- (a) pension business;
- (b) child trust fund business;
- (c) individual savings account business;
- (d) life reinsurance business; and
- (e) overseas life assurance business.
##### 431F
In this Chapter “*basic life assurance and general annuity business*” means life assurance business (including reinsurance business) other than pension business, life reinsurance business or overseas life assurance business.
### Separation of different categories of business
##### 431G
- (1) This section applies in relation to an insurance company which carries on life assurance business (whether or not it also carries on insurance business of any other kind).
- (2) Subject as follows, the profits of the life assurance business for any accounting period shall be charged to tax under the I minus E basis.
- (3) Where in the case of an insurance company for an accounting period either—
- (a) all of its life assurance business is reinsurance business and none of that business is of a type excluded from this subsection by regulations made by the Board, or
- (b) all, or substantially all, of its life assurance business is gross roll-up business,
the profits of that business for the accounting period shall be charged to tax in accordance with Case I of Schedule D and not otherwise.
- (4) Where—
- (a) the profits of the life assurance business of an insurance company for any accounting period are charged to tax under the I minus E basis, and
- (b) had those profits been charged to tax in accordance with Case I of Schedule D, a loss would have arisen to the company from that business for the period,
the loss (after being reduced in accordance with section 434A(2)(a)) may be set-off under section 393A or section 403(1).
- (5) The application, in relation to the life assurance business of an insurance company, of any provision of Case I of Schedule D is not to be taken—
- (a) to prevent the application of the I minus E basis in relation to that business of the company for any accounting period, or
- (b) to affect the operation of the I minus E basis in relation to the that business of the company for any accounting period except as specifically provided by the Corporation Tax Acts.
##### 431H
- (1) This section applies in relation to an insurance company which carries on life assurance business and insurance business of any other kind.
- (2) For the purposes of the Corporation Tax Acts—
- (a) the life assurance business, and
- (b) the other insurance business,
are to be treated as separate businesses.
- (3) The profits of the other insurance business shall be charged to tax under Case I of Schedule D as the profits of a separate trade.
- (4) But subsection (3) above does not apply where that business is mutual business.
- (5) As to the profits of the life assurance business, see section 431G.
##### 432YA
- (1) This section applies in the case of—
- (a) a company which is a non-profit company, or
- (b) the non-profit fund of a company which is not a non-profit company,
if an amount (other than nil) is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for the first period of account which ends on or after 31st December 2006.
- (2) In computing profits of long-term business which is not life assurance business in accordance with the provisions applicable to Case I of Schedule D an amount (“*the relevant amount*”) shall be added—
- (a) to the closing long term business provision of the company for the first period of account which ends on or after 31st December 2006, and
- (b) to the opening long term business provision of the company for the next period of account.
- (3) The relevant amount is, subject to subsection (4), the amount by which B exceeds A. Here—
- A is the company's long term business provision in respect of business which is not life assurance business for the first period of account which ends on or after 31st December 2006, calculated after taking into account the company's ability to—make provision for non-attributable expenses by reference to a homogeneous risk group instead of by reference to individual policies or contracts;make provision for the voluntary discontinuance of policies or contracts using a prudent lapse rate assumption; andset negative liabilities against positive liabilities (subject to overall liabilities not being less than nil);in accordance with the Insurance Prudential Sourcebook; and
- B is the company's long term business provision for that period of account in respect of business which is not life assurance business, calculated without taking into account the matters referred to in paragraphs (a) to (c) of the definition of A.
- (4) In a case falling within subsection (1)(b)—
- (a) the relevant amount shall be reduced (but not below nil) by so much (if any) of the amount shown in paragraph 4(12) of Appendix 9.4 to the periodical return as is reflected in column 1 of line 51 of the Form 14 for that period of account relating to the non-profit fund in question; and
- (b) the references in subsection (3) to long term business provision and to liabilities are respectively to long term business provision and to liabilities relating to the non-profit fund in question.
- (5) In this section—
- “*long term business provision*” has the same meaning as in Schedule 9A to the Companies Act 1985;
- “*non-profit company*” has the meaning given in section 83YA(8) of the Finance Act 1989; and
- “*non-profit fund*” has the same meaning as in the Insurance Prudential Sourcebook.
##### 432ZA
- (1) In this Chapter “*linked assets*” means assets of an insurance company which are identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined and in a case where only part of an asset is so identified, references to a linked asset are references to that part.
- (2) Linked assets shall be taken—
- (a) to be linked to long-term business of a particular category if the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category; and
- (b) to be linked solely to long-term business of a particular category if all (or all but an insignificant proportion) of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category.
- (3) Where an asset is linked to more than one category of long-term business, a part of the asset shall be taken to be linked to each category; and references in this Chapter to assets linked (but not solely linked) to any category of business shall be construed accordingly.
- (4) Where subsection (3) above applies, the part of the asset linked to any category of business shall be a proportion determined as follows—
- (a) where in the records of the company values are shown for the asset in funds referable to particular categories of business, the proportion shall be determined by reference to those values;
- (b) in any other case the proportion shall be equal to the proportion A/B where—
A is the total of the linked liabilities of the company which are liabilities of the internal linked fund in which the asset is held and are referable to that category of business;
B is the total of the linked liabilities of the company which are liabilities of that fund.
- (5) For the purposes of sections 432A to 432F—
- (a) income arising in any period from assets linked but not solely linked to a category of business,
- (b) gains arising in any period from the disposal of such assets, and
- (c) increases and decreases in the value of such assets,
shall be treated as arising to that category of business in the proportion which is the mean of the proportions determined under subsection (4) above at the beginning and end of the period.
- (6) In this section—
- “*internal linked fund*”, in relation to an insurance company, means an account—to which linked assets are appropriated by the company; andwhich may be divided into units the value of which is determined by the company by reference to the value of those assets;
- “*linked liabilities*” means liabilities in respect of benefits to be determined by reference to the value of linked assets.
- (7) In the case of a policy or contract the effecting of which constitutes a class of life assurance business the fact that it also constitutes long-term business other than life assurance business shall be disregarded for the purposes of this section unless the benefits to be provided which constitute long-term business other than life assurance business are to be determined by reference to the value of assets.
##### 432AA
- (1) An insurance company is treated as carrying on separate Schedule A businesses, or overseas property businesses, in accordance with the following rules.
- (2) The exploitation of land held as an asset of the company’s long-term insurance fund is treated as a separate business from the exploitation of land not so held.
- (3) The exploitation of land held as an asset of the company’s overseas life assurance fund is treated as a separate business from the exploitation of other land held as an asset of its long-term insurance fund.
- (4) The exploitation of land held as an asset linked to any of the following categories of business is regarded as a separate business—
- (a) pension business;
- (b) life reinsurance business;
- (c) basic life assurance and general annuity business;
- (d) long-term business other than life assurance business.
- (5) Accordingly, the exploitation of land held as an asset of the company’s long-term insurance fund otherwise than as mentioned in subsection (3) or (4) is treated as a separate business from any other.
- (6) In this section “*land*” means any estate, interest or rights in or over land.
##### 432AB
- (1) This section applies to any loss arising in a Schedule A business or overseas property business.
- (2) A loss arising from any category of business mentioned in section 432A(2) shall be apportioned under that section in the same way as income.
- (3) So far as a loss is referable to basic life assurance and general annuity business, it shall be treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.
- (4) Where a company is treated under section 432AA as carrying on—
- (a) more than one Schedule A business, or
- (b) more than one overseas property business,
then, in relation to either kind of business, the reference in subsection (3) above to a loss referable to basic life assurance and general annuity business shall be construed as a reference to any aggregate net loss after setting the losses from those businesses which are so referable against any profits from those businesses that are so referable.
- (5) The provisions of section 392A or 392B (loss relief) do not apply to a loss referable to life assurance business or any category of life assurance business.
- (6) Where a company is treated under section 432AA as carrying on—
- (a) more than one Schedule A business, or
- (b) more than one overseas property business,
and, in relation to either kind of business, there are losses and profits referable to business which is not life assurance business, those losses shall be set against those profits before being used under section 392A or 392B.
##### 432CA
- (1) This section applies where—
- (a) an insurance company is not a non-profit company in relation to a period of account (“the current period of account”),
- (b) in the case of any business with which an account of the company for the current period of account is concerned (“the relevant business”), an amount is a relevant brought into account amount for that period of account (see subsection (2)),
- (c) section 432C applies for determining the extent to which the relevant brought into account amount is referable to life assurance business or to gross roll-up business, and
- (d) the line 51 reduction condition is met (see subsection (3)).
- (2) An amount is a relevant brought into account amount for a period of account if—
- (a) it is brought into account as mentioned in subsection (2)(b) of section 83 of the Finance Act 1989 (increases in value of non-linked assets) for that period,
- (b) it is deemed to be brought into account for that period by subsection (2B) of that section in consequence of the transfer of non-linked assets, or
- (c) it is taken into account under subsection (2) of that section for that period by virtue of section 444AB as being the relevant amount in relation to non-linked assets.
- (3) The line 51 reduction condition is met if—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for the current period of account, is less than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant reduction”.
- (4) Section 432C applies in relation to so much of the relevant brought into account amount as does not exceed the relevant reduction (“the affected amount”) as if it were brought into account as an increase in the value of assets in the case of the relevant business for the applicable appropriate period of account of the company.
- (5) A period of account is an “appropriate period of account” if it ended before the current period of account and—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for it, was more than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant increase.”
- (6) The “applicable” appropriate period of account is the one which ended most recently (“the most recent appropriate period of account”).
- (7) But if the relevant increase in the case of the most recent appropriate period of account is less than the affected amount, the most recent appropriate period of account is the applicable appropriate period of account in relation to only so much of the affected amount as does not exceed that relevant increase.
- (8) In that case, the appropriate period of account which ended most recently before the most recent appropriate period of account is the applicable appropriate period of account in relation to so much of the remainder as does not exceed the relevant increase in the case of that appropriate period of account (and, where necessary, so on until the applicable appropriate period of account is established in relation to all of the affected amount or there are no more appropriate periods of account).
- (9) If the current period of account is not the first in relation to which this section has applied in the case of the business concerned, the amount of the relevant increase in the case of any appropriate period of account (“*the period in question*”) is to be treated as reduced by the relevant aggregate.
- (10) The “relevant aggregate” is the aggregate of so much of the affected amount for any period or periods of account earlier than the current period of account as was an amount to which section 432C applied as if it were brought into account as mentioned in subsection (4) for the period in question.
- (11) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
##### 432CB
- (1) This section applies where, under an insurance business transfer scheme, there is a transfer of long-term business—
- (a) from a non-profit fund of an insurance company (“*the transferor*”) which is not a non-profit company in relation to the relevant period of account,
- (b) to another insurance company (“*the transferee*”) to constitute or form part of a non-profit fund of the transferee (“*the transferee's non-profit fund*”),
(“*the transfer*”) and conditions A and B are met.
- (2) Condition A is that the fair value of the assets transferred by the transfer exceeds by an amount (“the chargeable excess”) the amount of the relevant liabilities transferred by the transfer.
For this purpose “relevant” liabilities are liabilities of a type shown (or treated as shown) in any of lines 14, 17, 21 to 23 and 31 to 38 of Form 14 of a periodical return of an insurance company.
- (3) Condition B is that the main purpose, or one of the main purposes, of the transferor or the transferee (or both) in entering into any part of the transfer scheme arrangements is to secure a reduction in tax as a result of section 432C having effect in the case of the transferee, rather than the transferor, in relation to the business transferred by the transfer.
- (4) The chargeable excess is to be brought into account by the transferor as mentioned in section 83(2)(b) of the Finance Act 1989 for the relevant period of account.
- (5) Where there is no amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first period of account of the transferee ending on or after the transfer date (“the first post-transfer period of account”), the chargeable excess is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the first post-transfer period of account.
- (6) Where—
- (a) there is an amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first post-transfer period of account, and
- (b) the amount so shown in column 1 of line 51 of Form 14 of the periodical return of the transferee for that period of account, or for any other period of account of the transferee ending after the transfer date, (an “affected period of account”) is less than the total chargeable excess amount,
the relevant amount is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the affected period of account.
- (7) For this purpose “the relevant amount” is the amount by which—
- (a) the amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the affected period of account, is less than
- (b) the total chargeable excess amount less any amount brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for any earlier period of account by virtue of the operation of this section in relation to the transferee's non-profit fund.
- (8) In subsections (6) and (7) “*the total chargeable excess amount*” means the aggregate of—
- (a) the chargeable excess, and
- (b) any amount which is the chargeable excess in relation to any other transfer of business to the transferee's non-profit fund.
- (9) In this section “*the relevant period of account*” means—
- (a) the period of account of the transferor ending immediately before the transfer date, or
- (b) if no period of account of the transferor so ends, the period of account of the transferor covering the transfer date.
- (10) In this section “*the transfer scheme arrangements*” means the insurance business transfer scheme and any relevant associated operations; and for this purpose “*relevant associated operations*” means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance, or
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee,
which is effected in connection with the insurance business transfer scheme.
- (11) In subsection (10)—
- “dependant”, and
- “insurance undertaking”,
have the same meaning as in the Insurance Prudential Sourcebook.
- (12) In this section “*the transfer date*” means the date on which the insurance business transfer scheme takes effect.
- (13) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
#### Exempt distributions: division of business
##### 432F
- (1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).
- (2) For each category of business in relation to which section 432E falls to be applied there shall be determined for each accounting period the amount (if any) by which the subsection (2) figure, after making any reduction required by section 432E(5), exceeds the subsection (3) figure (“the subsection (2) excess”).
- (3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.
- (4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.
##### 432G
- (1) This section applies where an amount falls within section 83(2)(e) of the Finance Act 1989.
- (2) Where—
- (a) this section applies, and
- (b) it is necessary in accordance with section 83 to determine what part of a business transfer-in is referable to life assurance business or any category of life assurance business,
a business transfer-in shall be apportioned to the categories of business of the transferee in the proportions which the amount of the liabilities transferred for each of those categories bear to the whole of the liabilities transferred.
### Miscellaneous provisions relating to life assurance business
##### 434AZA
- (1) Where this section applies in the case of a company carrying on life assurance business, relief allowable under section 393A or Chapter 4 of Part 10 in respect of losses incurred by the company in the life assurance business in an accounting period is reduced in accordance with section 434AZB.
- (2) This section applies in the case of a company where—
- (a) there has been a relevant addition to one or more non-profit funds in a period of account ending no later than the accounting period (“the relevant period of account”) (see subsection (3)),
- (b) the company is not a non-profit company in relation to the relevant period of account and has not elected under subsection (9) of section 83YA of the Finance Act 1989 to be treated for the purposes of that section as if it were, and
- (c) condition A or B is met,
and, if the relevant period of account is not the period of account ending with the accounting period (“the current period of account”), condition C is also met.
- (3) For the purposes of subsection (2), there is a relevant addition to a non-profit fund in the relevant period of account if an amount is shown as a transfer from non-technical account in line 32 of the Form 58 of the non-profit fund in the periodical return for that period of account.
- (4) Condition A is that there is a relevant book value election in relation to assets of a non-profit fund of the company.
- (5) For the purposes of subsection (4), there is a relevant book value election in relation to assets of a non-profit fund if an amount is shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account.
- (6) Condition B is that the company is party to arrangements the main purpose, or one of the main purposes, of which is to reduce the relevant admissible value of assets of a non-profit fund of the company, other than any structural assets.
- (7) For the purposes of subsection (6) (and section 434AZB), the “*relevant admissible value*” means the value reflected in line 89 of Form 13 of the periodical return for the current period of account.
- (8) Condition C is that the surplus arising since the last valuation shown in line 34 of the Form 58 of the non-profit fund, or any of the non-profit funds, in relation to which condition A or B is met in the periodical return for the current period of account is a negative amount.
#### Election by company paying dividend.
##### 434AZB
- (1) The amount of the relief allowable as mentioned in section 434AZA(1) is reduced by whichever of the following is the least—
- (a) the amount of the loss,
- (b) the amount specified in subsection (2), and
- (c) the amount specified in subsection (4).
- (2) The amount mentioned in subsection (1)(b) is—
- (a) where only condition A in section 434AZA is met, the relevant amount relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant amounts relating to them,
- (b) where only condition B is met, the amount of the relevant reduction relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant reductions relating to them, and
- (c) where both condition A and condition B are met, the aggregate of the amounts in paragraphs (a) and (b).
- (3) In subsection (2)—
- (a) “*relevant amount*”, in relation to a non-profit fund, means the amount shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account (as reduced by any amount which has had effect to reduce relief for losses for a previous accounting period), and
- (b) “*relevant reduction*”, in relation to a non-profit fund, means the reduction of the relevant admissible value of assets of the non-profit fund (other than structural assets) which is attributable to the arrangements (as so reduced).
- (4) The amount mentioned in subsection (1)(c) is—
- (a) if the relevant period of account is the current period of account, the amount referred to in section 434AZA(3) in the case of the non-profit fund, or of each of the non-profit funds, to which there has been a relevant addition in the relevant period of account, and
- (b) otherwise, so much of the amount shown in line 31 of the Form 58 of the non-profit fund or non-profit funds in the periodical return for the current period of account as is attributable to the amount so referred to.
##### 434AZC
- (1) For the purposes of sections 434AZA and 434AZB, a non-profit fund required to support a with-profits fund is to be treated as not being a non-profit fund.
- (2) Sections 434AZA and 434AZB apply to a non-profit part of a with-profits fund as if references to something shown in the Form 14 or Form 58 of the non-profit fund in a periodical return were to what would be so shown if there were a Form 14 or Form 58 of the non-profit part of the with-profits fund in the periodical return.
- (3) In sections 434AZA and 434AZB—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*structural assets*” has the same meaning as in section 83XA of the Finance Act 1989 (see subsection (3) of that section and any regulations made under it).
##### 434B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 436A
- (1) Profits arising to an insurance company from gross roll-up business—
- (a) are to be treated as income within Schedule D, and
- (b) are chargeable under Case VI of that Schedule.
- (2) For that purpose—
- (a) the gross roll-up business is to be treated separately, and
- (b) the profits from it are to be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) In making that computation, sections 82 and 82B to 83AB 83ZA of the Finance Act 1989 apply with the necessary modifications.
- (4) If in any accounting period an insurance company incurs a loss, to be computed on the same basis as the profits, arising from its gross roll-up business—
- (a) the loss must be set off against the amount of any profits chargeable under this section for any subsequent accounting period, and
- (b) accordingly, the amount of the company's profits so charged in any such accounting period is to be treated as reduced by the amount of the loss or so much of that amount as cannot be relieved under this section against profits of an earlier accounting period.
- (5) Section 396 does not apply to a loss incurred by an insurance company on its gross roll-up business.
- (6) No loss to which section 396 applies may be set off under subsection (4) above against the amount of any profits chargeable under this section.
- (7) This section does not apply in relation to an insurance company for an accounting period if the profits of its long-term business for the accounting period are charged to tax under Case I of Schedule D.
##### 436B
- (1) Gains referable to gross roll-up business are not chargeable gains.
- (2) For the purposes of this section “*gains referable to gross roll-up business*” means gains which—
- (a) accrue to an insurance company on the disposal by it of assets of its long-term insurance fund, and
- (b) are referable (in accordance with section 432A) to gross roll-up business.
##### 437A
- (1) For the purposes of section 437 an annuity is a steep-reduction annuity if—
- (a) the amount of any payment in respect of the annuity (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives;
- (b) the annuitant is entitled in respect of the annuity to payments of different amounts at different times; and
- (c) those payments include a payment (“*a reduced payment*”) of an amount which is substantially smaller than the amount of at least one of the earlier payments in respect of that annuity to which the annuitant is entitled.
- (2) Where there are different intervals between payments to which an annuitant is entitled in respect of any annuity, the question whether or not the conditions in subsection (1)(b) and (c) above are satisfied in the case of that annuity shall be determined by assuming—
- (a) that the annuitant’s entitlement, after the first payment, to payments in respect of that annuity is an entitlement to payments at yearly intervals on the anniversary of the first payment; and
- (b) that the amount to which the annuitant is assumed to be entitled on each such anniversary is equal to the annuitant’s assumed entitlement for the year ending with that anniversary.
- (3) For the purposes of subsection (2) above an annuitant’s assumed entitlement for any year shall be determined as follows—
- (a) the annuitant’s entitlement to each payment in respect of the annuity shall be taken to accrue at a constant rate during the interval between the previous payment and that payment; and
- (b) his assumed entitlement for any year shall be taken to be equal to the aggregate of the amounts which, in accordance with paragraph (a) above, are treated as accruing in that year.
- (4) In the case of an annuity to which subsection (2) above applies, the reference in section 437(1CB)(a) to the making of a reduced payment shall be construed as if it were a reference to the making of a payment in respect of that annuity which (applying subsection (3)(a) above) is taken to accrue at a rate that is substantially less than the rate at which at least one of the earlier payments in respect of that annuity is taken to accrue.
- (5) Where—
- (a) any question arises for the purposes of this section whether the amount of any payment in respect of any annuity—
- (i) is substantially smaller than the amount of, or
- (ii) accrues at a rate substantially less than,
an earlier payment in respect of that annuity, and
- (b) the annuitant or, as the case may be, every annuitant is an individual who is beneficially entitled to all the rights conferred on him as such an annuitant,
that question shall be determined without regard to so much of the difference between the amounts or rates as is referable to a reduction falling to be made as a result of the occurrence of a death.
- (6) Where the amount of any one or more of the payments to which an annuitant is entitled in respect of an annuity depends on any contingency, his entitlement to payments in respect of that annuity shall be determined for the purposes of section 437(1CA) to (1CC) and this section according to whatever (applying any relevant actuarial principles) is the most likely outcome in relation to that contingency.
- (7) Where any agreement or arrangement has effect for varying the rights of an annuitant in relation to a payment in respect of any annuity, that payment shall be taken, for the purposes of section 437(1CA) to (1CC) and this section, to be a payment of the amount to which the annuitant is entitled in accordance with that agreement or arrangement.
- (8) References in this section to a contingency include references to a contingency that consists wholly or partly in the exercise by any person of any option.
##### 438B
- (1) Where an asset held by an insurance company as an asset of its long-term insurance fund is held by the company as a member of a property investment LLP, the policy holders’ share of any income arising from, or chargeable gains accruing on the disposal of, the asset which—
- (a) is attributable to the company, and
- (b) would otherwise be referable by virtue of section 432A to pension business,
shall be treated for the purposes of the Corporation Tax Acts as referable to basic life assurance and general annuity business.
- (2) For the purposes of this section the property business of the insurance company for the purposes of which the asset is held shall be treated as a separate business.
- (3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business, it shall be treated as carrying on such business if any income or chargeable gains of the company are treated as referable to the business by virtue of subsection (1) above.
- (4) A company may be charged to tax by virtue of this section—
- (a) notwithstanding section 439A, and
- (b) whether or not the income or chargeable gains to which subsection (1) above applies is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.
- (5) The policy holders’ share of income or chargeable gains to which subsection (1) above applies—
- (a) shall not be treated as relevant profits for the purposes of section 88 of the Finance Act 1989 (corporation tax on policy holders’ fraction of profits), . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
but the whole of the income or gains to which that subsection applies shall be chargeable to tax at the rate provided by that section.
- (6) So far as income is brought into account as mentioned in section 83(2) of the Finance Act 1989, sections 432B to 432F (apportionment of receipts brought into account) have effect as if subsection (1) above did not apply.
##### 438C
- (1) For the purposes of section 438B the policy holders’ share of any income or chargeable gains to which subsection (1) of that section applies is what remains after deducting the shareholders’ share.
- (2) The shareholders’ share is found by applying to the whole the fraction—
$$AB$where—A is the amount of the profits of the company for the period which are chargeable to tax under section 436; andB is an amount equal to the excess of—(a) the amount taken into account as receipts of the company in computing those profits (apart from premiums and sums received by virtue of a claim under a reinsurance contract), over(b) the amounts taken into account as expenses in computing those profits.$
- (3) Where there is no such excess as is mentioned in subsection (2) above, or where the profits are greater than any excess, the whole of the income or gains is treated as the shareholders’ share.
- (4) Subject to that, where there are no profits none of the income or gains is treated as the shareholders’ share.
##### 439A
If a company does not carry on life assurance business other than reinsurance business, and none of that business is of a type excluded from this section by regulations made by the Board, the profits of that business shall be charged to tax in accordance with Case I of Schedule D and not otherwise.
##### 439B
- (1) Where a company carries on life reinsurance business and the profits arising from that business are not charged to tax in accordance with the provisions applicable to Case I of Schedule D, then, subject as follows, those profits shall be treated as income within Schedule D and be chargeable to tax under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, the profits from it shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (2) Subsection (1) above does not apply to so much of reinsurance business of any description excluded from that subsection by regulations made by the Board.
- (3) In making the computation referred to in subsection (1) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . , and
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from life reinsurance business in any previous accounting period beginning on or after 1st January 1995.
- (4) Section 396 shall not be taken to apply to a loss incurred by a company on life reinsurance business.
- (5) Nothing in section 128 or 399(1) shall affect the operation of this section.
- (6) Gains accruing to a company which are referable (in accordance with section 432A) to its life reinsurance business shall not be chargeable gains.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440B
- (1) The following provisions apply where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Section 440(1) and (2) apply as if the only categories set out in subsection (4) of that section were—
- (a) assets of the long-term insurance fund, and
- (b) other assets.
- (4) Section 440A applies as if for paragraphs (a) to (e) of subsection (2) there were substituted—
- (”) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of long-term business, shall be treated for the purposes of corporation tax as a separate holding linked solely to that business, and
- (b) any remaining securities shall be treated for those purposes as a separate holding which is not of the description mentioned in the preceding paragraph.”.
- (5) Section 212(1) of the 1992 Act does not apply, but without prejudice to the bringing into account of any amounts deferred under section 213(1) or 214A(2) of that Act from any accounting period beginning before 1st January 1995.
##### 440C
- (1) Subsection (2) makes provision for a case where—
- (a) subsection (4) of section 431G applies in relation to the profits of the life assurance business of an insurance company for any accounting period, but
- (b) the profits of that business for a succeeding accounting period fall to be charged to tax in accordance with Case I of Schedule D by virtue of subsection (3) of that section.
- (2) The loss referred to in section 431G(4)(b) (less any loss for the same accounting period set off under section 436A for any intervening accounting period and any amount deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989) may be set off under section 393 against profits of that succeeding accounting period (without being reduced in accordance with section 434A(2)(a)).
- (3) In determining whether any loss has been set off under section 436A for any intervening accounting period, or whether any amount has been deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989, losses of earlier accounting periods are to be assumed to be set off before those of later accounting periods.
- (4) Subsection (5) makes provision for a case where—
- (a) a loss arises to an insurance company for an accounting period for which the profits of its life assurance business fall to be charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3)(b),
- (b) the profits of that business for a subsequent accounting period are charged to tax under the I minus E basis, and
- (c) had those profits (instead) been charged to tax in accordance with Case I of Schedule D, any of that loss would have been available to be set off against them under section 393.
- (5) The loss is to be treated for the purposes of the operation of section 436A in relation to the subsequent accounting period as if it were a loss arising from its gross roll-up business in the accounting period in which it arose.
- (6) Subsections (7) and (8) make provision for a case where—
- (a) the profits of the life assurance business of an insurance company for an accounting period are charged to tax under the I minus E basis,
- (b) the profits of that business for its next accounting period fall to be charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3), and
- (c) that prevents the giving of relief in accordance with section 86(8) of the Finance Act 1989 (acquisition expenses relieved in fractions under section 76).
- (7) Any relief which would have been so given in—
- (a) the next accounting period, or
- (b) any subsequent accounting period for which the profits of the company's life assurance business continue to be charged to tax in accordance with Case I of Schedule D,
may be given by set-off against any gains treated as accruing under section 213(1) of the 1992 Act at the end of the accounting period.
- (8) But if the profits of the company's life assurance business for a subsequent accounting period are charged to tax under the I minus E basis, any relief not previously given under subsection (7) is to be treated for the purposes of the operation of section 76 in relation to the first subsequent accounting period for which profits are so charged as if it were an amount which is to be relieved under that section by virtue of section 86(8) and (9) of the Finance Act 1989.
#### Returns.
##### 440D
Schedule 19ABA (which makes modifications of this Act in relation to BLAGAB group reinsurers) shall have effect.
##### 441B
- (1) This section applies to land in the United Kingdom which—
- (a) is held by a company as an asset linked to the company’s overseas life assurance business, or
- (b) is held by a company which is charged to tax under Case I of Schedule D in respect of its life assurance business as an asset by reference to the value of which benefits under any policy or contract are to be determined, where the policy or contract (or, in the case of a reinsurance contract, the underlying policy or contract) is held by a person not residing in the United Kingdom.
- (2) Income arising from land to which this section applies shall be treated for the purposes of this Chapter as referable to basic life assurance and general annuity business.
- (2A) For the purposes of subsection (2) above a Schedule A business for the exploitation of any land to which this section applies shall be treated as a separate business from any other such business.
- (3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business it shall be treated as carrying on such business if any income of the company is treated as referable to such business by subsection (2) above.
- (4) A company may be charged to tax by virtue of this section—
- (a) notwithstanding section 439A, and
- (b) whether or not the income to which subsection (2) above relates is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.
- (5) In this section “*land*” has the same meaning as in Schedule 19AA.
##### 442A
- (1) Where an insurance company reinsures any risk in respect of a policy or contract attributable to its basic life assurance and general annuity business, the investment return on the policy or contract shall be treated as accruing to the company while the risk remains reinsured by the company under the reinsurance arrangement and shall be charged to tax under Case VI of Schedule D.
- (2) The Board may make provision by regulations as to the amount of investment return to be treated as accruing in each accounting period during which the reinsurance arrangement is in force.
- (3) The regulations may, in particular, provide that the investment return to be treated as accruing to the company in respect of a policy or contract in any accounting period shall be calculated by reference to—
- (a) the aggregate of the sums paid by the company to the reinsurer during that accounting period and any earlier accounting periods by way of premium or otherwise;
- (b) the aggregate of the sums paid by the reinsurer to the company during that accounting period and any earlier accounting periods by way of commission or otherwise;
- (c) the aggregate amount of the net investment return treated as accruing to the company in any earlier accounting periods, that is to say, net of tax at such rate as may be prescribed; and
- (d) such percentage rate of return as may be prescribed.
- (3A) Where a transfer of the reinsurance arrangement from one insurance company (“*the transferor*”) to another (“*the transferee*”) is effected by novation or an insurance business transfer scheme, for the purpose of calculating the investment return to be treated as accruing to the transferee in respect of the policy or contract after the transfer, the references to the company in subsection (3)(a), (b) and (c) above include (as well as the transferee)—
- (a) the transferor, and
- (b) any insurance company from which the reinsurance arrangement was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.
- (4) The regulations shall provide that the amount of investment return to be treated as accruing . . . in respect of a policy or contract in the final accounting period during which the policy or contract is in force is the amount, ascertained in accordance with regulations, by which the profit over the whole period during which the policy or contract, and the reinsurance arrangement, were in force exceeds the aggregate of the amounts treated as accruing in earlier accounting periods.
- (5) Regulations under this section—
- (a) may exclude from the operation of this section such descriptions of insurance company, such descriptions of policies or contracts and such descriptions of reinsurance arrangements as may be prescribed;
- (b) may make such supplementary provision as to the ascertainment of the investment return to be treated as accruing to the company as appears to the Board to be appropriate, including provision requiring payments made during an accounting period to be treated as made on such date or dates as may be prescribed; and
- (c) may make different provision for different cases or descriptions of case.
- (6) In this section “*prescribed*” means prescribed by regulations under this section.
##### 444AZA
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in respect of that business under the I minus E basis,
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3), and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits chargeable under section 436A (a “Case VI loss”) shall instead be treated as a loss of the transferee (a “Case I loss”) available to be set off against GRBP in relation to a period of account.
- (3) For the purposes of subsection (2) above “*GRBP*”, in relation to a period of account, is—
$P×GRBTLTL$
where—
- *P* is the amount of such profits of the transferee's life assurance business for the period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable),
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of any Case VI loss to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and the transferee shall be entitled to appear and be heard or to make representations in writing.
#### Application of sections 251B and 251C
##### 444AZB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3),
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under the I minus E basis, and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) The relevant fraction of any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits of that business (a “Case I loss”) shall instead be treated as a loss of the transferee (a “Case VI loss”) available to be set off against the amount of such profits chargeable under section 436A for a period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable).
- (3) For the purposes of subsection (2) above “*the relevant fraction*”, in relation to a period of account, is—
$GRBTLTL$
where—
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of the amount of any Case I loss to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and the transferee shall be entitled to appear and be heard or to make representations in writing.
##### 444AA
- (1) This section applies where an insurance business transfer scheme has effect to transfer the whole of the long-term business of one person (“*the transferor*”).
- (2) Where the last period covered by a periodical return of the transferor ends otherwise than immediately before the transfer, there is to be deemed for the purposes of corporation tax to be a periodical return of the transferor covering the period—
- (a) beginning immediately after the last period ending before the transfer which is covered by an actual periodical return of the transferor, and
- (b) ending immediately before the transfer,
containing such entries as would have been included in an actual periodical return of the transferor covering that period (and so making that period a period of account of the transferor).
- (3) Where the last period covered by a periodical return of the transferor (whether or not by virtue of subsection (2) above) ends immediately before the transfer, there is to be deemed for the relevant purpose to be a periodical return of the transferor—
- (a) covering the time of the transfer, and
- (b) containing such entries as would have been included in an actual periodical return covering the time of the transfer,
(and so making the time of the transfer a period of account of the transferor for the relevant purpose).
- (4) Where the last period covered by a periodical return of the transferor ends after the transfer, the periodical return covering that period is to be ignored for all purposes of corporation tax other than the relevant purpose.
- (5) In this section “*the relevant purpose*” means determining for the purposes of section 83(2B) of the Finance Act 1989 whether a transfer is brought into account as part of total expenditure.
- (6) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
- (7) Where this section applies in relation to a transfer in a case in which the transferor continues, after the transfer, to carry on insurance business which is not long-term business—
- (a) references in this section to the last period covered by a periodical return (or deemed periodical return) of the transferor shall be taken to be references to the last period covered by a periodical return (or deemed periodical return) of the transferor containing entries relating to long-term business;
- (b) subsection (4) above is to be read as if after “other than” there were inserted the purposes of sections 444BA to 444BD and.
##### 444AB
- (1) This section applies where, immediately after an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to one or more others (“*the transferee*” or “*the transferees*”), the transferor—
- (a) does not carry on long-term business, but
- (b) holds assets which, immediately before the transfer, were assets of its long-term insurance fund.
- (2) The transferor shall be charged to tax under Case VI of Schedule D in respect of the taxable amount as if it had been received by the transferor during the accounting period beginning immediately after the day of the transfer.
- (3) If the transferor was charged to tax on the profits of its life assurance business under Case I of Schedule D for the accounting period ending immediately before the transfer, the taxable amount is the whole of the previously untaxed amount.
- (4) Otherwise, the taxable amount is the non-BLAGAB fraction of the previously untaxed amount.
- (5) The previously untaxed amount is the lesser of—
- (a) if there are no retained liabilities, the fair value of the retained assets or, if there are, so much of the fair value of the retained assets as exceeds the amount of the retained liabilities, and
- (b) the amount by which the fair value of the assets of the transferor’s long-term insurance fund immediately before the transfer exceeds the amount of the relevant pre-transfer liabilities.
- (6) In subsection (5) above “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount.
- (6A) In subsection (5) above—
- (a) “*the retained assets*” means such of the assets held by the transferor immediately after the transfer as were assets of its long-term insurance fund immediately before the transfer; and
- (b) “*the retained liabilities*” means such of the liabilities of the transferor immediately after the transfer as were included in column 1 of line 14, 17, 22, 31 or 38 of Form 14 in the periodical return of the transferor covering the period of account ending immediately before the transfer.
- (7) Subject to subsection (8) below, the amount of the relevant pre-transfer liabilities is the aggregate of the amounts shown in column 1 of lines 14 and 49 of Form 14 in the periodical return of the transferor covering the period of account ending immediately before the transfer.
- (8) If the amount of the liabilities transferred exceeds the value of the assets so transferred, as brought into account for the first period of account of the transferee (or any of the transferees) ending after the transfer, the amount of the relevant pre-transfer liabilities is the amount arrived at by deducting the excess from the aggregate of the amounts shown as mentioned in subsection (7) above.
- (9) For the purposes of subsection (4) above the non-BLAGAB fraction of the previously untaxed amount is the fraction of which—
- (a) the numerator is the amount of the liabilities transferred, apart from those which are liabilities of basic life assurance and general annuity business, and
- (b) the denominator is the amount of the liabilities transferred.
- (10) References in this section to assets held by the transferor after the transfer do not include any held on trust for the transferee or any of the transferees.
- (11) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444ABA
- (1) This section applies where—
- (a) section 444AB applies in relation to a transfer in the case of which there are retained liabilities, and
- (b) in any accounting period of the transferor beginning after the day of the transfer there is a reduction in the amount of the retained liabilities occasioned otherwise than by the making of a payment in or towards their discharge.
- (2) The transferor shall be charged to tax under Case VI of Schedule D in respect of the taxable amount as if it had been received by the transferor in the accounting period in which the reduction occurs.
- (3) If the transferor was charged to tax on the profits of its life assurance business under Case I of Schedule D for the accounting period ending immediately before the transfer, the taxable amount is the whole amount of the reduction.
- (4) Otherwise the taxable amount is the non-BLAGAB fraction of the amount of the reduction.
- (5) The non-BLAGAB fraction of the amount of the reduction is the fraction of which—
- (a) the numerator is the amount of the liabilities transferred, apart from those which are liabilities of basic life assurance and general annuity business, and
- (b) the denominator is the amount of the liabilities transferred.
- (6) Where in any accounting period of the transferor beginning after the transfer there is an increase in the amount of the retained liabilities, this section applies in relation to subsequent accounting periods of the transferor as if the amount of the retained liabilities were reduced by the amount of the increase.
- (7) Where an amount is shown as post-transfer reduction liabilities in the transferor’s accounts for any accounting period beginning after the transfer, this section applies as if the amount of the retained liabilities at the end of that accounting period (and the beginning of the next) were increased by the amount so shown.
- (8) In subsection (7) above “*post-transfer reduction liabilities*” means liabilities of the transferor to make payments to relevant persons which, in accordance with the terms of the insurance business transfer scheme, have arisen in consequence of a reduction in the amount of the retained liabilities at any time after the transfer.
- (9) In subsection (8) above “*relevant persons*” means—
- (a) if the transferor’s life assurance business immediately before the transfer was mutual business, persons who were policy holders or annuitants, or members of the transferor, at that time, and
- (b) in any other case, persons who were policy holders or annuitants at that time.
##### 444ABAA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are non-profit fund transferred assets is—
$$FVA-(ABTO+TL)$where—FVA is the fair value of the assets on the transfer date,ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andTL is the amount of any non-profit fund transferred liabilities which are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38, but not in line 61, in Form 14 in the periodical return for the period of account of the transferor ending (or treated as ending by section 444AA) immediately before the transfer date or, if there is no period of account of the transferor so ending (or treated as so ending), the amount of any liabilities which would be so shown if one did.$
- (2) In subsection (1) “*non-profit fund transferred liabilities*” means such of the liabilities of the transferor's long-term insurance fund as are transferred from the transferor to the transferee by the insurance business transfer scheme and were, immediately before their transfer, liabilities of a non-profit fund of the transferor.
- (3) See section 444AA for the meaning of “the transfer date” in this section.
#### Interpretation of Part VI.
##### 444ABB
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are retained assets is the lesser of FVA and UTA, where—
- (a) FVA is the fair value of the assets on the transfer date, and
- (b) UTA is the amount by which the fair value of the assets of the long-term insurance fund of the transferor immediately before the transfer date exceeds the amount shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor covering the transfer date.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABBA
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, the transferee (and not the transferor) is chargeable to any amount of additional corporation tax to which the transferor would otherwise be chargeable by virtue of section 444AB(4) in relation to relevant non-transferred assets.
- (3) An election under subsection (2) above—
- (a) is to be irrevocable, and
- (b) is to be made by notice to an officer of Revenue and Customs no later than the end of the period of 90 days beginning with the day following the transfer date,
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer. Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) Where an election under subsection (2) above has been made, the transferor must inform the transferee of—
- (a) the amount of any additional corporation tax to which the transferor considers the election to apply, and
- (b) the day on which that tax is due and payable,
no later than the end of the period of 8 months beginning with the day following the transfer date.
- (5) Tax chargeable on the transferee by virtue of an election under subsection (2) above—
- (a) is due in accordance with section 59D of the Management Act on the day on which it would have been due if no election had been made, and
- (b) for the purposes of that section, is to be treated as tax payable by the transferor (and not as tax payable by the transferee).
- (6) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABC
- (1) This section applies where an insurance business transfer scheme has effect to transfer part (but not the whole or substantially the whole) of the long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) That condition is that any of the assets of the transferor's long-term insurance fund which are transferred from the transferor to the transferee by the insurance business transfer scheme are not, immediately after their transfer—
- (a) if the transferee is an insurance company, assets of the transferee's long-term insurance fund, or
- (b) if the transferee is not an insurance company, assets of a with-profits fund of the transferee,
(“relevant non-transferred assets”).
- (3) The relevant amount in relation to the relevant non-transferred assets (see subsection (4) below) is to be taken into account under section 83(2) of the Finance Act 1989 as an increase in value of the assets of the long-term insurance fund of the transferor for the period of account covering the transfer date.
- (4) The relevant amount in relation to the relevant non-transferred assets is—
$$FVA-BTO$whereFVA is the fair value of the assets on the transfer date, andBTO is any amount brought into account in respect of the assets as a business transfer-out.$
- (5) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABD
- (1) Any profits representing the amount by which—
- (a) the value of the liabilities transferred by an insurance business transfer scheme, exceeds
- (b) the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in line 32 of the periodical return of the transferor for the period of account of the transferor including the transfer date,
are to be taken into account as profits of that period of account.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AC
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If—
- (a) the transferee's line 31 amount in relation to the transfer, exceeds
- (b) the aggregate amount of the liabilities to policy holders and annuitants transferred to the transferee and of any relevant debts,
the excess is not to be regarded as a business transfer-in of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989.
- (2A) Subject to subsections (2C) and (2D) below, subsection (2B) below applies if—
- (a) the aggregate amount of the liabilities to policy holders and annuitants transferred to the transferee and of any relevant debts, exceeds
- (b) the transferee's line 31 amount in relation to the transfer.
- (2B) Where this subsection applies—
- (a) the life assurance part of the excess is to be taken into account as a receipt of the transferee in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of its life assurance business for the period of account of the transferee in which the transfer takes place (“*the relevant period of account*”); and
- (b) the relevant proportion of the excess is to be taken into account as a receipt of the transferee in so computing the profits of each category of its life assurance business for the relevant period of account;
and, for this purpose, “*the life assurance part of the excess*” means the proportion of the excess that the liabilities of the transferee's life assurance business that are transferred bear to the total liabilities transferred and “*the relevant proportion*”, in relation to a category of the transferee's life assurance business, is the proportion that the liabilities of that category that are transferred bear to the total liabilities transferred.
- (2C) Subsection (2B) above does not require the life assurance part of the excess to be taken into account as a receipt of the transferee in so computing the profits of its life assurance business for the relevant period of account if—
- (a) transferred liabilities of an aggregate amount equal to the life assurance part of the excess are not taken into account in so computing those profits for that period of account, and
- (b) the amount of the closing liabilities of that period of account is taken into account as opening liabilities in so computing those profits for the next period of account.
- (2D) Subsection (2B) above does not require the relevant proportion of the excess to be taken into account as a receipt of the transferee in so computing the profits of a category of its life assurance business for the relevant period of account if—
- (a) transferred liabilities of an aggregate amount equal to the relevant proportion of the excess are not taken into account in so computing those profits for that period of account, and
- (b) the amount of the closing liabilities of that period of account is taken into account as opening liabilities in so computing those profits for the next period of account.
- (2E) In subsections (2C)(a) and (2D)(a) above “*transferred liabilities*” means—
- (a) liabilities to policy holders or annuitants at the end of the relevant period of account that were transferred to the transferee, and
- (b) payments made to discharge, during that period of account, liabilities to policy holders or annuitants that were transferred to the transferee.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In this section “*relevant debts*” means debts which become debts of the transferee's long-term insurance fund as a result of the transfer.
- (5) But if—
- (a) the aggregate amount of any relevant reinsurance amounts and of the fair value, as at the date of the transfer, of the assets which become assets of the transferee's long-term insurance fund as a result of the transfer, exceeds
- (b) the transferee's line 31 amount in relation to the transfer,
the amount of any relevant debts for the purposes of this section is to be reduced (but not below nil) by the excess.
- (5A) In subsection (5)(a) above “*relevant reinsurance amounts*” means—
- (a) amounts which are comprised in line 16 of Form 14 in the periodical return of the transferor covering the period ending immediately before the transfer (or would be so comprised if the transferor drew up a periodical return covering that period), or
- (b) other amounts which arise under contracts of reinsurance in relation to which the reinsurer is the transferee and which, as at the date of the transfer, have fallen due to the transferor,
and which (in either case) do not become assets of the transferee's long-term insurance fund as a result of the transfer because (and only because) they arise under contracts of reinsurance in relation to which the reinsurer is the transferee.
- (6) In determining the amount of the liabilities transferred for the purposes of this section, there is to be disregarded any reduction in the transferee's liabilities resulting from reinsurance under a contract of reinsurance which is a relevant financial reinsurance contract (within the meaning of section 82C of the Finance Act 1989).
- (7) But where—
- (a) such a reduction results from reinsurance under a contract which was entered into by the transferor as cedant before the day on which the transfer takes place, and
- (b) the transferor's rights and obligations under the contract are transferred to the transferee under the transfer,
the amount of the reduction that would (apart from this subsection) be disregarded under subsection (6) above shall be reduced (but not below nil) by the amount given by subsection (8) below or, if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the amount by which the liabilities at the end of the closing period which fell to be taken into account in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the transferor's business for that period were reduced as a result of reinsurance under the contract.
- (9) The amount given by this subsection is the amount given by paragraph (a) below reduced (but not below nil) by the amount given by paragraph (b) below—
- (a) the amount given by this paragraph is the aggregate of the relevant amounts for any accounting period, and for this purpose the relevant amount for an accounting period is the amount in sub-paragraph (i) or (ii) below or, where applicable, the aggregate of those amounts—
- (i) the amount by which the profits of the transferor's business, computed in accordance with the provisions of this Act applicable to Case I of Schedule D, were increased for that accounting period as a result of reinsurance under the contract;
- (ii) the amount by which the losses of the transferor's business, so computed, were reduced for that accounting period as a result of reinsurance under the contract; and
- (b) the amount given by this paragraph is the aggregate of the relevant amounts for any accounting period, and for this purpose the relevant amount for an accounting period is the amount in sub-paragraph (i) or (ii) below or, where applicable, the aggregate of those amounts—
- (i) the amount by which the profits of the transferor's business, so computed, were reduced for that accounting period as a result of a reduction in reinsurance under the contract;
- (ii) the amount by which the losses of the transferor's business, so computed, were increased for that accounting period as a result of a reduction in reinsurance under the contract.
- (10) In subsections (8) and (9) above—
- “*the closing period*” means the accounting period of the transferor ending with the day on which the transfer takes place;
- “the transferor's business” means—the transferor's life assurance business, andany category of its life assurance business to which the liabilities relate.
- (11) For the purposes of this section and section 444ACA—
- “*fair value*” has the meaning given by section 444AB(6);
- “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444ACZA
- (1) This section applies where an insurance business transfer scheme has effect to transfer part (but not the whole or substantially the whole) of the long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) The condition is that the transferor did not carry on life assurance business that is mutual business during the period of account of the transferor covering the transfer date.
- (3) The amount which (apart from this section) would be regarded as other income of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989 for the period of account of the transferee which includes the transfer date is to be reduced by an amount equal to the transferred surplus.
- (4) In subsection (4) above “*the transferred surplus*” means such part of the amount shown (or treated as shown) in line 13 of Form 14 in the periodical return of the transferor covering the last period of account of the transferor ending before the transfer date as it is just and reasonable to regard as being attributable to the transfer.
- (5) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ACA
- (1) This section applies where an insurance business transfer scheme (see section 444AC(11)) has effect to transfer long-term business from one company (“*the transferor*”) to another (“*the transferee*”).
- (2) If—
- (a) immediately before the transfer, the assets of the long-term insurance fund of the transferee comprise or include relevant shares or an interest in such shares, and
- (b) the fair value (see section 444AC(11)) of the relevant shares, or of that interest, is reduced (whether or not to nil) as a result of the transfer,
an amount equal to that reduction in fair value is to be taken into account under section 83(2) of the Finance Act 1989 as a receipt of the transferee of the period of account of the transferee in which the transfer takes place.
- (3) But if—
- (a) the assets transferred to the transferee under the transfer comprise or include assets (“*the relevant assets*”) which, immediately before the transfer,—
- (i) were assets of the transferor, but
- (ii) were not assets of the transferor's long-term insurance fund, and
- (b) in respect of the transfer of the relevant assets, an amount is—
- (i) brought into account by the transferee as other income of the transferee of the period of account of the transferee in which the transfer takes place, and
- (ii) taken into account in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the transferee's life assurance business and any category of its life assurance business to which the amount is referable,
the amount taken into account under section 83(2) of the Finance Act 1989 by virtue of subsection (2) above shall be reduced (but not below nil) by an amount equal to the amount referred to in paragraph (b) above.
- (4) In subsection (2) above “*relevant shares*” means—
- (a) some or all of the shares in the transferor, or
- (b) some or all of the shares in a company (whether or not an insurance company) which owns, directly or indirectly,—
- (i) some or all of the shares in the transferor, or
- (ii) an interest in some or all of those shares.
- (5) In subsection (4) above “*shares*”, in relation to a company, includes any interests in the company possessed by members of the company.
##### 444AD
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, section 83(2B) of the Finance Act 1989 does not apply to the transferor by reason of the transfer as respects so much of the value of the assets to which it would otherwise so apply as does not exceed the amount specified in subsection (4) below.
- (3) An election under subsection (2) above—
- (a) is irrevocable, and
- (b) is to be made by notice to an officer of the Board no later than the end of the period of 28 days beginning with the day following that on which the transfer takes place;
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer.
Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) The amount referred to in subsection (2) above is the amount by which—
- (a) the fair value of such of the assets of the long-term insurance fund of the transferee immediately after the transfer as were assets of the transferor’s long-term insurance fund immediately before the transfer, is greater than
- (b) the transferee's line 31 amount in relation to the transfer representing the transferor’s long-term insurance fund.
- (5) In subsection (4) above “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount.
- (6) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444AE
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If a contingent loan made to the transferor (within the meaning of subsection (1) of section 83ZA of the Finance Act 1989) is transferred to the transferee, that section has effect as if—
- (a) the contingent loan had become repayable by the transferor immediately before the transfer, and
- (b) the contingent loan were made to the transferee immediately after the transfer.
##### 444AEA
- (1) This section applies where—
- (a) as a result of the whole or any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a Case I advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of the whole or any part of the transfer scheme arrangements is the obtaining of that Case I advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” means an insurance business transfer scheme (“*the relevant transfer scheme*”) together with any relevant associated operations.
- (3) If a Case I advantage is obtained by the transferor (see subsection (1) of section 444AEB), the amount of the transferor's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor for the period of account of the transferor covering the transfer date.
- (4) If a Case I advantage is obtained by the transferee (see subsection (1) of section 444AEC), the amount of the transferee's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the first period of account of the transferee ending after the transfer date.
- (5) In this section and sections 444AEB and 444AEC “*relevant associated operations*”, in relation to the relevant transfer scheme, means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance,
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee, or
- (d) any surplus-increasing transfer of assets,
which is effected in connection with the relevant transfer scheme.
- (6) In subsection (5) above—
- “*dependant*” and “*insurance undertaking*” have the same meaning as in the Insurance Prudential Sourcebook, and
- “*surplus-increasing transfer of assets*” means a transfer of assets of the transferor's long-term insurance fund to the transferee which is not brought into account for any period of account of the transferee but increases the amount of total surplus shown in line 39 of Form 58 in any periodical return of the transferee.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AEB
- (1) A Case I advantage is obtained by the transferor if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are less than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are greater than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements.
- (2) If a Case I advantage is obtained by the transferor, the amount of the Case I advantage is the aggregate of—
- (a) the amounts (if any) by which Case I profits for each period of account to which this section applies are less than they would be but for the transfer scheme arrangements or part, and
- (b) the amounts (if any) by which Case I losses for each such period of account are greater than they would be but for the transfer scheme arrangements or part.
- (3) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (4) In this section and section 444AEC “Case I profits” and “*Case I losses*” means profits and losses computed in accordance with the provisions of Case I of Schedule D.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AEC
- (1) A Case I advantage is obtained by the transferee if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are less than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are greater than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements.
- (2) If a Case I advantage is obtained by the transferee, the amount of the Case I advantage is—
- (a) the amount by which Case I profits for each period of account to which this section applies are less than they would be but for the transfer scheme arrangements or part, or
- (b) the amount by which Case I losses for each such period of account are greater than they would be but for the transfer scheme arrangements or part.
- (3) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (4) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “Case I profits” and “Case I losses”, in this section.
##### 444AECA
- (1) This section applies where—
- (a) as a result of any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a Case I advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of that part of the transfer scheme arrangements is the obtaining of that Case I advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” has the same meaning as in section 444AEA.
- (3) If a Case I advantage is obtained by the transferor (see subsection (1) of section 444AECB), the amount of the transferor's Case I advantage (see subsection (3) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a Case I advantage is obtained by the transferee (see subsection (1) of section 444AECC), the amount of the transferee's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AECB
- (1) A Case I advantage is obtained by the transferor if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the Case I profits to be greater or the Case I losses to be less than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a Case I advantage is obtained by the transferor.
- (3) If a Case I advantage is obtained by the transferor, the amount of the Case I advantage is the aggregate of—
- (a) the amounts (if any) by which Case I profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, and
- (b) the amounts (if any) by which Case I losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (5) In this section and section 444AECC “*the relevant part of the arrangements*” means, in relation to a Case I advantage, the part of the transfer scheme arrangements as a result of which the Case I advantage is obtained.
- (6) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “Case I profits” and “Case I losses” and “the relevant time”, in this section.
##### 444AECC
- (1) A Case I advantage is obtained by the transferee if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the Case I profits to be greater, or the Case I losses to be less, than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a Case I advantage is obtained by the transferor.
- (3) If a Case I advantage is obtained by the transferee, the amount of the Case I advantage is—
- (a) the amount by which Case I profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, or
- (b) the amount by which Case I losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (5) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations”, section 444AEB for the meaning of “Case I profits” and “Case I losses” and “the relevant time” and section 444AECB for the meaning of “the relevant part of the arrangements”, in this section.
##### 444AED
- (1) Section 444AEA does not apply in relation to the transferor or the transferee if, on an application under this section, the Commissioners for Her Majesty's Revenue and Customs (“the HMRC Commissioners”) have given a notice under subsection (2) below.
- (2) A notice under this subsection is a notice stating that the HMRC Commissioners are satisfied—
- (a) that the obtaining of a Case I advantage by the applicant is not the sole or main purpose of the whole or any part of the transfer scheme arrangements, or
- (b) that the transferor and the transferee are members of the same group of companies and that there is no advantage to the group arising from any Case I advantage obtained by the transferor or by the transferee.
- (3) For the purposes of this section there is no advantage to a group arising from any Case I advantage obtained by the transferor or by the transferee if—
- (a) as a result of transfer scheme arrangements, there is an increase in the liability to corporation tax of one or more companies which are members of the group of companies, and
- (b) the amount (or aggregate amount) of that increase is not less than the reduction in the liability to corporation tax of the transferor or the transferee (or both) arising from the obtaining of the Case I advantage.
- (4) An application under this section must be in writing and contain particulars of the transfer scheme arrangements.
- (5) The HMRC Commissioners may by notice require the applicant to provide further particulars in order to enable them to determine the application.
- (6) A requirement may be imposed under subsection (5) above within 30 days of the receipt of the application or of any further particulars required under that subsection.
- (7) If a notice under subsection (5) above is not complied with within 30 days or such longer period as the HMRC Commissioners may allow, they need not proceed further on the application.
- (8) The HMRC Commissioners must give notice of their decision on an application under this section to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of that notice being complied with.
- (9) If the HMRC Commissioners—
- (a) give notice to the applicant under subsection (8) above that they are not satisfied as mentioned in subsection (2) above, or
- (b) do not comply with subsection (8) above,
the applicant may require them to transmit the application to the Special Commissioners.
- (10) A requirement under subsection (9) above must be imposed within 30 days of the giving of the notice or the failure to comply and must be accompanied by any notice given under subsection (5) above and further particulars provided pursuant to any such notice.
- (11) Any notice given by the Special Commissioners has effect for the purposes of subsection (1) above as if it were given by the HMRC Commissioners.
- (12) If any particulars provided under this section do not fully and accurately disclose all facts and considerations material for the decision of the HMRC Commissioners or the Special Commissioners, any resulting notice that they are satisfied as mentioned in subsection (2) above is void.
- (13) For the purposes of this section two companies are members of the same group of companies if they are for the purposes of Chapter 4 of Part 10.
### Surpluses of mutual and former mutual businesses
##### 444AF
- (1) This section applies in relation to a period of account of an insurance company (“*the relevant period*”) if—
- (a) at any time in the relevant period the company carries on life assurance business that is not mutual business,
- (b) the company has an amount of undistributed demutualisation surplus for the relevant period (see subsection (7)), and
- (c) there is a reduction in the amount of the company's unappropriated surplus over the relevant period (see section 444AI).
- (2) Where this section applies in relation to the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund whichever of the following amounts is the smallest—
- (a) the amount of the reduction mentioned in subsection (1)(c) above;
- (b) the amount of the company's undistributed demutualisation surplus for the relevant period;
- (c) the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (4) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which sections 432C and 432D apply,
that subsection shall have effect as if for “smallest” there were substituted smaller and as if paragraph (c) were omitted.
- (5) This section shall have effect—
- (a) for the purposes of computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the company's life assurance business, and
- (b) for the purposes of so computing the profits of any category of the company's life assurance business chargeable to tax under Case VI of Schedule D.
- (6) But for the purposes mentioned in subsection (5)(b) above, this section and section 444AG have effect subject to the modification in section 444AH; and the Corporation Tax Acts have effect accordingly (so that there may, in particular, be a difference between—
- (a) the amount deemed to be brought into account by virtue of subsection (2) above for a period of account for those purposes, and
- (b) the amount so deemed to be brought into account for that period of account for the purposes mentioned in subsection (5)(a) above).
- (7) For the purposes of this section, the undistributed demutualisation surplus of an insurance company for the relevant period is—
- (a) an amount equal to (UDSP – AD + DTSI – DTSO); or
- (b) if that amount is a negative amount, nil.
For this purpose—
- UDSP is the undistributed demutualisation surplus of the company for the period of account immediately preceding the relevant period,
- AD is any amount deemed under this section to be brought into account for the period of account immediately preceding the relevant period as an increase in the value of the assets of the company's long-term insurance fund,
- DTSI is the total amount of any demutualisation transfer surpluses accruing to the company during the relevant period (see section 444AG),
- DTSO is the total amount of any demutualisation transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
##### 444AG
- (1) For the purposes of section 444AF and this section, a demutualisation transfer surplus accrues to an insurance company where—
- (a) life assurance business is transferred to the company by a person (“*the transferor*”),
- (b) after the transfer, the company carries on the transferred business otherwise than as mutual business, and
- (c) the condition in subsection (2) below is satisfied in relation to the transfer.
- (2) The condition is that—
- (a) immediately before the transfer, the transferor carried on the transferred business as mutual business, or
- (b) where paragraph (a) above does not apply, some or all of the transferred business was carried on by an insurance company as mutual business at a time on or after 1st January 1990 and before the transfer (“former mutual business”).
- (3) The demutualisation transfer surplus accrues to the company on the date of the transfer.
- (4) The amount of the demutualisation transfer surplus is given by subsection (5) or (6) below.
- (5) Where subsection (2)(a) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer, the aggregate of—
- (i) the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer, and
- (ii) the amount of any added surplus accruing to the company in connection with the transfer (see subsection (10));
- (b) otherwise, a just and reasonable portion of that aggregate amount, having regard to how much of the transferor's life assurance business was transferred to the company under the transfer.
- (6) Where subsection (2)(b) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer and all of the transferred business is former mutual business, the former mutual surplus of the transferor on the transfer date (see subsection (7));
- (b) otherwise, so much of that former mutual surplus as it is just and reasonable to attribute to the company, having regard in particular to—
- (i) how much of the transferor's life assurance business was transferred to the company under the transfer, and
- (ii) how much of the transferred business is former mutual business.
- (7) For the purposes of subsection (6) above, the former mutual surplus of the transferor on the transfer date is—
- (a) the amount given by subsection (8) below, or
- (b) if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the total amount of any demutualisation transfer surpluses accruing to the transferor—
- (a) on or after 1st January 1990, and
- (b) on or before the date of the transfer.
- (9) The amount given by this subsection is the lowest amount of unappropriated surplus of the transferor at the end of any period of account ending—
- (a) on or after the date of the last occasion on which a demutualisation transfer surplus accrued to it as mentioned in subsection (8) above, and
- (b) on or before the date of the transfer.
- (10) For the purposes of this section, added surplus accrues to the company in connection with the transfer if—
- (a) an amount of assets is received by the company in connection with the transfer, no later than six months after the date of the transfer,
- (b) the amount is not brought into account by the company,
- (c) the amount is added to the unappropriated surplus of the company, and
- (d) the amount does not derive from any unappropriated surplus of the transferor;
and the amount of the added surplus is the amount referred to in paragraphs (a) to (d) above.
##### 444AH
- (1) The modification in this section has effect for the purposes mentioned in section 444AF(5)(b) only.
- (2) In relation to any demutualisation transfer surplus accruing to a company in a post-2002 period of account—
- (a) the references in section 444AG(5) to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer shall be taken to be references to—
- (i) the amount of that unappropriated surplus, or
- (ii) if less, the unappropriated surplus of the transferor at the end of the period of account immediately preceding the first post-2002 period of account of the transferor; and
- (b) the references in sections 444AF and 444AG to the amount of any demutualisation transfer surplus are to have effect accordingly.
- (3) In this section “*post-2002 period of account*”, in relation to an insurance company, means a period of account of the company beginning on or after 1st January 2003 and ending on or after 9th April 2003.
##### 444AI
- (1) For the purposes of section 444AF—
- (a) there is a reduction in the amount of the company's unappropriated surplus over the relevant period if CUS is less than (OUS + TSI – TSO);
- (b) the amount of that reduction is the amount by which CUS is less than (OUS + TSI – TSO).
- (2) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- TSI is the total amount of any transfer surpluses accruing to the company during the relevant period (see subsections (3) to (7)),
- TSO is the total amount of any transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
- (3) For the purposes of this section, a transfer surplus accrues to an insurance company where life assurance business is transferred to the company by a person (“*the transferor*”).
- (4) The transfer surplus accrues to the company on the date of the transfer.
- (5) The amount of the transfer surplus is equal to so much of the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer as is transferred to the company under the transfer.
- (6) But if, immediately before the transfer, the transferor carried on the transferred business as mutual business, the amount of the transfer surplus is the aggregate of—
- (a) the amount given by subsection (5) above, and
- (b) the amount of any added surplus accruing to the company in connection with the transfer.
- (7) Subsection (10) of section 444AG applies for the purposes of subsection (6) above as it applies for the purposes of that section.
##### 444AJ
- (1) For the purposes of sections 444AF and 444AK, the amount of the company's relevant receipts reduction for the relevant period is to be calculated by—
- (a) determining, in the case of each with-profits fund of the company, the amount given by subsection (2) or (6) below for the relevant period, and
- (b) aggregating each of those amounts.
- (2) The amount, in the case of a fund other than a policy holder participation fund, is—
- (a) where the gross transfer to non-technical account for the fund for the relevant period (see subsections (3) and (4)) is greater than the post-policy holder surplus for the fund for the relevant period (see subsection (5)), the amount of the difference;
- (b) otherwise, nil.
- (3) In this section “*the gross transfer to non-technical account*” means the amount shown in line 13 of Form 58 for the fund.
- (4) But if—
- (a) there is a transfer from a with-profits fund of the company to another fund of the company (“the initial transfer”) which is shown in (or included in an amount shown in) line 14 of Form 58 for the with-profits fund,
- (b) there is a transfer from a fund of the company (whether or not the other fund mentioned in paragraph (a) above) to the non-technical account which is shown in (or included in an amount shown in) line 13 of Form 58 for that fund, and
- (c) the transfer to the non-technical account can reasonably be regarded as connected with the initial transfer,
the amount of the gross transfer to non-technical account for the relevant period given by subsection (3) above in the case of the with-profits fund is to be increased by the amount transferred to the non-technical account.
- (5) In this section “*post-policy holder surplus*” means an amount equal to—
$$SA-TAP$where—SA is—(a) the amount shown in line 34 of Form 58 for the fund (surplus arising since last valuation), or(b) if that amount is a negative amount, nil;TAP is the amount shown in line 46 of Form 58 for the fund (total allocated to policy holders).$
- (6) The amount, in the case of a policy holder participation fund, is—
- (a) where TAP is greater than SA, the amount of the difference;
- (b) otherwise, nil;
and for this purpose “*SA*” and “*TAP*” have the same meaning as in subsection (5) above.
- (7) References in this section to Form 58 are references to that Form in the periodical return of the company for the relevant period.
- (8) In this section “*policy holder participation fund*” means a fund in the case of which an amount equal to the amount shown in line 34 of Form 58 for the fund is allocated to policy holders for the relevant period.
##### 444AK
- (1) This section applies if at any time in a period of account of an insurance company (“*the relevant period*”)—
- (a) the company carries on life assurance business as mutual business, and
- (b) the company carries on one or more categories of life assurance business chargeable to tax under Case VI of Schedule D.
- (2) If there is a reduction in the amount of the company's unappropriated surplus over the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund—
- (a) the amount of that reduction, or
- (b) if less, the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) But subsection (2) above shall have effect only for the purposes of computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits for the relevant period of any category of the company's life assurance business chargeable to tax under Case VI of Schedule D.
- (4) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (5) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which sections 432C and 432D apply,
that subsection shall have effect as if paragraph (b) and the word “or” before it were omitted.
- (6) For the purposes of this section, there is a reduction in the amount of the company's unappropriated surplus over the relevant period if—
- (a) CUS is less than OUS, and
- (b) CUS is less than UUS.
- (7) The amount of that reduction is—
- (a) the amount by which CUS is less than OUS, or
- (b) if OUS is greater than UUS, the amount by which CUS is less than UUS.
- (8) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- UUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the first period of account of the company to begin on or after 1st January 2003 and to end on or after 9th April 2003.
##### 444AL
- (1) This section applies for the purposes of sections 444AF to 444AK.
- (2) References to mutual business, in relation to any time, include business which at that time is treated for the purposes of section 432E as mutual business.
- (3) “*Unappropriated surplus*”, in relation to a period of account of an insurance company, means an unappropriated surplus on valuation as shown in the periodical return of the company for the period of account.
- (4) References to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer are, where a period of account of the transferor does not end at that time, references to the unappropriated surplus on valuation that would have been shown in a periodical return of the transferor for that period had such a return been drawn up.
### Provisions applying in relation to overseas life insurance companies
##### 444B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “distribution”.
##### 444C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Equalisation reserves
##### 444BA
- (1) Subject to the following provisions of this section and to sections 444BB to 444BD, the rules in subsection (2) below shall apply in making any computation, for the purposes of Case I or V of Schedule D, of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of equalisation reserve rules, to maintain an equalisation reserve.
- (2) Those rules are—
- (a) that amounts which, in accordance with equalisation reserve rules, are transferred into the equalisation reserve in respect of the company’s business for the accounting period in question are to be deductible;
- (b) that amounts which, in accordance with any such regulations, are transferred out of the reserve in respect of the company’s business for that period are to be treated as receipts of that business; and
- (c) that it must be assumed that all such transfers as are required by equalisation reserve rules to be made into or out of the reserve in respect of the company’s business for any period are made as required.
- (3) Where an insurance company having any business in respect of which it is required, by virtue of equalisation reserve rules, to maintain an equalisation reserve ceases to trade—
- (a) any balance which exists in the reserve at that time for the purposes of the Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade; and
- (b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company so ceases and to have been required by equalisation reserve rules.
- (4) Where—
- (a) an amount is transferred into an equalisation reserve in respect of the business of an insurance company for any accounting period,
- (b) the rule in subsection (2)(a) above would apply to the transfer of that amount but for this subsection,
- (c) that company by notice in writing to an officer of the Board makes an election in relation to that amount for the purposes of this subsection, and
- (d) the notice of the election is given not more than two years after the end of that period,
the rule mentioned in subsection (2)(a) above shall not apply to that transfer of that amount and, instead, the amount transferred (the “unrelieved transfer”) shall be carried forward for the purposes of subsection (5) below to the next accounting period and (subject to subsection (6) below) from accounting period to accounting period.
- (5) Where—
- (a) in accordance with equalisation reserve rules, a transfer is made out of an equalisation reserve in respect of an insurance company’s business for any accounting period,
- (b) the rule in subsection (2)(b) above would apply to the transfer but for this subsection, and
- (c) the accounting period is one to which any amount representing one or more unrelieved transfers has been carried forward under subsection (4) above,
that rule mentioned in subsection (2)(b) above shall not apply to that transfer except to the extent (if any) that the amount of the transfer exceeds the aggregate of the amounts representing unrelieved transfers carried forward to that period.
- (6) Where in the case of any company—
- (a) any amount representing one or more unrelieved transfers is carried forward to an accounting period in accordance with subsection (4) above, and
- (b) by virtue of subsection (5) above the rule in subsection (2)(b) above does not apply to an amount representing the whole or any part of any transfer out of an equalisation reserve in respect of the company’s business for that period,
the amount mentioned in paragraph (a) above shall not be carried forward under subsection (4) above to the next accounting period except to the extent (if any) that it exceeds the amount mentioned in paragraph (b) above.
- (7) To the extent that any actual or assumed transfer in accordance with equalisation reserve rules of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—
- (a) the rule in subsection (2)(a) above shall not apply to that transfer; and
- (b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with equalisation reserve rules;
and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.
- (8) For the purposes of this section the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—
- (a) the sole or main purpose of which is, or
- (b) the sole or main benefit accruing from which might (but for subsection (7) above) be expected to be,
the reduction by virtue of this section of any liability to tax.
- (9) Where—
- (a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with equalisation reserve rules in respect of business carried on by that company over a period (“the equalisation period”), and
- (b) parts of the equalisation period are in different accounting periods,
the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.
- (10) The Treasury may by regulations provide in relation to any accounting periods ending on or after 1st April 1996 for specified transitional provisions contained in equalisation reserve rules to be disregarded for the purposes of the Tax Acts in determining how much is required, on any occasion, to be transferred into or out of any equalisation reserve in accordance with the rules.
- (11) In this section, and in sections 444BB to 444BD, “equalisation reserves rules” means the rules in chapter 7.5 of the Integrated Prudential Sourcebook.
##### 444BB
- (1) The Treasury may by regulations make provision modifying section 444BA so as, in cases mentioned in subsection (2) below—
- (a) to require—
- (i) sums by reference to which the amount of any transfer into or out of an equalisation reserve falls to be computed, or
- (ii) the amount of any such transfer,
to be apportioned between different parts of the business carried on for any period by an insurance company; and
- (b) to provide for the purposes of corporation tax for the amounts taken to be transferred into or out of an equalisation reserve to be computed disregarding any such sum or, as the case may be, any such part of a transfer as is attributed, in accordance with the regulations, to a part of the business described for the purpose in the regulations.
- (2) Those cases are cases where an insurance company which, in accordance with equalisation reserve rules, is required to make transfers into or out of an equalisation reserve in respect of any business carried on by that company for any period is carrying on, for the whole or any part of that period—
- (a) any business the income and gains of which fall to be disregarded in making a computation of the company’s profits in accordance with the rules applicable to Case I of Schedule D, or
- (b) any business by reference to which double taxation relief is afforded in respect of any income or gains.
- (3) Section 444BA shall have effect (subject to any regulations under subsection (1) above) in the case of an equalisation reserve maintained by an insurance company which—
- (a) is not resident in the United Kingdom, and
- (b) carries on business in the United Kingdom through a permanent establishment,
only if such conditions as may be prescribed by regulations made by the Treasury are satisfied in relation to that company and in relation to transfers into or out of that reserve.
- (4) Regulations under this section prescribing conditions subject to which section 444BA is to apply in the case of any equalisation reserve maintained by an insurance company may—
- (a) contain conditions imposing requirements on the company to furnish the Board with information with respect to any matters to which the regulations relate, or to produce to the Board documents or records relating to any such matters; and
- (b) provide that, where any prescribed condition is not, or ceases to be, satisfied in relation to the company or in relation to transfers into or out of that reserve, there is to be deemed for the purposes of the Tax Acts to have been a transfer out of that reserve of an amount determined under the regulations.
- (5) Regulations under this section may—
- (a) provide for apportionments under the regulations to be made in such manner, and by reference to such factors, as may be specified or described in the regulations;
- (b) make different provision for different cases;
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit;
- (d) make provision having retrospective effect in relation to accounting periods beginning not more than one year before the time when the regulations are made;
and the powers conferred by this section in relation to transfers into or out of any reserve shall be exercisable in relation to both actual and assumed transfers.
- (6) In this section “*double taxation relief*” means—
- (a) relief under double taxation arrangements which takes the form of a credit allowed against corporation tax, or
- (b) unilateral relief under section 790(1) which takes that form;
and “*double taxation arrangements*” here means arrangements having effect by virtue of section 788.
##### 444BC
- (1) The Treasury may by regulations make provision modifying the operation of section 444BA in relation to cases where an insurance company has, for the purpose of preparing the documents it is required to prepare for the purposes of section 9.3 of the Prudential Sourcebook (Insurers), applied for any period an accounting method described in paragraph 52 or 53 of Schedule 9A to the Companies Act 1985 (accounting on a non-annual basis).
- (2) Subsection (5) of section 444BB applies for the purposes of this section as it applies for the purposes of that section.
##### 444BD
- (1) The Treasury may by regulations provide for section 444BA to have effect, in such cases and subject to such modifications as may be specified in the regulations, in relation to any equivalent reserves as it has effect in relation to equalisation reserves maintained by virtue of equalisation reserve rules.
- (2) For the purposes of this section a reserve is an equivalent reserve if—
- (a) it is maintained, otherwise than by virtue of equalisation reserve rules, either—
- (i) by an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (ii) by a firm which has permission under paragraph 4 of Schedule 4 to that Act (as a result of qualifying for authorisation under paragraph 2 of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (iii) in respect of any business which consists of the effecting or carrying out of contracts of insurance and which is carried on outside the United Kingdom by a company resident in the United Kingdom;
- (b) the purpose for which, or the manner in which, it is maintained is such as to make it equivalent to an equalisation reserve maintained by virtue of equalisation reserve rules.
- (3) For the purposes of this section a reserve is also an equivalent reserve if it is maintained in respect of any credit insurance business in accordance with requirements imposed either—
- (a) by or under any enactment, or
- (b) under so much of the law of any territory as secures compliance with the requirements of Article 1 of the credit insurance directive (equalisation reserves for credit insurance).
- (4) Without prejudice to the generality of subsection (1) above, the modifications made by virtue of that subsection may—
- (a) provide for section 444BA to apply in the case of an equivalent reserve only where such conditions as may be specified in the regulations are satisfied in relation to the company maintaining the reserve or in relation to transfers made into or out of it; and
- (b) contain any other provision corresponding to any provision which, in the case of a reserve maintained by virtue of equalisation reserve rules, may be made under sections 444BA to 444BC.
- (5) Subsections (4) and (5) of section 444BB shall apply for the purposes of this section as they apply for the purposes of that section.
- (6) Without prejudice to the generality of section 444BB(5), the transitional provision which by virtue of subsection (5) above may be contained in regulations under this section shall include—
- (a) provision for treating the amount of any transfers made into or out of an equivalent reserve in respect of business carried on for any specified period as increased by the amount by which they would have been increased if no transfers into the reserve had been made in respect of business carried on for an earlier period; and
- (b) provision for excluding from the rule in section 444BA(2)(b) so much of any amount transferred out of an equivalent reserve as represents, in pursuance of an apportionment made under the regulations, the transfer out of that reserve of amounts in respect of which there has been no entitlement to relief by virtue of section 444BA(2)(a).
- (7) In this section—
- “credit insurance business” means business which consists of the effecting or carrying out of contracts of insurance against risks of loss to the persons insured arising from—the insolvency of debtors of theirs, orfrom the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;
- “*the credit insurance directive*” means Council Directive [87/343/EEC](https://www.legislation.gov.uk/european/directive/1987/0343) of 22nd June 1987 amending, as regards credit insurance and suretyship insurance, First Directive 73/239 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance; . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 458A
- (1) The Treasury may by regulations provide for the life assurance provisions of the Corporation Tax Acts to have effect in relation to companies carrying on capital redemption business as if capital redemption business were, or were a category of, life assurance business.
- (2) Regulations under this section may provide that the provisions applied by the regulations are to have effect as respects capital redemption business with such modifications and exceptions as may be provided for in the regulations.
- (3) Regulations under this section may—
- (a) make different provision for different cases;
- (b) include such incidental, supplemental, consequential and transitional provision (including provision modifying provisions of the Corporation Tax Acts other than the life assurance provisions) as the Treasury consider appropriate; and
- (c) include retrospective provision.
- (4) In this section references to the life assurance provisions of the Corporation Tax Acts are references to the following—
- (a) the provisions of this Chapter so far as they relate to life assurance business or companies carrying on such business; and
- (b) any other provisions of the Corporation Tax Acts making separate provision by reference to whether or not the business of a company is or includes life assurance business or any category of insurance business that includes life assurance business.
- (5) In this section “*capital redemption business*” has the same meaning as in section 458.
##### 461A
- (1) For the purposes of sections 461B and 461C, a “*qualifying society*” is an incorporated friendly society which—
- (a) immediately before its incorporation, was a registered friendly society to which section 461(2) did not apply,
- (b) was formed otherwise than by the incorporation of a registered friendly society or the amalgamation of two or more friendly societies and satisfies subsection (2) below, or
- (c) was formed by the amalgamation of two or more friendly societies and satisfies subsection (3) below,
and in respect of which no direction under section 461C(5) is in force.
- (2) A society satisfies this subsection if its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board.
- (3) If at the time of the amalgamation referred to in subsection (1)(c) above—
- (a) section 461(2) applied to none of the registered friendly societies being amalgamated (if any), and
- (b) all of the incorporated friendly societies being amalgamated (if any) were qualifying societies,
the society formed by the amalgamation satisfies this subsection.
- (4) For the purposes of this section and section 461C, any group of persons which was approved for the purposes of this section (as mentioned in subsection (2) above) by the Friendly Societies Commission immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date.
##### 461B
- (1) Subject to the following provisions of this section, a qualifying society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) Subsection (1) above shall not apply to any profits arising or accruing to the society from, or by reason of its interest in, a body corporate which is a subsidiary (within the meaning of the Friendly Societies Act 1992) of the society or of which the society has joint control (within the meaning of that Act).
- (2A) Subsection (1) above shall not apply to any profits arising or accruing to the society from or by reason of its membership of a property investment LLP.
- (3) If an incorporated friendly society which is not a qualifying society makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (4) In relation to an incorporated friendly society which, immediately before its incorporation, was a registered friendly society to which section 461(2) applied—
- (a) the references in subsection (3) above to sums paid to the society shall include sums paid to the registered friendly society,
- (b) the reference in subsection (3)(a) above to any payment made by the society shall include any payment made by the registered friendly society after 26 March 1974 or such later date as was specified in any direction under section 461 (7) relating to it, and
- (c) the reference in subsection (3)(b) above to any repayment shall include any repayment made by the registered friendly society.
- (5) Where a qualifying society at any time ceases by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, the company into which the society is converted shall be exempt from . . . corporation tax on its profits arising from any part of its business, other than life or endowment business, which relates to contracts made before that time.
- (6) Subsection (5) above shall apply so long as there is no increase in the scale of benefits which the company undertakes to provide in the course of carrying on the relevant part of its business.
- (7) Any part of a company’s business to which an exemption under subsection (5) above relates shall be treated for the purposes of the Corporation Tax Acts as a separate business from any other business carried on by the company.
##### 461C
- (1) Subject to subsection (2) below, subsections (3) and (4) below apply where a qualifying society—
- (a) begins to carry on business other than life or endowment business, or
- (b) in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character.
- (2) Subsections (3) and (4) below do not apply if—
- (a) the society’s business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of section 461 or 461A by the Board, or
- (b) the society’s rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as is authorised for the purposes of section 461.
- (3) If it appears to the Board, having regard to the restrictions imposed by section 461 on registered friendly societies registered after 31st May 1973, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the society to which it is given shall cease to be a qualifying society as from the date of the direction.
- (5) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (1) above;
- (b) subsections (3) and (4) above do not apply to it by reason of subsection (2) above; or
- (c) the direction is not necessary for the protection of the revenue.
##### 461D
- (1) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was exempt from corporation tax on profits arising from that business,
the transferee is so exempt after that time.
- (2) But if during an accounting period of the transferee there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on that business, the transferee shall not be exempt from corporation tax by virtue of subsection (1) above for that or any subsequent accounting period.
- (3) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was not exempt from corporation tax on profits arising from that business,
the transferee is not so exempt after that time.
- (4) The Treasury may by regulations provide that, where any business of a friendly society is exempt from corporation tax by virtue of subsection (1) above, or not so exempt by virtue of subsection (3) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (5) Regulations under subsection (4) above—
- (a) may make different provision for different cases,
- (b) may include any incidental, supplementary, consequential or transitional provisions which the Treasury consider appropriate, and
- (c) may include retrospective provision.
##### 462A
- (1) Where a registered friendly society has tax exempt life or endowment business which includes contracts—
- (a) made before 20th March 1991, and
- (b) expressed at the outset not to be made in the course of such business,
the society may by notice to the inspector elect that section 460(1) shall not apply to so much of the profits arising from such business as is attributable to such contracts.
- (2) Where a registered friendly society has tax exempt life or endowment business which includes contracts falling within subsection (3) below, the society may by notice to the inspector elect that section 460(1) shall not apply to so much of the profits arising from such business as is attributable to such contracts.
- (3) A contract falls within this subsection if—
- (a) at the outset, it is neither expressed to be made in the course of tax exempt life or endowment business nor expressed not to be so made but is assumed by the society not to be so made, and
- (b) the policy issued in pursuance of it falls within paragraph 21(1)(b) of Schedule 15.
- (4) An election under subsection (2) above shall only be valid if the society satisfies the inspector (or the Commissioners on appeal) that it is possible to identify all the contracts to which the election relates.
- (5) If the inspector decides that he is not satisfied as mentioned in subsection (4) above, he shall give notice of his decision to the society; and section 42(3), (4) and (9) of, and paragraph 1(1) to (1E) of Schedule 2 to, the Management Act shall apply in relation to such a decision as they apply in relation to a decision of an inspector on a claim.
- (6) An election under subsection (1) or (2) above shall have effect for accounting periods ending on or after the day on which the Finance Act 1991 was passed.
- (7) No election under subsection (1) or (2) above may be made after 31st July 1992.
- (8) Where a friendly society has made an election under subsection (1) or (2) above, then, for any accounting period for which the election has effect—
- (a) section 460(1) shall apply to profits arising from life or endowment business which would have been included in the society’s tax exempt life or endowment business had no account been taken of the contracts to which the election relates, and
- (b) section 462(1), in its application to the society, shall have effect with the insertion after “policies” of “and all policies issued in pursuance of contracts to which an election under section 462A(1) or (2) relates”.
- (9) If a friendly society which (or a branch of which) has made an election under subsection (1) or (2) above becomes an incorporated friendly society, the election shall have effect in relation to the incorporated friendly society as it had effect in relation to the society (or branch) which made the election (and accordingly, in relation to accounting periods of the incorporated friendly society, “*the society*” in subsection (8)(a) and (b) above shall be read as referring to the incorporated friendly society).
#### Elections as to transfer of relief under section 257A or 257AB.
##### 465A
- (1) This section applies where any assets of a branch of a registered friendly society have been identified in a scheme under section 6(5) of the Friendly Societies Act 1992 (property, rights etc. excluded from transfer to the society on its incorporation).
- (2) In relation to any time after the incorporation of the society, the assets shall be treated for the purposes of the Tax Acts as assets of the society (and, accordingly, any tax liability arising in respect of them shall be a liability of the society rather than of the branch).
- (3) Where, by virtue of this section, tax in respect of any of the assets becomes chargeable on and is paid by the society, the society may recover from the trustees in whom those assets are vested the amount of the tax paid.
##### 468AA
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##### 468A
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##### 468B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of relief under section 257A.
##### 468C
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##### 468D
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##### 468E
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#### Transitional relief: husband with excess allowances.
##### 468EE
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##### 468F
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##### 468G
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### Distributions of authorised unit trusts: general
##### 468H
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##### 468I
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### Dividend and foreign income distributions
##### 468J
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##### 468K
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### Interest distributions
##### 468L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life assurance premiums paid by employer
##### 468M
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##### 468N
- (1) Subsection (2) below applies where—
- (a) an interest distribution is made for a distribution period to a unit holder; and
- (b) the gross income entered in the distribution accounts for the purposes of computing the total amount available for distribution to unit holders does not derive from eligible income entirely.
- (2) Where this subsection applies, the obligation to deduct under section 349(2) shall not apply to the relevant amount of the interest distribution to the unit holder if the residence condition is on the distribution date fulfilled with respect to him.
- (3) Section 468O makes provision with respect to the circumstances in which the residence condition is fulfilled with respect to a unit holder.
- (4) This is how to calculate the relevant amount of the interest distribution—
$$R=AxBC$Where—R = the relevant amount;A = the amount of the interest distribution before deduction of tax to the unit holder in question;B = such amount of the gross income as derives from eligible income;C = the amount of the gross income.$
- (5) In subsection (4) above the references to the gross income are references to the gross income entered as mentioned in subsection (1)(b) above.
##### 468O
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##### 468P
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##### 468PA
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##### 468PB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions to corporate unit holder
##### 468Q
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##### 468R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 469A
- (1) The Tax Acts shall have effect in relation to any common investment fund established under section 42 of the Administration of Justice Act 1982 (common investment funds for money paid into court) as if—
- (a) the fund were an authorised unit trust;
- (b) the person who is for the time being the investment manager of the fund were the trustee of that authorised unit trust; and
- (c) the persons with qualifying interests were the unit holders in that authorised unit trust.
- (1A) For the purposes of subsection (1)(c) above, the persons with qualifying interests are—
- (a) in relation to shares in the fund held by the Accountant General, the persons whose interests entitle them, as against him, to share in the fund’s investments;
- (b) in relation to shares in the fund held by any other person authorised by the Lord Chancellor to hold such shares on behalf of others (an “authorised person”)—
- (i) if there are persons whose interests entitle them, as against the authorised person, to share in the fund’s investments, those persons;
- (ii) if not, the authorised person;
- (c) in relation to shares in the fund held by persons authorised by the Lord Chancellor to hold such shares on their own behalf, those persons.
- (2) In this section “*the Accountant General*” means . . . the Accountant General of the Supreme Court of Judicature in England and Wales or the Accountant General of the Supreme Court of Judicature of Northern Ireland.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 472A
- (1) This section applies in relation to securities—
- (a) which are held by a company carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities; and
- (b) which are such that a profit on their sale would form part of the trading profits of that business.
- (2) Profits and losses arising from such securities that in accordance with generally accepted accounting practice are—
- (a) calculated by reference to the fair value of the securities, and
- (b) recognised in that company's statement of recognised gains and losses or statement of changes in equity,
shall be brought into account in computing the profits or losses of a business in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (2) does not apply—
- (a) to an amount to the extent that it derives from or otherwise relates to an amount brought into account under that subsection in an earlier period of account, or
- (b) to an amount recognised for accounting purposes by way of correction of a fundamental error.
- (4) In this section, “securities”—
- (a) includes shares and any rights, interests or options that by virtue of section 99, 135(5) or 136(5) of the Taxation of Chargeable Gains Act 1992 are treated as shares for the purposes of sections 126 to 136 of that Act; but
- (b) does not include a loan relationship (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996).
##### 477A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . Dividends or interest payable in respect of shares in, or deposits with or loans to, a building society shall be dealt with for the purposes of corporation tax as follows—
- (a) to the extent that it would not otherwise fall to be so regarded, liability to pay the dividends or interest shall be treated for the purposes of Chapter II of Part IV of the Finance Act 1996 as a liability arising under a loan relationship of the building society;
- (aa) if the dividends or interest are payable to a company, then, to the extent that they would not otherwise fall to be so regarded, they shall be treated for those purposes as payable to that company in pursuance of a right arising under a loan relationship of that company;
- (b) no part of any such dividends or interest . . . shall be treated as a distribution of the society or as franked investment income of any company resident in the United Kingdom.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (3)(a) above shall apply to any interest paid by the society under a certified SAYE savings arrangement as if it were a dividend on a share in the society.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) In this section “*dividend*” includes any distribution (whether or not described as a dividend).
- (10) In this section—
- “*certified SAYE savings arrangement*” has the meaning given by section 703 of ITTOIA 2005
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- sections 42 and 46(1) and (2) of the Finance Act 1998 (provisions as to computation of profits and losses);
- sections 196 to 200 of the Finance Act 2004 (registered pension schemes);
- section 246 of that Act (employer-financed retirement benefits schemes).
- (3) Section 74(1)(d) of this Act (disallowance of provisions for future repairs) applies in relation to a Schedule A business as if the reference to premises occupied for the purposes of the trade were to premises held for the purposes of the Schedule A business.
- (4) The following provisions in Chapter V of Part IV of this Act do not apply, or are excepted from applying, in accordance with subsection (1)—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 87 (treatment of premiums taxed as rent),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 98 (tied premises: receipts and expenses treated as those of trade).
- (5) Part 1 of Schedule 22 to the Finance Act 2001 (deduction for capital expenditure on remediation of contaminated land) applies in accordance with subsection (1), and the other Parts of that Schedule (further provision as to relief for remediation of contaminated land) have effect in relation to a Schedule A business in accordance with their provisions.
##### 21B
The following provisions apply for the purposes of Schedule A in relation to a Schedule A business as they apply for the purposes of Case I of Schedule D in relation to a trade—
- sections 103 to 106 . . . and 110 (post-cessation receipts and expenses, etc.) , with any reference to a trade within the charge to income tax being read as a reference to a UK property business;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 337(1) (effect of company beginning or ceasing to carry on trade);
- section 401(1) (pre-trading expenditure);
- section 64 of and Schedule 22 to the Finance Act 2002 (change of accounting basis).
##### 21C
- (1) The following provisions have effect for the purpose of applying the charge to corporation tax under Schedule A in relation to mutual business.
- (2) The transactions or relationships involved in mutual business are treated as if they were transactions or relationships between persons between whom no relationship of mutuality existed.
- (3) Any surplus arising from the business is regarded as a profit (and any deficit as a loss) if it would be so regarded if the business were not mutual.
- (4) The company to which the profit arises is the company which would satisfy that description if the business were not mutual business.
- (5) Nothing in this section affects the operation of section 488 (co-operative housing associations).
##### 31ZA
##### 477B
- (1) In computing for the purposes of corporation tax the income of a building society from the trade carried on by it, there shall be allowed as a deduction, if subsection (2) below applies, the incidental costs of obtaining finance by means of issuing shares in the society which are qualifying shares.
- (1A) A deduction shall not be allowed by virtue of subsection (1) above to the extent that the costs in question fall to be brought into account as debits for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships).
- (2) This subsection applies if any amount payable in respect of the shares by way of dividend or interest is deductible in computing for the purposes of corporation tax the income of the society from the trade carried on by it.
- (3) In subsection (1) above, “*the incidental costs of obtaining finance*” means expenditure on fees, commissions, advertising, printing and other incidental matters (but not including stamp duty), being expenditure wholly and exclusively incurred for the purpose of obtaining the finance (whether or not it is in fact obtained), or of providing security for it or of repaying it.
- (4) This section shall not be construed as affording relief—
- (a) for any sums paid in consequence of, or for obtaining protection against, losses resulting from changes in the rate of exchange between different currencies, or
- (b) for the cost of repaying qualifying shares so far as attributable to their being repayable at a premium or to their having been issued at a discount.
- (5) In this section—
- “*dividend*” has the same meaning as in section 477A, and
- “*qualifying share*” has the same meaning as in section 117(4) of the 1992 Act.
##### 480A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 480B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying policies.
##### 480C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of cash dividend retained and then later paid out
##### 482A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### PETROLEUM EXTRACTION ACTIVITIES
##### 494AA
- (1) This section applies where—
- (a) a company (“*the seller*”) carrying on a trade has disposed of an asset which was used for the purposes of that trade, or an interest in such an asset;
- (b) the asset is used, under a lease, by the seller or a company associated with the seller (“*the lessee*”) for the purposes of a ring fence trade carried on by the lessee; and
- (c) the lessee uses the asset before the end of the period of two years beginning with the disposal.
- (2) Subject to subsection (4) below, subsection (3) below applies to so much (if any) of the expenditure incurred by the lessee under the lease as—
- (a) falls, in accordance with generally accepted accounting practice, to be treated in the accounts of the lessee as a finance charge;. . . or
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) falls, if the case is one where the lease is a long funding operating lease, to be deductible in computing the profits of the lessee for the purposes of corporation tax (after first making against any such expenditure any reductions falling to be made by virtue of section 502K).
- (3) The expenditure shall not be allowable in computing for the purposes of Schedule D the profits of the ring fence trade.
- (4) Expenditure shall not be disallowed by virtue of subsection (3) above to the extent that the disposal referred to in subsection (1) above is made for a consideration which—
- (a) is used to meet expenditure incurred by the seller in carrying on oil extraction activities or in acquiring oil rights otherwise than from a company associated with the seller; or
- (b) is appropriated to meeting expenditure to be so incurred by the seller.
- (5) Where any expenditure—
- (a) would apart from subsection (3) above be allowable in computing for the purposes of Schedule D the profits of the ring fence trade for an accounting period, but
- (b) by virtue of that subsection is not so allowable,
that expenditure shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 as if it were a non-trading debit in respect of a loan relationship of the lessee for that accounting period.
- (6) In this section —
- “*long funding operating lease*” means a long funding operating lease for the purposes of Part 2 of the Capital Allowances Act (see section 70YI(1) of that Act);
- “*lease*”, in relation to an asset, has the same meaning as in sections 781 to 784.
##### 494A
- (1) In section 403(3) (availability of charges, Schedule A losses and management expenses for surrender as group relief) the reference to the gross profits of the surrendering company for an accounting period does not include the company’s relevant ring fence profits for that period.
- (2) If for that period—
- (a) there are no charges on income paid by the company that are allowable under section 338, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
all the company’s ring fence profits are relevant ring fence profits.
- (3) In any other case the company’s relevant ring fence profits are so much of its ring fence profits as exceeds the amount of the charges on income paid by the company as—
- (a) are allowable under section 338 for that period, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 496A
Schedule 19B to this Act (exploration expenditure supplement) shall have effect.
##### 496B
Schedule 19C to this Act (ring fence expenditure supplement) shall have effect.
#### “Gross rate” and “gross amount” of distributions to include ACT.
##### 501A
- (1) Where in any accounting period beginning on or after 17th April 2002 a company carries on a ring fence trade, a sum equal to 20 per cent of its adjusted ring fence profits for that period shall be charged on the company as if it were an amount of corporation tax chargeable on the company.
- (2) A company’s adjusted ring fence profits for an accounting period are the amount which, on the assumption mentioned in subsection (3) below, would be determined for that period (in accordance with this Chapter) as the profits of the company’s ring fence trade chargeable to corporation tax.
- (3) The assumption is that financing costs are left out of account in computing—
- (a) the amount of the profits or loss of any ring fence trade of the company’s for each accounting period beginning on or after 17th April 2002; and
- (b) where for any such period the whole or part of any loss relief is surrendered to the company in accordance with section 492(8), the amount of that relief or, as the case may be, that part.
- (4) For the purposes of this section, “*financing costs*” means the costs of debt finance.
- (5) In calculating the costs of debt finance for an accounting period the matters to be taken into account include—
- (a) any costs giving rise to debits in respect of debtor relationships of the company under Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) , other than debits in respect of exchange losses from such relationships (see section 103(1A) and (1B) of that Act);
- (b) any exchange gain or loss from a debtor relationship, within the meaning of that Chapter (see section 103(1A) and (1B) of that Act), in relation to debt finance;
- (c) any credit or debit falling to be brought into account under Schedule 26 to the Finance Act 2002 (derivative contracts) in relation to debt finance;
- (d) the financing cost implicit in a payment under a finance lease;
- (dd) where the company is the lessee under a long funding operating lease, the amount deductible in respect of payments under the lease in computing the profits of the lessee for the purposes of corporation tax (after first making against any such amount any reductions falling to be made by virtue of section 502K); and
- (e) any other costs arising from what would be considered in accordance with generally accepted accounting practice to be a financing transaction.
- (6) Where an amount representing the whole or part of a payment falling to be made by a company—
- (a) falls (or would fall) to be treated as a finance charge under a finance lease for the purposes of accounts relating to that company and one or more other companies and prepared in accordance with generally accepted accounting practice, but
- (b) is not so treated in the accounts of the company,
the amount shall be treated for the purposes of this section as financing costs falling within subsection (5)(d) above.
- (7) If—
- (a) in computing the adjusted ring fence profits of a company for an accounting period, an amount falls to be left out of account by virtue of subsection (5)(d) above, but
- (b) the whole or any part of that amount is repaid,
the repayment shall also be left out of account in computing the adjusted ring fence profits of the company for any accounting period.
- (8) In this section “*finance lease*” means any arrangements—
- (a) which provide for an asset to be leased or otherwise made available by a person to another person (“*the lessee*”), and
- (b) which, under generally accepted accounting practice,—
- (i) fall (or would fall) to be treated, in the accounts of the lessee or a person connected with the lessee, as a finance lease or a loan, or
- (ii) are comprised in arrangements which fall (or would fall) to be so treated.
- (9) For the purposes of applying subsection (8)(b) above, the lessee and any person connected with the lessee are to be treated as being companies which are incorporated in a part of the United Kingdom.
- (10) In this section “*accounts*”, in relation to a company, includes any accounts which—
- (a) relate to two or more companies of which that company is one, and
- (b) are drawn up in accordance with generally accepted accounting practice.
- (11) In this section “*long funding operating lease*” means a long funding operating lease for the purposes of Part 2 of the Capital Allowances Act (see section 70YI(1) of that Act).
##### 501B
- (1) Subject to subsection (3) below, the provisions of section 501A(1) relating to the charging of a sum as if it were an amount of corporation tax shall be taken as applying, subject to the provisions of the Taxes Acts, and to any necessary modifications, all enactments applying generally to corporation tax, including—
- (a) those relating to returns of information and the supply of accounts, statements and reports;
- (b) those relating to the assessing, collecting and receiving of corporation tax;
- (c) those conferring or regulating a right of appeal; and
- (d) those concerning administration, penalties, interest on unpaid tax and priority of tax in cases of insolvency under the law of any part of the United Kingdom.
- (2) Accordingly (but without prejudice to subsection (1) above) the Management Act shall have effect as if any reference to corporation tax included a reference to a sum chargeable under section 501A(1) as if it were an amount of corporation tax.
- (3) In any regulations made under section 32 of the Finance Act 1998 (as at 17th April 2002, the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999)—
- (a) references to corporation tax do not include a reference to a sum chargeable on a company under section 501A(1) as if it were corporation tax; and
- (b) references to profits charged to corporation tax do not include a reference to adjusted ring fence profits, within the meaning of section 501A(1).
- (4) In this section “*the Taxes Acts*” has the same meaning as in the Management Act.
### Chapter 5A — Special rules for long funding leases of plant or machinery: corporation tax
### Introductory
##### 502A
This Chapter has effect for the purposes of corporation tax only.
### Lessors under long funding finance leases
##### 502B
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessor of any plant or machinery under a long funding finance lease.
- (2) The amount to be brought into account as the lessor's taxable income from the lease for the period of account is the amount of the rental earnings in respect of the lease for the period of account.
- (3) The “rental earnings” for any period is the amount which, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment for that period in respect of the lease where it meets the finance lease test.
- (4) If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan in the accounts in question, so much of the rentals under the lease as fall (or would fall) to be treated as interest are to be treated for the purposes of this section as rental earnings.
##### 502C
- (1) This section applies for determining for the purposes of corporation tax the profits of a company which is or has been the lessor under a long funding finance lease.
- (2) This section has effect where a profit or loss (whether of an income or capital nature)—
- (a) arises to the company in connection with the lease, and
- (b) in accordance with generally accepted accounting practice falls to be recognised for accounting purposes in a period of account, but
- (c) would not, apart from this section, be brought into account in computing the profits of the company for the purposes of corporation tax.
- (3) The profit or loss is to be treated—
- (a) in the case of a profit, as income of the company attributable to the lease,
- (b) in the case of a loss, as a revenue expense incurred by the company in connection with the lease.
- (4) Any reference in this section to an amount falling to be recognised for accounting purposes in a period of account is a reference to an amount falling to be recognised for accounting purposes—
- (a) in the company's profit and loss account or income statement,
- (b) in the company's statement of recognised gains and losses or statement of changes in equity, or
- (c) in any other statement of items brought into account in computing the company's profits or losses for that period.
##### 502D
- (1) This section applies for determining the liability to corporation tax of a company which is or has been the lessor under a long funding finance lease.
- (2) Where—
- (a) the lease terminates, and
- (b) a sum calculated by reference to the termination value is paid to the lessee,
no deduction in respect of the sum paid to the lessee is allowed in computing the profits of the company.
- (3) This section does not prevent a deduction in respect of a sum to the extent that the sum is brought into account in determining the company's rental earnings.
### Lessors under long funding operating leases
##### 502E
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account—
- (a) for the whole of which, or
- (b) for any part of which,
the company is the lessor of any plant or machinery under a long funding operating lease.
- (2) A deduction is allowed in computing the profits of the company for the period of account.
- (3) The amount of the deduction for any period of account is to be determined as follows.
- (4) First, find the “*relevant value*” for the purposes of subsection (6)(a) below, which is—
- (a) if the only use of the plant or machinery by the lessor has been the leasing of it under the long funding operating lease as a qualifying activity, cost;
- (b) if the last previous use of the plant or machinery by the lessor was the leasing of it under another long funding operating lease as a qualifying activity, market value;
- (c) if the last previous use of the plant or machinery by the lessor was the leasing of it under a long funding finance lease as a qualifying activity, the recognised value;
- (d) if the last previous use of the plant or machinery by the lessor was for the purposes of a qualifying activity other than leasing under a long funding lease, the lower of cost and market value;
- (e) if the lessor owns the plant or machinery as a result of having incurred expenditure on its provision for purposes other than those of a qualifying activity, but—
- (i) the plant or machinery is brought into use by the lessor for the purposes of a qualifying activity on or after 1st April 2006, and
- (ii) that qualifying activity is the leasing of the plant or machinery under the long funding operating lease,
the relevant value is the lower of first use market value and first use amortised value.
- (5) In subsection (4) above—
- “*cost*” means the amount of the expenditure incurred by the lessor on the provision of the plant or machinery;
- “*first use amortised value*” means the value that the plant or machinery would have at the time when it is first brought into use for the purposes of the qualifying activity, on the assumption that—the cost of acquiring the plant or machinery had been written off on a straight line basis over the remaining useful economic life of the plant or machinery, andany further capital expenditure incurred had been written off on a straight line basis over so much of the remaining economic life of the plant or machinery as remains at the time when the expenditure is incurred;
- “*first use market value*” means the market value of the plant or machinery at the time when it is first brought into use for the purposes of the qualifying activity;
- “*market value*” means the market value of the plant or machinery at the commencement of the term of the long funding operating lease;
- “*recognised value*” means the value at which the plant or machinery is recognised in the books or other financial records of the lessor at the commencement of the long funding operating lease.
- (6) From—
- (a) the relevant value determined in accordance with subsection (4) above,
subtract
- (b) the amount which, at the commencement of the term of the lease, is (or, in a case falling within subsection (4)(e) above, would have been) expected to be the residual value of the plant or machinery,
to find the expected gross reduction in value over the term of the lease.
- (7) Apportion the amount of that expected gross reduction in value to each period of account in which any part of the term of the lease falls.
- (8) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each period of account.
- (9) The amount of the deduction for any period of account is the amount so apportioned to that period.
##### 502F
- (1) This section applies if in any period of account—
- (a) a company is the lessor of any plant or machinery under a long funding operating lease,
- (b) the company incurs capital expenditure in relation to the plant or machinery, and
- (c) that capital expenditure (the “additional expenditure”) is not reflected in the market value of the plant or machinery at the commencement of the term of the lease.
- (2) In a case falling within section 502E(4)(e) above, subsection (1)(c) above has effect as if the reference to the commencement of the term of the lease were a reference to the time when the plant or machinery is first brought into use by the lessor for the purposes of the qualifying activity.
- (3) Where this section applies, an additional deduction is allowed in computing the profits of the company for each post-expenditure period of account in which the company is the lessor of the plant or machinery under the lease.
- (4) The amount of the deduction for any such period of account is to be determined as follows.
- (5) Find ARV, CRV, PRV, and TRV where—
- “ARV” is the amount which, at the time when the additional expenditure is incurred, is expected to be the residual value of the plant or machinery;
- “CRV” is the amount which, at the commencement of the term of the lease, is expected to be the residual value of the plant or machinery;
- “PRV” is the sum of any amounts that fell to be taken into account as RRV (see subsection (6)) in the application of this section in relation to any previous additional expenditure incurred by the company in relation to the leased plant or machinery;
- “TRV” is the total of CRV and PRV.
- (6) Find RRV, where—
- (a) if ARV exceeds TRV, RRV is the portion of the excess that is a result of the additional expenditure, but
- (b) if ARV does not exceed TRV, RRV is nil.
- (7) From—
- (a) the amount of the additional expenditure,
subtract
- (b) RRV,
to find the expected partial reduction in value over the remainder of the term of the lease.
- (8) Apportion the amount of that expected partial reduction in value to each post-expenditure period of account in which any part of the term of the lease falls.
- (9) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each post-expenditure period of account.
- (10) The amount of the additional deduction for any period of account is the amount so apportioned to that period.
- (11) In this section “*post-expenditure period of account*” means any period of account ending after the incurring of the additional expenditure.
##### 502G
- (1) This section applies for determining the liability to corporation tax of a company which is the lessor immediately before the termination of a long funding operating lease.
- (2) Step 1 is to find—
- (a) the termination amount (TA);
- (b) the total of any sums paid to the lessee that are calculated by reference to the termination value (LP).
- (3) Step 2 is to find—
- (a) the relevant value for the purposes of section 502E(6)(a) (RV);
- (b) the total of the deductions allowable under section 502E for periods of account for the whole or part of which the company was the lessor before the termination of the lease (TD1);
- (c) the amount, if any, (ERV) by which RV exceeds TD1.
- (4) Step 3 is to find—
- (a) the total of any amounts of capital expenditure incurred by the company which constitute additional expenditure for the purposes of section 502F in the case of the lease (TAE);
- (b) the total of any deductions allowable under section 502F for periods of account for the whole or part of which the company was the lessor before the termination of the lease (TD2);
- (c) the amount, if any, (EAE) by which TAE exceeds TD2.
- (5) Step 4 is to find the total of ERV and EAE (T).
- (6) If (TA – LP) exceeds T, treat a profit of an amount equal to the excess as arising to the company in the period of account in which the lease terminates.
- (7) If T exceeds (TA – LP), treat a loss of an amount equal to the excess as arising to the company in that period of account.
- (8) A profit or loss treated as arising to the company under subsection (6) or (7) above is to be treated—
- (a) in the case of a profit, as income of the company attributable to the lease,
- (b) in the case of a loss, as a revenue expense incurred by the company in connection with the lease.
- (9) In computing the profits of the company, no deduction is allowed in respect of any sums paid to the lessee that are calculated by reference to the termination value.
### Lessors under long funding finance or operating leases: avoidance etc
#### Meaning of “the minimum amount”
##### 502GA
- (1) Sections 502B to 502G do not apply in the case of a company which is or has been the lessor of any plant or machinery under a long funding lease if the following condition is met.
- (2) The condition is that any part of the expenditure incurred by the company on the acquisition of the plant or machinery for leasing under the lease—
- (a) is (apart from those sections) allowable as a deduction in calculating its profits or losses for the purposes of corporation tax, and
- (b) is so allowable as a result of the plant or machinery forming part of its trading stock.
- (3) For the purposes of this section the cases in which expenditure incurred by a company on the acquisition of any plant or machinery for leasing under a lease is allowable as such a deduction include any case where—
- (a) the company becomes entitled to the deduction at any time after the expenditure is incurred, and
- (b) the deduction arises as a result of the plant or machinery forming part of its trading stock at that time.
- (4) If—
- (a) at any time any of sections 502B to 502G has applied for determining the amounts to be taken into account in calculating the profits or losses of the company for the purposes of corporation tax, and
- (b) the condition in subsection (2) is met at any subsequent time,
those amounts, and any other amounts which (as a result of this section) are to be so taken into account, are subject to such adjustments as are just and reasonable.
- (5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (4).
##### 502GB
- (1) This section applies if—
- (a) a company carries on a Schedule A business in relation to land which consists of or includes a dwelling-house,
- (b) the company incurs expenditure in acquiring and installing an energy-saving item in the dwelling-house or in a building containing the dwelling-house (see subsections (5) to (7)),
- (c) the expenditure is incurred before 1st April 2015,
- (d) a deduction for the expenditure is not prohibited by the wholly and exclusively rule but would otherwise be prohibited by the capital prohibition rule (see subsection (8)), and
- (e) no allowance under the Capital Allowances Act may be claimed in respect of the expenditure.
- (2) In calculating the profits of the Schedule A business, a deduction for the expenditure is allowed.
- (3) But any deduction is subject to—
- (a) section 31ZB (restrictions on the relief), and
- (b) any provision made by regulations under section 31ZC.
- (4) If, on a just and reasonable apportionment of any expenditure, part of the expenditure would qualify for the relief (but the remainder would not), a deduction is allowed for that part.
- (5) “*Energy-saving item*” means an item of an energy-saving nature of such description as is for the time being specified in regulations made by the Treasury.
- (6) The Treasury may by regulations provide for an item to be an energy-saving item only if it satisfies such conditions as may be—
- (a) specified in, or
- (b) determined in accordance with,
the regulations.
- (7) The conditions may include conditions imposed by reference to information or documents issued by any body, person or organisation.
- (8) In this section—
- “*the capital prohibition rule*” means the rule in section 74(1)(f) or (g) (capital expenditure), as applied by section 21A, and
- “*the wholly and exclusively rule*” means the rule in section 74(1)(a) or (e) (expenses not wholly and exclusively for trade and unconnected losses), as applied by section 21A.
#### Schedule E.
##### 31ZB
- (1) This section restricts deductions that would otherwise be allowable under section 31ZA.
- (2) No deduction is allowed if, when the energy-saving item is installed, the dwelling-house—
- (a) is in the course of construction, or
- (b) is comprised in land in which the company does not have an interest or is in the course of acquiring an interest or further interest.
- (3) No deduction is allowed in respect of expenditure in an accounting period if—
- (a) the Schedule A business consists of or includes the commercial letting of furnished holiday accommodation for the purposes of section 503, and
- (b) the dwelling-house constitutes some or all of that accommodation for the accounting period.
- (4) No deduction is allowed in respect of expenditure treated by section 401 (as applied by section 21B) as incurred on the date on which the company starts to carry on the Schedule A business unless the expenditure was incurred not more than 6 months before that date.
- (5) No deduction is allowed in respect of expenditure incurred in acquiring and installing the energy-saving item in a building containing the dwelling-house in so far as the expenditure is not for the benefit of the dwelling-house.
##### 31ZC
- (1) In relation to any deduction under section 31ZA, the Treasury may make regulations for—
- (a) restricting or reducing the amount of expenditure for which the deduction is allowable,
- (b) excluding entitlement to the deduction in such cases as may be specified in, or determined in accordance with, the regulations,
- (c) determining who is (and is not) entitled to the deduction if different persons have different interests in land that consists of or includes the whole or part of a building containing one or more dwelling-houses,
- (d) making apportionments if the Schedule A business is carried on by persons in partnership or an interest in land is beneficially owned by persons jointly or in common.
- (2) The apportionments that may be made include apportionments to persons within the charge to income tax.
- (3) Regulations under this section may—
- (a) make different provision for different cases, and
- (b) contain incidental, supplemental, consequential and transitional provision and savings (including provision as to appeals in relation to apportionments mentioned in subsection (1)(d)).
##### 31A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 31B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schedule A.
### Connected persons
##### 33A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 33B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 37A
- (a) a company is the lessee of any plant or machinery under a lease (“lease A”) that is not a long funding lease,
- (b) it enters into a lease (“lease B”) of any of that plant or machinery (as lessor), and
- (c) lease B is a long funding lease.
- (2) Sections 502B to 502G do not apply in relation to lease B.
- (3) If by virtue of section 70H of the Capital Allowances Act (tax return by lessee treating lease as long funding lease) lease A becomes a long funding lease (and does not cease to be such a lease), treat this section as never having applied in relation to lease B.
##### 502GC
- (1) Sections 502B to 502G do not apply in the case of a company which is or has been the lessor of any plant or machinery under a long funding lease if conditions A to C are met.
- (2) Condition A is that the long funding lease forms part of any arrangement entered into by the company which includes one or more other transactions (whether the arrangement is entered into before or after or at the inception of the lease).
- (3) Condition B is that the main purpose, or one of the main purposes, of the arrangement is to secure that, over the relevant period, there would be a substantial difference between—
- (a) the total amount of the amounts under the arrangement which are, in accordance with generally accepted accounting practice, recognised in determining the company's profit or loss for any period or taken into account in calculating the amounts which are so recognised, and
- (b) the total amount of the amounts under the arrangement which are taken into account in calculating the profits or losses of the company for the purposes of corporation tax.
- (4) For the purposes of condition B “*the relevant period*” means the period which begins with the inception of the lease and ends with the end of the term of the lease.
- (5) Condition C is that the difference would be attributable (wholly or partly) to the application of any of sections 502B to 502G in relation to the company by reference to the plant or machinery under the lease.
- (6) The reference in this section to an amount being recognised in determining a company's profit or loss for a period is to an amount being recognised for accounting purposes—
- (a) in the company's profit and loss account or income statement,
- (b) in the company's statement of recognised gains and losses or statement of changes in equity, or
- (c) in any other statement of items brought into account in calculating the company's profits and losses for that period.
- (7) For the purposes of this section it does not matter whether the parties to any transaction which forms part of the arrangement differ from the parties to any of the other transactions.
- (8) For the purposes of this section the cases in which two or more transactions are to be taken as forming part of an arrangement include any case in which it would be reasonable to assume that one or more of them—
- (a) would not have been entered into independently of the other or others, or
- (b) if entered into independently of the other or others, would not have taken the same form or been on the same terms.
- (9) If—
- (a) at any time any of sections 502B to 502G has applied for determining the amounts to be taken into account in calculating the profits or losses of the company for the purposes of corporation tax, and
- (b) conditions A to C are met at any subsequent time,
those amounts, and any other amounts which (as a result of this section) are to be so taken into account, are subject to such adjustments as are just and reasonable.
- (10) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (9).
##### 502GD
- (1) If a company is or has been a lessor under a long funding lease of a film, sections 502B to 502G do not apply in respect of the lease.
- (2) “*Film*” has the same meaning as in Part 15 of CTA 2009 (see section 1181 of that Act).
### Insurance company as lessor
##### 502H
- (1) This section applies to a company carrying on life assurance business if it is the lessor under a long funding lease in a period of account.
- (2) In this section—
- (a) subsections (3) to (7) have effect in relation to—
- (i) basic life assurance and general annuity business, and
- (ii) long-term business which is not life assurance business, and
- (b) subsections (8) to (10) have effect in relation to certain computations falling to be made in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (4) below applies in the case of each of the following amounts—
- (a) an amount of rental earnings which the company is required by section 502B (long funding finance lease) to bring into account as taxable income,
- (b) an amount treated under section 502C(3)(a) (long funding finance lease: lessor's exceptional items) as a profit arising to the company,
- (c) an amount of rental income arising to the company from a long funding operating lease,
- (d) an amount treated under section 502G(8)(a) (long funding operating lease: lessor's excess termination amount) as a profit arising to the company,
but only if the leased asset is an asset of the company's long-term insurance fund.
- (4) In determining for the purposes of the Corporation Tax Acts in any such case the extent to which any such amount is referable to—
- (a) basic life assurance and general annuity business, or
- (b) long-term business which is not life assurance business,
section 432A (apportionment of insurance companies' income) is to have effect in relation to the amount as it has effect in relation to the income arising from an asset.
This subsection is subject to subsections (5) and (6) below.
- (5) Before applying subsection (4) above in a case where—
- (a) that subsection applies by virtue of subsection (3)(a) above in relation to an amount of rental earnings, and
- (b) there is an amount which is deductible as a revenue expense by virtue of section 502C(3)(b) (long funding finance lease: lessor's exceptional items),
the amount so deductible is to be given effect by applying it, so far as possible, in reducing the amount of the rental earnings.
- (6) Before applying subsection (4) above by virtue of subsection (3)(c) above in relation to an amount of rental income,—
- (a) any deduction falling to be made under section 502E, or
- (b) any reduction falling to be made under section 502F,
is to be given effect by applying it, so far as possible, in reducing (or further reducing) the amount of the rental income.
- (7) Where, after applying amounts in making reductions required by subsection (5) or (6) above, there remains unapplied an amount in respect of—
- (a) a deduction falling to be made under section 502E,
- (b) a reduction falling to be made under section 502F, or
- (c) an amount deductible as a revenue expense by virtue of section 502C(3)(b),
the amount is to be apportioned under section 432A in the same way as income.
- (8) Where—
- (a) the leased asset is an asset of the company's long-term insurance fund, and
- (b) a computation falling within subsection (9) below falls to be made,
subsection (10) below applies to the computation.
- (9) A computation falls within this subsection if it is a computation of profits of—
- (a) life assurance business carried on by the company, or
- (b) any category of life assurance business carried on by the company,
and falls to be made in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (10) In making the computation, no amount shall be brought into account by virtue of any of the following provisions—
- (a) section 502B (long funding finance lease: rental earnings),
- (b) section 502C(3)(a) or (b) (long funding finance lease: profit or loss in respect of exceptional items),
- (c) section 502E (long funding operating lease: periodic deduction),
- (d) section 502F (long funding operating lease: lessor's additional expenditure),
- (e) section 502G(8)(a) or (b) (long funding operating lease: lessor's profit or loss in respect of termination amount).
### Lessees under long funding finance leases
#### Elections as to transfer of relief under section 257A or 257AB.
##### 502I
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessee of any plant or machinery under a long funding finance lease.
- (2) In calculating the company's profits for the period of account,—
- (a) the amount deducted in respect of amounts payable under the lease,
must not exceed
- (b) the amounts which, in accordance with generally accepted accounting practice, fall (or would fall) to be shown in the company's accounts as finance charges in respect of the lease.
- (3) If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan, subsection (2) above applies as if the lease were one which, under generally accepted accounting practice, fell to be treated as a finance lease.
##### 502J
- (1) This section applies where—
- (a) a company is or has been the lessee under a long funding finance lease, and
- (b) in connection with the termination of the lease, a payment calculated by reference to the termination value falls to be made to the company.
- (2) The payment is not to be brought into account in determining for the purposes of corporation tax the profits of the company for any period of account.
- (3) Subsection (2) above does not affect the amount of any disposal value that falls to be brought into account by the company under the Capital Allowances Act.
### Lessees under long funding operating leases
##### 502K
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessee of any plant or machinery under a long funding operating lease.
- (2) The deductions that may be allowed in computing the profits of the company for the period of account are to be reduced in accordance with the following provisions of this section.
- (3) The amount of the reduction for any period of account is to be determined as follows.
- (4) First, find the “*relevant value*” for the purposes of subsection (6)(a) below, which is—
- (a) the market value of the plant or machinery at the commencement of the term of the lease, unless paragraph (b) below applies;
- (b) if the lessee—
- (i) has the use of the plant or machinery as a result of having incurred expenditure on its provision for purposes other than those of a qualifying activity, but
- (ii) brings the plant or machinery into use for the purposes of a qualifying activity on or after 1st April 2006,
the lower of first use market value and first use amortised market value.
- (5) In subsection (4) above—
- “*first use amortised market value*” means the value that the plant or machinery would have—at the time when it is first brought into use for the purposes of the qualifying activity, buton the assumption that the market value of the plant or machinery at the commencement of the term of the lease had been written off on a straight line basis over the remaining useful economic life of the plant or machinery;
- “*first use market value*” means the market value of the plant or machinery at the time when it is first brought into use for the purposes of the qualifying activity.
- (6) From—
- (a) the relevant value determined in accordance with subsection (4) above,
subtract
- (b) the amount which, at the commencement of the term of the lease, is (or, in a case falling within subsection (4)(b) above, would have been) expected to be the market value of the plant or machinery at the end of the term of the lease,
to find the expected gross reduction over the term of the lease.
- (7) Apportion the amount of that expected gross reduction to each period of account in which any part of the term of the lease falls.
- (8) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each period of account.
- (9) The amount of the reduction for any period of account is the amount so apportioned to that period.
### Interpretation of Chapter
##### 502L
- (1) This section has effect for the interpretation of this Chapter.
- (2) In this Chapter—
- “*qualifying activity*” has the same meaning as in Part 2 of the Capital Allowances Act;
- “*residual value*”, in relation to any plant or machinery leased under a long funding operating lease, means—the estimated market value of the plant or machinery on a disposal at the end of the term of the lease,lessthe estimated costs of that disposal.
- (3) Any reference in this Chapter to a sum being written off on a straight line basis over a period of time (the “writing-off period”) is a reference to—
- (a) the sum being apportioned between each of the periods of account in which any part of the writing-off period falls,
- (b) that apportionment being made on a time basis, according to the proportion of the writing-off period that falls in each of the periods of account, and
- (c) the sum being written off accordingly.
- (4) Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases) applies in relation to this Chapter as it applies in relation to that Part.
##### 504A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Eligibility for relief.
#### Transfer of relief under section 257A.
##### 506A
- (1) This section applies to the following transactions—
- (a) the sale or letting of property by a charitable company to a substantial donor,
- (b) the sale or letting of property to a charitable company by a substantial donor,
- (c) the provision of services by a charitable company to a substantial donor,
- (d) the provision of services to a charitable company by a substantial donor,
- (e) an exchange of property between a charitable company and a substantial donor,
- (f) the provision of financial assistance by a charitable company to a substantial donor,
- (g) the provision of financial assistance to a charitable company by a substantial donor, and
- (h) investment by a charitable company in the business of a substantial donor.
- (2) For the purposes of this section a person is a substantial donor to a charitable company in respect of an accounting period if—
- (a) the charitable company receives relievable gifts of at least £25,000 from him in a period of 12 months in which the accounting period wholly or partly falls, or
- (b) the charitable company receives relievable gifts of at least £100,000 from him in a period of six years in which the accounting period wholly or partly falls;
and if a person is a substantial donor to a charitable company in respect of an accounting period by virtue of paragraph (a) or (b), he is a substantial donor to the charitable company in respect of the following five accounting periods.
- (3) A payment made by a charitable company to a substantial donor in the course of or for the purposes of a transaction to which this section applies shall be treated for the purposes of section 505 as non-charitable expenditure.
- (4) If the terms of a transaction to which this section applies are less beneficial to the charitable company than terms which might be expected in a transaction at arm's length, the charitable company shall be treated for the purposes of section 505 as incurring non-charitable expenditure equal to that amount which the Commissioners for Her Majesty's Revenue and Customs determine as the cost to the charitable company of the difference in terms.
- (5) A payment by a charitable company of remuneration to a substantial donor shall be treated for the purposes of section 505 as non-charitable expenditure unless it is remuneration, for services as a trustee, which is approved by—
- (a) the Charity Commission,
- (b) another body with responsibility for regulating charities by virtue of legislation having effect in respect of any Part of the United Kingdom, or
- (c) a court.
##### 506B
- (1) Section 506A shall not apply to a transaction within section 506A(1)(b) or (d) if the Commissioners for Her Majesty's Revenue and Customs determine that the transaction—
- (a) takes place in the course of a business carried on by the substantial donor,
- (b) is on terms which are no less beneficial to the charitable company than those which might be expected in a transaction at arm's length, and
- (c) is not part of an arrangement for the avoidance of any tax.
- (2) Section 506A shall not apply to the provision of services to a substantial donor if the Commissioners determine that the services are provided—
- (a) in the course of the actual carrying out of a primary purpose of the charitable company, and
- (b) on terms which are no more beneficial to the substantial donor than those on which services are provided to others.
- (3) Section 506A shall not apply to the provision of financial assistance to a charitable company by a substantial donor if the Commissioners determine that the assistance—
- (a) is on terms which are no less beneficial to the charitable company than those which might be expected in a transaction at arm's length, and
- (b) is not part of an arrangement for the avoidance of any tax.
- (4) Section 506A shall not apply to investment by a charitable company in the business of a substantial donor where the investment takes the form of the purchase of shares or securities listed on a recognised stock exchange.
- (5) A disposal at an undervalue in respect of which relief is available under section 587B of this Act or section 431 of ITA 2007 (gifts of shares, securities and real property to charities etc) shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (6) A disposal at an undervalue to which section 257(2) of the 1992 Act (gifts of chargeable assets) applies shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (7) In the application of section 506A payments by a charitable company, or benefits arising to a substantial donor from a transaction, shall be disregarded in so far as they relate to a donation by the donor, and—
- (a) if the donation is made by a company, the payments or benefits do not prevent the donation being a qualifying donation for the purposes of section 339 because of subsection (3B)(b) of that section (restrictions on associated benefits), or
- (b) if the donation is made by an individual, the payments or benefits do not prevent the donation being a qualifying donation for the purposes of section 416 of ITA 2007 because of subsection (7)(b) of that section (restrictions on associated benefits).
- (8) A company which is wholly owned by a charity within the meaning of section 339(7AB) shall not be treated as a substantial donor in relation to a charitable company which owns it (or any part of it).
- (9) A registered social landlord or housing association shall not be treated as a substantial donor in relation to a charitable company with which it is connected; and for that purpose—
- (a) “*registered social landlord or housing association*” means a body entered on a register maintained under—
- (i) section 1 of the Housing Act 1996,
- (ii) section 57 of the Housing (Scotland) Act 2001, or
- (iii) Article 14 of the Housing (Northern Ireland) Order 1992, and
- (b) a body and a charitable company are connected if (and only if)—
- (i) the one is wholly owned, or subject to control, by the other, or
- (ii) both are wholly owned, or subject to control, by the same person.
##### 506C
- (1) A gift is “*relievable*” for the purposes of section 506A(2) if relief is available in respect of it under—
- (a) section 83A,
- (b) section 339,
- (c) sections 587B and 587C,
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) section 257 of the 1992 Act (gifts of chargeable assets),
- (f) section 63 of the Capital Allowances Act (gifts of plant and machinery),
- (g) sections 713 to 715 of ITEPA 2003 (payroll giving),
- (h) section 108 of ITTOIA 2005 (gifts of trading stock), . . .
- (i) sections 628 and 630 of ITTOIA 2005 (gifts from settlor-interested trusts), or
- (j) Chapters 2 and 3 of Part 8 of ITA 2007 (gift aid and gifts of shares, securities and real property).
- (2) A charitable company is treated as incurring expenditure in accordance with section 506A(4) at such time (or times) as the Commissioners determine.
- (3) Section 506A applies to a transaction entered into in an accounting period with a person who is a substantial donor in respect of that period, even if it was not until after the transaction was entered into that he first satisfied the definition of “substantial donor” in respect of that period.
- (4) Either or both of subsections (3) and (4) of section 506A may be applied to a single transaction; but any amount of non-charitable expenditure which a charitable company is treated as incurring under section 506A(3) in respect of a transaction shall be deducted from any amount which it would otherwise be treated as incurring under section 506A(4) in respect of the transaction.
- (5) A charitable company and any other charities with which it is connected are to be treated as a single charitable company for the purposes of section 506A and 506B and this section; and for this purpose “*connected*” means connected in a matter relating to the structure, administration or control of a charity.
- (6) Where remuneration is paid otherwise than in money, section 506A(5) shall apply as to a payment in money of the amount that would, under Part 3 of ITEPA 2003, be the cash equivalent of the remuneration as a benefit.
- (7) In sections 506A and 506B and this section—
- (a) a reference to a substantial donor or other person includes a reference to a person connected with him within the meaning of section 839,
- (b) “*financial assistance*” includes, in particular—
- (i) the provision of a loan, guarantee or indemnity, and
- (ii) entering into alternative finance arrangements within the meaning of section 46 of the Finance Act 2005, and
- (c) a reference to a gift of a specified amount includes a reference to a non-monetary gift of that value.
- (8) On an appeal against an assessment the Special Commissioners may review a decision of the Commissioners in connection with section 506A.
- (9) The Treasury may by regulations vary a sum, or a period of time, specified in section 506A(2).
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 508A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 508B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 510A
- (1) In this section “*grouping*” means a European Economic Interest Grouping formed in pursuance of Council Regulation [(EEC) No. 2137/85](https://www.legislation.gov.uk/european/regulation/1985/2137) of 25th July 1985, whether registered in Great Britain, in Northern Ireland, or elsewhere.
- (2) Subject to the following provisions of this section, for the purposes of charging corporation tax a grouping shall be regarded as acting as the agent of its members.
- (3) In accordance with subsection (2) above—
- (a) for the purposes mentioned in that subsection the activities of the grouping shall be regarded as those of its members acting jointly and each member shall be regarded as having a share of its property, rights and liabilities; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
but paragraph (a) above is subject to subsection (6A) below.
- (4) Subject to subsection (5) below, for the purposes of this section a member’s share of any property, rights or liabilities of a grouping shall be determined in accordance with the contract under which the grouping is established.
- (5) Where the contract does not make provision as to the shares of members in the property, rights or liabilities in question a member’s share shall be determined by reference to the share of the profits of the grouping to which he is entitled under the contract (and if the contract makes no provision as to that, the members shall be regarded as having equal shares).
- (6) . . . Where any trade or profession is carried on by a grouping it shall be regarded for the purposes of charging corporation tax as carried on in partnership by the members of the grouping.
- (6A) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) shall have effect in relation to a grouping as it has effect in relation to a partnership (see in particular section 87A of, and paragraphs 19 and 20 of Schedule 9 to, that Act).
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 519A
- (1) A health service body shall be exempt from corporation tax.
- (2) In this section “*health service body*” means—
- (a) a Strategic Health Authority established under section 13 of the National Health Service Act 2006. . . . . . ;
- (aa) a Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006;
- (ab) a Primary Care Trust;
- (aba) a Local Health Board;
- (b) a National Health Service trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006;
- (bb) an NHS foundation trust
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) a Health Board or Special Health Board, the Common Services Agency for the Scottish Health Service and a National Health Service trust respectively constituted under sections 2, 10 and 12A of the National Health Service (Scotland) Act 1978;
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (g) the Scottish Dental Practice Board; . . .
- (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (i) a Health and Social Services Board and the Northern Ireland Central Services Agency for the Health and Social Services established under Articles 16 and 26 respectively of the Health and Personal Social Services (Northern Ireland) Order 1972;
- (j) a special health and social services agency established under the Health and Personal Social Services (Special Agencies) (Northern Ireland) Order 1990; and
- (k) a Health and Social Services trust established under the Health and Personal Social Services (Northern Ireland) Order 1991.
- (3) The Treasury may by order disapply subsection (1) in relation to a specified activity, or class of activity, of an NHS foundation trust.
- (4) An order under subsection (3) shall make provision for determining the amount of the profits relating to an activity that are to be charged to corporation tax as a result of the disapplication of subsection (1).
- (5) An order under subsection (3) may, in particular—
- (a) make provision for disregarding profits of less than a specified amount in respect of a financial year or accounting period or a specified part of a financial year or accounting period;
- (b) make provision for disregarding a specified part of profits in respect of a financial year or accounting period or a specified part of a financial year or accounting period;
- (c) make provision for disregarding all or part of profits relating to activity in respect of which receipts or turnover (as defined by the order) are less than a specified amount in respect of a financial year or accounting period or a specified part of a financial year or accounting period.
- (6) An order under subsection (3)—
- (a) may apply, with or without modification, a provision of the Tax Acts,
- (b) may disapply a provision of the Tax Acts,
- (c) may make provision similar to a provision of the Tax Acts, and
- (d) may make provision generally or in relation to a specified body or class of bodies.
- (7) The Treasury may make an order under subsection (3) only—
- (a) in relation to an activity or class of activity that appears to the Treasury to be of a commercial nature,
- (b) where it appears to the Treasury to be expedient for the purpose of avoiding, removing or reducing differences between—
- (i) the fiscal treatment of the body undertaking the activity, and
- (ii) the fiscal treatment of another body or class of body which is of a commercial nature and which undertakes or might undertake the same or a similar activity, and
- (c) if a draft has been laid before, and approved by resolution of, the House of Commons.
- (8) An activity authorised under section 43(1) of the National Health Service Act 2006 shall not be treated as an activity of a commercial nature for the purposes of subsection (7)(a).
#### Transfer of relief under section 257A where relief exceeds income or 257AB.
#### Tax on companies in administration
#### Indexation of amounts in sections 257 , 257A and 257AB.
#### Life assurance premiums paid by employer
#### Expenditure and houses of ministers of religion.
### Designs
##### 537A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 537B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Aggregation of wife’s income with husband’s.
##### 539ZA
- (1) This section applies where, for the purposes of determining the application of this Chapter in relation to a policy or contract at any time, it is necessary to have regard to its application at another time.
- (2) It makes no difference to the application of this Chapter at that other time whether liability in respect of a gain arising at that time would have arisen or (as the case may be) would arise because of the application of this Chapter or Chapter 9 of Part 4 of ITTOIA 2005 (which makes provision for income tax purposes corresponding to that made by this Chapter).
- (3) References in this section to this Chapter include references to paragraph 20 of Schedule 15 to this Act and section 79 of the Finance Act 1997 (payments under certain life insurance policies).
##### 539A
- (1) The conditions mentioned in section 539(2)(f) (excepted group life policies) are those set out in the following provisions of this section.
- (2) Condition 1 is that under the terms of the policy a sum or other benefit of a capital nature is payable or arises on the death of each of the individuals insured under the policy who dies without attaining an age which is specified in the policy and is not greater than 75 years.
In determining whether this condition is satisfied, disregard any terms of the policy which exclude from benefit the death of a person in specified circumstances, if the exclusion applies in relation to death in those circumstances in the case of each of the individuals insured under the policy.
- (3) Condition 2 is that under the terms of the policy—
- (a) the same method is to be used for calculating the sums or other benefits of a capital nature payable or arising on each death, and
- (b) if there is any limitation on those sums or other benefits, the limitation is the same in the case of any death.
- (4) Condition 3 is that the policy does not have, and is not capable of having, on any day—
- (a) a surrender value that exceeds the proportion of the premiums paid which, on a time apportionment, is referable to the unexpired paid-up period beginning with that day, or
- (b) if there is no such period, any surrender value.
For the purposes of this subsection the unexpired paid-up period beginning with any day is the period (if any) which—
- (i) begins with that day, and
- (ii) ends with the earliest subsequent day on which—
- (a) a payment of premium falls due under the policy, or
- (b) the term of the policy ends.
- (5) Condition 4 is that no sums or other benefits may be paid or conferred under the policy, except as mentioned in condition 1 or condition 3.
- (6) Condition 5 is that any sums payable or other benefits arising under the policy must (whether directly or indirectly) be paid to or for, or conferred on, or applied at the direction of—
- (a) an individual or charity beneficially entitled to them, or
- (b) a trustee or other person acting in a fiduciary capacity who will secure that the sums or other benefits are paid to or for, or conferred on, or applied in favour of, an individual or charity beneficially.
In this subsection “*charity*” means any body of persons or trust established for charitable purposes only.
- (7) Condition 6 is that no person—
- (a) who is an individual whose life is insured under the policy, or
- (b) who is, within the meaning of section 839, connected with an individual whose life is so insured,
may, by virtue of a group membership right relating to that individual, receive (directly or indirectly) any death benefit in respect of another group member.
In this subsection—
- (i) “*group membership right*”, in relation to an individual, means any right (including the right of any person to be considered by trustees in their exercise of a discretion) that is referable to that individual’s being one of the individuals whose lives are insured by the policy; and
- (ii) “*death benefit in respect of another group member*” means—
- (a) any sums or other benefits payable or arising under the policy on the death of any other of those individuals, or
- (b) anything representing any such sums or benefits.
- (8) Condition 7 is that a tax avoidance purpose is not the main purpose, or one of the main purposes, for which a person is at any time—
- (a) the holder, or one of the holders, of the policy, or
- (b) the person, or one of the persons, beneficially entitled under the policy.
In this subsection—
- (i) “*tax avoidance purpose*” means any purpose that consists in securing a tax advantage (whether for the holder of the policy or any other person); and
- (ii) “*tax advantage*” has the meaning given by section 840ZA.
#### Transfers of trade to obtain balancing allowances
##### 546A
- (1) This section applies in any case where—
- (a) as a result of any transaction (the “*material transaction*”) the whole or part of or a share in the rights conferred by a policy or contract (“*the material interest*”) becomes beneficially owned by one person or by two or more persons jointly or in common (“*the new ownership*”);
- (b) immediately before the material transaction, the material interest was in the beneficial ownership of one person or of two or more persons jointly (“*the old ownership*”); and
- (c) at least one person who is a member of the old ownership is also a member of the new ownership.
- (2) In any such case, the material transaction shall, in accordance with the following provisions of this section, be taken for the purposes of this Chapter (other than this section) to be one or more assignments, of part only of the rights conferred by the policy or contract.
- (3) For the purposes of this Chapter (other than this section), the members of the old ownership shall be treated—
- (a) where the old ownership consists of two or more persons beneficially entitled jointly, as if the material interest had been in their beneficial ownership in equal shares instead of jointly;
- (b) where the new ownership consists of two or more persons beneficially entitled jointly, as if the result of the material transaction had been that the material interest was in the beneficial ownership of those persons in equal shares instead of jointly; and
- (c) as if the material transaction had been the assignment by each member of the old ownership of so much (if any) of his old share as exceeds his new share (or, if he does not have a new share, the whole of his old share).
- (4) In this section—
- “*new share*”, in relation to the material interest and a person who is a member of the new ownership, means—if there is only one member of the new ownership, the material interest;if there are two or more members of the new ownership beneficially entitled to the material interest in common, the member’s share in the material interest; orif there are two or more members of the new ownership beneficially entitled to the material interest jointly, the share attributed to the member by subsection (3)(b) above;
- “*old share*”, in relation to the material interest and a person who is a member of the old ownership, means—if there is only one member of the old ownership, the material interest; orif there are two or more members of the old ownership, the share attributed to the member by subsection (3)(a) above.
##### 546B
- (1) This section applies in relation to a policy or contract in any case where—
- (a) a section 546 excess occurs at the end of any year (including the final year, whether or not ending with a terminal chargeable event); and
- (b) the condition in subsection (2) below is satisfied in relation to that year.
This subsection is subject to subsection (1A) below.
- (1A) In the case of a policy which is a qualifying policy (whether or not the premiums under the policy are eligible for relief under section 266) this section applies only if—
- (a) the section 546 excess occurs within the time described in section 540(1)(b)(i); or
- (b) the policy has been converted into a paid-up policy within that time.
- (2) The condition is that—
- (a) during the year there has been an assignment for money or money’s worth of part of or a share in the rights conferred by the policy or contract; or
- (b) during the year there has been both—
- (i) an assignment, otherwise than for money or money’s worth, of the whole or part of or a share in the rights conferred by the policy or contract; and
- (ii) an earlier surrender of part of or a share in the rights conferred by the policy or contract.
- (3) Where this section applies—
- (a) the occurrence of the section 546 excess shall be treated for the purposes of this Chapter as not being a chargeable event; but
- (b) the amount of the section 546 excess shall be charged to tax in accordance with the provisions of section 546C.
- (4) In this section—
- “*final year*” has the meaning given by section 546(4);
- “*section 546 excess*”, in relation to any year, means an excess, occurring at the end of the year, of—the reckonable aggregate value mentioned in subsection (2) of section 546, overthe allowable aggregate amount mentoned in subsection (3) of that section;
- “*terminal chargeable event*” means any chargeable event other than—
- (a) an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract;
- (b) the occurrence of a section 546 excess; or
- (c) a chargeable event by virtue of section 546C(7)(a);
##### 546C
- (1) This section applies where, in relation to any policy or contract, the amount of a section 546 excess occurring at the end of any year falls to be charged to tax in accordance with this section by virtue of section 546B(3)(b).
- (2) The following amounts shall be calculated as at the end of that year—
- (a) the aggregate of the values calculated under section 546(1)(a) in respect of any part of or share in the rights conferred by the policy or contract which has been assigned for money or money’s worth, or surrendered, during the year;
- (b) the amount by which—
- (i) the reckonable aggregate value mentioned in section 546(2), as at the end of the year, exceeds
- (ii) the aggregate calculated under paragraph (a) above;
and
- (c) the amount by which—
- (i) the allowable aggregate amount mentioned in section 546(3), as at the end of the year, exceeds
- (ii) the amount calculated under paragraph (b) above.
- (3) In this section—
- (a) “*relevant transaction*” means any assignment for money or money’s worth, or any surrender, of a part of or share in the rights conferred by the policy or contract which has happened during the year;
- (b) “*transaction value*”, in relation to any relevant transaction, means the value calculated in accordance with section 546(1)(a) in the case of that transaction;
- (c) “*the amount of available premium*” means—
- (i) in relation to the earliest relevant transaction, the amount calculated under subsection (2)(c) above (that amount being taken to be nil if there is no such excess as is there mentioned); and
- (ii) in relation to each successive relevant transaction, that amount as successively reduced under subsections (5) to (7) below.
- (4) Subsection (5) below shall apply successively to each of the relevant transactions that happened in the year, in the order in which they happened.
If the year is the final year and ends with a terminal chargeable event, this subsection is subject to section 546D.
- (5) Where this subsection applies in relation to a relevant transaction—
- (a) the transaction value shall be compared to the amount of available premium; and
- (b) if the amount of available premium exceeds or is equal to the transaction value, subsection (6) below shall apply in relation to the transaction; but
- (c) if the transaction value exceeds the amount of available premium, subsection (7) below shall apply in relation to the transaction.
- (6) Where this subsection applies in relation to a relevant transaction—
- (a) the amount of available premium shall be reduced (or further reduced) by the transaction value; and
- (b) that reduction shall have effect in relation to the next subsequent relevant transaction.
- (7) Where this subsection applies in relation to a relevant transaction—
- (a) the relevant transaction shall for the purposes of this Chapter be a chargeable event in relation to the policy or contract, except as provided by sections 540(3) and 542(3);
- (b) a gain of an amount equal to that by which the transaction value exceeds the amount of available premium shall be treated for the purposes of this Chapter as arising in connection with the policy or contract on the happening of that chargeable event; and
- (c) in relation to any subsequent relevant transaction, the amount of available premium shall be reduced to nil.
- (8) Where the whole or any part of the amount of any gain treated as arising by subsection (7)(b) above falls to be treated under section 547(1)(b) as forming part of the income of any company for—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the accounting period in which the chargeable event in question happened,
that . . . accounting period shall be taken to be the one which includes the end of the year as at which the section 546 excess in question occurs, instead of the one (if different) in which the relevant transaction happened.
- (9) Where this section applies in relation to the final year and that year ends with a terminal chargeable event—
- (a) effect shall be given to this section before applying the provisions of this Chapter in relation to the terminal chargeable event; and
- (b) in applying this Chapter in relation to the terminal chargeable event, any chargeable event by virtue of subsection (7)(a) above accordingly falls to be regarded as having occurred before the terminal chargeable event.
- (10) This section shall be construed as one with section 546B.
##### 546D
- (1) This section applies in any case where the year mentioned in section 546C(4) is the final year and that year ends with a terminal chargeable event.
- (2) In any such case there shall be calculated, as at the end of the year, the amount of the gain (“*the gains limit*”) that would have been treated as arising on the happening of the terminal chargeable event, apart from the application of sections 546B and 546C in relation to that year.
- (3) Subsection (5) of section 546C shall apply successively to each of the relevant transactions that happened in the year, in the order in which they happened, unless and until the transaction in question (the “*final transaction*”) is such that the aggregate of—
- (a) its transaction value apart from subsection (4) below, and
- (b) the sum of the transaction values of any relevant transactions to which subsection (5) of that section has previously applied,
exceeds the gains limit.
- (4) If, in the case of the final transaction,—
- (a) the aggregate mentioned in subsection (3) above exceeds the gains limit, but
- (b) the sum mentioned in paragraph (b) of that subsection is less than that limit,
subsection (5) of section 546C shall apply in relation to that transaction, but for the purposes of subsections (5) to (7) of that section its transaction value shall be reduced to an amount equal to the difference between the gains limit and the sum mentioned in paragraph (b) above.
- (5) Except as provided by subsection (4) above, subsection (5) of section 546C shall not apply in relation to the final transaction or any subsequent relevant transaction.
- (6) This section shall be construed as one with sections 546B and 546C.
##### 547A
- (1) If—
- (a) immediately before the happening of a chargeable event, two or more persons have relevant interests in the rights conferred by the policy or contract in question, and
- (b) any of those persons is a company,
section 547 shall have effect in relation to each such company as if it had been the only person with a relevant interest in those rights, but with references to the amount of the gain construed as references to the company's proportionate share of the amount of the gain.
- (2) References in this section to the rights conferred by a policy or contract are, in the case of an assignment or surrender of only a part of or share in any rights, references to that part or share.
- (3) For the purposes of this section, a person has a “relevant interest" in the rights conferred by a policy or contract—
- (a) in the case of an individual, if a share in the rights is vested in him as beneficial owner, or is held on non-charitable trusts created, or as security for a debt owed, by him;
- (b) in the case of a company, if a share in the rights is in the beneficial ownership of the company, or is held on non-charitable trusts created, or as security for a debt owed, by the company;
- (c) in the case of personal representatives, if a share in the rights is vested in them;
- (cc) in the case of trustees of a charitable trust, if a share in the rights is held by them or as security for a debt owed by them;
- (d) in the case of trustees of a non-charitable trust—
- (i) if a share in the rights is held by them, and the person who created the trusts is not resident in the United Kingdom or has died or (in the case of a company or foreign institution) has been dissolved or wound up or has otherwise come to an end;
- (ia) if a share in the rights is held by them which does not also fall within paragraph (a), (b) or (c) above or sub-paragraph (i) above; or
- (ii) if a share in the rights is held as security for a debt owed by them;
- (e) in the case of a foreign institution, if a share in the rights is in the beneficial ownership of the foreign institution, or is held as security for a debt owed by the foreign institution.
- (4) For the purposes of subsection (1) above, a person’s “proportionate share" of the amount of a gain is that share of it which is proportionate to the share of the rights by reference to which he has the relevant interest in question.
- (5) Where, immediately before the happening of a chargeable event, the rights conferred by the policy or contract in question are, or a share in those rights is, held as security for one or more debts owed by two or more persons, this section shall effect in relation to the chargeable event as if—
- (a) each of those persons were instead the sole debtor in respect of a separate debt; and
- (b) the security for that separate debt were the appropriate share of the security for the actual debt or debts (so far as consisting of the rights, or a share in the rights, conferred by the policy or contract);
and for the purposes of paragraph (b) above the appropriate share, in the case of any person, is a share which is proportionate to that share of the actual debt or, as the case may be, the aggregate of the two or more actual debts, for which he is liable as between the debtors.
- (6) Where, immediately before the happening of a chargeable event, the rights conferred by the policy or contract in question are, or a share in those rights is, held on non-charitable trusts created by two or more persons, this section shall have effect in relation to that chargeable event as if—
- (a) each of those persons had instead been the sole settlor in relation to a separate share of the rights or share so held; and
- (b) that separate share were proportionate to the share which originates from him of the whole of the property subject to the trusts immediately before the happening of the chargeable event.
- (7) The reference in subsection (6)(b) above to the share of the property which originates from a person is a reference to the share of the property which consists of—
- (a) property which that person has provided directly or indirectly for the purposes of the trusts;
- (b) property representing property which that person has so provided; and
- (c) so much of any property which represents both property so provided and other property as, on a just apportionment, represents the property so provided.
- (8) References in subsection (7) above to property which a person has provided directly or indirectly—
- (a) include references to property which has been provided directly or indirectly by another in pursuance of reciprocal arrangements with the person, but
- (b) do not include references to property which the person has provided directly or indirectly in pursuance of reciprocal arrangements with another.
- (9) References in subsection (7) above to property which represents other property include references to property which represents accumulated income from that other property.
- (10) Where immediately before the happening of a chargeable event—
- (a) the rights conferred by the policy or contract in question are, or a share in those rights is, held subject to any non-charitable trusts, and
- (b) different shares of the whole of the property subject to those trusts originate (within the meaning of subsection (6)(b) above) from different persons,
the rights or share shall, in relation to that chargeable event, be taken for the purposes of this section to be held on non-charitable trusts created by those persons.
- (11) Where the rights conferred by a policy or contract are, or an interest in any such rights is, in the beneficial ownership of two or more persons jointly, the rights or interest shall be treated for the purposes of this section as if they were in the beneficial ownership of those persons in equal shares.
- (12) A non-fractional interest in the rights conferred by a policy or contract shall be treated for the purposes of this section as if it were instead such a share in those rights as may justly and reasonably be regarded for those purposes as representing the non-fractional interest.
- (13) For the purposes of subsection (12) above, a “non-fractional interest" in the rights conferred by a policy or contract is an interest in some or all of those rights which is not a share in all of those rights (otherwise than by virtue only of subsection (2) above).
- (14) This section applies in a case where the same person has two or more relevant interests in the rights conferred by a policy or contract as it applies in a case where two or more persons have separate relevant interests, unless—
- (a) that person is the only person with a relevant interest in those rights, and
- (b) he has all the relevant interests in the same capacity,
in which case section 547 applies.
- (15) In this section—
- “*foreign institution*” means a person which is a company or other institution resident or domiciled outside the United Kingdom;
- “*personal representatives*” has the same meaning as in Part XVI.
- (16) For the purposes of this section, property held for the purposes of a foreign institution shall be regarded as in the beneficial ownership of the foreign institution.
- (17) Any reference in this section to trusts created by an individual includes a reference to trusts arising under—
- (a) section 11 of the Married Women's Property Act 1882;
- (b) section 2 of the Married Women's Policies of Assurance (Scotland) Act 1880; or
- (c) section 4 of the Law Reform (Husband and Wife) Act (Northern Ireland) 1964;
and references to the settlor or to the person creating the trusts shall be construed accordingly.
##### 548A
- (1) This section applies if—
- (a) in calculating the amount that falls to be treated as a receipt of a UK property business under Chapter 4 of Part 3 of ITTOIA 2005 (“*the ITTOIA receipt*”), there is a reduction under section 288 of that Act by reference to a taxed receipt, and
- (b) the taxed receipt is the amount chargeable on the superior interest for the purposes of section 37.
- (2) Section 37(4) shall apply for the period in respect of which the ITTOIA receipt arose only if the appropriate fraction of the amount chargeable on the superior interest exceeds the amount of the ITTOIA receipt given by the formula in section 277, 279, 280, 281 or 282 of ITTOIA 2005, as the case may be.
- (3) Section 37(4) shall then apply as if the amount chargeable on the superior interest were reduced in the proportion which that excess bears to that appropriate fraction.
- (4) Subsection (5) applies if—
- (a) the ITTOIA receipt is in respect of a lease granted out of the taxed lease,
- (b) the taxed lease is the head lease for the purposes of section 37, and
- (c) the lease granted as mentioned in paragraph (a) does not extend to the whole of the premises subject to the head lease.
- (5) Section 37(4) and subsections (2) and (3) above shall be applied separately to the part of the premises subject to the lease and to the remainder of the premises, but as if for any reference to the amount chargeable on the superior interest there were a reference to that amount proportionately adjusted.
- (6) For the purposes of this section the appropriate fraction of the amount chargeable on the superior interest is the fraction—
$$AB$where—A is the period in respect of which the ITTOIA receipt arose, andB is the period in respect of which the amount chargeable on the superior interest arose for the purposes of section 37.$
- (7) For the purposes of this section the period in respect of which an ITTOIA receipt arose is its receipt period (within the meaning of Chapter 4 of Part 3 of ITTOIA 2005 (see section 288(6))).
- (8) In this section the following expressions have the same meaning as in Chapter 4 of Part 3 of ITTOIA 2005—
- “reduction under section 288 by reference to a taxed receipt” (see section 290(6) of that Act),
- “taxed lease” (see section 287(4) of that Act), and
- “taxed receipt” (see section 287(4) of that Act).
- (9) In the application of this section to Scotland, references to a lease granted out of a taxed lease are to be construed as references to a sublease of land subject to the taxed lease.
#### Schedule E.
##### 42A
- (1) The Board may by regulations make provision for the charging, assessment, collection and recovery on or from prescribed persons falling within subsection (2) below of prescribed amounts in respect of the tax which is or may become chargeable —
- (a) under Schedule A, or
- (b) as the profits of a UK property business, under Chapter 3 of Part 3 of ITTOIA 2005,
on the income of any person who has his usual place of abode outside the United Kingdom (“the non-resident”).
- (2) A person falls within this subsection if he is—
- (a) a person by whom any such sums are payable to the non-resident as fall, or would fall, to be treated as receipts of a Schedule A business , or a UK property business, carried on by the non-resident; or
- (b) a person who acts on behalf of the non-resident in connection with the management or administration of any such business.
- (3) A person on whom any obligation to make payments to the Board is imposed by regulations under this section shall be entitled—
- (a) to be indemnified by the non-resident for all such payments; and
- (b) to retain, out of any sums otherwise due from him to the non-resident, or received by him on behalf of the non-resident, amounts sufficient for meeting any liabilities under the regulations to make payments to the Board which have been discharged by that person or to which he is subject.
- (4) Without prejudice to the generality of the preceding provisions of this section, regulations under this section may include any or all of the following provisions, that is to say—
- (a) provision for the amount of any payment to be made to the Board in respect of the tax on any income to be calculated by reference to such factors as may be prescribed;
- (b) provision for the determination in accordance with any such regulations of the period for which, the circumstances in which and the times at which any payments are to be made to the Board;
- (c) provision for requiring the payment of interest on amounts which are not paid to the Board at the times required under any such regulations;
- (d) provision as to the certificates to be given in prescribed circumstances to the non-resident by a person falling within subsection (2) above, and as to the particulars to be included in any such certificate;
- (e) provision for the making of repayments of tax to the non-resident and for such repayments to be made in prescribed cases to persons falling within subsection (2) above;
- (f) provision for the payment of interest by the Board on sums repaid under any such regulations;
- (g) provision for the rights and obligations arising under any such regulations to depend on the giving of such notices and the making of such claims and determinations as may be prescribed;
- (h) provision for the making and determination of applications for requirements of any such regulations not to apply in certain cases, and for the variation or revocation, in prescribed cases, of the determinations made on such applications;
- (i) provision for appeals with respect to questions arising under any such regulations;
- (j) provision requiring prescribed persons falling within subsection (2)(b) above to register with the Board;
- (k) provision requiring persons registered with the Board and other prescribed persons falling within subsection (2) above to make returns and supply prescribed information to the Board and to make available prescribed books, documents and other records for inspection on behalf of the Board;
- (l) provision for the partnership, as such, to be treated as the person falling within subsection (2) above in a case where a liability to make any payment under the regulations arises from amounts payable or things done in the course of a business carried on by any persons in partnership;
- (m) provision which, in relation to payments to be made by virtue of this section in respect of any tax or to any sums retained in respect of such payments, applies (with or without modifications) any enactment or subordinate legislation having effect apart from this section with respect to cases in which tax is or is treated as deducted from any income.
- (5) Interest required to be paid by any regulations under this section shall be paid without deduction of tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.
- (6) Regulations under this section may—
- (a) a relevant chargeable event occurs in respect of a policy or contract,
- (b) commission in respect of the policy or contract has at any time been rebated or reinvested, and
- (c) condition A or B is met.
- (2) For the purposes of performing the calculation under section 541(1)(b) or (c) or 543(1)(a) or (b) for the chargeable event, the total amount paid under the policy or contract by way of premiums in any period is to be reduced by the total amount of commission attributable to those premiums that has been rebated or reinvested.
- (3) Condition A is that the total amount paid under the policy or contract by way of premiums in a relevant period exceeds £100,000.
- (4) Condition B is that—
- (a) at a time when the policy or contract was the taxable person's, the taxable person's policies and contracts exceeded the relevant threshold as respects a relevant period, and
- (b) payments under the policy or contract by way of premiums were made in that relevant period.
- (5) In subsection (4)(a) “*taxable person*” means the person whose policy or contract the policy or contract is, immediately before the chargeable event.
- (6) For the purposes of subsection (4)(a) a person's policies and contracts “exceed the relevant threshold” as respects a relevant period if the total amount of payments under them by way of premiums in that relevant period exceeds the sum specified in subsection (3).
- (7) In this section “*relevant chargeable event*” means a chargeable event within—
- (a) any of sub-paragraphs (ii) to (iv) of section 540(1)(a) (including those sub-paragraphs as they apply in relation to a qualifying policy),
- (b) section 542(1)(a) or (b), or
- (c) section 545(1)(a) to (c).
- (8) In this section “*relevant period*” means—
- (a) the period beginning with the beginning of the year of assessment in which the chargeable event occurs and ending with the chargeable event, or
- (b) any of the 3 preceding years of assessment.
- (9) References in this section to a premium include, in relation to a contract for a life annuity, lump sum consideration.
- (10) The Treasury may by order—
- (a) substitute another sum for the sum for the time being specified in subsection (3);
- (b) amend the definition of “relevant period”.
#### Qualifying maintenance payments.
##### 548B
- (1) This section supplements section 548A.
- (2) “*Commission*”, in relation to a policy or contract, includes any passing of value to or for the benefit of an intermediary, or a person connected with an intermediary, that can reasonably be taken to represent a reward in respect of the policy or contract.
- (3) Commission in respect of a policy or contract is “reinvested” if, as a result of a waiver of an entitlement to it, there is an increase in the total value of a relevant person's policies and contracts.
- (4) The amount of commission reinvested is the amount of the increase.
- (5) Commission in respect of a policy or contract is “rebated” if—
- (a) value passes (directly or indirectly) from an intermediary, or a person connected with an intermediary, to or for the benefit of a relevant person (and the passing of value does not amount to the reinvestment of the commission), and
- (b) the passing of value can reasonably be taken to be in respect of the commission.
- (6) The amount of commission rebated is the amount of value passed.
- (7) A policy or contract is a person's policy or contract if a gain arising in connection with it would be—
- (a) a gain for which the person, or (if the person is an individual) the person's spouse or civil partner, would be liable to tax under Chapter 9 of Part 4 of ITTOIA 2005, or
- (b) treated by virtue of section 547(1) above as forming part of the person's income.
- (8) Any necessary apportionment is to be made (on a just and reasonable basis) as regards—
- (a) commission which is attributable to two or more premiums, and
- (b) any part of such commission that has been rebated or reinvested.
- (9) Commission which is in respect of one or more policies or contracts (but is not attributable to particular premiums) is to be attributed to such premiums as is just and reasonable.
- (10) In subsections (3) and (5), “*relevant person*” means—
- (a) any of the policyholders (including any of the persons who hold the contract),
- (b) a person who beneficially owns the rights under the policy or contract,
- (c) if those rights are held on trust, any of the trustees, or
- (d) a person connected (within the meaning of section 839) with a person within any of paragraphs (a) to (c).
- (11) In subsections (8) and (9), references to a premium include, in relation to a contract for a life annuity, lump sum consideration.
##### 551A
- (1) Where—
- (a) an amount is included in a company’s income by virtue of section 547(1)(b), and
- (b) the rights, or the part or share, in question were held immediately before the happening of the chargeable event on non-charitable trusts,
the company shall be entitled to recover from the trustees, to the extent of any sums, or to the value of any benefits, received by them by reason of the event, the amount (if any) by which T1 exceeds T2.
- (2) For the purposes of subsection (1) above—
- T1 is the tax with which the company is chargeable for the accounting period in question; and
- T2 is the tax with which the company would have been chargeable for the accounting period if the amount mentioned in subsection (1)(a) above had not been included as there mentioned.
- (3) A company may require the Board to certify any amount recoverable by the company by virtue of this section, and the certificate shall be conclusive evidence of the amount.
##### 552ZA
- (1) This section supplements section 552 and shall be construed as one with it.
- (2) Where the obligations under any policy or contract of the body that issued, entered into or effected it (“*the original insurer*”) are at any time the obligations of another body (“*the transferee*”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, section 552 shall have effect in relation to that time, except where the chargeable event—
- (a) happened before the transfer, and
- (b) in the case of a death or an assignment, is an event of which the notification mentioned in subsection (6) or (7) of that section was given before the transfer,
as if the policy or contract had been issued, entered into or effected by the transferee.
- (3) Where, in consequence of section 546C(7)(a) of this Act and section 514(1) of ITTOIA 2005, paragraph (a) or (b) of section 552(1) requires certificates to be delivered in respect of two or more surrenders, happening in the same year, of part of or a share in the rights conferred by the policy or contract, a single certificate may be delivered under the paragraph in question in respect of all those surrenders (and may treat them as if they together constituted a single surrender) unless between the happening of the first and the happening of the last of them there has been—
- (a) an assignment of part of or a share in the rights conferred by the policy or contract; or
- (b) an assignment, otherwise than for money or money’s worth, of the whole of the rights conferred by the policy or contract.
- (4) Where the appropriate policy holder is two or more persons—
- (a) section 552(1)(a) requires a certificate to be delivered to each of them; but
- (b) nothing in section 552 or this section requires a body to deliver a certificate under subsection (1)(a) of that section to any person whose address has not been provided to the body (or to another body, at a time when the obligations under the policy or contract were obligations of that other body).
- (5) A certificate under section 552(1)(b) or (3)—
- (a) shall be in a form prescribed for the purpose by the Board; and
- (b) shall be delivered by any means prescribed for the purpose by the Board;
and different forms, or different means of delivery, may be prescribed for different cases or different purposes.
- (6) The Board may by regulations make such provision as they think fit for securing that they are able—
- (a) to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 or this section; and
- (b) to verify any certificate under that section.
- (7) Regulations under subsection (6) above may include, in particular, provisions requiring persons to whom premiums under any policy are or have at any time been payable—
- (a) to supply information to the Board; and
- (b) to make available books, documents and other records for inspection on behalf of the Board.
- (8) Regulations under subsection (6) above may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential and transitional provision as appears to the Board to be appropriate;
and the provision that may be made by virtue of paragraph (b) above may include provision which, in connection with any other provision made by any such regulations, modifies the operation in any case of section 59A of the Management Act or Schedule 21 to the Finance Act 1995 (payments on account of income tax).
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 552ZB
- (1) The Commissioners for Her Majesty's Revenue and Customs may make regulations—
- (a) requiring relevant persons—
- (i) to provide prescribed information to persons who apply for the issue of qualifying policies or who are, or may be, required to make statements under paragraph B3(2) of Schedule 15;
- (ii) to provide to an officer of Revenue and Customs prescribed information about qualifying policies which have been issued by them or in relation to which they are or have been a relevant transferee;
- (b) making such provision (not falling within paragraph (a)) as the Commissioners think fit for securing that an officer of Revenue and Customs is able—
- (i) to ascertain whether there has been or is likely to be any contravention of the requirements of the regulations or of paragraph B3(2) of Schedule 15;
- (ii) to verify any information provided to an officer of Revenue and Customs as required by the regulations.
- (2) The provision that may be made by virtue of subsection (1)(b) includes, in particular, provision requiring relevant persons to make available books, documents and other records for inspection by or on behalf of an officer of Revenue and Customs.
- (3) The regulations may—
- (a) make different provision for different cases or circumstances, and
- (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.
- (4) In this section—
- “*prescribed*” means prescribed by the regulations,
- “*qualifying policy*” includes a policy which would be a qualifying policy apart from—paragraph A1(2), B1(2), B2(2) or B3(3) of Schedule 15, orparagraph 17(2)(za) of that Schedule (including as applied by paragraph 18), and
- “*relevant person*” means a person—who issues, or has issued, qualifying policies, orwho is, or has been, a relevant transferee in relation to qualifying policies.
- (5) For the purposes of this section a person (“X”) is at any time a “*relevant transferee*” in relation to a qualifying policy if the obligations under the policy of its issuer are at that time the obligations of X as a result of there having been a transfer to X of the whole or any part of a business previously carried on by the issuer.
##### 552A
- (1) This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative.
- (2) In this section “*overseas insurer*” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of—
- (a) policies of life insurance;
- (b) contracts for life annuities; or
- (c) capital redemption policies.
- (3) This section applies to an overseas insurer—
- (a) if the condition in subsection (4) below is satisfied on the designated day; or
- (b) where that condition is not satisfied on that day, if it has subsequently become satisfied.
- (4) The condition mentioned in subsection (3) above is that—
- (a) there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and
- (b) the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more.
- (5) In this section “*relevant insurance*” means any policy of life insurance, contract for a life annuity or capital redemption policy . . . in the case of which—
- (a) the holder is resident in the United Kingdom;
- (b) the obligations of the insurer are obligations of a person not resident in the United Kingdom; and
- (c) those obligations are not attributable to a branch or agency of that person’s in the United Kingdom.
- (6) Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative.
- (7) A person shall not be a tax representative unless—
- (a) if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or
- (b) if he is not an individual, he has a business establishment in the United Kingdom,
and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board.
- (8) A person shall not be an overseas insurer’s tax representative unless—
- (a) his nomination by the overseas insurer has been approved by the Board; or
- (b) he has been appointed by the Board.
- (9) The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to—
- (a) the making of a nomination by an overseas insurer of a person to be his tax representative;
- (b) the information which is to be provided in connection with such a nomination;
- (c) the form in which such a nomination is to be made;
- (d) the powers and duties of the Board in relation to such a nomination;
- (e) the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so;
- (f) the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative;
- (g) the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made);
- (h) the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative;
- (j) circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative;
- (k) appeals to the Special Commissioners against decisions of the Board under this section or regulations under it.
- (10) The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B.
- (11) Section 839 (connected persons) applies for the purposes of this section.
- (12) In this section—
- “*capital redemption policy*” means a capital redemption policy in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*contract for a life annuity*” means a contract for a life annuity in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*the designated day*” means such day as the Board may specify for the purpose in regulations;
- “*policy of life insurance*” means a policy of life insurance in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*tax representative*” means a tax representative under this section.
##### 552B
- (1) It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer.
- (2) For the purposes of this section “*the relevant duties*” are—
- (a) the duties imposed by section 552,
- (b) the duties imposed by section 552ZA(2), (4) or (5), and
- (c) any duties imposed by regulations made under subsection (6) of section 552ZA by virtue of subsection (7) of that section,
so far as relating to relevant insurances under which the overseas insurer in question has any obligations.
- (3) An overseas insurer’s tax representative shall be personally liable—
- (a) in respect of any failure to secure the discharge of the relevant duties, and
- (b) in respect of anything done for purposes connected with acting on the overseas insurer’s behalf,
as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer.
- (4) In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment.
- (5) This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made.
- (5A) In subsection (5) “*chargeable event*” has the same meaning as in section 552 (see subsection (10) of that section).
- (6) Expressions used in this section and in section 552A have the same meaning in this section as they have in that section.
##### 553A
- (1) A policy of life insurance which, immediately before the happening of a chargeable event or a relevant event—
- (a) is an overseas policy, but
- (b) is not a new non-resident policy,
shall, in relation to that event, be treated for the purposes of this Chapter as if it were a new non-resident policy.
- (2) A policy of life insurance which, immediately before the happening of a relevant event—
- (a) is an overseas policy, and
- (b) is a new non-resident policy,
shall, in relation to that event, be taken for the purposes of this Chapter not to be a qualifying policy.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In this section—
- “*new non-resident policy*” means a new non-resident policy as defined in paragraph 24 of Schedule 15 (and in subsection (2) above includes a policy treated as such by virtue of subsection (1) above);
- “*overseas policy*” means a policy of life insurance which, by virtue of section 431D(1)(a), forms part of the overseas life assurance business of an insurance company or friendly society;
- “*relevant event*”, in relation to a policy of life insurance, means an event which would be a chargeable event in relation to that policy if the policy were assumed not to be a qualifying policy.
- (5) This section applies in relation to chargeable events and relevant events happening on or after 17th March 1998 in relation to policies of life insurance issued in respect of insurances made on or after that date.
- (6) A policy of life insurance issued in respect of an insurance made before 17th March 1998 shall be treated for the purposes of this section as issued in respect of one made on or after that date if it is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and any exercise of rights conferred by the policy shall be regarded for this purpose as a variation.
##### 553B
- (1) A capital redemption policy which immediately before the happening of a chargeable event—
- (a) is an overseas policy, but
- (b) is not a new offshore capital redemption policy,
shall, in relation to that event, be treated for the purposes of this Chapter as if it were a new offshore capital redemption policy.
- (2) In this section—
- “*new offshore capital redemption policy*” has the same meaning as in section 553;
- “*overseas policy*” means a capital redemption policy which, by virtue of section 431D(1)(a), forms part of the overseas life assurance business of an insurance company.
- (3) This section applies in relation to capital redemption policies where the contract is made after the coming into force of the first regulations under section 458A in consequence of which capital redemption business forms part of the overseas life assurance business of an insurance company.
##### 553C
- (1) The Treasury may by regulations make provision imposing a yearly charge to corporation tax in relation to personal portfolio bonds (“yearly" being construed for this purpose by reference to years as defined in section 546(4)).
- (2) Subject to any provision to the contrary made by the regulations, any charge to corporation tax under this section is in addition to any other charge to corporation tax under this Chapter.
- (3) The regulations may make provision with respect to or in connection with all or any of the following—
- (a) the method by which the charge to corporation tax, or any relief, allowance or deduction against or in respect of the tax, is to be imposed or given effect;
- (b) the person who is to be liable for the tax;
- (c) the periods for or in respect of which the tax is to be charged;
- (d) the amounts in respect of which, or by reference to which, the tax is to be charged;
- (e) the period or periods by reference to which those amounts are to be determined;
- (f) the rate or rates at which the tax is to be charged;
- (g) any reliefs, allowances or deductions which are to be given or made against or in respect of the tax;
- (h) the administration of the tax.
- (4) The provision that may be made by the regulations includes provision for imposing the charge to corporation tax by a method which involves—
- (a) treating an event described in the regulations as if it were a chargeable event;
- (b) treating an amount determined in accordance with the regulations as if it were a gain treated as arising on the happening of a chargeable event; or
- (c) deeming an amount determined in accordance with the regulations to be income of a company; . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) The provision that may be made in the regulations includes provision for the amount or amounts in respect of which, or by reference to which, the tax is to be charged for periods beginning after the coming into force of the regulations to be determined in whole or in part by reference to periods beginning or ending, premiums paid, or events happening, before, on or after the day on which the Finance Act 1998 is passed.
- (6) The regulations may make provision excluding, or applying (with or without modification), other provisions of this Chapter in relation to policies or contracts which are also personal portfolio bonds.
- (7) In this section, “*personal portfolio bond*” means a policy of life insurance, contract for a life annuity or capital redemption policy under whose terms—
- (a) some or all of the benefits are determined by reference to the value of, or the income from, property of any description (whether or not specified in the policy or contract) or fluctuations in, or in an index of, the value of property of any description (whether or not so specified); and
- (b) some or all of the property, or such an index, may be selected by, or by a person acting on behalf of, the holder of the policy or contract or a person connected with him (or the holder of the policy or contract and a person connected with him);
but a policy or contract is not a personal portfolio bond if the only property or index which may be so selected is of a description prescribed for this purpose in the regulations.
- (8) The regulations may prescribe additional conditions which must be satisfied if a policy or contract is to be a personal portfolio bond.
- (9) The regulations—
- (a) may make different provision for different cases, different circumstances or different periods; and
- (b) may make incidental, consequential, supplemental or transitional provision.
- (9A) The Treasury may by regulations make provision, in relation to any policy or contract to which this subsection applies, for—
- (a) treating an event described in the regulations as if it were a chargeable event, and
- (b) treating an amount determined in accordance with the regulations as if it were a gain treated as arising on the happening of a chargeable event.
- (9B) Regulations under subsection (9A) may make such provision for the purposes only of enabling the gain to be taken into account in the application of this Chapter to the policy or contract on the later happening of a chargeable event.
- (9C) Regulations under subsection (9A) may make any provision for the calculation of the amount of the gain which regulations under subsection (1) may make for the calculation of the amount charged to corporation tax by virtue of regulations under that subsection.
- (9D) Subsections (6), (8) and (9) apply to regulations under subsection (9A).
- (9E) Subsection (9A) applies to a policy or contract if—
- (a) it is a personal portfolio bond, and
- (b) liability in respect of a gain arising in relation to it would arise by virtue of any of sections 464 to 468 of ITTOIA 2005 (persons liable for tax under Chapter 9 of Part 4 of that Act).
- (10) In this section, “holder", in the case of a policy or contract held by two or more persons, includes a reference to any of those persons.
- (11) Section 839 (connected persons) applies for the purposes of this section.
##### 559A
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#### Relevant loan interest.
### Chapter 5A — Share loss relief
### Relief for losses on unquoted shares in trading companies
##### 576A
- (1) For the purposes of this Chapter a qualifying trading company is a company which meets each of conditions A to D.
- (2) Condition A is that the company either—
- (a) meets each of the following requirements on the date of the disposal—
- (i) the trading requirement (see section 576B),
- (ii) the control and independence requirement (see section 576D),
- (iii) the qualifying subsidiaries requirement (see section 576E), and
- (iv) the property managing subsidiaries requirement (see section 576F), or
- (b) has ceased to meet any of those requirements at a time which is not more than 3 years before that date and has not since that time been an excluded company, an investment company or a trading company.
- (3) Condition B is that the company either—
- (a) has met each of the requirements mentioned in condition A for a continuous period of 6 years ending on that date or at that time, or
- (b) has met each of those requirements for a shorter continuous period ending on that date or at that time and has not before the beginning of that period been an excluded company, an investment company or a trading company.
- (4) Condition C is that the company—
- (a) met the gross assets requirement (see section 576G) both immediately before and immediately after the issue of the shares in respect of which the relief is claimed under this Chapter, and
- (b) met the unquoted status requirement (see section 576H) at the relevant time within the meaning of that section.
- (5) Condition D is that the company has carried on its business wholly or mainly in the United Kingdom throughout the period—
- (a) beginning with the incorporation of the company or, if later, 12 months before the shares in question were issued, and
- (b) ending with the date of the disposal.
### Qualifying trading companies: the requirements
##### 576B
- (1) The trading requirement is that—
- (a) the company, disregarding any incidental purposes, exists wholly for the purpose of carrying on one or more qualifying trades, or
- (b) the company is a parent company and the business of the group does not consist wholly or as to a substantial part in the carrying on of non-qualifying activities.
- (2) If the company intends that one or more other companies should become its qualifying subsidiaries with a view to their carrying on one or more qualifying trades—
- (a) the company is treated as a parent company for the purposes of subsection (1)(b), and
- (b) the reference in subsection (1)(b) to the group includes the company and any existing or future company that will be its qualifying subsidiary after the intention in question is carried into effect.
This subsection does not apply at any time after the abandonment of that intention.
- (3) For the purpose of subsection (1)(b) the business of the group means what would be the business of the group if the activities of the group companies taken together were regarded as one business.
- (4) For the purpose of determining the business of a group, activities are disregarded to the extent that they are activities carried on by a mainly trading subsidiary otherwise than for its main purpose.
- (5) For the purposes of determining the business of a group, activities of a group company are disregarded to the extent that they consist in—
- (a) the holding of shares in or securities of a qualifying subsidiary of the parent company,
- (b) the making of loans to another group company,
- (c) the holding and managing of property used by a group company for the purpose of one or more qualifying trades carried on by a group company, or
- (d) the holding and managing of property used by a group company for the purpose of research and development from which it is intended—
- (i) that a qualifying trade to be carried on by a group company will be derived, or
- (ii) that a qualifying trade carried on or to be carried on by a group company will benefit.
- (6) Any reference in subsection (5)(d)(i) or (ii) to a group company includes a reference to any existing or future company which will be a group company at any future time.
- (7) In this section—
- “*prescribed*” means prescribed by, or determined by an officer of the Board in accordance with, regulations made by the Board under this section; and
- “*subordinate legislation*” has the same meaning as in the Interpretation Act 1978.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Rent factoring
##### 43A
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##### 43B
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##### 43C
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##### 43D
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##### 43E
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##### 43F
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##### 43G
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##### 51AA
A direction under section 50 or 51 that any security shall be deemed to have been issued subject to the condition that the interest thereon shall be paid without deduction of tax may provide that the direction is to have effect in relation only to payments of interest made on or after such date as may be specified in the direction.
##### 51A
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##### 51B
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#### Schedule F.
##### 56A
- (1) This section applies where there is an arrangement under which—
- (a) there is a right to receive an amount (with or without interest)
in pursuance of a deposit of money,
- (b) when the right comes into existence there is no certificate of deposit in respect of the right, and
- (c) the person for the time being entitled to the right is entitled to call for the issue of a certificate of deposit in respect of the right.
- (2) In such a case—
- (a) the right shall be treated as not falling within section 56(1)(b), and
- (b) if there is a disposal or exercise of the right before such time (if any) as a certificate of deposit is issued in respect of it, section 56(2) shall apply to it by virtue of this paragraph.
- (3) In the application of section 56 by virtue of this section—
- (a) subsection (2) shall have effect as if the words from “(whether” to “person)” read “(whether by the person originally entitled to the right or by some other person)”, and
- (b) subsection (3) shall have effect as if the words “stated in a certificate of deposit” read “under an arrangement”.
- (4) In this section “*certificate of deposit*” has the meaning given by section 56(5).
##### 62A
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##### 63A
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##### 65A
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##### 68A
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##### 68B
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##### 68C
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##### 70A
- (1) This section applies where a company is chargeable to corporation tax under Case V of Schedule D in respect of income which—
- (a) arises from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land outside the United Kingdom, and
- (b) is not income to which section 70(2) applies (income from a trade or vocation).
- (2) The provisions of Schedule A apply to determine whether income falls within subsection (1)(a) above as they would apply to determine whether the income fell within paragraph 1(1) of that Schedule if—
- (a) the land in question were in the United Kingdom, or
- (b) a caravan or houseboat which is to be used at a location outside the United Kingdom were to be used at a location in the United Kingdom.
- (3) Any provision of the Taxes Acts which deems there to be a Schedule A business in the case of land in the United Kingdom applies where the corresponding circumstances arise with respect to land outside the United Kingdom so as to deem there to be a business within subsection (1)(a) above.
- (4) All businesses and transactions carried on or entered into by a particular company or partnership, so far as they are businesses or transactions the income from which is chargeable to tax under Case V of Schedule D in accordance with this section, are treated for the purposes of the charge to tax under Case V as, or as entered into in the course of carrying on, a single business (an “overseas property business").
- (5) The income from an overseas property business shall be computed for the purposes of Case V of Schedule D in accordance with the rules applicable to the computation of the profits of a Schedule A business.
Those rules apply separately in relation to—
- (a) an overseas property business, and
- (b) any actual Schedule A business of the company chargeable,
as if each were the only Schedule A business carried on by that company.
- (6) Sections 503 and 504 of this Act . . . do not apply to the profits or losses of an overseas property business.
- (7) Where under this section rules expressed by reference to domestic concepts of law apply in relation to land outside the United Kingdom, they shall be interpreted so as to produce the result that most closely corresponds with the result produced for Schedule A purposes in relation to land in the United Kingdom.
##### 75A
- (1) This section has effect for the purpose of determining the accounting period to which expenses of management are referable for the purposes of section 75(1).
- (2) Where—
- (a) expenses of management are debited in accounts drawn up by a company for a period of account,
- (b) the treatment of those expenses in those accounts is in accordance with generally accepted accounting practice, and
- (c) the period of account coincides with an accounting period,
the expenses of management are referable to that accounting period.
- (3) Where—
- (a) expenses of management are debited in accounts drawn up by a company for a period of account, and
- (b) the treatment of those expenses in those accounts is in accordance with generally accepted accounting practice, but
- (c) the period of account does not coincide with an accounting period,
subsection (4) below applies.
- (4) Where this subsection applies, the expenses of management—
- (a) shall be apportioned between any accounting periods that fall within the period of account, and
- (b) are referable to an accounting period to the extent that they are so apportioned to it.
- (5) An apportionment under subsection (4) above shall be in accordance with section 834(4) (time basis) unless it appears that that method would work unreasonably or unjustly, in which case such other method shall be used as appears just and reasonable.
- (6) Where—
- (a) expenses of management are not referable to an accounting period by virtue of subsections (2) to (5) above, but
- (b) accounts are drawn up by the company for a period of account, and
- (c) if the expenses of management had been treated in those accounts in accordance with generally accepted accounting practice, they would fall to be debited in those accounts,
the expenses of management are referable to the accounting period to which they would have been referable in accordance with subsections (2) to (5) above if they had been so debited in those accounts.
- (7) Where expenses of management are not referable to an accounting period by virtue of subsections (2) to (6) above, they are referable to the accounting period to which they would be referable in accordance with subsections (2) to (5) above on the assumptions in subsection (8) below.
- (8) Those assumptions are—
- (a) that for each accounting period that does not coincide with, or fall within, any period of account, there is a period of account that coincides with that accounting period, and
- (b) that so much of the expenses of management as would fall to be debited in accordance with generally accepted accounting practice in accounts drawn up by the company for any such deemed period of account are so debited.
- (9) This section is without prejudice to any other provision of the Corporation Tax Acts which provides for amounts to be treated for the purposes of section 75 as expenses of management referable to an accounting period.
- (10) Any reference in this section to expenses of management being debited in accounts is a reference to those expenses being brought into account, in accordance with generally accepted accounting practice, as a debit—
- (a) in the company’s profit and loss account or income statement, or
- (b) in a statement of total recognised gains and losses , statement of changes in equity or other statement of items brought into account in computing the company’s profits and losses for accounting purposes.
For this purpose “*debit*” means an amount which for accounting purposes reduces a profit, or increases a loss, for a period of account.
#### Restrictions on relief
##### 75B
- (1) This section applies in any case where the following conditions are satisfied—
- (a) a credit is brought into account by a company in a period of account (the “reversal period”) which ends on or after the commencement date,
- (b) the credit reverses (in whole or in part) a debit brought into account in a previous period of account of the company (whenever ending),
- (c) the debit (in whole or in part) represents expenses of management deductible under section 75(1) for an accounting period of the company (“the period of deductibility”),
- (d) the expenses of management were so deductible for that period otherwise than by virtue of section 75(9) (carry forward of unrelieved excess),
- (e) the period of deductibility ends before, or at the same time as, the reversal period,
- (f) the reversal period does not coincide with an accounting period beginning before the commencement date.
- (2) In any such case, subsection (4) or (5) below (as the case may be) shall apply in relation to the reversal amount.
- (3) In this section “*the reversal amount*” means so much of the credit as—
- (a) reverses so much of the debit as represents the expenses of management, and
- (b) does not represent sums otherwise taken into account in determining for the purposes of corporation tax the profits and losses of the company for the relevant accounting period or any earlier accounting period.
For this purpose the relevant accounting period is the latest accounting period of the company that falls wholly or partly within the reversal period.
- (4) If the reversal period coincides with an accounting period of the company beginning on or after the commencement date, the reversal amount shall be dealt with for that period in accordance with subsection (7) below.
- (5) If the reversal period does not coincide with an accounting period of the company—
- (a) the reversal amount shall be apportioned between any accounting periods that fall within the reversal period, and
- (b) any amount so apportioned to an accounting period beginning on or after the commencement date shall be dealt with for that period in accordance with subsection (7) below.
- (6) An apportionment under subsection (5) above shall be in accordance with section 834(4) (time basis) unless it appears that that method would work unreasonably or unjustly, in which case such other method shall be used as appears just and reasonable.
- (7) Where an amount falls to be dealt with in accordance with this subsection for an accounting period—
- (a) it shall, so far as possible, be applied in reducing or further reducing (but not below nil) the company’s expenses of management deductible for that period otherwise than by virtue of section 75(9) (carry forward of unrelieved excess), and
- (b) so much of the amount as cannot be so applied shall be regarded as income of the company chargeable under Case VI of Schedule D for that accounting period.
- (8) In subsection (1) above “*brought into account*”, in relation to a period of account of a company, means brought into account in accordance with generally accepted accounting practice in determining, for accounting purposes, profit and loss for that period of account.
- (9) If (apart from this subsection) an accounting period does not coincide with, or fall within, any period of account, it shall be assumed for the purposes of this section that there is a period of account of the company that coincides with that accounting period.
- (10) It shall be assumed for the purposes of this section that, in determining for accounting purposes profit and loss for any period of account of any company, amounts fall to be brought into account in accordance with generally accepted accounting practice.
- (11) For the purposes of this section a credit reverses a debit in whole or in part in any case where the sum represented in whole or in part by the debit is paid and then in whole or in part repaid (as well as in a case where the sum represented by the debit is never paid).
- (12) In this section—
- “*the commencement date*” means 1st April 2004;
- “*credit*” means an amount which for accounting purposes increases or creates a profit, or reduces a loss, for a period of account;
- “*debit*” means an amount which for accounting purposes reduces a profit, or increases or creates a loss, for a period of account.
#### Section 37(4) and reductions in receipts under ITTOIA 2005
##### 76A
- (1) In computing the amount of the profits to be charged to corporation tax under Case I of Schedule D arising from a trade carried on by an authorised person (other than an investment company)—
- (a) to the extent that it would not be deductible apart from this section, any sum expended by the authorised person in paying a levy may be deducted as an allowable expense;
- (b) any payment which is made to the authorised person as a result of a repayment provision is to be treated as a trading receipt.
- (2) “Levy” means—
- (a) a payment required under rules made under section 136(2) of the Financial Services and Markets Act 2000 (“the Act of 2000”);
- (b) a levy imposed under the Financial Services Compensation Scheme;
- (c) a payment required under rules made under section 234 of the Act of 2000;
- (d) a payment required under scheme rules in accordance with paragraph 15(1) of Schedule 17 to the Act of 2000;
- (e) a payment required in accordance with the standard terms fixed under paragraph 18 of Schedule 17 to the Act of 2000 other than an award which is not an award of costs under cost rules.
- (3) “Repayment provision” means—
- (a) any provision made by virtue of section 136(7) or 214(1)(e) of the Act of 2000;
- (b) any provision by scheme rules for fees to be refunded in specified circumstances.
- (4) “*Authorised person*” has the same meaning as in the Act of 2000.
- (5) “Scheme rules” means the rules referred to in paragraph 14(1) of Schedule 17 to the Act of 2000.
- (6) “Costs rules” means—
- (a) rules made under section 230 of the Act of 2000;
- (b) provision relating to costs contained in the standard terms fixed under paragraph 18 of Schedule 17 to the Act of 2000.
##### 76B
- (1) For the purposes of section 75 any sums paid by a company with investment business—
- (a) by way of a levy, or
- (b) as a result of an award of costs under costs rules,
shall be treated as part of its expenses of management.
- (2) For the purposes of corporation tax, if a payment is made to a company with investment business as a result of a repayment provision, the company shall be charged to tax under Case VI of Schedule D on the amount of that payment.
- (3) “*Levy*” has the meaning given in section 76A(2).
- (4) “Costs rules” has the meaning given in section 76A(6).
- (5) “*Repayment provision*” has the meaning given in section 76A(3).
#### Rules for ascertaining duration of leases.
##### 79A
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to a training and enterprise council, business link organisation or a local enterprise company, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or profession for the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the council, organisation or company concerned or from any other person.
- (4) In any case where—
- (a) relief has been given under subsection (1) above in respect of a contribution made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D, or if the company is not chargeable to corporation tax under either of those Cases for that period under Case VI of Schedule D, on an amount equal to the value of that benefit.
- (5) In this section—
- (aa) “*business link organisation*” means any person authorised by or on behalf of the Secretary of State to use a service mark (within the meaning of the Trade Marks (Amendment) Act 1984) designated by the Secretary of State for the purposes of this paragraph
- (a) “*training and enterprise council*” means a body with which the Secretary of State has made an agreement (not being one which has terminated) under which it is agreed that the body shall carry out the functions of a training and enterprise council, and
- (b) “*local enterprise company*” means a company with which an agreement (not being one which has terminated) under which it is agreed that the company shall carry out the functions of a local enterprise company has been made by . . . Scottish Enterprise or Highlands and Islands Enterprise.
- (6) Section 839 applies for the purposes of subsections (3) and (4) above.
- (7) This section applies to contributions made on or after 1st April 1990 or, in the case of a contribution to a business link organisation, 30th November 1993. . . .
##### 79B
- (1) Notwithstanding anything in section 74, but subject to the provisions of this section, where a company carrying on a trade or profession makes any contribution (whether in cash or in kind) to a designated urban regeneration company, any expenditure incurred by the company in making the contribution may be deducted as an expense in computing the profits of the trade or professionfor the purposes of corporation tax if it would not otherwise be so deductible.
- (2) Where any such contribution is made by a company with investment business, any expenditure allowable as a deduction under subsection (1) above shall for the purposes of section 75 be treated as expenses of management.
- (2A) Where any such contribution is made by a company in relation to which section 76 applies (expenses of insurance companies) any expenditure allowable as a deduction under subsection (1) above shall for the purposes of that section be treated as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section.
- (3) Subsection (1) above does not apply in relation to a contribution made by any company if either the company or any person connected with the company receives or is entitled to receive a benefit of any kind whatsoever for or in connection with the making of that contribution, whether from the urban regeneration company concerned or from any other person.
- (4) In any case where—
- (a) relief has been given under subsection (1) above in respect of a contribution made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to that contribution,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) In this section “*urban regeneration company*” means any body of persons (whether corporate or unincorporate) which the Treasury by order designates as an urban regeneration company for the purposes of this section.
- (6) The Treasury may only make an order under subsection (5) above designating a body as an urban regeneration company for the purposes of this section if they consider that each of the criteria in subsection (7) below is satisfied in the case of the body.
- (7) The criteria are that—
- (a) the sole or main function of the body is to co-ordinate the regeneration of a specific urban area in the United Kingdom;
- (b) the body is expected to seek to perform that function by creating a plan for the development of that area and endeavouring to secure that the plan is carried into effect;
- (c) in co-ordinating the regeneration of that area, the body is expected to work together with some or all of the public or local authorities which exercise functions in relation to the whole or part of that area.
- (8) An order under subsection (5) above may be framed so as to take effect on a date earlier than the making of the order, but not earlier than—
- (a) 1st April 2003, in the case of the first order under that subsection, or
- (b) three months before the date on which the order is made, in the case of any subsequent order.
- (9) Section 839 (connected persons) applies for the purposes of this section.
- (10) This section applies to contributions made on or after 1st April 2003.
##### 82A
- (1) Notwithstanding anything in section 74, where a company carrying on a trade incurs expenditure not of a capital nature on research and development—
- (a) related to that trade, and
- (b) directly undertaken by the company or on the company's behalf,
the expenditure incurred may be deducted as an expense in computing the profits of the trade for the purposes of corporation tax.
- (2) For this purpose expenditure on research and development does not include expenditure incurred in the acquisition of rights in, or arising out of, research and development.
Subject to that, it includes all expenditure incurred in carrying out, or providing facilities for carrying out, research and development.
- (3) The reference in subsection (1) above to research and development related to a trade includes—
- (a) research and development which may lead to or facilitate an extension of that trade;
- (b) research and development of a medical nature which has a special relation to the welfare of workers employed in that trade.
- (4) The same expenditure may not be taken into account under this section in relation to more than one trade.
- (5) In this section “*research and development*” has the meaning given by section 837A and includes oil and gas exploration and appraisal.
##### 82B
- (1) Notwithstanding anything in section 74, where a company carrying on a trade—
- (a) pays any sum to an Association in the case of which exemption may be claimed under section 508 and which has as its object the undertaking of research and development which may lead to or facilitate an extension of the class of trade to which the trade carried on by the company belongs, or
- (b) pays any sum to be used for scientific research related to that class of trade to any such university, college research institute or other similar institution as is for the time being approved for the purposes of this section by the Secretary of State,
the sum paid may be deducted as an expense in computing the profits of the trade for the purposes of corporation tax.
- (2) In this section “*scientific research*” means any activities in the fields of natural or applied science for the extension of knowledge.
- (3) The reference in subsection (1)(b) above to scientific research related to a class of trade includes—
- (a) scientific research which may lead to or facilitate an extension of trades of that class;
- (b) scientific research of a medical nature which has a special relation to the welfare of workers employed in trades of that class.
- (4) If a question arises under this section whether, or to what extent, any activities constitute or constituted scientific research, the Board shall refer the question for decision to the Secretary of State.
The decision of the Secretary of State is final.
- (5) The same expenditure may not be taken into account under this section in relation to more than one trade.
##### 83A
- (1) This section applies where a company carrying on a trade or profession gives an article falling within subsection (2) below to—
- (a) a charity within the meaning of section 506, or
- (b) a body listed in section 507(1).
- (2) An article falls within this subsection if—
- (a) it is an article manufactured, or of a class or description sold, by the company in the course of its trade; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to subsection (4) below, where this section applies in the case of the gift of an article—
- (a) no amount shall be required, in consequence of the the company's disposal of that article from trading stock, to be brought into account for corporation tax purposes as a trading receipt of the company; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In any case where—
- (a) relief is given under subsection (3) above or section 63(2) of the Capital Allowances Act in respect of the gift of an article made by a company, and
- (b) any benefit received in any accounting period by the company or any person connected with the company is in any way attributable to the making of that gift,
the company shall in respect of that accounting period be charged to corporation tax under Case I or Case II of Schedule D or, if the company is not chargeable to corporation tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
- (5) Section 839 applies for the purposes of this section.
##### 84A
- (1) Subsection (2) below applies where—
- (a) a company incurs expenditure on establishing a share option scheme which the Board approve and under which no employee or director obtains rights before such approval is given, or
- (b) a company incurs expenditure on establishing a profit sharing scheme which the Board approve and under which the trustees acquire no shares before such approval is given.
- (2) In such a case the expenditure—
- (a) shall be deducted in computing for the purposes of Schedule D or Part 2 of ITTOIA 2005 the profits of a trade carried on by the company, or
- (b) if the company is one with investment business, shall be treated as expenses of management deductible under section 75 to the extent that it otherwise would not be, or
- (c) if the company is one in relation to which section 76 applies, shall be treated for the purposes of that section as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section to the extent that it otherwise would not be.
- (3) In a case where—
- (a) subsection (2) above applies, and
- (b) the approval is given after the end of the period of nine months beginning with the day following the end of the period of account in which the expenditure is incurred,
for the purpose of applying subsection (2) above the expenditure shall be treated in accordance with subsection (3ZA) below.
- (3ZA) Where this subsection applies—
- (a) in applying subsection (2)(a) above, the expenditure shall be treated as incurred in the period of account in which the approval is given (and not the period of account mentioned in subsection (3)(b) above),
- (b) in applying subsection (2)(b) or (c) above, the expenditure shall be treated as referable to the accounting period in which the approval is given.
- (3A) In this section, “*share option scheme*” means—
- (a) an SAYE option scheme within the meaning of the SAYE code (see section 516(4) of ITEPA 2003 (approved SAYE option schemes)), or
- (b) a CSOP scheme within the meaning of the CSOP code (see section 521(4) of that Act (approved CSOP schemes)).
- (4) References in this section to approving are to approving under Schedule 9 to this Act or under Schedule 3 or 4 to ITEPA 2003 (approved SAYE option schemes and approved CSOP schemes).
- (5) This section applies where the expenditure is incurred on or after 1st April 1991.
##### 85A
- (1) Subsection (2) below applies where a company incurs expenditure on establishing a qualifying employee share ownership trust.
- (2) In such a case the expenditure—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade carried on by the company,. . .
- (b) if the company is a company with investment business, shall be treated as expenses of management deductible under section 75 to the extent that it otherwise would not be, or
- (c) if the company is one in relation to which section 76 applies, shall be treated for the purposes of that section as expenses payable which fall to be brought into account at Step 1 in subsection (7) of that section to the extent that it otherwise would not be.
- (3) In a case where—
- (a) subsection (2) above applies, and
- (b) the trust is established after the end of the period of nine months beginning with the day following the end of the period of account in which the expenditure is incurred,
for the purpose of applying subsection (2) above, the expenditure shall be treated in accordance with subsection(3A) below.
- (3A) Where this subsection applies—
- (a) in applying subsection (2)(a) above, the expenditure shall be treated as incurred in the period of account in which the trust is established (and not the period of account mentioned in subsection (3)(b) above),
- (b) in applying subsection (2)(b) or (c) above, the expenditure shall be treated as referable to the accounting period in which the trust is established.
- (4) In this section “*qualifying employee share ownership trust*” shall be construed in accordance with Schedule 5 to the Finance Act 1989.
- (5) For the purposes of this section the trust is established when the deed under which it is established is executed.
- (6) This section applies where the expenditure is incurred on or after 1st April 1991.
##### 85B
Schedule 4AA (which provides for deductions relating to approved share incentive plans) shall have effect.
##### 86A
- (1) This section applies where—
- (a) a company (the employer) is liable to make to any individual payments from which income tax falls to be deducted under PAYE regulations, and
- (b) the employer withholds sums from those payments in accordance with an approved scheme and pays the sums to an approved agent.
- (1A) In subsection (1)(b) “*approved scheme*” and “*approved agent*” have the same meaning as in section 714 of ITEPA 2003.
- (2) Any relevant expenditure incurred by the employer on or after 16th March 1993—
- (a) shall be deducted in computing for the purposes of Schedule D the profits of a trade or profession carried on by the employer, or
- (b) if the employer is a company with investment business, shall be treated as expenses of management deductible under section 75.
- (3) Relevant expenditure is expenditure incurred in making to the agent any payment in respect of expenses which have been or are to be incurred by the agent in connection with his functions under the scheme.
#### Saving for pre-1963 leases, and special relief for individuals.
##### 87A
- (1) This section applies if—
- (a) a lease has been granted out of the interest referred to in section 87(4),
- (b) in calculating the amount that falls to be treated as a receipt of a UK property business under Chapter 4 of Part 3 of ITTOIA 2005 in respect of the lease, there is a reduction under section 288 of that Act by reference to a taxed receipt, and
- (c) the taxed receipt is the amount chargeable for the purposes of section 87.
- (2) Section 37A (section 37(4) and reductions in receipts under ITTOIA 2005) shall apply for modifying the operation of section 87(2) and (3) as it applies for modifying the operation of section 37(4).
- (3) In this section the following expressions have the same meaning as in Chapter 4 of Part 3 of ITTOIA 2005—
- “reduction under section 288 by reference to a taxed receipt” (see section 290(6) of that Act), and
- “taxed receipt” (see section 287(4) of that Act).
#### Appeals against determinations under sections 34 to 36 or Chapter 4 of Part 3 of ITTOIA 2005.
##### 88A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 88D
- (1) This section applies to debts to which the following provisions do not apply—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships, etc);
- (b) Schedule 26 to the Finance Act 2002 (derivative contracts);
- (c) Schedule 29 to that Act (intangible fixed assets).
- (2) In calculating the profits of a company's trade for the purposes of corporation tax, no deduction is allowed in respect of a debt owed to the company, except—
- (a) by way of impairment loss, or
- (b) to the extent that the debt is released wholly and exclusively for the purposes of that trade as part of a statutory insolvency arrangement.
- (3) In this section “*debt*” includes an obligation or liability that falls to be discharged otherwise than by the payment of money.
- (4) In this section “*trade*” has the meaning given by section 6(4).
##### 91A
- (1) This section applies where on or after 6th April 1989 a company makes a site restoration payment in the course of carrying on a trade.
- (2) Subject to subsection (3) below, for the purposes of . . . corporation tax the payment shall be allowed as a deduction in computing the profits of the trade for the period of account in which the payment is made.
- (3) Subsection (2) above shall not apply to so much of the payment as—
- (a) represents expenditure which has been allowed as a deduction in computing the profits of the trade for any period of account preceding the period of account in which the payment is made, or
- (b) represents capital expenditure in respect of which an allowance has been, or may be, made under the enactments relating to capital allowances.
- (4) For the purposes of this section a site restoration payment is a payment made—
- (a) in connection with the restoration of a site or part of a site, and
- (b) in order to comply with any condition of a relevant licence, or any condition imposed on the grant of planning permission to use the site for the carrying out of waste disposal activities, or any relevant obligation.
- (5) For the purposes of this section waste disposal activities are the collection, treatment, conversion and final depositing of waste materials, or any of those activities.
- (6) For the purposes of this section a relevant icence is—
- (a) a disposal licence under Part I of the Control of Pollution Act 1974 or Part II of the Pollution Control and Local Government (Northern Ireland) Order 1978, or
- (b) a waste management licence under Part II of the Environmental Protection Act 1990 or any corresponding provision for the time being in force in Northern Ireland, or
- (ba) a permit under regulations under section 2 of the Pollution Prevention and Control Act 1999, or a permit under regulations under Article 4 of the Environment (Northern Ireland) Order 2002, or
- (ba) a permit granted under regulations under section 2 of the Pollution Prevention and Control Act 1999, or a permit under regulations under Article 4 of the Environment (Northern Ireland) Order 2002, or
- (c) any authorisation under the Radioactive Substances Act 1960 or the Radioactive Substances Act 1993 for the disposal of radioactive waste or any nuclear site licence under the Nuclear Installations Act 1965.
- (7) For the purposes of this section a relevant obligation is—
- (a) an obligation arising under an agreement made under—
- (i) section 106 of the Town and Country Planning Act 1990, as originally enacted;
- (ii) section 75 of the Town and Country Planning (Scotland) Act 1997;
- (b) a planning obligation entered into under section 106 of the Act of 1990, as substituted by section 12 of the Planning and Compensation Act 1991, or under section 299A of the Act of 1990;
- (c) an obligation arising under or under an agreement made under any provision—
- (i) corresponding to section 106 of the Town and Country Planning Act 1990, as originally enacted or as substituted by the Act of 1991 or to section 299A of the Act of 1990; and
- (ii) for the time being in force in Northern Ireland.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 91B
- (1) This section applies where a company—
- (a) incurs, in the course of carrying on a trade, site preparation expenditure in relation to a waste disposal site (the site in question),
- (b) holds, at the time the company first deposits waste materials on the site in question, a relevant licence which is then in force,
- (c) makes a claim for relief under this section in such form as the Board may direct, and
- (d) submits such plans and other documents (if any) as the Board may require;
and it is immaterial whether the expenditure is incurred before or after the coming into force of this section.
- (2) In computing the profits of the trade for a period of account ending after 5th April 1989, the allowable amount shall be allowed as a deduction for the purposes of . . . corporation tax.
- (3) In relation to a period of account (the period in question) the allowable amount shall be determined in accordance with the formula—
$(A-B)×CC+D$
- (4) A is the site preparation expenditure incurred by the company at any time before the beginning of, or during, the period in question—
- (a) in relation to the site in question, and
- (b) in the course of carrying on the trade;
but this subsection is subject to subsections (5) and (9) below.
- (5) A does not include any expenditure—
- (a) which has been allowed as a deduction in computing for the purposes of corporation tax or income tax the profits of the trade for any period of account preceding the period in question, or
- (b) which constitutes capital expenditure in respect of which an allowance has been, or may be, made for the purposes of corporation tax or income tax under the enactments relating to capital allowances.
- (6) B is an amount equal to any amount allowed as a deduction under this section or section 165 of ITTOIA 2005 (relief for income tax purposes), if allowed—
- (a) in computing the profits of the trade for any period of account preceding the period in question, and
- (b) as regards expenditure incurred in relation to the site in question;
and if different amounts have been so allowed as regards different periods, B is the aggregate of them.
- (7) C is the volume of waste materials deposited on the site in question during the period in question; but if the period is one beginning before 6th April 1989 C shall be reduced by the volume of any waste materials deposited on the site during the period but before that date.
- (8) D is the capacity of the site in question not used up for the deposit of waste materials, looking at the state of affairs at the end of the period in question.
- (9) Where any of the expenditure which would be included in A (apart from this subsection) was incurred before 6th April 1989, A shall be reduced by an amount determined in accordance with the formula—
$E×FF+G$
- (10) For the purposes of subsection (9) above—
- (a) E is so much of the initial expenditure (that is, the expenditure which would be included in A apart from subsection (9) above) as was incurred before 6th April 1989,
- (b) F is the volume of waste materials deposited on the site in question before 6th April 1989, and
- (c) G is the capacity of the site in question not used up for the deposit of waste materials, looking at the state of affairs immediately before 6th April 1989.
- (10A) For the purposes of this section any expenditure incurred for the purposes of a trade by a company about to carry it on shall be treated as if it had been incurred by that company on the first day on which it does carry it on and in the course of doing so.
- (11) For the purposes of this section—
- (a) a waste disposal site is a site used (or to be used) for the disposal of waste materials by their deposit on the site,
- (b) in relation to such a site, site preparation expenditure is expenditure on preparing the site for the deposit of waste materials (and may include expenditure on earthworks),
- (c) in relation to such a site, “*capacity*” means capacity expressed in volume,
- (d) “*relevant licence*” has the same meaning as in section 91A, . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 91BA
- (1) This section applies where—
- (a) site preparation expenditure has been incurred in relation to a waste disposal site,
- (b) that expenditure was incurred by a person in the course of carrying on a trade, and
- (c) on or after 21st March 2000—
- (i) that person (“*the predecessor*”) ceases to carry on that trade, or ceases to carry it on so far as it relates to that site, and
- (ii) another person that is a company (“*the successor*”) begins to carry on that trade, or to carry on in the course of a trade the activities formerly carried on by the predecessor in relation to that site.
- (2) If the conditions specified in the following provisions of this section are met, then, for the purposes of section 91B above—
- (a) the trade carried on by the successor shall be treated as the same trade as that carried on by the predecessor, and
- (b) allowances shall be made to the successor (and not to the predecessor) as if everything done to or by the predecessor had been done to or by the successor.
- (3) The first condition is that the whole of the site in question is transferred to the successor.
Provided the successor holds an estate or interest in the whole of the site, it need not be the same as that held by the predecessor.
- (4) The second condition is that the successor, at the time it first deposits waste material at the site, holds a relevant licence in respect of the site which is then in force.
- (5) Expressions used in this section have the same meaning as in section 91B.
##### 91C
Where—
- (a) a company carrying on a trade incurs expenditure on mineral exploration and access as defined in section 396(1) of the Capital Allowances Act in an area or group of sands in which the presence of mineral deposits in commercial quantities has already been established, and
- (b) if the presence in that area or group of sands of mineral deposits in commercial quantities had not already been established, that expenditure would not have been allowed to be deducted in computing the profits of the trade for the purposes of corporation tax,
that expenditure shall not be so deducted.
### Payments for restrictive undertakings
##### 76ZA
- (1) This section applies if a payment—
- (a) is treated as earnings of an employee by virtue of section 225 of ITEPA 2003 (payments for restrictive undertakings), and
- (b) is made, or treated as made for the purposes of section 226 of that Act (valuable consideration given for restrictive undertakings), by a company in relation to which section 76 applies.
- (2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.
### Seconded employees
##### 76ZB
- (1) This section applies if a company to which section 76 applies makes the services of a person employed for the purposes of the company's life assurance business available to—
- (a) a charity, or
- (b) an educational establishment,
on a basis that is stated and intended to be temporary.
- (2) Expenses of the employer that are attributable to the employee's employment during the period of the secondment are treated as expenses payable which fall to be brought into account at Step 1 in section 76(7).
- “*excluded activities*” has the meaning given by section 192 of ITA 2007 read with sections 193 to 199 of that Act,
- “*group*” means a parent company and all its qualifying subsidiaries,
- “*group company*”, in relation to a group, means the parent company or any of its qualifying subsidiaries,
- “*incidental purposes*” means purposes having no significant effect (other than in relation to incidental matters) on the extent of the activities of the company in question,
- “*mainly trading subsidiary*” means a subsidiary which, apart from incidental purposes, exists wholly for the purpose of carrying on one or more qualifying trades, and any reference to the main purpose of such a subsidiary is to be read accordingly,
- “*non-qualifying activities*” means—excluded activities, andactivities (other than research and development) carried on otherwise than in the course of a trade,
- “*parent company*” means a company that has one or more qualifying subsidiaries,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007,
- “*qualifying trade*” has the meaning given by section 189 of that Act,
- “*research and development*” has the meaning given by section 837A.
- (8) In sections 189(1)(b) and 194(4)(c) of ITA 2007 (as applied by subsection (7) for the purposes of the definitions of “excluded activities” and “qualifying trade”) “*period B*” means the continuous period that is relevant for the purposes of section 576A(3).
- (9) In section 195 of ITA 2007 as applied by subsection (7) for the purposes mentioned in subsection (8), references to the issuing company are to be read as references to the company mentioned in subsection (1).
#### Second loans.
##### 576C
- (1) A company is not regarded as ceasing to meet the trading requirement by reason only of anything done in consequence of the company or any of its subsidiaries being in administration or receivership.
This has effect subject to subsections (2) and (3).
- (2) Subsection (1) applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a result of the company concerned being in administration or receivership,
is for genuine commercial reasons, and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (3) A company ceases to meet the trading requirement if before the time that is relevant for the purposes of section 576A(2)—
- (a) a resolution is passed, or an order is made, for the winding up of the company or any of its subsidiaries (or, in the case of a winding up otherwise than under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989, any other act is done for the like purpose), or
- (b) the company or any of its subsidiaries is dissolved without winding up.
This is subject to subsection (4).
- (4) Subsection (3) does not apply if —
- (a) the winding up is for genuine commercial reasons, and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax, and
- (b) the company continues, during the winding up, to be a trading company.
- (5) References in this section to a company being “in administration” or “in receivership” are to be read in accordance with section 252 of ITA 2007.
##### 576D
- (1) The control element of the requirement is that—
- (a) the company must not control (whether on its own or together with any person connected with it) any company which is not a qualifying subsidiary of the company, and
- (b) no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 576A(3) or otherwise).
- (2) The independence element of the requirement is that—
- (a) the company must not—
- (i) be a 51% subsidiary of another company, or
- (ii) be under the control of another company (or of another company and any other person connected with that other company), without being a 51% subsidiary of that other company, and
- (b) no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 576A(3) or otherwise).
- (3) This section is subject to section 576J(3).
- (3A) Section 839 (connected persons) applies for the purposes of this section.
- (4) In this section—
- “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable,
- “control” is to be read as follows—in subsection (1)(a), in accordance with section 416(2) to (6),in subsection (2)(a), in accordance with section 840,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007.
#### Restriction of relief where amounts raised exceed permitted maximum.
##### 576E
- (1) The qualifying subsidiaries requirement is that any subsidiary that the company has must be a qualifying subsidiary of the company.
- (2) In this section “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007.
##### 576F
- (1) The property managing subsidiaries requirement is that any property managing subsidiary that the company has must be a qualifying 90% subsidiary of the company.
- (2) In this section—
- “*property managing subsidiary*” has the meaning given by section 188(2) of ITA 2007,
- “*qualifying 90% subsidiary*” has the meaning given by section 190 of that Act.
##### 576G
- (1) The gross assets requirement in the case of a single company is that the value of the company's gross assets—
- (a) must not exceed £7 million immediately before the shares in respect of which the relief is claimed under this Chapter are issued, and
- (b) must not exceed £8 million immediately afterwards.
- (2) The gross assets requirement in the case of a parent company is that the value of the group assets—
- (a) must not exceed £7 million immediately before the shares in respect of which the relief is claimed under this Chapter are issued, and
- (b) must not exceed £8 million immediately afterwards.
- (3) The value of the group assets means the aggregate of the values of the gross assets of each of the members of the group, disregarding any that consist in rights against, or shares in or securities of, another member of the group.
- (4) In this section—
- “*group*” means a parent company and its qualifying subsidiaries,
- “*parent company*” means a company that has one or more qualifying subsidiaries,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007, and
- “*single company*” means a company that does not have one or more qualifying subsidiaries.
##### 576H
- (1) The unquoted status requirement is that, at the time (“*the relevant time*”) at which the shares in respect of which the relief is claimed under this Chapter are issued—
- (a) the company must be an unquoted company,
- (b) there must be no arrangements in existence for the company to cease to be an unquoted company, and
- (c) there must be no arrangements in existence for the company to become a subsidiary of another company (“the new company”) by virtue of an exchange of shares, or shares and securities, if—
- (i) section 576J applies in relation to the exchange, and
- (ii) arrangements have been made with a view to the new company ceasing to be an unquoted company.
- (2) The arrangements referred to in subsection (1)(b) and (c)(ii) do not include arrangements in consequence of which any shares, stocks, debentures or other securities of the company or the new company are at any subsequent time—
- (a) listed on a stock exchange that is a recognised stock exchange by virtue of an order made under section 1005 of ITA 2007, or
- (b) listed on an exchange, or dealt in by any means, designated by an order made for the purposes of section 184(3)(b) or (c) of that Act,
if the order was made after the relevant time.
- (3) In this section—
- “*educational establishment*” has the same meaning as in section 70 of CTA 2009, and
- “*the period of the secondment*” means the period for which the employee's services are made available to the charity or educational establishment.
### Counselling and retraining expenses
##### 76ZC
- (1) This section applies if—
- (a) a company carrying on life assurance business (“*the employer*”) incurs counselling expenses,
- (b) the expenses are incurred in relation to a person (“*the employee*”) who holds or has held an office or employment under the employer, and
- (c) the relevant conditions are met.
- (2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).
- (3) In this section “*counselling expenses*” means expenses incurred—
- (a) in the provision of services to the employee in connection with the cessation of the office or employment,
- (b) in the payment or reimbursement of fees for such provision, or
- (c) in the payment or reimbursement of travelling expenses in connection with such provision.
- (4) In this section “*the relevant conditions*” means—
- (a) conditions A to D for the purposes of section 310 of ITEPA 2003 (employment income exemptions: counselling and other outplacement services), and
- (b) in the case of travel expenses, condition E for those purposes.
##### 76ZD
- (1) This section applies if—
- (a) a company carrying on life assurance business (“*the employer*”) incurs training course expenses,
- (b) they are incurred in relation to a person (“*the employee*”) who holds or has held an office or employment under the employer, and
- (c) the relevant conditions are met.
- (2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).
- (3) In this section—
- “*retraining course expenses*” means expenses incurred in the payment or reimbursement of retraining course expenses within the meaning given by section 311(2) of ITEPA 2003, and
- “*the relevant conditions*” means—the conditions in subsections (3) and (4) of section 311 of ITEPA 2003 (employment income exemptions: retraining courses), andin the case of travel expenses, the conditions in subsection (5) of that section.
##### 76ZE
- (1) This section applies if—
- (a) an employer's liability to corporation tax for an accounting period is determined on the assumption that it is entitled by virtue of section 76ZD to bring an amount into account in determining the amount of a deduction to be made under section 76, and
- (b) without section 76ZD the employer would not have been so entitled.
- (2) If, subsequently—
- (a) the condition in section 311(4)(a) of ITEPA 2003 is not met because of the employee's failure to begin the course within the period of one year after ceasing to be employed, or
- (b) the condition in section 311(4)(b) of ITEPA 2003 is not met because of the employee's continued employment or re-employment,
an assessment of an amount or further amount of corporation tax due as a result of the condition not being met may be made under paragraph 41 of Schedule 18 to FA 1998.
- (3) Such an assessment must be made before the end of the period of 6 years immediately following the end of the accounting period in which the failure to meet the condition occurred.
- (4) If subsection (2) applies, the employer must give an officer of Revenue and Customs a notice containing particulars of—
- (a) the employee's failure to begin the course,
- (b) the employee's continued employment, or
- (c) the employee's re-employment,
within 60 days of coming to know of it.
- (5) If an officer of Revenue and Customs has reason to believe that the employer has failed to give such a notice, the officer may by notice require the employer to provide such information as the officer may reasonably require for the purposes of this section about—
- (a) the failure to begin the course,
- (b) the continued employment, or
- (c) the re-employment.
- (6) A notice under subsection (5) may specify a time (not less than 60 days) within which the required information must be provided.
### Redundancy payments etc
##### 76ZF
- (1) Sections 76ZG to 76ZI apply if—
- (a) a company to which section 76 applies (“*the employer*”) makes a redundancy payment or an approved contractual payment to another person (“*the employee*”), and
- (b) the payment is in respect of the employee's employment wholly in the employer's life assurance business or partly in the employer's life assurance business and partly in one or more other capacities.
- (2) For the purposes of this section and sections 76ZG to 76ZH “*redundancy payment*” means a redundancy payment payable under—
- (a) Part 11 of the Employment Rights Act 1996, or
- (b) Part 12 of the Employment Rights (Northern Ireland) Order 1996.
- (3) For the purposes of this section and those sections—
- “*contractual payment*” means a payment which, under an agreement, an employer is liable to make to an employee on the termination of the employee's contract of employment, and
- a contractual payment is “*approved*” if, in respect of that agreement, an order is in force under—section 157 of the Employment Rights Act 1996, orArticle 192 of the Employment Rights (Northern Ireland) Order 1996.
##### 76ZG
- (1) This section applies if the payment is in respect of the employee's employment wholly in the employer's life assurance business.
- (2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.
- (3) The amount brought into account by virtue of this section for an approved contractual payment must not exceed the amount which would have been due to the employee if a redundancy payment had been payable.
- (4) If the payment is referable to an accounting period beginning after the business has permanently ceased to be carried on, it is treated as referable to the last accounting period in which the business was carried on.
##### 76ZH
- (1) This section applies if the payment is in respect of the employee's employment with the employer—
- (a) partly in the employer's life assurance business, and
- (b) partly in one or more other capacities.
- (2) The amount of the redundancy payment, or the amount which would have been due if a redundancy payment had been payable, is to be apportioned on a just and reasonable basis between—
- (a) the employment in the life assurance business, and
- (b) the employment in the other capacities.
- (3) The part of the payment apportioned to the employment in the life assurance business is treated as a payment in respect of the employee's employment wholly in the life assurance business for the purposes of section 76ZG.
##### 76ZI
- (1) This section applies if the employer's business, or part of it, ceases (permanently) to be carried on and the employer makes a payment to the employee in addition to—
- (a) the redundancy payment, or
- (b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
- (2) If—
- (a) the additional payment would not otherwise be regarded as expenses payable for the purposes of section 76, but
- (b) that is only because the business, or the part of the business, has ceased to be carried on,
the additional payment is regarded as expenses payable for the purposes of section 76.
- (3) So far as the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it is not to be so regarded for the purposes of that subsection (or of subsection (2) above so far as relating to section 76).
- (4) The amount treated under this section as expenses payable for the purposes of section 76 is limited to 3 times the amount of—
- (a) the redundancy payment, or
- (b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
- (5) If the payment is referable to an accounting period beginning after the business or the part of the business has ceased to be carried on, it is treated as referable to the last accounting period in which the business, or the part concerned, was carried on.
##### 76ZJ
- (1) This section applies if—
- (a) a redundancy payment or an approved contractual payment is payable by a company to which section 76 applies (“*the employer*”), and
- (b) a payment to which subsection (2) applies is made in respect of the payment.
- (2) This subsection applies to—
- (a) payments made by the Secretary of State under section 167 of the Employment Rights Act 1996, and
- (b) payments made by the Department for Employment and Learning under Article 202 of the Employment Rights (Northern Ireland) Order 1996.
- (3) So far as the employer reimburses the Secretary of State or Department for the payment, sections 76ZG to 76ZI apply as if the payment were—
- (a) a redundancy payment, or
- (b) an approved contractual payment,
made by the employer.
### Contributions to local enterprise organisations or urban regeneration companies
##### 76ZK
- (1) This section applies if a company to which section 76 applies (“*the contributor*”) incurs expenses in making a contribution (whether in cash or in kind)—
- (a) to a local enterprise organisation, or
- (b) to an urban regeneration company.
- (2) The expenses are treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 1 in section 76(7).
- (3) But if, in connection with the making of the contribution, the contributor or a connected person—
- (a) receives a disqualifying benefit of any kind, or
- (b) is entitled to receive such a benefit,
the amount treated in accordance with subsection (2) is restricted to the amount of the expenses less the value of the benefit.
- (4) For this purpose it does not matter whether a person receives, or is entitled to receive, the benefit—
- (a) from the local enterprise organisation or urban regeneration company concerned, or
- (b) from anyone else.
- (5) Subsection (6) applies if—
- (a) an amount has been brought into account in accordance with subsection (2), and
- (b) the contributor or a connected person receives a disqualifying benefit that is in any way attributable to the contribution.
- (6) The contributor is to be treated as receiving, when the benefit is received, an amount—
- (a) which is equal to the value of the benefit (so far as not brought into account in determining the amount of the deduction), and
- (b) to which the charge to corporation tax on income applies.
- (7) In this section—
- “*disqualifying benefit*” means a benefit the expenses of obtaining which, if incurred by the contributor directly in a transaction at arm's length, would not be expenses payable for the purposes of section 76,
- “*local enterprise organisation*” has the meaning given by section 83 of CTA 2009,
- “*urban regeneration company*” has the meaning given by section 86 of CTA 2009.
- (8) Section 839 (“connected person”) applies for the purposes of subsections (3) and (5).
### Unpaid remuneration
##### 76ZL
- (1) This section applies if—
- (a) an amount is charged in respect of employees' remuneration in the accounts for a period of a company to which section 76 applies,
- (b) the amount would apart from this section be brought into account under section 76 as expenses payable, and
- (c) the remuneration is not paid before the end of the period of 9 months immediately following the end of the period of account.
- (2) If the remuneration is paid after the end of that period of 9 months, the amount is brought into account for the period of account in which it is paid.
- (3) But—
- (a) subsection (2) is subject to section 86 of FA 1989 (spreading of relief for acquisition expenses), and
- (b) in interpreting that section the remuneration is treated as expenses payable which fall to be included at Step 1 in section 76(7) for the period of account in which the remuneration is paid.
- (4) The amount is not brought into account under section 76 as expenses payable if it is not paid.
##### 76ZM
- (1) For the purposes of section 76ZL an amount charged in the accounts in respect of employees' remuneration includes an amount for which provision is made in the accounts with a view to its becoming employees' remuneration.
- (2) For the purposes of section 76ZL it does not matter whether an amount is charged for—
- (a) particular employments, or
- (b) employments generally.
- (3) If the profits of the company are calculated before the end of the 9 month period mentioned in section 76ZL(1)(c)—
- (a) it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but
- (b) if the remuneration is subsequently paid before the end of that period, nothing in this subsection prevents the calculation being revised and any tax return being amended accordingly.
- (4) For the purposes of this section and section 76ZL remuneration is paid when it—
- (a) is treated as received by an employee for the purposes of ITEPA 2003 by section 18 or 19 of that Act (receipt of money and non-money earnings), or
- (b) would be so treated if it were not exempt income.
- (5) In this section and section 76ZL—
- “*employee*” includes an office-holder and “*employment*” therefore includes an office, and
- “*remuneration*” means an amount which is or is treated as earnings for the purposes of Parts 2 to 7 of ITEPA 2003.
### Car or motor cycle hire
##### 76ZN
- (1) Subsection (2) applies if—
- (a) in calculating the corporation tax to which a company is liable for an accounting period, an amount representing expenses incurred on the hiring of a car or motor cycle can be brought into account under section 76 as expenses payable,
- (b) the car or motor cycle is not a qualifying hire car or motor cycle, and
- (c) the retail price of the car or motor cycle when new exceeds £12,000.
- (2) The amount that would otherwise be capable of being brought into account as expenses payable is reduced by multiplying the amount by the fraction—
$$£12,000+RP2×RP$where RP is the retail price of the car or motor cycle when new.$
- (3) Subsection (4) applies if an amount is reduced as a result of subsection (2), or a corresponding provision, and—
- (a) subsequently—
- (i) there is a rebate (however described) of the hire charges, or
- (ii) a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency agreement, and
- (b) an amount is brought into account in respect of the rebate or release.
- (4) For the purposes of subsection (3)(b) an amount is brought into account in respect of a rebate of hire charges or the release of a debt if—
- (a) the amount of a reversal representing the rebate or release falls to be deducted under Step 4 in section 76(7), or
- (b) (in the case of a rebate of hire charges) an amount representing the rebate is chargeable under section 85(1) of the Finance Act 1989 (c. 26).
- (5) The amount that would otherwise be deductible as mentioned in subsection (4)(a) or chargeable as mentioned in subsection (4)(b) is reduced by multiplying it by the fraction set out in subsection (2).
- (6) In this section “*corresponding provision*” means—
- (a) section 56(2) of CTA 2009 (car or motor cycle hire: trade profits and property income),
- (b) section 1251(2) of CTA 2009 (car or motor cycle hire: companies with investment business), and
- (c) section 48(2) of ITTOIA 2005 (car or motor cycle hire: trade profits and property income).
- (7) The power under section 74(4) of CAA 2001 to increase or further increase the sums of money specified in Chapter 8 of Part 2 of CAA 2001 includes the power to increase or further increase the sum of money specified in subsection (1)(c) or (2).
- (8) In this section “*car or motor cycle*” and “*qualifying hire car or motor cycle*” have the meanings given by section 57 of CTA 2009.
##### 76ZO
- (1) Section 76ZN does not apply to expenses incurred on the hiring of a car with low CO₂ emissions, or an electrically-propelled car, if—
- (a) the car was first registered on or after 17 April 2002, and
- (b) the period of hire begins before 1 April 2013 under a contract entered into before that date.
- (2) For this purpose—
- “*car with low CO₂ emissions*” has the meaning given by section 45D of CAA 2001, and
- “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable,
- “*debenture*” has the meaning given by section 744 of the Companies Act 1985,
- “*unquoted company*” has the meaning given by section 184(2) of ITA 2007.
##### 576I
The Treasury may by order make such amendments of sections 576B to 576H as they consider appropriate.
### Qualifying trading companies: supplementary provisions
##### 576J
- (1) This section and section 576K apply in relation to shares if—
- (a) a company (“the new company”) in which the only issued shares are subscriber shares acquires all the shares (“old shares”) in another company (“the old company”),
- (b) the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company,
- (c) the consideration for the new shares of each description consists wholly of old shares of the corresponding description,
- (d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of and in proportion to their holdings, and
- (e) by virtue of section 127 of the 1992 Act as applied by section 135(3) of that Act (company reconstructions etc), the exchange of shares is not to be treated as involving a disposal of the old shares or an acquisition of the new shares.
In this subsection references to shares, except the first and that in the expression “subscriber shares”, include securities.
- (2) For the purposes of this Chapter the exchange of shares is not regarded as involving any disposal of the old shares or any acquisition of the new shares.
- (3) Nothing in section 576D (the control and independence requirement) applies in relation to such an exchange of shares, or shares and securities, as is mentioned in subsection (1), or arrangements with a view to such an exchange.
- (4) For the purposes of this section old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights.
- (5) References in section 576K to “old shares”, “new shares”, “the old company” and “the new company” are to be read in accordance with this section.
##### 576K
- (1) Subsection (2) applies if, in the case of any new shares held by a company or by a nominee for a company, the old shares for which they were exchanged were shares that had been subscribed for by the company (“the investor”).
- (2) This Chapter has effect as if—
- (a) the new shares had been subscribed for by the investor at the time when, and for the amount for which, the old shares were subscribed for by the investor,
- (b) the new shares had been issued by the new company at the time when the old shares were issued to the investor by the old company, and
- (c) any requirements of this Chapter which were met at any time before the exchange by the old company had been met at that time by the new company.
- (3) Section 573(6) applies for the purposes of this section.
- (4) Nothing in subsection (2) applies in relation to section 195(7) of ITA 2007 as applied by section 576B(7) above for the purposes mentioned in section 576B(8).
### Supplemental
##### 576L
- (1) In this Chapter (subject to subsections (2) to (5))—
- “*excluded company*” means a company which—has a trade which consists wholly or mainly of dealing in land, in commodities or futures or in shares, securities or other financial instruments,has a trade which is not carried on on a commercial basis and in such a way that profits in the trade can reasonably be expected to be realised,is a holding company of a group other than a trading group, oris a building society or a registered industrial and provident society,
- “group” (except in sections 576B and 576G) means a company which has one or more 51% subsidiaries together with that or those subsidiaries,
- “*holding company*” means a company whose business consists wholly or mainly in the holding of shares or securities of companies which are its 51% subsidiaries,
- “*investment company*” has the meaning given by section 130 except that it does not include the holding company of a trading group,
- “*registered industrial and provident society*” means a society registered or treated as registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) Act 1969,
- “shares”—includes stock, butdoes not include shares or stock not forming part of a company's ordinary share capital,
- “*trading company*” means a company other than an excluded company which is—a company whose business consists wholly or mainly of the carrying on of a trade or trades, orthe holding company of a trading group, and
- “*trading group*” means a group the business of whose members, when taken together, consists wholly or mainly in the carrying on of a trade or trades.
- (2) Except as provided by subsection (3), paragraph (b) of the definition of “shares” in subsection (1) does not apply in the definition of “excluded company” in subsection (1) or in section 576J(1) to (4).
- (3) Paragraph (b) of that definition applies in relation to the first reference to “shares” in section 576J(1).
- (4) The definition of “shares” in subsection (1) does not apply in sections 576B(5)(a), 576G(3) and 576H(1)(c) and (2).
- (5) For the purposes of the definition of “trading group” in subsection (1), any trade carried on by a subsidiary which is an excluded company is treated as not constituting a trade.
#### Individuals qualifying for relief.
##### 577A
- (1) In computing profits chargeable to corporation tax under . . . Schedule D, no deduction shall be made for any expenditure incurred —
- (a) in making a payment the making of which constitutes the commission of a criminal offence, or
- (b) in making a payment outside the United Kingdom where the making of a corresponding payment in any part of the United Kingdom would constitute a criminal offence there.
- (1A) In computing profits chargeable to corporation tax under . . . Schedule D, no deduction shall be made for any expenditure incurred in making a payment induced by a demand constituting—
- (a) the commission in England or Wales of the offence of blackmail under section 21 of the Theft Act 1968,
- (b) the commission in Northern Ireland of the offence of blackmail under section 20 of the Theft Act (Northern Ireland) 1969, or
- (c) the commission in Scotland of the offence of extortion.
- (2) Any expenditure mentioned in subsection (1) or (1A) above—
- (a) shall not be included in computing any expenses of management in respect of which relief may be given under the Corporation Tax Acts; and
- (b) shall not be brought into account under section 76 as expenses payable.
##### 578A
- (1) This section provides for a reduction in the amounts—
- (a) allowable as deductions in computing profits chargeable to corporation tax under Case I or II of Schedule D, or
- (b) which can be included as expenses of management of a company with investment business (as defined by section 130),. . . or
- (bb) which can be brought into account under section 76 as expenses payable,
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for expenditure on the hiring of a car to which this section applies.
- (2) This section applies to the hiring of a car—
- (a) which is not a qualifying hire car, and
- (b) the retail price of which when new exceeds £12,000.
“Car” and “qualifying hire car” are defined by section 578B.
- (2A) This section does not apply to the hiring of a car, other than a motorcycle, if—
- (a) it is an electrically-propelled car, or
- (b) it is a car with low CO₂ emissions.
- (2B) In subsection (2A) above—
- “*car*” has the meaning given by section 578B;
- “*car with low CO₂ emissions*” has the meaning given by section 45D of the Capital Allowances Act 2001 (expenditure on cars with low CO₂ emissions to be first-year qualifying expenditure);
- “*electrically-propelled car*” has the meaning given by that section.
##### 95ZA
- (1) If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly section 208 does not apply in relation to those distributions).
- (2) A company (“company A”) receives a “relevant distribution” if—
- (a) it receives a distribution made by a company resident in the United Kingdom (“company B”),
- (b) the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution,
- (c) a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and
- (d) either—
- (i) the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or
- (ii) the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days.
- (3) In this section “*relevant insurance business*” means any kind of insurance business other than life assurance business.
- (4) Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i).
- (5) Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding.
##### 95A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Relief for post-cessation expenditure
##### 109A
- (1) Where in connection with a trade, profession or vocation formerly carried on by him which has been permanently discontinued a person makes, within seven years of the discontinuance, a payment to which this section applies, he may, by notice given within twelve months from the 31st January next following the year of assessment in which the payment is made, claim relief from income tax on an amount of his income for that year equal to the amount of the payment.
- (2) This section applies to payments made wholly and exclusively—
- (a) in remedying defective work done, goods supplied or services rendered in the course of the former trade, profession or vocation or by way of damages (whether awarded or agreed) in respect of any such defective work, goods or services; or
- (b) in defraying the expenses of legal or other professional services in connection with any claim that work done, goods supplied or services rendered in the course of the former trade, profession or vocation was or were defective;
- (c) in insuring against any liabilities arising out of any such claim or against the incurring of such expenses; or
- (d) for the purpose of collecting a debt taken into account in computing the profits of the former trade, profession or vocation.
- (3) The amount which would, apart from this section, be allowable or capable of being included must be reduced by multiplying it by the fraction—
$£12,000+P2P$
where P is the retail price of the car when new.
- (4) If an amount has been reduced under subsection (3) and subsequently—
- (a) there is a rebate (however described) of the rentals, or
- (b) there occurs in connection with the rentals a transaction that falls within section 94 (debts deducted and subsequently released),
the amount otherwise taxable in respect of the rebate or transaction must be reduced by multiplying it by the fraction in subsection (3) above.
##### 578B
- (1) In section 578A “car” means a mechanically propelled road vehicle other than one—
- (a) of a construction primarily suited for the conveyance of goods or burden of any description, or
- (b) of a type not commonly used as a private vehicle and unsuitable for such use.
References to a car accordingly include a motor cycle.
- (2) For the purposes of section 578A, a car is a qualifying hire car if—
- (a) it is hired under a hire-purchase agreement (within the meaning of section 784(6)) under which there is an option to purchase exercisable on the payment of a sum equal to not more than 1 per cent. of the retail price of the car when new, or
- (b) it is a qualifying hire car for the purposes of Part 2 of the Capital Allowances Act (under section 82 of that Act).
- (3) In section 578A and this section “*new*” means unused and not second-hand.
- (4) The power under section 74(4) of the Capital Allowances Act to increase or further increase the sums of money specified in Chapter 8 of Part 2 of that Act includes the power to increase or further increase the sum of money specified in section 578A(2)(b) or (3).
##### 580A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Valuation of interests in land for purposes of section 294(1)(b).
##### 581A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 582A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from overseas property business.
##### 587A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587B
- (1) Subsection (2) below applies where, otherwise than by way of a bargain made at arm’s length, a company which is not itself a charity disposes of the whole of the beneficial interest in a qualifying investment to a charity.
- (2) On a claim made in that behalf to an officer of the Board—
- (a) the relevant amount shall be allowed—
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) . . . as a charge on income for the purposes of corporation tax for the accounting period in which the disposal is made; and
- (b) no relief in respect of the disposal shall be given under section 83A of this Act. . . ;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a trade, profession or vocation carried on by a person has been permanently discontinued and subsequently an unpaid debt which was taken into account in computing the profits of that trade, profession or vocation and to the benefit of which he is entitled is released in whole or in part as part of a relevant arrangement or compromise (within the meaning of section 74), he shall be treated as making a payment to which this section applies of—
- (a) an amount equal to the amount released, or
- (b) if he was entitled to only part of the benefit of the debt, an amount equal to an appropriate proportion of that amount.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) Where a trade, profession or vocation carried on by a person has been permanently discontinued and subsequently an unpaid debt which was taken into account in computing the profits of that trade, profession or vocation and to the benefit of which he is entitled, proves to be bad, then if—
- (a) in making a claim for a year of assessment under subsection (1) above he gives notice that the debt was bad in any part of that year, and
- (b) he has not given such a notice in respect of that debt in the making of any other such claim,
he shall be treated as making in that year a payment to which this section applies of an amount equal to the amount of the debt or, if he was entitled to only part of the benefit of the debt, to an appropriate proportion of that amount.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where in the case of a trade, profession or vocation which has subsequently been permanently discontinued a deduction was made in computing the profits or losses of the trade, profession or vocation in respect of an expense not actually paid (an “unpaid expense”), then—
- (a) if relief under this section in connection with that trade, profession or vocation is claimed in respect of any year of assessment, the amount of the relief shall be reduced by the amount of any unpaid expenses at the end of that year;
- (b) for the purposes of the application of paragraph (a) above in relation to a subsequent year of assessment, any amount by which relief under this section has been reduced by virtue of that paragraph shall be treated as having been paid in respect of the expense in question; and
- (c) if subsequently any amount is in fact paid in respect of an expense in respect of which a reduction has been made under paragraph (a), that amount (or, if less, the amount of the reduction) shall be treated as a payment to which this section applies.
- (6) Relief shall not be given under this section in respect of an amount for which relief has been given or is available under any other provision of the Income Tax Acts.
In applying this subsection relief available under section 254 of ITTOIA 2005 (allowable deductions against post-cessation receipts charged to income tax) shall be treated as given in respect of other amounts before any amount in respect of which relief is available under this section.
- (6A) This section applies in relation to a UK property business as it applies in relation to a trade, profession or vocation.
- (7) This section does not apply for the purposes of corporation tax.
### Change of residence
##### 110A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treasury directions as respects Northern Ireland securities.
### Limited liability partnerships
##### 118ZA
- (1) For corporation tax purposes, where a limited liability partnership carries on a trade, profession or other business with a view to profit—
- (a) all the activities of the partnership are treated as carried on in partnership by its members (and not by the partnership as such),
- (b) anything done by, to or in relation to the partnership for the purposes of, or in connection with, any of its activities is treated as done by, to or in relation to the members as partners, and
- (c) the property of the partnership is treated as held by the members as partnership property.
References in this subsection to the activities of the limited liability partnership are to anything that it does, whether or not in the course of carrying on a trade, profession or other business with a view to profit.
- (2) For all purposes, except as otherwise provided, in the Corporation Tax Acts—
- (a) references to a partnership include a limited liability partnership in relation to which subsection (1) above applies,
- (b) references to members of a partnership include members of such a limited liability partnership,
- (c) references to a company do not include such a limited liability partnership, and
- (d) references to members of a company do not include members of such a limited liability partnership.
- (3) Subsection (1) above continues to apply in relation to a limited liability partnership which no longer carries on any trade, profession or other business with a view to profit—
- (a) if the cessation is only temporary, or
- (b) during a period of winding up following a permanent cessation, provided—
- (i) the winding up is not for reasons connected in whole or in part with the avoidance of tax, and
- (ii) the period of winding up is not unreasonably prolonged,
but subject to subsection (4) below.
- (4) Subsection (1) above ceases to apply in relation to a limited liability partnership—
- (a) on the appointment of a liquidator or (if earlier) the making of a winding-up order by the court, or
- (b) on the occurrence of any event under the law of a country or territory outside the United Kingdom corresponding to an event specified in paragraph (a) above.
##### 118ZB
- (1) Sections 117 and 118 have effect in relation to a member of a limited liability partnership as in relation to a limited partner, but subject to sections 118ZC and 118ZD.
- (2) However, section 117 does not apply in relation to a loss sustained by an individual in a trade . . . in a qualifying year of assessment within the meaning of section 118ZE.
##### 118ZC
- (1) Subsection (3) of section 117 does not have effect in relation to a member of a limited liability partnership.
- (2) But, for the purposes of that section and section 118, such a member’s contribution to a trade at any time (“*the relevant time*”) is the greater of—
- (a) the amount subscribed by him, and
- (b) the amount of his liability on a winding up.
- (3) The amount subscribed by a member of a limited liability partnership is the amount which he has contributed to the limited liability partnership as capital, less so much of that amount (if any) as—
- (a) he has previously, directly or indirectly, drawn out or received back,
- (b) he so draws out or receives back during the period of five years beginning with the relevant time,
- (c) he is or may be entitled so to draw out or receive back at any time when he is a member of the limited liability partnership, or
- (d) he is or may be entitled to require another person to reimburse to him.
- (4) The amount of the liability of a member of a limited liability partnership on a winding up is the amount which—
- (a) he is liable to contribute to the assets of the limited liability partnership in the event of its being wound up, and
- (b) he remains liable so to contribute for the period of at least five years beginning with the relevant time (or until it is wound up, if that happens before the end of that period).
- (5) This section is subject to provision made by regulations under section 118ZN (partners: meaning of “contribution to the trade”).
##### 118ZD
- (1) Where amounts relating to a trade carried on by a member of a limited liability partnership are, in any one or more chargeable periods, prevented from being given or allowed by section 117 or 118 as it applies otherwise than by virtue of this section (his “total unrelieved loss”), subsection (2) applies in each subsequent chargeable period in which—
- (a) he carries on the trade as a member of the limited liability partnership, and
- (b) any of his total unrelieved loss remains outstanding.
- (2) Sections 380, 381, 393A(1) and 403 (and sections 117 , 118 and 118ZE as they apply in relation to those sections) shall have effect in the subsequent chargeable period as if—
- (a) any loss sustained or incurred by the member in the trade in that chargeable period were increased by an amount equal to so much of his total unrelieved loss as remains outstanding in that period, or
- (b) (if no loss is so sustained or incurred) a loss of that amount were so sustained or incurred.
- (3) To ascertain whether any (and, if so, how much) of a member’s total unrelieved loss remains outstanding in the subsequent chargeable period, deduct from the amount of his total unrelieved loss the aggregate of—
- (a) any relief given under any provision of the Tax Acts (otherwise than as a result of subsection (2)) in respect of his total unrelieved loss in that or any previous chargeable period, and
- (b) any amount given or allowed in respect of his total unrelieved loss as a result of subsection (2) in any previous chargeable period (or which would have been so given or allowed had a claim been made).
### Non-active general partners and non-active members of limited liability partnerships
##### 118ZE
- (1) This section applies to an amount which may be given to an individual under section . . . 380 or 381 in respect of a loss sustained by him in a trade . . . in a qualifying year of assessment.
- (2) The amount may be given otherwise than against income consisting of profits arising from the trade only to the extent that—
- (a) the amount given, or
- (b) (as the case may be) the aggregate amount,
does not exceed the amount of the individual’s contribution to the trade as at the end of that year of assessment.
- (3) A “*qualifying year of assessment*” means a year of assessment—
- (a) at any time during which the individual carried on the trade as a general partner or a member of a limited liability partnership,
- (b) in which he did not devote a significant amount of time to the trade (within the meaning given by section 118ZH),
- (c) which is the year of assessment in which the trade is first carried on by him or any of the next three years of assessment,
- (d) the basis period for which ends on or after 10 February 2004, and
- (e) which is not a year of assessment at any time during which he carried on the trade as a limited partner.
- (4) In this section—
- (a) a “*general partner*” means any partner who is not a limited partner, and
- (b) “*limited partner*” has the meaning given by section 117(2),
and in paragraph (a) “*any partner*” does not include a member of a limited liability partnership.
- (5) In this section and sections 118ZF to 118ZK, “*basis period*” means (subject to subsection (6)) the basis period given by Chapter 15 of Part 2 of ITTOIA 2005 as applied by section 853 of that Act.
- (6) The basis period for a year of assessment to which section 199(1) of ITTOIA 2005 applies is to be taken for the purposes of this section and sections 118ZF to 118ZK below to be the period beginning with the date when the individual first carried on the trade and ending with the end of the year of assessment.
- (7) In subsection (1) “*a trade*” does not include underwriting business within the meaning of section 184 of the Finance Act 1993 (Lloyd’s underwriters).
- (8) This section has effect subject to sections 118ZJ and 118ZK (transitional provision).
##### 118ZF
- (1) In section 118ZE(2) “*the aggregate amount*” means (subject to section 118ZK) the aggregate of any amounts given to the individual at any time under section . . . 380 or 381 in respect of a loss sustained by him in the trade . . . in a year of assessment falling within subsection (2) , less the amount of any reclaimed relief.
- (1A) For the purposes of subsection (1) “*the amount of any reclaimed relief*” means the total of any amounts which the individual has been treated as receiving under section 74 of the Finance Act 2005 (recovery of excess relief given under section 380 or 381) as a result of the application of that section of that Act to him in respect of losses sustained by him in the trade.
- (2) A year of assessment falls within this subsection if—
- (a) it is a qualifying year of assessment within the meaning of section 118ZE, or
- (b) it is a year of assessment—
- (i) at any time during which the individual carried on the trade as a member of a limited liability partnership or as a limited partner within the meaning given by section 117(2), and
- (ii) the basis period for which ends on or after 10 February 2004.
#### Amounts reversing expenses of management deducted: charge to tax
##### 118ZG
- (1) For the purposes of section 118ZE(2), the individual’s contribution to the trade at any time (“*the relevant time*”) is the sum of—
- (a) the amount subscribed by him,
- (b) the amount of any profits of the trade to which he is entitled but which he has not received in money or money’s worth, and
- (c) where there is a winding up, the amount that he has contributed to the assets of the partnership on its winding up.
- (2) For the purposes of subsection (1)(a) the “*amount subscribed*”by an individual is the sum of—
- (a) the total amount (if any) contributed by him to the trade as capital on or after 10 February 2004, reduced (but not below nil) by his withdrawn capital, and
- (b) the total amount (if any) contributed by him to the trade as capital before 10 February 2004, reduced (but not below nil) by—
- (i) the pre-announcement allowance (within the meaning given by section 118ZJ),
- (ii) the aggregate of any amounts given to him at any time under section . . . 380 or 381 in respect of a loss sustained by him in a trade . . . in a year of assessment falling within subsection (3), and
- (iii) the amount (if any) of his withdrawn capital that has not been used in the reduction to nil required by paragraph (a).
- (3) A year of assessment falls within this subsection if—
- (a) it does not fall within section 118ZE(3)(d), and
- (b) it is either—
- (i) a year of assessment that would be a qualifying year of assessment but for section 118ZE(3)(d), or
- (ii) a year of assessment at any time during which the individual carried on the trade as a member of a limited liability partnership or as a limited partner within the meaning given by section 117(2).
- (4) The individual’s “*withdrawn capital*”is so much, if any, of the amount that he has contributed to the trade as capital as—
- (a) he has previously, directly or indirectly, drawn out or received back,
- (b) he so draws out or receives back during the period of five years beginning with the relevant time,
- (c) he is or may be entitled so to draw out or receive back at any time when he carries on the trade as a member of the partnership, or
- (d) he is or may be entitled to require another person to reimburse to him.
- (5) An amount drawn out or received back that would otherwise fall within subsection (4)(a) or (b), or an entitlement that would otherwise fall within subsection (4)(c), shall be treated as not so falling if the amount drawn out or received back is chargeable to income tax as profits of the trade.
- (6) In relation to a member of a limited liability partnership, references in this section to an amount contributed to the trade as capital shall be read as references to an amount contributed to the limited liability partnership as capital.
- (7) This section is subject to provision made by regulations under section 118ZN (partners: meaning of “contribution to the trade”).
##### 118ZH
- (1) For the purposes of section 118ZE the individual shall be treated as having “*devoted a significant amount of time to the trade*”in a given year of assessment if, for the whole of the relevant period, he spent an average of at least ten hours a week personally engaged in activities carried on for the purposes of the trade.
- (2) “*The relevant period*” means the basis period for the year of assessment in question, except that—
- (a) if the basis period is less than six months and begins with the date when the individual first carried on the trade, “*the relevant period*” means six months beginning with that date, and
- (b) if the basis period is less than six months and ends with the date when the individual ceased to carry on the trade, “*the relevant period*” means six months ending with that date.
- (3) Where relief has been given on the assumption that an individual will meet the condition in subsection (1) and he fails to do so, the relief shall be withdrawn by the making of an assessment to income tax.
##### 118ZI
- (1) Where amounts relating to a trade carried on by an individual in a qualifying year of assessment are prevented from being given by section 118ZE as it applies otherwise than by virtue of this section or section 118ZD, subsection (3) of this section applies as respects each subsequent year of assessment in which—
- (a) the individual carries on the trade in partnership or makes a contribution to the assets of the partnership on its winding up, and
- (b) any of his total restricted loss remains outstanding.
- (2) His “*total restricted loss*” means the total of any amounts, relating to any one or more qualifying years of assessment, that have been prevented from being given by section 118ZE as it applies otherwise than by virtue of this section or section 118ZD.
- (3) Sections 380 and 381 (and section 118ZE as it applies in relation to those sections) shall have effect in the subsequent year of assessment as if—
- (a) any loss sustained by the individual in the trade in that year of assessment were increased by an amount equal to so much of his total restricted loss as remains outstanding in that year of assessment, or
- (b) (if no loss is sustained) a loss of that amount were so sustained.
- (4) To ascertain whether any (and, if so, how much) of the individual’s total restricted loss remains outstanding in the subsequent year of assessment, deduct from the amount of his total restricted loss the aggregate of—
- (a) any relief given (otherwise than as a result of subsection (3)) under any provision of the Tax Acts, in that or any previous year of assessment, in respect of any of his total restricted loss, and
- (b) any amount which was given as a result of subsection (3), in any previous year of assessment, in respect of any of his total restricted loss (or which would have been so given had a claim been made).
- (5) For the purposes of sections 118ZE and 118ZF (and of sections 117 and 118ZB(2))—
- (a) any additional amount of loss deemed by subsection (3)(a) to have been sustained in the subsequent year of assessment, and
- (b) any loss deemed by subsection (3)(b) to have been so sustained,
shall be treated as having been sustained in a qualifying year of assessment.
- (6) Subsection (7) applies where the subsequent year of assessment—
- (a) is one in which the trade is not carried on in partnership by the individual, but
- (b) is one in which he contributes to the assets of the partnership on its winding up.
- (7) Where this subsection applies, nothing in section 381(4) or 384 (restrictions on right of set-off) applies to—
- (a) an additional amount of loss deemed by subsection (3)(a) to have been sustained in the subsequent year of assessment, or
- (b) a loss deemed by subsection (3)(b) to have been so sustained.
- (8) In this section “*qualifying year of assessment*” has the meaning given by section 118ZE.
##### 18ZJ
- (1) This section applies where the year of assessment referred to in section 118ZE(1) is a year of assessment the basis period for which includes 10 February 2004 (“the first restricted year”).
- (2) If this section would (but for this subsection) apply in relation to more than one year of assessment as respects the same individual and the same trade, it applies only in relation to the first of those years of assessment and “*the first restricted year*” means that year of assessment.
- (3) Where this section applies, section 118ZE(2) shall have effect as if for the words from “only to the extent that” there were substituted only to the extent that the total amount given under section . . . 380 and 381 in respect of losses sustained by him in the trade . . . in that year of assessment does not exceed the sum of—
- (a) the pre-announcement allowance, and
- (b) the post-announcement allowance.
- (4) The “*pre-announcement allowance*” is . . . —
- (a) the loss (if any) sustained by the individual in the trade in the period beginning with the start of the basis period for the first restricted year and ending with 9 February 2004, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) The “*post-announcement allowance*”is so much of—
- (a) the loss (if any) sustained by the individual in the trade in the period beginning with 10 February 2004 and ending with the end of the basis period for the first restricted year, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
as does not exceed the individual’s contribution to the trade as at the end of the year of assessment, computed in accordance with section 118ZG.
- (6) In each of subsections (4)(a) and (5)(a), the reference to the loss sustained by the individual in the trade in the period there mentioned is a reference to his share of any losses of the partnership arising for that period from the trade, and—
- (a) subject to subsection (7), the losses of the partnership arising for that period from the trade shall be computed in the same way as if the period were one for which profits and losses had to be computed for the purposes of section 111(2), and
- (b) subject to subsection (8), the individual’s share of the losses shall be determined according to his interest in the partnership during that period.
- (7) In computing for the purposes of subsection (6) the losses of the partnership arising for the period mentioned in subsection (4)(a) or (5)(a)—
- (a) any capital allowance treated as an expense of the trade for the purposes of the computation required by section 111(2) for the first restricted year is to be regarded as belonging to the period mentioned in subsection (4)(a) unless the capital expenditure to which it relates is incurred after 9 February 2004, and
- (b) any amount deducted under section 42(1) of the Finance (No. 2) Act 1992 for the purposes of that computation is to be regarded as belonging to the period mentioned in subsection (4)(a) unless the expenditure to which it relates is incurred after 9 February 2004.
- (8) If the individual had an interest in the partnership at any time that falls within—
- (a) the basis period for the first restricted year, and
- (b) the period beginning with 10 February 2004 and ending with 25 March 2004,
he shall be deemed for the purposes of subsection (6)(b) to have had the interest on 9 February 2004.
##### 118ZK
- (1) This section applies where the year of assessment referred to in section 118ZE(1) is a year of assessment later than the first restricted year.
- (2) Section 118ZE(2) shall not apply to any part of the amount mentioned in section 118ZE(1) that—
- (a) derives from a capital allowance treated as an expense of the trade where the capital expenditure to which the allowance relates was incurred before 10 February 2004, or
- (b) derives from a deduction made under section 42(1) of the Finance (No. 2) Act 1992 or any of sections 138 to 140 of ITTOIA 2005 where the expenditure to which the deduction relates was incurred before 10 February 2004.
- (3) In computing for the purposes of section 118ZE(2)(a) or (b) the amount given or (as the case may be) the aggregate amount, any part of an amount given that falls within subsection (2)(a) or (b) of this section shall be left out of account.
- (4) In computing the aggregate amount for the purposes of section 118ZE(2), any amount given in respect of the pre-announcement allowance shall be left out of account.
- (5) For the purposes of subsections (2) and (3) the part of an amount that derives from a capital allowance or a deduction made under section 42(1) of the Finance (No. 2) Act 1992 or any of sections 138 to 140 of ITTOIA 2005 shall be determined on such basis as is just and reasonable.
- (6) In this section “the first restricted year” and “the pre-announcement allowance” have the meanings given by section 118ZJ.
### Partnerships exploiting films
##### 118ZL
- (1) Where (apart from this section) an amount may be given to an individual under section 380 or 381 in respect of a loss (“the loss in question”) sustained by him—
- (a) in a trade consisting of or including the exploitation of films, and
- (b) in an affected year of assessment,
none of that amount may be given otherwise than against income consisting of profits arising from the trade; but this is subject to subsection (4).
- (2) An “*affected year of assessment*” means a year of assessment at any time during which the individual carried on the trade in partnership which is also—
- (a) the year of assessment in which the trade is first carried on by him or any of the next three years of assessment,
- (b) a year of assessment in which he did not devote a significant amount of time to the trade, and
- (c) a year of assessment at any time during which there existed a relevant agreement guaranteeing him an amount of income.
- (3) For the purposes of subsection (2)(c)—
- (a) “*a relevant agreement*” means—
- (i) an agreement that was made with a view to the individual’s carrying on the trade or in the course of his carrying it on (including any agreement under which he is or may be required to contribute an amount to the trade), or
- (ii) an agreement related to an agreement falling within sub-paragraph (i),
- (b) an agreement “guarantees” the individual an amount of income if the agreement, or any part of it, is designed to secure the receipt by the individual of that amount (or at least that amount) of income, and
- (c) it is immaterial when the amount of income would be received under the agreement.
- (4) If the loss in question derives to any extent from exempt expenditure, amounts that (apart from this section) may be given under section 380 or 381 in respect of the loss otherwise than against income consisting of profits arising from the trade may be so given to the extent that the total of the amounts so given does not exceed the exempt part of the loss.
- (5) The exempt part of the loss is so much of the loss in question as derives from exempt expenditure.
- (6) Expenditure is exempt expenditure for the purposes of this section if it is—
- (a) expenditure incurred before 26 March 2004 in a case where this paragraph applies, or
- (b) expenditure that, for the purposes of the computation required by section 849 of ITTOIA 2005 (calculation of firm's profits or losses), was deducted under any of sections 137 to 140 of ITTOIA 2005, or
- (c) incidental expenditure that, although deductible apart from sections 137 to 140 of that Act, was incurred in connection with the production or acquisition of a film in relation to which expenditure was deducted under any of those sections.
- (7) Subsection (6)(a) applies where the individual carried on the trade before 26 March 2004.
##### 118ZM
- (1) In section 118ZL and this section any reference to a film is to be construed in accordance with paragraph 1 of Schedule 1 to the Films Act 1985.
- (2) Section 118ZH (meaning of “a significant amount of time” etc) applies for the purposes of section 118ZL as it applies for the purposes of section 118ZE.
- (3) For the purposes of section 118ZL(3) agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (4) The reference in section 118ZL(6) to the acquisition of a film is a reference to the acquisition of the original master version of the film; and this subsection is to be construed as if contained in Chapter 9 of Part 2 of ITTOIA 2005.
- (5) In section 118ZL(6) “*incidental expenditure*” means expenditure on management, administration or obtaining finance.
- (6) The part of the loss in question that derives from exempt expenditure shall be determined on such basis as is just and reasonable.
- (7) The extent to which any expenditure falls within section 118ZL(6)(c) shall be determined on such basis as is just and reasonable.
- (8) In any case where sections 380 and 381 have effect as mentioned in section 118ZD(2) or 118ZI(3) (cases where sections 380 and 381 have effect as if loss carried forward from earlier year sustained in subsequent year), section 118ZL also has effect as mentioned in section 118ZD(2) or (as the case may be) section 118ZI(3).
### Partners: meaning of “contribution to the trade”
#### Expenses of insurance companies
##### 118ZN
- (1) This section applies for the purposes of the application of any of the following provisions (“*the relevant provisions*”)—
- (a) section 117 (restriction on relief for limited partners),
- (b) that section as applied by section 118ZB in relation to a member of a limited liability partnership, and
- (c) section 118ZE (restriction on relief for non-active partners),
to an amount which may be given to an individual under section 380 or 381 in respect of a relevant loss sustained by him in a trade (“*the relevant trade*”).
- (2) The Board may by regulations provide that, for those purposes, any amount of a description specified in the regulations is to be excluded when computing the amount of the individual's contribution to the relevant trade at any time for the purposes of the relevant provisions.
- (3) Regulations under this section may—
- (a) make provision having effect before the date on which the regulations are made,
- (b) make such supplementary, incidental, consequential or transitional provision as appears to the Board to be necessary or expedient, and
- (c) make different provision for different cases or different purposes.
- (4) The provision mentioned in subsection (3)(b) may include provision amending or repealing any provision of an Act passed before the passing of the Finance Act 2005.
- (5) No regulations may be made under this section unless a draft has been laid before and approved by a resolution of the House of Commons.
##### 118ZO
- (1) For the purposes of section 118ZN a “*relevant loss*” means—
- (a) a loss sustained by the individual in the relevant trade in a year of assessment the basis period for which begins on or after 2nd December 2004, or
- (b) a post-announcement loss sustained by the individual in the relevant trade in a straddling year of assessment.
- (2) For the purposes of this section—
- “*basis period*” means the basis period given by Chapter 15 of Part 2 of ITTOIA 2005, as applied by section 853 of that Act, except that the basis period for a year of assessment to which section 199(1) of that Act applies is to be taken to be the period beginning with the date when the individual first carried on the relevant trade and ending with the end of the year of assessment;
- “*post-announcement loss*”, in relation to a straddling year of assessment, means the loss (if any) sustained by the individual in the relevant trade in the period which—begins with 2nd December 2004, andends with the end of the basis period for that straddling year of assessment;
- “*straddling year of assessment*” means a year of assessment the basis period for which begins before and includes 2nd December 2004.
- (3) In the definition of “post-announcement loss” in subsection (2), the reference to the loss sustained by the individual in the relevant trade in a period is a reference to his share of any losses of the partnership arising for that period from the trade, and—
- (a) the losses of the partnership arising for that period from the trade are to be computed in the same way as if the period were one for which profits and losses had to be computed for the purposes of section 849 of ITTOIA 2005, and
- (b) the individual's share of the losses is to be determined according to his interest in the partnership during that period.
- (4) In subsection (3) the references to “*the partnership*” are to the partnership as a member of which the individual carries on the relevant trade.
- (5) In relation to years of assessment which are before the year 2005-06, this section has effect as if—
- (a) in subsection (2) for the definition of “basis period” there were substituted—
> “*basis period*” means the basis period given by sections 60 to 63 as applied by section 111(4) and (5), except that the basis period for a year of assessment to which section 61(1) applies is to be taken to be the period beginning with the date when the individual first carried on the trade and ending with the end of the year of assessment;
, and
- (b) the reference in subsection (3)(a) to section 849 of ITTOIA 2005 were a reference to section 111(2) of this Act.
### Chapter VIIA — Paying and collecting agents
##### 118A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118H
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##### 118I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 118K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Levies and repayments under the Financial Services and Markets Act 2000.
##### 126A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 127A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 129A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 129B
- (1) The income which, as income deriving from investments of a description specified in any of the relevant provisions, is eligible for relief from tax by virtue of that provision shall be taken to include any relevant stock lending fee.
- (2) For the purposes of this section the relevant provisions are sections 613(4) and 614(3) and section 186 of the Finance Act 2004.
- (3) In this section “*relevant stock lending fee*”, in relation to investments of any description, means any amount, in the nature of a fee, which is payable in connection with any stock lending arrangement relating to investments which, but for any transfer under the arrangement, would be investments of that description.
- (4) In this section “*stock lending arrangement*” has the same meaning as in section 263B of the 1992 Act.
#### Payments to Export Credit Guarantee Department.
#### Payments to Export Credit Guarantee Department.
#### Paying agents.
##### 140A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 140B
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##### 140C
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##### 140D
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##### 140E
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##### 140F
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##### 140G
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##### 140H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definitions.
##### 144A
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##### 146A
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##### 151A
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##### 155ZA
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##### 155ZB
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##### 155AA
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##### 155A
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#### Cars available for private use.
##### 156A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 157A
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##### 159AA
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##### 159AB
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##### 159AC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 159A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 161A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 161B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 168A
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##### 168AA
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##### 168AB
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##### 168B
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##### 168C
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##### 168D
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##### 168E
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##### 168F
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##### 168G
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#### Exceptions from tax.
#### Change of scheme employer.
##### 177A
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##### 177B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Contributions in respect of share option gains
#### Interpretation of sections 185 and 186 and Schedules 9 and 10.
##### 187A
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### Removal expenses and benefits
##### 191A
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##### 191B
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##### 192A
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#### Foreign pensions.
##### 197A
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##### 197AA
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##### 197AB
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##### 197AC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mileage allowances
##### 197AD
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##### 197AE
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#### Giving effect to mileage allowance relief
##### 197AF
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##### 197AG
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##### 197AH
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mileage allowances
##### 197B
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##### 197C
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##### 197D
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##### 197E
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##### 197F
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### Sporting and recreational facilities
##### 197G
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##### 198A
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##### 200ZA
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##### 200AA
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##### 200A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 200H
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##### 200J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 201AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 201A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 202A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 202B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203FA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203FB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 203L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 206A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 207A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### PAYE: payment by intermediary.
##### 209A
- (1) Subsection (3AA) of section 209 does not apply in relation to a security issued by a company (the “*issuing company*”) if the security is one which to a significant extent reflects dividends or other distributions in respect of, or fluctuations in the value of, shares in one or more companies each of which is—
- (a) the issuing company; or
- (b) an associated company of the issuing company;
but this subsection is subject to the following provisions of this section.
- (2) Subsection (1) above does not prevent subsection (3AA) of section 209 above from applying in relation to a security if—
- (a) the issuing company is a bank or securities house;
- (b) the security is issued by the issuing company in the ordinary course of its business; and
- (c) the security reflects dividends or other distributions in respect of, or fluctuations in the value of, shares in companies falling within paragraph (a) or (b) of subsection (1) above by reason only that the security reflects fluctuations in a qualifying index.
- (3) In subsection (2)(c) above “*qualifying index*” means an index whose underlying subject matter includes both—
- (a) shares in one or more companies falling within paragraph (a) or (b) of subsection (1) above, and
- (b) shares in one or more companies falling within neither of those paragraphs,
and which is an index such that the shares falling within paragraph (b) above represent a significant proportion of the market value of the underlying subject matter of the index.
- (4) In this section—
- “*bank*” has the meaning given by section 840A;
- “*securities house*” means any person—who is authorised for the purposes of the Financial Services and Markets Act 2000; andwhose business consists wholly or mainly of dealing in financial instruments as principal;and in paragraph (b) above “*financial instrument*” has the meaning given by section 349(5) and (6).
- (5) For the purposes of this section a company is an “*associated company*” of another at any time if at that time one has control of the other or both are under the control of the same person or persons.
- (6) For the purposes of subsection (5) above, “*control*”, in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (7) There shall be left out of account for the purposes of subsection (6) above—
- (a) any shares held by a company, and
- (b) any voting power or other powers arising from shares held by a company,
if a profit on a sale of the shares would be treated as a trading receipt of a trade carried on by the company and the shares are not, within the meaning of Chapter 1 of Part 12, assets of an insurance company’s long-term insurance fund (see section 431(2)).
##### 209B
- (1) Subsection (3AA) of section 209 does not at any time apply in relation to a security issued by a company (the “*issuing company*”) if at that time, or any earlier time on or after 17th April 2002, there are or have been any hedging arrangements that relate to some or all of the company’s liabilities under the security.
- (2) Subsection (1) above does not prevent subsection (3AA) of section 209 from applying in relation to a security at any time if—
- (a) conditions 1 to 4 below are satisfied in relation to any such hedging arrangements at that time; and
- (b) at all earlier times on or after 17th April 2002 when there have been hedging arrangements that relate to some or all of the company’s liabilities under the security, conditions 1 to 4 below were satisfied in relation to those hedging arrangements.
- (3) Where subsection (3AA) of section 209 at any time ceases to apply in relation to a security by virtue of this section, subsection (2)(d) of that section shall have effect in relation to the security as from that time as it would have had effect if subsection (3AA) had never applied in relation to the security.
- (4) Condition 1 is that the hedging arrangements do not constitute, include, or form part of, any scheme or arrangement the purpose or one of the main purposes of which is the avoidance of tax (including stamp duty or stamp duty land tax).
- (5) Condition 2 is that the hedging arrangements are such that, where for the purposes of corporation tax a deduction in respect of the security falls to be made at any time by the issuing company, then at that time, or within a reasonable time before or after it, any amounts intended under the hedging arrangements to offset some or all of that deduction arise—
- (a) to the issuing company; or
- (b) to a company which is a member of the same group of companies as the issuing company.
- (6) Condition 3 is that the whole of every amount arising as mentioned in subsection (5) above is brought into charge to corporation tax—
- (a) by a company falling within paragraph (a) or (b) of that subsection, or
- (b) by two or more companies, taken together, each of which falls within paragraph (a) or (b) of that subsection.
- (7) Condition 4 is that for the purposes of corporation tax any deductions in respect of expenses of establishing or administering the hedging arrangements are reasonable, in proportion to the amounts required to be brought into charge to corporation tax by subsection (6) above.
- (8) For the purposes of this section “*hedging arrangements*”, in relation to a security, means any scheme or arrangement for the purpose, or for purposes which include the purpose, of securing that an amount of income or gain accrues, or is received or receivable, whether directly or indirectly, which is intended to offset some or all of the amounts which fall to be brought into account, in accordance with generally accepted accounting practice, in respect of amounts accruing or falling to be paid in accordance with the terms of the security.
- (9) Any reference in this section to two companies being members of the same group of companies is a reference to their being members of the same group of companies for the purposes of Chapter 4 of Part 10 of this Act (group relief).
##### 213A
- (1) A reference in the Corporation Tax Acts to distributions of a company shall not apply to a distribution if—
- (a) it is a distribution consisting of—
- (i) the transfer of part of a business by a company (“the distributing company”) to one or more other companies (“the transferee company or companies”), and
- (ii) the issue of shares by the transferee company or companies to the members of the distributing company, and
- (b) the requirements of either section 140A(1A) of the 1992 Act (division of UK business) or section 140C(1A) of that Act (division of non-UK business) are satisfied in relation to the distribution.
- (2) A distribution to which this section applies is an “*exempt distribution*” for the purposes of sections 214 to 217.
- (3) The expression “*relevant company*” in sections 214 to 217 includes the distributing company and the transferee company or companies.
### Industrial and provident society dividends etc
##### 230A
- (1) This section applies if—
- (a) a dividend or bonus is granted by a registered industrial and provident society, and
- (b) section 132 (deduction for dividends etc granted by industrial and provident societies) of CTA 2009 allows the sum representing the dividend or bonus to be deducted in calculating the profits of a trade.
- (2) The dividend, or the bonus, is not treated as a distribution for the purposes of the Corporation Tax Acts.
##### 231A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 231AA
- (1) A person shall not be entitled to a tax credit under section 231 above or section 397(1) of ITTOIA 2005 in respect of a qualifying distribution if—
- (a) he is the borrower under a stock lending arrangement or the interim holder under a repurchase agreement;
- (b) the qualifying distribution is, or is a payment representative of, a distribution in respect of securities to which the arrangement or agreement relates; and
- (c) a manufactured dividend representative of that distribution is paid by that person in respect of securities to which the arrangement or agreement relates.
- (1A) Where subsection (1) above applies to a person resident in the United Kingdom in respect of a qualifying distribution, section 399(2) of ITTOIA 2005 (certain persons to be treated as having paid income tax at dividend ordinary rate on certain distributions etc) shall not apply in relation to that person in respect of that distribution.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this section “*stock lending arrangement*” has the same meaning as in section 263B of the 1992 Act and, in relation to any such arrangement, any reference to the borrower, or the securities to which the arrangement relates, shall be construed accordingly.
- (3) For the purposes of this section the cases where there is a repurchase agreement are the following—
- (a) any case falling within subsection (1) of section 730A; and
- (b) any case which would fall within that subsection if the sale price and the repurchase price were different;
and, in any such case, any reference to the interim holder, or the securities to which the agreement relates, shall be construed accordingly.
- (4) For the purposes of this section “*manufactured dividend*” has the same meaning as in paragraph 2 of Schedule 23A (and any reference to a manufactured dividend being paid accordingly includes a reference to a payment falling by virtue of section 736B(2) or 737A(5) to be treated for the purposes of Schedule 23A as if it were made).
##### 231AB
- (1) A person shall not be entitled to a tax credit under section 231 above or section 397(1) of ITTOIA 2005 in respect of a qualifying distribution if—
- (a) he is the original owner under a repurchase agreement;
- (b) the qualifying distribution is a manufactured dividend paid to that person by the interim holder under the repurchase agreement in respect of securities to which the agreement relates; and
- (c) the repurchase agreement is not such that the actual dividend which the manufactured dividend represents is receivable otherwise than by the original owner.
- (1A) Where subsection (1) above applies to a person resident in the United Kingdom in respect of a qualifying distribution, section 399(2) of ITTOIA 2005 (certain persons to be treated as having paid income tax at dividend ordinary rate on certain distributions etc) shall not apply in relation to that person in respect of that distribution.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this section the cases where there is a repurchase agreement are the following—
- (a) any case falling within subsection (1) of section 730A; and
- (b) any case which would fall within that subsection if the sale price and the repurchase price were different;
and, in any such case, any reference to the original owner, the interim holder, or the securities to which the agreement relates, shall be construed accordingly.
- (3) Subsection (4) of section 231AA applies for the purposes of this section as it applies for the purposes of that section.
##### 231B
- (1) This section applies in any case where—
- (a) a person (“A”) is entitled to a tax credit in respect of a qualifying distribution;
- (b) arrangements subsist such that another person (“B”) obtains, whether directly or indirectly, a payment representing any of the value of the tax credit;
- (c) the arrangements (whether or not made directly between A and B) were entered into for an unallowable purpose; and
- (d) the condition in subsection (2) below is satisfied.
- (2) The condition is that if B had been the person entitled to the tax credit and the qualifying distribution to which it relates, and had received the distribution when it was made, then—
- (a) B would not have been entitled to obtain any payment under section 231(2) or (3) in respect of the tax credit; and
- (b) if B is a company, B could not have used the income consisting of the distribution to frank a distribution actually made in the accounting period in which it would have received the distribution to which the tax credit relates.
- (3) This section does not apply if and to the extent that any other provision of the Tax Acts has the effect of cancelling or reducing the tax advantage which would otherwise be obtained by virtue of the arrangements.
- (4) Where this section applies—
- (a) no claim shall be made under section 231(2) for payment of the amount of the tax credit;
- (b) no claim shall be made under section 397(2) of ITTOIA 2005. . . in respect of the tax credit;
- (c) the income consisting of the distribution in respect of which A is entitled to the tax credit shall not be regarded for the purposes of section 241 as franked investment income; and
- (d) no claim shall be made under section 35 of the Finance (No. 2) Act 1997 (transitional relief) for payment of an amount determined by reference to that distribution.
- (5) For the purposes of this section, the question whether any arrangements were entered into for an “unallowable purpose” shall be determined in accordance with subsections (6) and (7) below.
- (6) Arrangements are entered into for an unallowable purpose if the purposes for which at least one person is a party to the arrangements include a purpose which is not amongst the business or other commercial purposes of that person.
- (7) Where one of the purposes for which a person enters into any arrangements is the purpose of securing that that person or another obtains a tax advantage, that purpose shall be regarded as a business or other commercial purpose of the person only if it is neither the main purpose, nor one of the main purposes, for which the person enters into the arrangements.
- (8) Any reference in this section to a person obtaining a tax advantage includes a reference to a person obtaining a payment representing any of the value of a tax credit in circumstances where, had the person obtaining the payment been entitled to the tax credit and the qualifying distribution to which it relates, that person—
- (a) would not have been entitled to obtain any payment under section 231(2) or (3) in respect of the tax credit; and
- (b) if that person is a company, could not have used the income consisting of the distribution to frank a distribution actually made in the accounting period in which it would have received the distribution to which the tax credit relates.
- (9) If an amount representing any of the value of a tax credit to which a person is entitled is applied at the direction of, or otherwise in favour of, some other person (whether by way of set off or otherwise), the case shall be treated for the purposes of this section as one where that other person obtains a payment representing any of the value of the tax credit.
- (10) In determining for the purposes of subsections (2)(b) and (8)(b) b above whether a company could have used the income consisting of the distribution in question to frank a distribution of the company, the company shall be taken to use its actual franked investment income to frank distributions before using the income consisting of the distribution in question.
- (11) References in this section to using franked investment income to frank a distribution of a company have the same meaning as in Chapter V of Part VI.
- (12) In this section—
- “*arrangements*” means arrangements of any kind, whether in writing or not (and includes a series of arrangements, whether or not between the same parties);
- “*business or other commercial purposes*” includes the efficient management of investments;
- “*franked investment income*” has the same meaning as in Chapter V of Part VI and references to income consisting of a distribution shall be construed accordingly;
- “*tax advantage*” has the same meaning as in Chapter I of Part XVII.
#### Section 209(3AA): link to shares of company or associated company
##### 234A
- (1) This section applies where dividend or interest is distributed by a company which is—
- (a) a company within the meaning of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986, or
- (b) a company created by letters patent or by or in pursuance of an Act.
- (2) If the company makes a payment of dividend or interest to any person, and subsection (3) below does not apply, within a reasonable period the company shall send an appropriate statement to that person.
- (3) If the company makes a payment of dividend or interest into a bank or building society account held by any person, within a reasonable period the company shall send an appropriate statement to either—
- (a) the bank or building society concerned, or
- (b) the person holding the account.
- (4) In a case where—
- (a) a statement is received by a person under subsection (2) or (3)(b) above,
- (b) the whole or part of the sum concerned is paid to or on behalf of the person as nominee for another person, and
- (c) the nominee makes a payment of the sum or part to the other person and subsection (5) below does not apply,
within a reasonable period the nominee shall send an appropriate statement to that person.
- (5) In a case where—
- (a) a statement is received by a person under subsection (2) or (3)(b) above,
- (b) the whole or part of the sum concerned is paid to or on behalf of the person as nominee for another person, and
- (c) the nominee makes a payment of the sum or part into a bank or building society account held by the other person,
within a reasonable period the nominee shall send an appropriate statement to either the bank or building society concerned or the other person.
- (6) In the case of a payment of interest which is not a qualifying distribution or part of a qualifying distribution, references in this section to an appropriate statement are to a written statement showing—
- (a) the gross amount which, after deduction of the income tax appropriate to the interest, corresponds to the net amount actually paid,
- (b) the rate and the amount of income tax appropriate to such gross amount,
- (c) the net amount actually paid, and
- (d) the date of the payment.
- (7) In the case of a payment of dividend or interest which is a qualifying distribution or part of a qualifying distribution, references in this section to an appropriate statement are to a written statement showing—
- (a) the amount of the dividend or interest paid,
- (b) the date of the payment, and
- (c) the amount of the tax credit to which a person is entitled in respect of the dividend or interest, or to which a person would be so entitled if he had a right to a tax credit in respect of the dividend or interest.
- (8) In this section “*send*” means send by post.
- (8A) In this section “*bank*” has the meaning given by section 840A.
- (9) If a person fails to comply with subsection (2), (3), (4) or (5) above, the person shall incur a penalty of £60 in respect of each offence, except that the aggregate amount of any penalties imposed under this subsection on a person in respect of offences connected with any one distribution of dividends or interest shall not exceed £600.
- (10) The Board may by regulations provide that where a person is under a duty to comply with subsection (2), (3), (4) or (5) above, the person shall be taken to comply with the subsection if the person either—
- (a) acts in accordance with the subsection concerned, or
- (b) acts in accordance with rules contained in the regulations;
and subsection (9) above shall be construed accordingly.
- (11) Regulations under subsection (10) above may make different provision for different circumstances.
##### 245A
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##### 245B
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### Chapter VA — Foreign Income Dividends
### Election by company paying dividend
#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions.
##### 246A
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##### 246B
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### Recipient of foreign income dividend
##### 246C
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##### 246D
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### Companies: payments and receipts
##### 246E
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##### 246F
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##### 246G
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##### 246H
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### Foreign source profit and distributable foreign profit
##### 246I
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### Matching of dividend with distributable foreign profit
##### 246J
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##### 246K
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##### 246L
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##### 246M
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### Repayment or set-off of advance corporation tax
##### 246N
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##### 246P
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##### 246Q
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##### 246R
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### International headquarters companies
##### 246S
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##### 246T
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##### 246U
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##### 246V
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##### 246W
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### Adjustments
##### 246X
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### Application of this Chapter
##### 246Y
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#### Taxation of certain recipients of distributions and in respect of non-qualifying distributions.
### Approved share incentive plans
##### 251A
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##### 251B
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##### 251C
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#### Further interpretation of sections 135 to 139.
##### 251D
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##### 256A
- (1) For the purposes of this Chapter an individual's adjusted net income for a year of assessment is calculated as follows.
*Step 1*
Take the amount of the individual's net income for the year of assessment.
*Step 2*
If in the year of assessment the individual makes, or is treated under section 426 of ITA 2007 as making, a gift that is a qualifying donation for the purposes of Chapter 2 of Part 8 of that Act (gift aid) deduct the grossed up amount of the gift.
*Step 3*
If the individual is given relief in accordance with section 192 of FA 2004 (relief at source) in respect of any contribution paid in the year of assessment under a pension scheme, deduct the gross amount of the contribution.
*Step 4*
Add back any relief under section 266 of this Act given by virtue of subsection (7) of that section (payments for life insurance etc) that was deducted in calculating the individual's net income for the year of assessment.
The result is the individual's adjusted net income for the year of assessment.
- (2) The grossed up amount of a gift is the amount of the gift grossed up by reference to the basic rate for the year of assessment.
- (3) The gross amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004.
##### 256B
In this Chapter “*the minimum amount*” means £2,350.
##### 257AA
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##### 257A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him and whose marriage was entered into before 5th December 2005, and either of them was born before 6th April 1935, he shall (subject to subsection (3A) below) be entitled for that year to an income tax reduction calculated by reference to £2,665 . . . .
- (3) If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him and whose marriage was entered into before 5th December 2005, and either of them
- (a) is at any time within that year of the age of 75 or upwards, and
- (b) was born before 6th April 1935,
he shall (subject to subsection (3A) below) be entitled for that year to an income tax reduction calculated by reference to £2,705 (instead of to the reduction provided for by subsection . . . (2) above).
- (3A) Subsections (2) and (3) above shall not apply in relation to the claimant for any year of assessment if an election made by the claimant and his wife under section 257AB(1)(c) has effect for that year.
- (4) For the purposes of subsection (3) above a person who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (5) In relation to a claimant whose total income for the year of assessment exceeds £12,300, subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by—
- (a) one half of the excess, less
- (b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section,
. . .
- (5A) The amounts specified in subsections (2) and (3) above shall not by virtue of subsection (5) above be treated as reduced below £1,970.
- (6) A man shall not be entitled by virtue of this section to more than one income tax reduction for any year of assessment; and in relation to a claim by a man who becomes married in the year of assessment and has not previously in the year been entitled to relief under this section, this section shall have effect as if the amounts specified in subsections (2) and (3) above were reduced by one twelfth for each month of the year ending before the date of the marriage.
- In this subsection “*month*” means a month beginning with the 6th day of a month of the calendar year.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257AB
- (1) This section applies if —
- (a) the claimant is, for the whole or any part of the year of assessment, living with his spouse or civil partner,
- (b) either the claimant or his spouse or civil partner was born before 6th April 1935,
- (c) the marriage or civil partnership was entered into on or after 5th December 2005 or, if the marriage was entered into before that date, an election for this section to apply has effect for that year, and
- (d) the claimant's total income for that year exceeds that of his spouse or civil partner or, if they have the same amount of total income for that year, the claimant is specified in an election as the person to be entitled to relief under this section for that year.
- (2) The claimant shall be entitled for that year to an income tax reduction —
- (a) calculated by reference to £5,975 (if either the claimant or his spouse or civil partner is at any time within that year of the age of 75 or upwards), or
- (b) calculated by reference to £5,905 (in any other case).
- (3) For the purposes of subsection (2)(a) above an individual who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (4) In relation to a claimant whose total income for the year of assessment exceeds £19,500, subsection (2) above applies as if the amounts specified in it were reduced by—
- (a) one half of the excess, less
- (b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section.
- (5) The amounts specified in subsection (2) above shall not by virtue of subsection (4) above be treated as reduced below £2,280.
- (6) An individual shall not be entitled by virtue of this section to more than one income tax reduction for any year of assessment.
- (7) In relation to a claim by an individual who —
- (a) becomes a spouse or civil partner in the year of assessment, and
- (b) has not previously in the year been entitled to relief under this section,
this section shall have effect as if the amounts specified in subsection (2) above were reduced by one twelfth for each month of the year ending before the date of the marriage or civil partnership.
- In this subsection “*month*” means a month beginning with the 6th day of a month of the calendar year.
- (8) An election under subsection (1)(c) —
- (a) shall be made jointly by the parties to the marriage,
- (b) shall be made before the first year of assessment for which it is to have effect,
- (c) shall have effect for that and each succeeding year of assessment for which any party to the marriage is entitled to relief under this section, and
- (d) shall be irrevocable.
- (9) An election under subsection (1)(d) —
- (a) shall be made jointly by the parties to the marriage or civil partnership, and
- (b) shall be made on or before the 5th anniversary of the 31st January next following the end of the year of assessment to which the election relates.
#### Credit-tokens.
##### 257BA
- (1) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to relief under section 257A or 257AB—
- (a) the individual shall be entitled (on making a claim) to an income tax reduction calculated by reference to one half of the amount specified in section 257A(5A)or 257AB(5) for that year, and
- (b) the amount by reference to which the calculation of the income tax reduction to which the individual's spouse or civil partner is entitled under section 257A or 257AB is to be made shall be reduced accordingly.
- (2) An individual and the individual's spouse or civil partner may jointly elect that for any year of assessment for which the individual is entitled to relief under section 257A or 257AB—
- (a) the individual's spouse or civil partner shall be entitled (on making a claim) to an income tax reduction calculated by reference to the amount specified in section 257A(5A)or 257AB(5) for that year, and
- (b) the amount that by reference to which the calculation of the income tax reduction to which the individual is entitled under section 257A or 257AB is to be made shall be reduced accordingly . . . .
- (3) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to relief by virtue of an election under subsection (2) above—
- (a) the individual shall be entitled (on making a claim) to to an income tax reduction calculated by reference to one half of the amount specified in section 257A(5A)or 257AB(5) for that year (in addition to any income tax reduction to which the individual is already entitled under section 257A or 257AB), and
- (b) the amount by reference to which the calculation of the income tax reduction to which the individual's spouse or civil partner is entitled by virtue of that election is to be made shall be reduced accordingly.
- (4) An election under this section shall be made by giving notice to the inspector in such form as the Board may determine and—
- (a) subject to subsections (5) and (7) below, shall be made before the first year of assessment for which it is to have effect, and
- (b) shall have effect for that and each succeeding year of assessment for which the individual concerned is entitled to relief under section 257A or 257AB, subject to its withdrawal under subsection (8) below or a subsequent election under this section.
- (5) An election may be made during the first year of assessment for which it is to have effect if that is the year of assessment in which the marriage or civil partnership takes place.
- (6) Where subsection (5) above applies, the references in subsections (1)(a), (2)(a) and (3)(a) above to the amount specified for the year of assessment in section 257A(5A)or 257AB(5) shall be read as references to that amount reduced in accordance with section 257A(6) or (as the case may be) 257AB(7).
- (7) An election may be made within the first thirty days of the first year of assessment for which it is to have effect if before that year the inspector has been given written notification that it is intended to make the election.
- (8) The person or persons by whom an election was made may withdraw it by giving notice to the inspector in such form as the Board may determine; but the withdrawal shall not have effect until the year of assessment after the one in which the notice is given.
- (9) An individual shall not be entitled by virtue of an election under this section to more than one income tax reduction for any year of assessment.
##### 257BB
- (1) Where—
- (a) an individual is entitled to relief under section 257A or 257AB, but
- (b) the amount of the reduction to which the individual is entitled is determined in accordance with section 256(2)(b) (read with section 25(6)(c) of the Finance Act 1990 where applicable) or, by virtue of the individual's having no income tax liability to which that reduction is applicable, is nil,
the individual's spouse or civil partner shall be entitled (in addition to any reduction to which that spouse or civil partner is entitled by virtue of an election under section 257BA) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which the individual's income tax reduction fell to be calculated in pursuance of section 257A or 257AB and any election under section 257BA.
- (2) Subsection (1) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (3) Where—
- (a) an individual is entitled to relief by virtue of an election under section 257BA, but
- (b) the amount of the reduction to which the individual is entitled is determined in accordance with section 256(2)(b) (read with section 25(6)(c) of the Finance Act 1990 where applicable) or, by virtue of the individual's having no income tax liability to which that reduction is applicable, is nil,
the individual's spouse or civil partner shall be entitled (in addition to any other reduction to which that spouse or civil partner is entitled by virtue of section 257A or 257AB) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which the individual's income tax reduction fell to be calculated in pursuance of that election.
- (3A) In this section references, in relation to such an amount as is mentioned in subsection (1)(b) or (3)(b), to the unused part of an amount by reference to which any income tax reduction fell to be calculated are references to so much of it (including, where the amount so mentioned is nil, all of it) as has no practical effect on the determination of the amount so mentioned.
- (4) Subsection (3) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (5) Any notice under subsection (2) or (4) above—
- (a) shall be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257B
- (1) Where—
- (a) a man is entitled to relief under section 257A, but
- (b) the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it,
his wife shall be entitled to a deduction from her total income of an amount equal to the excess.
- (2) In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—
- (a) on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or
- (b) under section 289 or
- (c) on account of any payments to which section 593(2) or 639(3) applies,or
- (d) on account of any payments to which section 54(5) of the Finance Act 1989 applies.
, or
- (e) on account of any payments to which section 32(4) of the Finance Act 1991 applies.
- (3) This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given not later than six years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
##### 257C
- (1) If the retail prices index for the month of September preceding a year of assessment is higher than it was for the previous September, then, unless Parliament otherwise determines, sections 257 . . . , 257A and 257AB shall apply for that year as if for each amount specified in them as they applied for the previous year (whether by virtue of this section or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index, and—
- (a) if in the case of an amount specified in sections 257(5) , 257A(5) and 257AB(4) the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple;
- (b) if in the case of any other amount the increase is not a multiple of £10, rounding the increase up to the nearest amount which is such a multiple.
- (4) Subject to subsections (5) to (7) below, the relevant amount is an amount equal to—
- (a) where the disposal is a gift, the value of the net benefit to the charity at, or immediately after, the time when the disposal is made (whichever time gives the lower value);
- (b) where the disposal is at an undervalue, the amount by which—
- (i) the value described in paragraph (a) above, exceeds
- (ii) the amount or value of the consideration for the disposal,
or, if there is no such excess, nil.
- (5) Where there are one or more benefits received in consequence of making the disposal which are received by the company making the disposal or a person connected with it, the relevant amount shall be reduced by the value of that benefit or, as the case may be, the aggregate value of those benefits; and section 839 applies for the purposes of this subsection.
- (6) Where the disposal is a gift, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the company making it.
- (7) Where the disposal is at an undervalue—
- (a) to the extent that the consideration for the disposal is less than that for which the disposal is treated as made by virtue of section 257(2)(a) of the 1992 Act, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the company making it; and
- (b) section 48 of that Act (consideration due after time of disposal) shall apply in relation to the computation of the relevant amount as it applies in relation to the computation of a gain.
- (8) In the case of a disposal by a company which is carrying on life assurance business—
- (a) if the company is charged to tax under Case I of Schedule D in respect of such business, subsection (2) above shall not apply;
- (b) if the company is not so charged to tax in respect of such business—
- (i) subsection (2)(a)(ii) above shall have effect as if for “a charge on income" there were substituted “expenses payable falling to be brought into account at Step 3 in section 76(7)”; and
- (ii) the relevant amount given by subsection (4) above shall be reduced by so much (if any) of that amount as is not referable to basic life assurance and general annuity business;
and for the purpose of determining how much (if any) of that amount is not so referable, section 432A shall have effect as if that amount were a gain accruing on the disposal of the qualifying investment to the company.
- (8A) The value of the net benefit to the charity is—
- (a) the market value of the qualifying investment, unless subsection (8B) below applies;
- (b) where that subsection applies, that market value reduced by the aggregate amount of the related liabilities of the charity (see subsections (8E) to (8G)).
- (8B) This subsection applies in any case where—
- (a) the charity is, or becomes, subject to an obligation to any person (whether or not the company making the disposal or a person connected with it), and
- (b) one or more of the conditions in subsection (8C) below is satisfied.
- (8C) For the purposes of subsection (8B) above—
- (a) condition 1 is that, taking into account all the circumstances (including, in particular, the difference in the value of the net benefit to the charity if subsection (8B) applies and if it does not), it is reasonable to suppose that the disposal of the qualifying investment to the charity would not have been made in the absence of the obligation;
- (b) condition 2 is that the obligation (whether in whole or in part) relates to, is framed by reference to, or is conditional on the charity receiving, the qualifying investment or a related investment (see subsection (8D)).
- (8D) In subsection (8C) above “*related investment*” means any of the following—
- (a) any asset of the same class or description as the qualifying investment (irrespective of size, quantity or amount);
- (b) any asset derived from, or representing, the qualifying investment whether in whole or in part and whether directly or indirectly;
- (c) any asset from which the qualifying investment is derived, or which the qualifying investment represents, whether in whole or in part and whether directly or indirectly.
- (8E) For the purposes of this section, the liabilities which are related liabilities in the case of any qualifying investment are the liabilities of the charity under each of the obligations that fall within subsection (8B) above (as read with subsection (8C) above) in relation to that investment.
- (8F) Where an obligation is contingent and the contingency occurs, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, under the obligation is the amount or value of the liability actually incurred in consequence of the occurrence of the contingency.
- (8G) Where an obligation is contingent and the contingency does not occur, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, is nil.
- (9) In this section—
- “*authorised unit trust*” has the meaning given by section 468;
- “*charity*” has the same meaning as in section 506 and includes the Trustees of the National Heritage Memorial Fund;the Historic Buildings and Monuments Commission for England; andthe National Endowment for Science, Technology and the Arts;
- “*the incidental costs of making the disposal to the company making it*” shall be construed in accordance with section 38(2) of the 1992 Act;
- “*life assurance business*” and related expressions have the same meaning as in Chapter I of Part XII;
- “*obligation*” includes a reference to each of the following—any scheme, arrangement or understanding of any kind, whether or not legally enforceable;a series of obligations (whether or not between the same parties);
- “*offshore fund*” has the same meaning as in Chapter 5 of Part 17;
- “*open-ended investment company*” is to be read in accordance with section 468A(2) to (4);
- “*qualifying investment*” means any of the following—shares or securities which are listed or dealt in on a recognised stock exchange;units in an authorised unit trust;shares in an open-ended investment company;. . . an interest in an offshore fund; anda qualifying interest in land;
- “*related liabilities*” shall be construed in accordance with subsection (8E) above;
- “*value of the net benefit to the charity*” shall be construed in accordance with subsection (8A) above.
- (9A) In this section a “*qualifying interest in land*” means—
- (a) a freehold interest in land, or
- (b) a leasehold interest in land which is a term of years absolute,
where the land in question is in the United Kingdom.
This subsection is subject to subsections (9B) to (9D) below.
- (9B) Where a company makes a disposal to a charity of—
- (a) the whole of its beneficial interest in such freehold or leasehold interest in land as is described in subsection (9A)(a) or (b) above, and
- (b) any easement, servitude, right or privilege so far as benefiting that land,
the disposal falling within paragraph (b) above is to be regarded for the purposes of this section as a disposal by the company of the whole of its beneficial interest in a qualifying interest in land.
- (9C) Where a company which has a freehold or leasehold interest in land in the United Kingdom grants a lease for a term of years absolute (or, in the case of land in Scotland, grants a lease) to a charity of the whole or part of that land, the grant of that lease is to be regarded for the purposes of this section as a disposal by the company of the whole of the beneficial interest in the leasehold interest so granted.
- (9D) For the purposes of subsection (9A) above, an agreement to acquire a freehold interest and an agreement for a lease are not qualifying interests in land.
- (9E) In the application of this section to Scotland—
- (a) references to a freehold interest in land are references to the interest of the owner,
- (b) references to a leasehold interest in land which is a term of years absolute are references to a tenant’s right over or interest in a property subject to a lease, and
- (c) references to an agreement for a lease do not include references to missives of let that constitute an actual lease.
- (10) Subject to subsection (11) below, the market value of any qualifying investment shall be determined for the purposes of this section as for the purposes of the 1992 Act.
- (10A) Section 839 (connected persons) applies for the purposes of this section.
- (11) In the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 272(5) of the 1992 Act (meaning of “*market value*” in relation to rights of unit holders in a unit trust scheme) shall apply with any necessary modifications for determining the market value of the interest for the purposes of this section.
- (12) This section is supplemented by sections 587BA and 587C below.
##### 587BA
- (1) This section applies for the purposes of section 587B where a qualifying investment is a qualifying interest in land.
- (2) Where two or more persons (“the owners”)—
- (a) are jointly beneficially entitled to the qualifying interest in land, or
- (b) are, taken together, beneficially entitled in common to the qualifying interest in land,
relief under section 587B is available if at least one of the owners is a qualifying company and all the owners dispose of the whole of their beneficial interests in the qualifying interest in land to the charity.
- (3) Subsection (4) applies if one or more of the owners is not a company.
- (4) For the purpose of determining whether the owners' beneficial interests are disposed of as mentioned in subsection (2), section 587B(9B) and (9C) applies as if references to a company included a reference to a person who is not a company.
- (5) Relief under section 587B is available to each of the owners which is a qualifying company.
- (6) If one or more of the owners is an individual—
- (a) the relevant amount is taken to be the relievable amount calculated for the purposes of Chapter 3 of Part 8 of ITA 2007, and
- (b) the amount of relief under section 587B to be given to a qualifying company is such share of the relievable amount as is allocated to the company by the agreement mentioned in section 442(5) of ITA 2007.
- (7) Subsections (8) to (12) apply if none of the owners is an individual.
- (8) The amount of relief under section 587B to be given to a qualifying company is such share of the relevant amount as is allocated to the company by an agreement made between those owners which are qualifying companies.
- (9) Calculate the relevant amount as if—
- (a) the owners were a single qualifying company, and
- (b) the disposals of the owners' beneficial interests were a single disposal by that single company of the whole of the beneficial interest in the qualifying interest in land.
- (10) In particular, for the purposes of section 587B(7) calculate the consideration for which the disposal is made by virtue of section 257(2)(a) of the 1992 Act by—
- (a) calculating, for each owner, the consideration for which the disposal of the owner's beneficial interest is so made, and
- (b) adding together all the consideration calculated under paragraph (a).
- (11) If one or more of the owners is not a qualifying company, in calculating the relevant amount make just and reasonable adjustments to reduce the relevant amount to reflect the fact that relief under section 587B is not available to that owner or to those owners.
- (12) If one or more of the owners is within paragraph (b) of section 587B(8), in calculating the relevant amount make just and reasonable adjustments to reduce the relevant amount to reflect the requirements of sub-paragraph (ii) of that paragraph.
- (13) A company is a qualifying company if—
- (a) it is not itself a charity, and
- (b) it is not within section 587B(8)(a).
##### 587C
- (1) This section applies for the purposes of section 587B where a qualifying investment is a qualifying interest in land.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) Subsection (1) above shall not require any change to be made in the amounts deductible or repayable under PAYE regulations during the period beginning with 6th April and ending with 17th May in the year of assessment.
- (3) The Treasury shall in each year of assessment make an order specifying the amounts which by virtue of subsection (1) above will be treated as specified for the following year of assessment in sections 257 . . . , 257A and 257AB.
- (4) *This section shall have effect in relation to reliefs for the year* 1990-91 (*as well as for later years*);*and for that purpose it shall be assumed that sections* 257*and* 257A*applied for the year* 1989-90*as they apply, apart from this section, for the year* 1990-91.
##### 257D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 261A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 266A
- (1) This section applies if—
- (a) pursuant to an employer-financed retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and
- (b) the payment is made under such an insurance or contract as is mentioned in section 266.
This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.
- (2) Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—
- (a) the payment had been made by him, and
- (b) the insurance or contract under which the payment is made had been made with him.
- (3) For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.
- (4) If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.
- (5) The amount treated as paid for or in respect of each employee is—
$$A×BC$where—A is the sum paid,B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, andC is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them.$
- (6) This section does not apply if—
- (a) in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or
- (b) the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.
- (7) Those conditions are—
- (a) that the employment is with a foreign employer, and
- (b) that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.
- (8) In subsection (6)(a) “*earnings charged on remittance*” means earnings which are taxable earnings under—
- (a) section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or
- (b) section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).
- (9) In this section—
- “*employer-financed retirement benefits scheme*”, and
- “*relevant benefits*”,
- have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
#### Supplementary provisions.
##### 282A
- (1) Subject to the following provisions of this section, income arising from property held in the names of a husband and his wife , or in the names of civil partners of each other, shall for the purposes of income tax be regarded as income to which they are beneficially entitled to equal shares.
- (2) Subsection (1) above shall not apply to income to which neither the husband nor the wife , or neither of the civil partners, is beneficially entitled.
- (3) Subsection (1) above shall not apply to income—
- (a) to which either the husband or the wife , or one of the civil partners, is beneficially entitled to the exclusion of the other, or
- (b) to which they are beneficially entitled in unequal shares,
if a declaration relating to it has effect under section 282B.
- (4) Subsection (1) above shall not apply to—
- (a) earned income, or
- (b) income which is not earned income but to which Part 9 of ITTOIA 2005 (partnerships) applies.
- (4A) Subsection (1) above shall not apply to income consisting of a distribution arising from property consisting of—
- (a) close company shares to which either the husband or the wife , or one of the civil partners, is beneficially entitled to the exclusion of the other, or
- (b) close company shares to which they are beneficially entitled in equal or unequal shares.
In this subsection “*close company shares*” means shares in or securities of a close company; and for this purpose “*shares*” and “*securities*” have the same meaning as in Part 6 (see section 254).
- (5) Subsection (1) above shall not apply to income to which the husband or the wife , or one of the civil partners, is beneficially entitled if or to the extent that it is treated by virtue of any other provision of the Income Tax Acts as the income of the other of them or of a third party.
- (6) References in this section to a husband and his wife are references to a husband and wife living together , and references in this section to civil partners of each other are references to civil partners of each other living together.
##### 282B
- (1) The declaration referred to in section 282A (3) is a declaration by both the husband and the wife , or both the civil partners, of their beneficial interests in—
- (a) the income to which the declaration relates, and
- (b) the property from which that income arises.
- (2) Subject to the following subsections, a declaration shall have effect under this section in relation to income arising on or after the date of the declaration; but a declaration made before 6th June 1990 shall also have effect in relation to income arising before that date.
- (3) A declaration shall not have effect under this section unless notice of it is given to the inspector, in such form and manner as the Board may prescribe, within the period of 60 days beginning with the date of the declaration.
- (4) A declaration shall not have effect under this section in relation to income from property if the beneficial interests of the husband and the wife , or of the civil partners, in the property itself do not correspond to their beneficial interests in the income.
- (5) A declaration having effect under this section shall continue to have effect unless and until the beneficial interests of the husband and wife , or of the civil partners, in either the income to which it relates, or the property from which the income arises, cease to accord with the declaration.
#### Further interpretation of sections 135 to 139.
##### 289A
- (1) Where an individual eligible for relief in respect of any amount subscribed for eligible shares makes a claim, then, subject to the following provisions of this Chapter, the amount of his liability for the year of assessment in which the shares were issued (“*the current year*”) to income tax on his total income shall be the following amount.
- (2) That amount is the amount to which he would be so liable apart from this section less whichever is the smaller of—
- (a) an amount equal to tax at the lower rate for the current year on the amount or, as the case may be, the aggregate of the amounts subscribed for eligible shares issued in that year in respect of which he is eligible for relief, and
- (b) the amount which reduces his liability to nil.
- (3) Subject to subsection (4) below, if in the case of any issue of relevant shares, that is, shares—
- (a) which are issued before 6th October in the current year, and
- (b) in respect of the amount subscribed for which the individual is eligible for relief,
the individual so requests in his claim, subsection (1) above shall apply as if, in respect of such part of that issue as may be specified in his claim, the shares had been issued in the preceding year of assessment; and his liability to income tax for both years of assessment shall be determined accordingly.
- (4) Not more than half of the relevant shares comprised in any issue may be treated by virtue of subsection (3) above as issued in the previous year; and the number of relevant shares (comprised in any issues) so treated as issued in a particular year shall not be such that the total amount subscribed for them exceeds £50,000.
- (5) In determining for the purposes of subsection (2) above the amount of income tax to which a person would be liable apart from this section, no account shall be taken of—
- (a) any income tax reduction under Chapter I of Part VII of this Act or under section 347B,
- (b) any income tax reduction under section 353(1A),
- (c) any income tax reduction under section 54(3A) of the Finance Act 1989,
- (ca) any income tax reduction under paragraph 19(2) of Schedule 16 to the Finance Act 2002 (community investment tax relief),
- (d) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1), or
- (e) any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.
- (6) A claim for relief in respect of eligible shares issued by a company shall not be allowed unless subsection (7) below is complied with in relation to the issue of shares in question but, where it is complied with, the relief may be given at any time when it appears that the conditions for the relief may be satisfied.
- (7) This subsection is complied with if—
- (a) in a case where the money raised by an issue of eligible shares is raised wholly for the purpose of a qualifying business activity falling within paragraph (a) of section 289(2), the trade concerned has been carried on for four months by no person other than the qualifying company or a qualifying 90% subsidiary of that company, and
- (b) in a case where the money raised by an issue of eligible shares is raised wholly or partly for the purpose of a qualifying business activity falling within paragraph (b) of that subsection the research and development concerned has been carried on for four months by no person other than the qualifying company or a qualifying 90% subsidiary of that company. . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where—
- (a) by reason only of the qualifying company or any other company being wound up or dissolved without winding up—
- (i) the trade concerned is carried on as mentioned in subsection (7)(a) above, or
- (ii) the research and development concerned is carried on as mentioned in subsection (7)(b) above,
for a period shorter than four months, and
- (b) . . . the winding up or dissolution is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,
subsection (7)(a) or, as the case may be, (7)(b) above shall have effect as if it referred to that shorter period.
- (8A) Where, by reason only of anything done as a consequence of the qualifying company or any other company being in administration or receivership—
- (a) the trade concerned is carried on as mentioned in subsection (7)(a) above for a period shorter than four months, or
- (b) the research and development concerned is carried on as mentioned in subsection (7)(b) above for a period shorter than four months,
subsection (7)(a) or, as the case may be, (7)(b) above shall have effect as if it referred to that shorter period.
This applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company concerned being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 289B
- (1) References in this Chapter, in relation to any individual, to the relief attributable to any shares or issue of shares shall be read, subject to the provisions of this Chapter providing for the reduction or withdrawal of relief, as references to any reduction made in the individual’s liability to income tax which is attributed to those shares or that issue in accordance with this section.
- (2) Where an individual’s liability to income tax is reduced in any year of assessment (“*the current year*”) under section 289A, then—
- (a) where the reduction is given by reason of an issue of shares made (or treated as made) in the current year, the amount of the reduction shall be attributed to that issue, and
- (b) where the reduction is given by reason of two or more issues of shares made (or treated as made) in the current year, the reduction—
- (i) shall be apportioned between those issues in the same proportions as the amounts subscribed by the individual for each issue, and
- (ii) shall be attributed to those issues accordingly.
- (3) Where under this section an amount of any reduction of income tax is attributed to an issue of shares (“*the original issue*”) in a company to an individual—
- (a) a proportionate part of that amount shall be attributed to each share comprised in the original issue, and
- (b) if any corresponding bonus shares in that company are issued to him at any subsequent time—
- (i) a proportionate part of the total amount attributed immediately before that time to shares comprised in the original issue shall be attributed to each of the shares in the holding comprising those shares and the bonus shares, and
- (ii) this Chapter shall apply as if the original holding had comprised all those shares.
- (3A) In subsection (3) above “*corresponding bonus shares*” means bonus shares which—
- (a) are issued in respect of the shares comprised in the original issue; and
- (b) are of the same class, and carry the same rights, as those shares.
- (4) Subject to subsection (5) below, in this Chapter references (however expressed) to an issue of eligible shares in any company to an individual are references to any eligible shares in the company that are of the same class and are issued to him on the same day, but this subsection does not apply in relation to section 289A(6) and (7).
- (5) Where section 289A(1) applies in the case of any issue of shares as if part of the issue had been issued in a previous year, this section and sections 299(4) and 306(1) shall have effect as if that part and the remainder were separate issues of shares (and that part had been issued on a day in the previous year).
- (6) Where, at a time when any relief is attributable to, or to any part of, any issue of shares, the relief falls to be withdrawn or reduced under this Chapter—
- (a) where it falls to be withdrawn, the relief attributable to each of the shares in question shall be reduced to nil, and
- (b) where it falls to be reduced by any amount, the relief attributable to each of the shares in question shall be reduced by a proportionate part of that amount.
##### 290A
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#### Credit-tokens.
##### 291A
- (1) An individual is not connected with the issuing company by reason only that he, or an associate of his, is a director of that or another company unless he or his associate (or a partnership of which he or his associate is a member)—
- (a) receives a payment from the issuing company or a related person during the period mentioned in section 291(1)(b), or
- (b) is entitled to receive such a payment in respect of that period or any part of it.
- (2) In this section—
- (a) “*related person*”, in relation to the issuing company, means—
- (i) any company of which the individual or his associate is a director and which is a subsidiary or a partner of the issuing company or of a subsidiary, and
- (ii) any person connected with the issuing company or with a company falling within sub-paragraph (i) above, and
- (b) any reference to a payment to an individual includes a payment made to him indirectly or to his order or for his benefit.
- (3) For the purposes of subsection (1) above there shall be disregarded—
- (a) any payment or reimbursement of travelling or other expenses wholly, exclusively and necessarily incurred by him or his associate in the performance of his duties as a director,
- (b) any interest which represents no more than a reasonable commercial return on money lent to the issuing company or a related person,
- (c) any dividend or other distribution which does not exceed a normal return on the investment,
- (d) any payment for the supply of goods which does not exceed their market value,
- (e) any payment of rent for any property occupied by the issuing company or a related person which does not exceed a reasonable and commercial rent for the property, and
- (f) any reasonable and necessary remuneration which —
- (i) is paid for services rendered to the issuing company or related person in the course of a trade or profession carried on wholly or partly in the United Kingdom (not being secretarial or managerial services or services of a kind provided by the person to whom they are rendered), and
- (ii) is taken into account in calculating for tax purposes the profits of that trade or profession.
- (4) An individual (“*the subscriber*”) who subscribes for eligible shares (“*the relevant shares*”) may qualify for the relief notwithstanding his connection with the company at any time in the relevant period if—
- (a) he is so connected by reason only of his, or his associate’s, being a director of, or of a company which is a partner of, the issuing company or a subsidiary in receipt of, or entitled to receive, remuneration as such, and
- (b) the following conditions are satisfied;
and in this subsection and subsection (5) below “*remuneration*” includes any benefit or facility.
- (5) The conditions are that—
- (a) in relation to the director (whether he is the subscriber or his associate), his remuneration, or the remuneration to which he is entitled, (leaving out of account any reasonable and necessary remuneration falling within subsection (3)(f) above) consists only of remuneration which is reasonable remuneration for services rendered to the company of which he is a director in his capacity as such,
- (b) the subscriber was issued with eligible shares (whether the relevant shares or a previous issue of eligible shares) at a time when he had never been—
- (i) connected with the issuing company, or
- (ii) involved in carrying on (whether on his own account or as a partner, director or employee) the whole or any part of the trade carried on by the issuing company or a subsidiary, and
- (c) where the issue of the relevant shares did not satisfy paragraph (b) above, they were not issued after the end of the period—
- (i) beginning with the date of the latest issue of eligible shares which satisfied that paragraph, and
- (ii) ending immediately before the termination date relating to those eligible shares,
and in paragraph (b) above “*trade*” includes any business, profession or vocation . . . .
- (6) In this section “*subsidiary*”, in relation to the issuing company, means a 51 per cent. subsidiary of the issuing company.
##### 291B
- (1) An individual is connected with the issuing company if he directly or indirectly possesses or is entitled to acquire more than 30 per cent. of—
- (a) the issued ordinary share capital of the company or any subsidiary,
- (b) the loan capital and issued share capital of the company or any subsidiary, or
- (c) the voting power in the company or any subsidiary.
- (2) An individual is connected with the issuing company if he directly or indirectly possesses or is entitled to acquire such rights as would, in the event of the winding up of the company or any subsidiary or in any other circumstances, entitle him to receive more than 30 per cent. of the assets of the company or subsidiary (the “*company in question*”) which would then be available for distribution to equity holders of the company in question.
- (3) For the purposes of subsection (2) above—
- (a) the persons who are equity holders of the company in question, and
- (b) the percentage of the assets of the company in question to which the individual would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18, taking references in paragraph 3 to the first company as references to an equity holder and references to a winding up as including references to any other circumstances in which assets of the company in question are available for distribution to its equity holders.
- (4) An individual is connected with a company if he has control of it or of any subsidiary.
- (5) Where an individual subscribes for shares in a company with which (apart from this subsection) he is not connected, he shall nevertheless be treated as connected with it if he subscribes for the shares as part of any arrangement which provides for another person to subscribe for shares in another company with which (assuming it to be an issuing company) that or any other individual who is a party to the arrangement is connected.
- (5A) An individual is not connected with a company by reason only of the fact that one or more shares in the company are held by him, or by an associate of his, at a time when the company—
- (a) has not issued any shares other than subscriber shares; and
- (b) has not begun to carry on, or to make preparations for carrying on, any trade or business.
- (6) In this section “*subsidiary*”, in relation to the issuing company, means a company which at any time in the relevant period is a 51 per cent. subsidiary of the issuing company, whether or not it is such a subsidiary while the individual concerned has, or is entitled to acquire, such capital, voting power, rights or control as are mentioned in this section.
- (7) For the purposes of this section the loan capital of a company shall be treated as including any debt incurred by the company—
- (a) for any money borrowed or capital assets acquired by the company,
- (b) for any right to receive income created in favour of the company, or
- (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium on it).
- (8) For the purposes of this section an individual shall be treated as entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire, and there shall be attributed to any person any rights or powers of any other person who is an associate of his.
- (9) In determining for the purposes of this section whether an individual is connected with a company, no debt incurred by the company or any subsidiary by overdrawing an account with a person carrying on a business of banking shall be treated as loan capital of the company or subsidiary if the debt arose in the ordinary course of that business.
- (10) Section 840 applies for the purposes of this section.
##### 299A
- (1) An individual is not eligible for relief in respect of any shares in a company if—
- (a) there is a loan made by any person, at any time in the relevant period, to that individual or any associate of his; and
- (b) the loan is one which would not have been made, or would not have been made on the same terms, if that individual had not subscribed for those shares or had not been proposing to do so.
- (2) References in this section to the making by any person of a loan to any individual or an associate of his include references—
- (a) to the giving by that person of any credit to that individual or any associate of his; and
- (b) to the assignment or assignation to that person of any debt due from that individual or any associate of his;
and the references in section 307(6)(ca) to the making of a loan shall be construed accordingly.
- (3) Section 312(1A)(a) applies to determine the relevant period for the purposes of this section.
##### 299B
- (1) An individual is not eligible for relief in respect of any shares in a company if the relevant arrangements include—
- (a) arrangements with a view to the subsequent repurchase, exchange or other disposal of those shares or of other shares in or securities of the same company;
- (b) arrangements for or with a view to the cessation of any trade which is being or is to be or may be carried on by the company or a person connected with the company;
- (c) arrangements for the disposal of, or of a substantial amount of, the assets of the company or of a person connected with the company;
- (d) arrangements the main purpose of which, or one of the main purposes of which, is (by means of any insurance, indemnity or guarantee or otherwise) to provide partial or complete protection for persons investing in shares in that company against what would otherwise be the risks attached to making the investment.
- (2) The arrangements referred to in subsection (1)(a) above do not include any arrangements with a view to such an exchange of shares, or shares and securities, as is mentioned in section 304A(1).
- (3) The arrangements referred to in subsection (1)(b) and (c) above do not include any arrangements applicable only on the winding up of a company except in a case where—
- (a) the relevant arrangements include arrangements for the company to be wound up; or
- (b) the company is wound up otherwise than for bona fide commercial reasons.
- (4) The arrangements referred to in subsection (1)(d) above do not include any arrangements which are confined to the provision—
- (a) for the company itself, or
- (b) in the case of a company which is a parent company of a trading group, for the company itself, for the company itself and one or more of its subsidiaries or for one or more of its subsidiaries,
of any such protection against the risks arising in the course of carrying on its business as it might reasonably be expected so to provide in normal commercial circumstances.
- (5) The reference in subsection (4) above to the parent company of a trading group shall be construed in accordance with the provision contained for the purposes of section 293 in that section.
- (6) In this section “*the relevant arrangements*” means—
- (a) the arrangements under which the shares are issued to the individual; and
- (b) any arrangements made before the issue of the shares to him in relation to or in connection with that issue.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 300A
- (1) Where—
- (a) any relief attributable to any eligible shares comprised in an issue of shares subscribed for by an individual (“*the individual*”) would, in the absence of this section, be reduced or withdrawn under section 300 by reason of a receipt of value within subsection (2) or (5) of that section (“*the original value*”),
- (b) the original supplier receives value (“*the replacement value*”) from the original recipient by virtue of a qualifying receipt, and
- (c) the amount of the replacement value is not less than the amount of the original value,
the receipt of the original value shall be disregarded for the purposes of section 300.
This is subject to subsections (7) and (8) below.
- (2) For the purposes of this section—
- “*the original recipient*” means the person who receives the original value, and
- “*the original supplier*” means the person from whom that value was received.
- (3) Where the amount of the original value is, by virtue of subsection (1BA) of section 300, treated as reduced for the purposes of that section as it applies in relation to the eligible shares in question, the reference in subsection (1)(c) above to the amount of the original value shall be read as a reference to the amount of that value disregarding the reduction.
- (4) A receipt of the replacement value is a qualifying receipt for the purposes of subsection (1) above if it arises—
- (a) by reason of the original recipient doing one or more of the following—
- (i) making a payment to the original supplier, other than a payment which falls within paragraph (c) below or to which subsection (5) below applies;
- (ii) acquiring any asset from the original supplier for a consideration the amount or value of which is more than the market value of the asset;
- (iii) disposing of any asset to the original supplier for no consideration or for a consideration the amount or value of which is less than the market value of the asset;
- (b) where the receipt of the original value was within section 300(2)(d), by reason of an event the effect of which is to reverse the event which constituted the receipt of the original value; or
- (c) where the receipt of the original value was within section 300(5), by reason of the original recipient repurchasing the share capital or securities in question, or (as the case may be) reacquiring the right in question, for a consideration the amount or value of which is not less than the amount of the original value.
- (5) This subsection applies to—
- (a) any payment for any goods, services or facilities, provided (whether in the course of a trade or otherwise) by—
- (i) the original supplier, or
- (ii) any other person who, at any time in the period of restriction, is an associate of, or connected with, that supplier (whether or not he is such an associate, or so connected, at the material time),
which is reasonable in relation to the market value of those goods, services or facilities;
- (b) any payment of any interest which represents no more than a reasonable commercial return on money lent to—
- (i) the original recipient, or
- (ii) any person who, at any time in the period of restriction, is an associate of his (whether or not he is such an associate at the material time);
- (c) any payment for the acquisition of an asset which does not exceed its market value;
- (d) any payment, as rent for any property occupied by—
- (i) the original recipient, or
- (ii) any person who, at any time in the period of restriction, is an associate of his (whether or not he is such an associate at the material time),
of an amount not exceeding a reasonable and commercial rent for the property;
- (e) any payment in discharge of an ordinary trade debt; and
- (f) any payment for shares in or securities of any company in circumstances that do not fall within subsection (4)(a)(ii) above.
- (6) For the purposes of this section, the amount of the replacement value is—
- (a) in a case within paragraph (a) of subsection (4) above, the aggregate of—
- (i) the amount of any payment within sub-paragraph (i) of that paragraph, and
- (ii) the difference between the market value of any asset to which sub-paragraph (ii) or (iii) of that paragraph applies and the amount or value of the consideration (if any) received for it,
- (b) in a case within subsection (4)(b) above, the same as the amount of the original value, and
- (c) in a case within subsection (4)(c) above, the amount or value of the consideration received by the original supplier,
and section 300(4) and (5) shall apply for the purposes of determining the amount of the original value.
- (7) The receipt of the replacement value by the original supplier shall be disregarded for the purposes of this section, as it applies in relation to the eligible shares, to the extent to which that receipt has previously been set (under this section) against any receipts of value which are, in consequence, disregarded for the purposes of section 300 as that section applies in relation to those shares or any other shares subscribed for by the individual.
- (8) The receipt of the replacement value by the original supplier (“*the event*”) shall be disregarded for the purposes of this section if—
- (a) the event occurs before the start of the period of restriction, or
- (b) in a case where the event occurs after the time the original recipient receives the original value, it does not occur as soon after that time as is reasonably practicable in the circumstances, or
- (c) where an appeal has been brought by the individual against an assessment to withdraw or reduce any relief attributable to the eligible shares by reason of the receipt of the original value, the event occurs more than 60 days after the amount of relief which falls to be withdrawn has been finally determined.
But nothing in this section requires the replacement value to be received after the original value.
- (9) Subsection (10) below applies where—
- (a) the receipt of the replacement value by the original supplier is a qualifying receipt (for the purposes of subsection (1) above) in consequence of which any receipts of value are disregarded for the purposes of section 300 as that section applies in relation to the shares in question or any other shares subscribed for by the individual in question, and
- (b) the event which gives rise to the receipt is (or includes) a subscription for shares by—
- (i) the individual, or
- (ii) any person who, at any time in the period of restriction, is an associate of his, whether or not he is such an associate at the material time.
- (10) Where this subsection applies, the person who subscribes for the shares as mentioned in subsection (9)(b) above shall not—
- (a) be eligible for any relief under this Chapter in relation to those shares or any other shares in the same issue, or
- (b) by virtue of his subscription for those shares or any other shares in the same issue, be treated as making a qualifying investment for the purposes of Schedule 5B to the 1992 Act (enterprise investment scheme: reinvestment).
- (11) In this section—
- (a) any reference to a payment to a person (however expressed) includes a reference to a payment made to him indirectly or to his order or for his benefit, and
- (b) references to “*the period of restriction*” are to the period of restriction relating to the shares mentioned in subsection (1)(a) above.
##### 301A
- (1) In this section and section 300 references to a receipt of insignificant value (however expressed) are references to a receipt of an amount of insignificant value.
This is subject to subsection (3) below.
- (2) For the purposes of this section and section 300 “*an amount of insignificant value*” means an amount of value which—
- (a) does not exceed £1,000, or
- (b) if it exceeds that amount, is insignificant in relation to the amount subscribed by the individual in question for the eligible shares in question.
- (3) For the purposes of section 300, if, at any time in the period—
- (a) beginning one year before the eligible shares in question are issued, and
- (b) expiring at the end of the issue date,
arrangements are in existence which provide for the individual in question to receive or to be entitled to receive, at any time in the period of restriction relating to those shares, any value from the company that issued those shares, no amount of value received by the individual shall be treated as a receipt of insignificant value.
- (4) For the purposes of this section—
- (a) references to the individual include references to any person who, at any time in the period of restriction relating to the shares in question, is an associate of his (whether or not he is such an associate at the material time), and
- (b) the reference in subsection (3) above to the company includes a reference to any person who, at any time in the period of restriction relating to the shares in question, is connected with the company (whether or not that person is so connected at the material time).
- (5) For the purposes of this section, an individual who acquires any eligible shares on such a transfer as is mentioned in section 304 shall be treated as if he subscribed for those shares.
##### 303AA
- (1) Any repayment shall be disregarded for the purposes of section 303(1) (repayments etc. which cause withdrawal or reduction of relief) if whichever is the greater of—
- (a) the market value of the shares to which it relates (“*the target shares*”) immediately before the event occurs, and
- (b) the amount received by the member in question,
is insignificant in relation to the market value of the remaining issued share capital of the company in question (or, as the case may be, subsidiary in question) immediately after the event occurs.
This is subject to subsection (4) below.
- (2) For the purposes of this section “*repayment*” means a repayment, redemption, repurchase or payment mentioned in section 303(1) (repayments etc. which cause withdrawal or reduction of relief).
- (3) For the purposes of subsection (1) above it shall be assumed that the target shares are cancelled at the time the repayment is made.
- (4) Where an individual subscribes for eligible shares in a company, subsection (1) above does not apply to prevent section 303(1) having effect in relation to those shares if, at a relevant time, arrangements are in existence that provide—
- (a) for a repayment by the company or any subsidiary of the company (whether or not it is such a subsidiary at the time the arrangements are made), or
- (b) for anyone to be entitled to such a repayment,
at any time in the period of restriction relating to those shares.
- (5) For the purposes of subsection (4) above “*a relevant time*” means any time in the period—
- (a) beginning one year before the eligible shares were issued, and
- (b) expiring at the end of the issue date.
#### Conditional acquisition of shares.
##### 303A
- (1) Subsections (4) and (7) below apply where, by reason of a repayment, any investment relief which is attributable under Schedule 15 to the Finance Act 2000 to any shares is withdrawn under paragraph 56(2) of that Schedule.
- (2) For the purposes of this section “*repayment*” has the meaning given in section 303AA(2) above.
- (3) For the purposes of this section “*the relevant amount*” is the amount determined by the formula—
$$X-5Y$Where—X is the amount of the repayment, andY is the aggregate amount of investment relief withdrawn by reason of the repayment.$
- (4) Where the relevant amount does not exceed £1,000 the repayment shall be disregarded for the purposes of section 303(1), unless repayment arrangements are in existence at any time in the period—
- (a) beginning one year before the shares mentioned in subsection (1) above are issued, and
- (b) expiring at the end of the issue date of those shares.
- (5) For this purpose “*repayment arrangements*” means arrangements which provide—
- (a) for a repayment by the company that issued the shares (“*the issuing company*”) or any subsidiary of that company, or
- (b) for anyone to be entitled to such a repayment,
at any time.
- (6) Subsection (5)(a) above applies in relation to a subsidiary of the issuing company whether or not it is such a subsidiary—
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) No company may make a claim for a relief under subsection (2) of section 587B unless it has received a certificate given by or on behalf of the charity.
- (5) The certificate must—
- (a) specify the description of the qualifying interest in land which is the subject of the disposal,
- (b) specify the date of the disposal, and
- (c) contain a statement that the charity has acquired the qualifying interest in land.
- (6) If, in the case of a disposal of a qualifying interest in land, a disqualifying event occurs at any time in the relevant period, the following shall be treated as never having been entitled to relief under section 587B in respect of the disposal—
- (a) in a case to which section 587BA does not apply, the company which made the disposal, and
- (b) in a case to which section 587BA applies, each qualifying company which is an owner.
- (7) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (6) above.
- (8) For the purposes of subsection (6) above a disqualifying event occurs if a person mentioned in subsection (8A)—
- (a) becomes entitled to an interest or right in relation to all or part of the land to which the disposal relates, or
- (b) becomes party to an arrangement under which he enjoys some right in relation to all or part of that land,
otherwise than for full consideration in money or money’s worth.
- (8A) The persons are—
- (a) in a case to which section 587BA does not apply—
- (i) the company which made the disposal, or
- (ii) a person connected with that company, and
- (b) in a case to which section 587BA applies—
- (i) a person who is an owner, or
- (ii) a person connected with such a person.
- (9) A disqualifying event does not occur, for the purposes of subsection (6) above, if a person becomes entitled to an interest or right as mentioned in subsection (8)(a) above as a result of a disposition of property on death, whether the disposition is effected by will, under the law relating to intestacy or otherwise.
- (10) For the purposes of subsection (6) above the relevant period is the period beginning with the date of the disposal of the qualifying interest in land and ending with—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) when the arrangements were made.
- (7) Where the repayment is not disregarded by virtue of subsection (4) above, the amount receivable by reason of the repayment shall be treated for the purposes of section 303(1C)(a) as an amount equal to the relevant amount.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) In this section—
- (a) “*investment relief*” has the same meaning as in Schedule 15 to the Finance Act 2000 (corporate venturing scheme); and
- (b) references to the withdrawal of investment relief include its reduction.
#### Further interpretation of sections 135 to 139.
##### 304A
- (1) This section applies where—
- (a) a company (“the new company") in which the only issued shares are subscriber shares acquires all the shares (“old shares") in another company (“the old company");
- (b) the consideration for the old shares consists wholly of the issue of shares (“new shares") in the new company;
- (c) the consideration for new shares of each description consists wholly of old shares of the corresponding description;
- (d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of and in proportion to their holdings;
- (e) at some time before the issue of the new shares—
- (i) the old company issued eligible shares; and
- (ii) a certificate in relation to those eligible shares was issued by that company for the purposes of subsection (2) of section 306 and in accordance with that section; and
- (f) before the issue of the new shares, the Board have, on the application of the new company or the old company, notified that company that the Board are satisfied that the exchange of shares—
- (i) will be effected for bona fide commercial reasons; and
- (ii) will not form part of any such scheme or arrangements as are mentioned in section 137(1) of the 1992 Act.
- (2) For the purposes of this Chapter—
- (a) the exchange of shares shall not be regarded as involving any disposal of the old shares or any acquisition of the new shares; and
- (b) any relief under this Chapter which is attributable to any old shares shall be attributable instead to the new shares for which they are exchanged.
- (3) Where, in the case of any new shares held by an individual to which relief becomes so attributable, the old shares for which they are exchanged were subscribed for by and issued to the individual, this Chapter shall have effect as if—
- (a) the new shares had been subscribed for by him at the time when, and for the amount for which, the old shares were subscribed for by him;
- (b) the new shares had been issued to him by the new company at the time when the old shares were issued to him by the old company;
- (c) the claim for relief made in respect of the old shares had been made in respect of the new shares; and
- (d) his liability to income tax had been reduced under section 289A in respect of the new shares for the same year of assessment as that for which his liability was so reduced in respect of the old shares.
- (4) Where, in the case of any new shares held by an individual to which relief becomes so attributable, the old shares for which they are exchanged were transferred to the individual as mentioned in section 304, this Chapter shall have effect in relation to any subsequent disposal or other event as if—
- (a) the new shares had been subscribed for by him at the time when, and for the amount for which, the old shares were subscribed for;
- (b) the new shares had been issued by the new company at the time when the old shares were issued by the old company;
- (c) the claim for relief made in respect of the old shares had been made in respect of the new shares; and
- (d) his liability to income tax had been reduced under section 289A in respect of the new shares for the same year of assessment as that for which the liability of the individual who subscribed for the old shares was so reduced in respect of those shares.
- (5) Where relief becomes so attributable to any new shares—
- (a) this Chapter shall have effect as if anything which, under section 306(2), 307(1A) or 310, has been done, or is required to be done, by or in relation to the old company had been done, or were required to be done, by or in relation to the new company; and
- (b) any appeal brought by the old company against a notice under section 307(1A)(b) may be prosecuted by the new company as if it had been brought by that company.
- (6) For the purposes of this section old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights; and in subsection (1) above references to shares, except in the expressions “*eligible shares*” and “*subscriber shares*”, include references to securities.
- (7) Nothing in section 293(8) shall apply in relation to such an exchange of shares, or shares and securities, as is mentioned in subsection (1) above or arrangements with a view to such an exchange.
- (8) Subsection (2) of section 138 of the 1992 Act shall apply for the purposes of subsection (1)(f) above as it applies for the purposes of subsection (1) of that section.
##### 305A
- (1) Section 574 shall apply on the disposal by an individual of shares to which relief is attributable as it applies to a disposal by him of shares in a qualifying trading company for which he has subscribed (“*qualifying trading company*” and “*subscribed*” having for this purpose the same meaning as in that section).
- (2) For the purposes of that section (as applied by this) sections 575(1) and (3) and 576(1) to (3) shall apply
#### Provisions supplementary to section 138.
#### Approved profit sharing schemes.
##### 326A
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##### 326B
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##### 326BB
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##### 326C
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##### 326D
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##### 327A
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#### Relief for contributions in respect of share option gains.
##### 329AA
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##### 329AB
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##### 329A
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##### 329B
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##### 329C
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##### 331A
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##### 332A
Schedule 15B shall have effect for conferring relief from income tax in respect of investments in venture capital trusts . . . .
##### 333A
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##### 333B
- (1) The Treasury may make regulations providing exemption from tax for income from, and chargeable gains in respect of, investments and deposits of so much of an insurance company’s long-term insurance fund as is referable to plan business.
- (2) The Treasury may by regulations modify the effect of section 30(4) of the Finance (No. 2) Act 1997 (which repeals section 231(2) of the Taxes Act 1988 with effect from 6th April 1999) in relation to distributions which—
- (a) are made before 6th April 2004; and
- (b) are received by an insurance company in respect of investments of so much of its long-term insurance fund as is referable to plan business.
- (3) Regulations under this section may make provision for insurance companies that are not resident in the United Kingdom to be treated, in relation to investments of so much of their long-term insurance funds as are referable to plan business—
- (a) as if they were so resident for the purposes of any enactment conferring an entitlement to, or to the payment of, tax credits in respect of investments; and
- (b) as if such other conditions of any entitlement to, or to the payment of, tax credits were also satisfied.
- (4) Regulations under section 333 or this section or Chapter 3 of Part 6 of ITTOIA 2005 (except sections 697 and 698) may include provision which, in relation to insurance companies that are not resident in the United Kingdom—
- (a) requires a person to be appointed to be responsible for securing the discharge of any duties to which such an insurance company is subject under the regulations; and
- (b) confers rights and powers, and imposes liabilities, on a person so appointed;
and, without prejudice to the generality of paragraphs (a) and (b) above, regulations made by virtue of this subsection may include any provision corresponding to any that, in relation to a European institution, may be made under section 697 or 698 of ITTOIA 2005 (requirements concerning foreign plan managers).
- (5) Regulations under this section may provide that an insurance company—
- (a) shall comply with any notice served on it by the Board which requires it, within a prescribed period, to make available for the Board’s inspection documents (of a prescribed kind) relating to, or to matters connected with, its past or present plan business; and
- (b) shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about its past or present plan business or any matters connected with it.
- (6) Any power of the Treasury under this section to make provision by regulations in relation to insurance companies shall include power by regulations to make such corresponding provision in relation to friendly societies as the Treasury think fit.
- (7) Regulations under this section may—
- (a) for purposes connected with any exemption from tax conferred by virtue of subsection (1) above, apply or modify any provision made by or under the Tax Acts;
- (b) make different provision for different cases;
- (c) include such incidental, supplemental, consequential and transitional provision as the Treasury may consider appropriate.
- (8) Without prejudice to the generality of the powers conferred by subsection (7) above, the provision that may be made in connection with an exemption from tax conferred by virtue of subsection (1) above shall include provision for section 436 to apply (with any such modifications as may be prescribed) in relation to plan business as it applies in relation to pension business.
- (9) In this section—
- “*friendly society*” has the same meaning as in Chapter II of Part XII;
- “insurance company” means an undertaking carrying on the business of effecting or carrying out contracts of insurance and, for the purposes of this definition, “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*long-term insurance fund*” has the same meaning as in Chapter I of Part XII;
- “*plan business*”, in relation to an insurance company, means the business of the company that is attributable to the making of investments with that company under plans for which provision is made by regulations under Chapter 3 of Part 6 (except sections 697 and 698) of ITTOIA 2005 (income from individual investment plans)
- “*prescribed*” means prescribed by regulations under this section;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 338B
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##### 337A
- (1) For the purposes of corporation tax, subject to any provision of the Corporation Tax Acts expressly authorising a deduction—
- (a) a company’s profits shall be computed without any deduction in respect of dividends or other distributions, and
- (b) a company’s income from any source shall be computed without any deduction in respect of charges on income.
- (2) In computing a company’s income from any source for the purposes of corporation tax—
- (a) no deduction shall be made in respect of interest except in accordance with Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships); and
- (b) no deduction shall be made in respect of losses from intangible fixed assets within Schedule 29 to the Finance Act 2002 except in accordance with that Schedule.
##### 338A
- (1) This section defines what payments or other amounts are “*charges on income*” for the purposes of corporation tax.
This section has effect subject to any express exceptions in the Corporation Tax Acts.
- (2) Subject to the following provisions of this section, the following (and only the following) are charges on income—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) qualifying donations within the meaning of section 339 (qualifying donations to charity);
- (c) amounts allowed as charges on income under section 587B(2)(a)(ii) (gifts of shares etc to charity).
- (3) No payment that is deductible in computing profits or any description of profits for the purposes of corporation tax shall be treated as a charge on income.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 339A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 342A
- (1) In this section—
- (a) references to the relevant event, in relation to a company in administration, are references—
- (i) to the administrator sending a notice in respect of the company under paragraph 84(1) of Schedule B1 to the Insolvency Act 1986 (company moving from administration to dissolution), or
- (ii) in the case of a company which enters administration otherwise than under that Act, to the doing of any other act for a like purpose, and
- (b) references to a company’s final year are references to the financial year in which the relevant event occurs, and references to the company’s penultimate year are references to the last financial year preceding its final year.
- (2) Subject to subsections (3) and (4)—
- (a) corporation tax shall be charged on the profits of the company arising in the administration in its final year at the rate of corporation tax fixed or proposed for the penultimate year, but
- (b) where the corporation tax charged on the company’s income included in those profits falls to be calculated or reduced in accordance with section 13, it shall be so calculated or reduced in accordance with such rate or fraction fixed or proposed for the penultimate year as is applicable under that section.
- (3) If, before the relevant event, any of the rates or fractions mentioned in subsection (2) has been fixed or proposed for the final year, that subsection shall have effect in relation to that rate or fraction as if for the references to the penultimate year there were substituted references to the final year.
- (4) If, in the case of the company’s final accounting period, the income (if any) which consists of interest received or receivable by the company under section 826 does not exceed £2,000, that income shall not be subject to corporation tax.
- (5) In subsection (4) “*the company’s final accounting period*” means the last accounting period of the company before the relevant event.
- (6) An assessment on the company’s profits for an accounting period in which the company is in administration shall not be invalid because made before the end of the accounting period.
- (7) In making an assessment after the company enters administration and before the date of the relevant event, the administrator may act on an assumption as to when that date will fall so far as it governs section 12(3).
- (8) The assumption of the wrong date shall not alter the company’s final and penultimate year and, if the right date is later—
- (a) an accounting period shall end on the date assumed and a new accounting period shall begin, and
- (b) thereafter, section 12(3) shall apply as if the company had entered administration at the beginning of that new accounting period.
- (9) Subsections (7) and (9) of section 342 apply in relation to this section as they apply in relation to that section, except that in subsection (7) of that section the reference to the completion of the winding up is to be read as a reference to the relevant event.
- (10) Where the company entered administration before its final year, paragraphs (a) and (b) of subsection (2) (but not subsection (3)) apply in relation to the company’s profits arising at any time in its penultimate year.
#### Foreign pensions.
#### P.A.Y.E.: meaning of payment.
##### 343ZA
- (1) This section applies where—
- (a) a company (“the predecessor”) ceases to carry on a trade,
- (b) another company (“*the successor*”) begins to carry on the activities of that trade as its trade or as part of its trade,
- (c) in the accounting period in which the predecessor ceases to carry on the trade the predecessor would (apart from this section) be entitled under Part 2 of the Capital Allowances Act to a balancing allowance in respect of the trade, and
- (d) the predecessor's ceasing to carry on the trade is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor to that balancing allowance.
- (2) This section also applies where—
- (a) a company (“the predecessor”) ceases to carry on part of a trade,
- (b) another company (“*the successor*”) begins to carry on the activities of that part of the trade as its trade or as part of its trade, and
- (c) the predecessor's ceasing to carry on the part of the trade mentioned in paragraph (a) is part of a scheme or arrangement the main purpose, or one of the main purposes, of which is to entitle the predecessor, on cessation of the trade, to a balancing allowance in respect of the trade under Part 2 of the Capital Allowances Act.
- (3) This section does not apply where section 343 applies.
- (4) Where this section applies, the Corporation Tax Acts have effect subject to section 343(2), but as if the words “and are subject to section 343A (company reconstructions involving business of leasing plant or machinery)” were omitted.
- (5) Where this section applies because of subsection (1), and the successor carries on the activities of the trade the predecessor ceased to carry on as part of the successor's trade, for the purposes of section 343(2) that part of the successor's trade is to be treated as a separate trade carried on by the successor.
- (6) Where this section applies because of subsection (2), for the purposes of section 343(2)—
- (a) that part of the trade which the predecessor ceased to carry on is to be treated as a separate trade carried on by the predecessor, and
- (b) where the successor carries on the activities of that part of the trade as part of its trade, that part of the successor's trade is to be treated as a separate trade carried on by the successor.
- (7) Where subsection (5) or (6) applies, such apportionment of receipts, expenses, assets and liabilities is to be made as may be just.
- (8) Section 343(10) applies to an apportionment under subsection (7) as it applies to an apportionment under section 343(9).
##### 343A
- (1) This section applies if the trade is or forms part of a business of leasing plant or machinery which the predecessor or the successor carries on on the day of cessation.
- (2) If, on the day of cessation, both the predecessor and the successor carry on the trade otherwise than in partnership, section 343(2) does not apply unless—
- (a) the principal company or companies of the predecessor immediately before the cessation are the same as the principal company or companies of the successor immediately afterwards, and
- (b) if any such principal company is a consortium principal company, the relevant fraction in relation to the predecessor immediately before the cessation is the same as the relevant fraction in relation to the successor immediately afterwards (irrespective of whether the members of each consortium are the same).
- (3) If, on the day of cessation, the predecessor or the successor carries on the trade in partnership, section 343(2) does not apply unless—
- (a) the predecessor ceases to carry on the whole of its trade, and
- (b) that trade is a business of leasing plant or machinery which the predecessor carries on in partnership on the day of cessation.
- (4) In any case where section 343(2) does not apply as a result of this section, the plant or machinery belonging to the trade shall be treated for the purposes of the Corporation Tax Acts as sold by the predecessor to the successor on the day of the cessation for an amount equal to its market value as at that day.
- (5) In this section—
- “business of leasing plant or machinery”—has the same meaning as in Part 2 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc) (if the business is carried on otherwise than in partnership), andhas the same meaning as in Part 3 of that Schedule (if the business is carried on in partnership),
- “*consortium principal company*” means a company which is a principal company as a result of paragraph 12 of that Schedule,
- “*market value*”, in relation to plant or machinery, is to be construed in accordance with paragraph 41(8) of that Schedule,
- “*plant or machinery*” has the same meaning as in Part 2 of the Capital Allowances Act,
- “*principal company*” is to be construed in accordance with paragraph 11 or (as the case may be) 12 of Schedule 10 to the Finance Act 2006, and
- “*relevant fraction*” has the same meaning as in paragraph 12 of that Schedule.
#### Expenses necessarily incurred and defrayed from official emoluments.
#### Application of lower rate to company distributions.
#### Section 209(3AA): link to shares of company or associated company
##### 347A
- (1) A payment to which this section applies shall not be a charge on the income of the person liable to make it, and accordingly—
- (a) his income shall be computed without any deduction being made on account of the payment, and
- (b) the payment shall not , for the purposes of corporation tax, form part of the income of any company to whom it is made or of any other company.
- (2) This section applies to any annual payment made by an individual which would otherwise be within the charge to tax under Case III of Schedule D except—
- (a) a payment of interest;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) a payment made for bona fide commercial reasons in connection with the individual’s trade, profession or vocation; and
- (d) a payment to which section 125(1) applies.
- (2A) This section applies to any annual payment made by an individual which—
- (a) arises in the United Kingdom, and
- (b) is exempt from any charge under Part 5 of ITTOIA 2005 (miscellaneous income) as a result of section 727 of that Act.
- (3) This section applies to a payment made by personal representatives (within the meaning given in section 701(4)) where—
- (a) the deceased would have been liable to make the payment if he had not died, and
- (b) this section would have applied to the payment if he had made it.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) References in subsection (2) or (2A) above to an individual include references to a Scottish partnership in which at least one partner is an individual.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 347B
- (1) Subject to subsection (1A) below in this section “*qualifying maintenance payment*” means a periodical payment which—
- (a) is made under an order made by a court in a member State, or under a written agreement the law applicable to which is the law of a member State or of a part of a member State,
- (b) is made —
- (i) by one of the parties to a marriage or civil partnership (including a marriage or civil partnership which has been dissolved or annulled) to or for the benefit of the other party and for the maintenance of the other party, or
- (ii) by one parent of a child to the child's other parent for the maintenance of the child by the other parent or by one person to another for the maintenance by the other of a relevant child of theirs,
- (c) is due at a time when—
- (i) in a case falling within paragraph (b)(i) above, the two parties are not a married couple, or civil partners of each other, living together and the party to whom or for whose benefit the payment is made has not subsequently entered into a marriage or civil partnership, and
- (ii) in a case falling within paragraph (b)(ii) above, the person making the payment is not living together with the person to whom the payment is made, and
- (d) is not a payment in respect of which relief from tax is available to the person making the payment under any provision of the Income Tax Acts other than this section.
- (1A) A periodical payment is not a qualifying maintenance payment unless—
- (a) in a case falling within subsection (1)(b)(i) above, either of the parties to the marriage or civil partnership was born before 6th April 1935, or
- (b) in a case falling within subsection (1)(b)(ii) above, either the person by whom the payment is made, or the person to whom it is made, was born before that date.
- (2) . . . Subject to subsection (3) below, a person making a claim for the purpose shall be entitled, for a year of assessment to an income tax reduction calculated by reference to an amount equal to the aggregate amount of any qualifying maintenance payments made by him which fall due in that year.
- (3) The amount by reference to which any income tax reduction is to be calculated under this section shall be limited to the amount specified in section 257A(5A) for the year.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5A) Where any person is entitled under this section for any year of assessment to an income tax reduction calculated by reference to the amount determined in accordance with subsections (2) and (3) above (“*the relevant amount*”), the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from this section less whichever is the smaller of—
- (a) the amount equal to 10 per cent. of the relevant amount; and
- (b) the amount which reduces his liability to nil;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5B) In determining for the purposes of subsection (5A) above the amount of income tax to which a person would be liable apart from any income tax reduction under this section, no account shall be taken of—
- (a) any income tax reduction under Chapter I of Part VII;
- (b) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or
- (c) any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.
- (6) *The reference in subsection* (1)*above to a married couple living together shall be construed in accordance with section* 282(1),*but section* 282(2)*shall not apply for the purposes of this section*.
- (7) In this section—
- “*child*” means a person under 21 years of age;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “periodical payment” does not include an instalment of a lump sum;
- “*relevant child*”, in relation to any two persons, means a child who (not being a child who has been boarded out with them by a public authority or voluntary organisation) has been treated by both of them as a child of their family.
- (8) In subsection (1)(a) above, the reference to an order made by a court in the United Kingdom includes a reference to a maintenance assessment.
- (9) Where—
- (a) any periodical payment is made under a maintenance assessment by any person,
- (b) another person is, for the purposes of the Child Support Act 1991 or (as the case may be) the Child Support (Northern Ireland) Order 1991, a parent of the child or children with respect to whom the assessment has effect,
- (c) the assessment was not made under section 7 of the Child Support Act 1991 (right of child in Scotland to apply for maintenance assessment), and
- (d) any of the conditions mentioned in subsection (10) below is satisfied,
this section shall have effect as if the payment had been made to the other person for the maintenance by that other person of that child or (as the case may be) those children.
- (10) The conditions are that—
- (a) the payment is made to the Secretary of State in accordance with regulations made under section 29 of the Child Support Act 1991, by virtue of subsection (3)(a)(ii) of that section;
- (b) the payment is made to the Department of Health and Social Services for Northern Ireland in accordance with regulations made under Article 29 of the Child Support (Northern Ireland) Order 1991, by virtue of paragraph (3)(a)(ii) of that Article;
- (c) the payment is retained by the Secretary of State in accordance with regulations made under section 41 of that Act;
- (d) the payment is retained by the Department of Health and Social Services for Northern Ireland in accordance with regulations made under Article 38 of that Order.
- (11) In this section “*maintenance assessment*” means a maintenance assessment made under the Child Support Act 1991 or the Child Support (Northern Ireland) Order 1991.
- (12) Where any periodical payment is made to the Secretary of State or to the Department of Health and Social Services for Northern Ireland—
- (a) by any person , and
- (b) under an order—
- (i) made under section 106 of the Social Security Administration Act 1992 or section 101 of the Social Security Administration (Northern Ireland) Act 1992 (recovery of expenditure on benefit from person liable for maintenance) in respect of income support claimed by any other person; or
- (ii) made by virtue of section 23 of the Jobseekers Act 1995 (recovery of sums in respect of maintenance), or any corresponding enactment in Northern Ireland, in respect of an income-based jobseeker’s allowance claimed by any other person,
this section shall have effect as if the payment had been made to that other person to or for the benefit, and for the maintenance, of that other person or (as the case may be) to that other person for the maintenance of the child or children concerned.
- (13) In subsection (12) above, “*income-based jobseeker’s allowance*” has the same meaning as in the Jobseekers Act 1995 or, for Northern Ireland, the same meaning as in any corresponding enactment in Northern Ireland.
#### No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement.
##### 349ZA
- (1) Subsection (2) applies if—
- (a) a person who is a non-UK resident is chargeable to tax under section 587 of ITTOIA 2005 on profits from the sale of the whole or part of any patent rights, and
- (b) the net proceeds of the sale consist wholly or partly of a capital sum.
- (2) Subsection (1) of section 349 of this Act applies to any payment of the net proceeds of sale, or of an instalment of them, as if the net proceeds or instalment were, so far as consisting of the capital sum—
- (a) an annual sum to which paragraph (a) of that subsection applies, and
- (b) payable otherwise than out of profits or gains charged to income tax.
- (3) For the purposes of this section the net proceeds of the sale is the amount of the proceeds net of any incidental expenses of the sale which are deducted before payment.
- (4) Sections 597 to 599 of ITTOIA 2005 (licences connected with patents etc.) apply for the purposes of this section as they apply for the purposes of sections 587 to 596 of that Act.
- (5) Section 4 of the Capital Allowances Act 2001 (meaning of “capital sums” etc.) applies in relation to this section as it applies in relation to Chapter 2 of Part 5 of ITTOIA 2005 (receipts from intellectual property).
- (6) In this section “*a non-UK resident*” means a person who is not resident in the United Kingdom.
##### 349A
- (1) The provisions specified in subsection (3) below (which require tax to be deducted on making certain payments) do not apply to a payment made by a company or a local authority if, at the time the payment is made, the company or authority reasonably believes that one of the conditions specified in section 349B is satisfied.
- (2) Subsection (1) above has effect subject to any directions under section 349C.
- (3) The provisions are—
- section 349(1) (certain annuities and other annual payments, and royalties and other sums paid for use of UK patents),
- section 349(2)(a) and (b) (UK interest),
- section 349(3A) (dividend or interest on securities issued by building societies), and
- 349ZA(2) (which provides for section 349(1) to apply to proceeds of sale of UK patent rights).
- (4) References in subsection (3) above to any provision of section 349 do not include that provision as applied—
- (a) under section 777(9) (directions applying section 349(1) to certain payments to non-residents), or
- (b) by paragraph 4(2) of Schedule 23A (manufactured overseas dividends to be treated as annual payments within section 349).
- (5) References in this section to the company by which a payment is made do not include a company acting as trustee or agent for another person.
- (6) For the purposes of this section—
- (a) a payment by a partnership is treated as made by a company if any member of the partnership is a company , and
- (b) a payment by a partnership is treated as made by a local authority if any member of the partnership is a local authority.
#### Information relating to distributions.
##### 349B
- (1) The first of the conditions mentioned in section 349A(1) is that the person beneficially entitled to the income in respect of which the payment is made is—
- (a) a company resident in the United Kingdom, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) The second of those conditions is that—
- (a) the person beneficially entitled to the income in respect of which the payment is made is a company not resident in the United Kingdom (“*the non-resident company*”),
- (b) the non-resident company carries on a trade in the United Kingdom through a permanent establishment, and
- (c) the payment falls to be brought into account in computing the chargeable profits (within the meaning given by section 11(2)) of the non-resident company.
- (3) The third of those conditions is that the payment is made to , or to the nominee of—
- (a) a local authority;
- (b) a health service body within the meaning of section 519A(2);
- (c) a public office or department of the Crown to which section 829(1) applies;
- (d) a charity (within the meaning of section 506(1));
- (e) a body for the time being mentioned in section 507(1) (bodies that are allowed the same exemption from tax as charities the whole income of which is applied to charitable purposes);
- (f) an Association of a description specified in section 508 (scientific research organisations);
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (i) the scheme administrator of a registered pension scheme;
- (ia) the sub-scheme administrator of a sub-scheme which forms part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006;
- (j) the trustees of a scheme entitled to exemption under section 613(4) (Parliamentary pension funds); or
- (k) the persons entitled to receive the income of a fund entitled to exemption under section 614(3) (certain colonial, etc pension funds);
- (l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (m) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The fourth of those conditions is that—
- (a) the person to whom the payment is made is, or is the nominee of, the plan manager of a plan of a kind to which regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) apply,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) the plan manager receives the payment in respect of investments under the plan.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) The sixth of those conditions is that the person beneficially entitled to the income in respect of which the payment is made is a partnership each member of which is—
- (a) a person or body mentioned in subsection (3) above, or
- (b) a person or body mentioned in subsection (7) below.
- (7) The persons and bodies referred to in subsection (6)(b) above are—
- (a) a company resident in the United Kingdom;
- (b) a company that—
- (i) is not resident in the United Kingdom,
- (ii) carries on a trade there through a permanent establishment, and
- (iii) is required to bring into account, in computing its chargeable profits (within the meaning of section 11(2)), the whole of any share of that payment that falls to it by reason of sections 114 and 115;
- (c) the European Investment Fund.
- (8) The Treasury may by order amend—
- (a) subsection (3) above;
- (b) subsection (7) above;
so as to add to, restrict or otherwise alter the persons and bodies falling within that subsection.
##### 349C
- (1) The Board may give a direction to a company or local authority directing that section 349A(1) is not to apply in relation to any payment that—
- (a) is made by the company or authority after the giving of the direction, and
- (b) is specified in the direction or is of a description so specified.
- (2) Such a direction shall not be given unless the Board have reasonable grounds for believing as respects each payment to which the direction relates that it is likely that none of the conditions specified in section 349B will be satisfied in relation to the payment at the time the payment is made.
- (3) A direction under this section may be varied or revoked by a subsequent such direction.
- (4) In this section—
- “*company*” includes a partnership of which any member is a company; and
- “*local authority*” includes a partnership of which any member is a local authority.
##### 349D
- (1) Where—
- (a) a payment is made by a company or local authority without an amount representing the income tax on the payment being deducted from the payment,
- (b) at the time the payment is made, the company or authority reasonably believes that one of the conditions specified in section 349B is satisfied,
- (c) if the company or authority did not so believe, tax would be deductible from the payment under section 349, and
- (d) none of the conditions specified in section 349B is satisfied at the time the payment is made,
section 350 applies as if the payment were within section 349 (and Schedule 16 applies as if tax were deductible from the payment under section 349).
- (2) In this section—
- “*company*” includes a partnership of which any member is a company; and
- “*local authority*” includes a partnership of which any member is a local authority.
##### 349E
- (1) Where—
- (a) a company makes a payment of a royalty to which section 349(1) applies, and
- (b) the company reasonably believes that, at the time the payment is made, the payee is entitled to relief in respect of the payment under any arrangements under section 788 (double taxation relief),
the company may, if it thinks fit, calculate the sum to be deducted from the payment under section 349(1) by reference to the rate of income tax appropriate to the payee pursuant to the arrangements.
- (2) But, where the payee is not at that time entitled to such relief, section 350 and Schedule 16 shall have effect as if subsection (1) above never applied in relation to the payment.
- (3) Where the Board are not satisfied that the payee will be entitled to such relief in respect of one or more payments to be made by a company, they may direct the company that subsection (1) above is not to apply to the payment or payments.
- (4) A direction under subsection (3) above may be varied or revoked by a subsequent such direction.
- (5) In this section—
- “*payee*”, in relation to a payment, means the person beneficially entitled to the income in respect of which the payment is made; and
- “*royalty*” includes—any payment received as a consideration for the use of, or the right to use, any copyright, patent, trade mark, design, process or information, orany proceeds of sale of all or any part of any patent rights.
- (6) Paragraph 3(1) of Schedule 18 to the Finance Act 1998 (requirement to make return in respect of information relevant to application of Corporation Tax Acts) has effect as if the reference to the Corporation Tax Acts included a reference to this section.
- (7) Paragraph 20 of that Schedule (penalties for incorrect returns), in its application to an error relating to information required in a return by virtue of subsection (6) above, has effect as if—
- (a) the reference in sub-paragraph (1) to a tax-related penalty were a reference to an amount not exceeding £3000, and
- (b) sub-paragraphs (2) and (3) were omitted.
##### 350A
- (1) The Board may by regulations—
- (a) make provision as to the time and manner in which persons who under section 349(3C) deduct sums representing income tax out of payments of UK public revenue dividends are to account for and pay those sums; and
- (b) otherwise modify the provisions of sections 349 and 350 in their application to such dividends;
and in this section “*UK public revenue dividend*” has the same meaning as in section 349.
- (2) Regulations under this section may—
- (a) make different provision for different descriptions of UK public revenue dividend and for different circumstances;
- (b) make special provision for UK public revenue dividends which—
- (i) are payable to the Bank of Ireland out of the public revenue of the United Kingdom, or
- (ii) are entrusted to the Bank of Ireland for payment and distribution and are not payable by that Bank out of its principal office in Belfast;
- (c) include such transitional and other supplementary provisions as appear to the Board to be necessary or expedient.
- (3) No regulations under this section shall be made unless a draft of them has been laid before and approved by a resolution of the House of Commons.
##### 356A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information relating to distributions.
##### 357A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 357B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 357C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 360A
- (1) For the purposes of section 360(2)(a) an individual shall be treated as having a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—
- (a) is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 5 per cent. of the ordinary share capital of the company, or
- (b) possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 5 per cent. of the assets which would then be available for distribution among the participators.
- (2) Subject to the following provisions of this section, in subsection (1) above “*associate*”, in relation to an individual, means—
- (a) any relative or partner of the individual;
- (b) the . . . trustees of a settlement in relation to which the individual is, or any relative of his (living or dead) is or was, a settlor . . . ; and
- (c) where the individual is interested in any shares or obligations of the company which are subject to any trust, or are part of the estate of a deceased person, the . . . trustees of the settlement concerned or, as the case may be, the personal representative of the deceased.
- (3) In relation to any loan made after 5th April 1987, there shall be disregarded for the purposes of subsection (2)(c) above—
- (a) the interest of the trustees of an approved profit sharing scheme (within the meaning of section 187) in any shares which are held by them in accordance with the scheme and have not yet been appropriated to an individual; and
- (b) any rights exercisable by those trustees by virtue of that interest.
- (4) In relation to any loan made on or after the day on which the Finance Act 1989 was passed, where the individual has an interest in shares or obligations of the company as a beneficiary of an employee benefit trust, the trustees shall not be regarded as associates of his by reason only of that interest unless subsection (6) below applies in relation to him.
- (5) In subsection (4) above “*employee benefit trust*” has the same meaning as in paragraph 7 of Schedule 8, except that in its application for this purpose paragraph 7(5)(b) shall have effect as if it referred to the day on which the Finance Act 1989 was passed instead of to 14th March 1989.
- (6) This subsection applies in relation to an individual if at any time on or after the day on which the Finance Act 1989 was passed—
- (a) the individual, either on his own or with any one or more of his associates, or
- (b) any associate of his, with or without other such associates,
has been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 per cent. of the ordinary share capital of the company.
- (7) Sub-paragraphs (9) to (12) of paragraph 7 of Schedule 8 shall apply for the purposes of subsection (6) above in relation to an individual as they apply for the purposes of that paragraph in relation to an employee.
- (8) In relation to any loan made before 14th November 1986, where the individual is interested in any shares or obligations of the company which are subject to any trust, or are part of the estate of a deceased person, subsection (2)(c) above shall have effect as if for the reference to the . . . trustees of the settlement concerned or, as the case may be, the personal representative of the deceased there were substituted a reference to any person (other than the individual) interested in the settlement or estate, but subject to subsection (9) below.
- (9) Subsection (8) above shall not apply so as to make an individual an associate as being entitled or eligible to benefit under a trust—
- (a) if the trust relates exclusively to a registered pension scheme; or
- (b) if the trust is exclusively for the benefit of the employees, or the employees and directors, of the company or their dependants (and not wholly or mainly for the benefit of directors or their relatives), and the individual in question is not (and could not as a result of the operation of the trust become), either on his own or with his relatives, the beneficial owner of more than 5 per cent. of the ordinary share capital of the company;
and in applying paragraph (b) above any charitable trusts which may arise on the failure or determination of other trusts shall be disregarded.
- (10) In this section “participator” has the meaning given by section 417(1) and“*relative*” means spouse or civil partner, parent or remoter forebear, child or remoter issue or brother or sister.
#### Procedure for making election.
#### Returns.
##### 367A
- (1) Sections 353 and 365 have effect as if—
- (a) purchase and resale arrangements involved the making of a loan, and
- (b) alternative finance return were interest.
- (2) Section 366 has effect accordingly.
- (3) In this section—
- “*alternative finance return*” has the meaning given in sections 564I to 564L of ITA 2007, and
- “*purchase and resale arrangements*” means arrangements to which section 564C of ITA 2007 applies.
#### Interpretation of Part VI.
##### 374A
- (1) This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . . . .
- (5) If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted.
##### 375A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 376A
- (1) The Board shall maintain, and publish in such manner as they consider appropriate, a register for the purposes of section 376(4).
- (1A) The following are entitled to be registered—
- (a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000—
- (i) to accept deposits; or
- (ii) to effect or carry out contracts of general insurance;
- (b) a 90 per cent subsidiary of a person mentioned in—
- (i) section 376(4)(e); or
- (ii) paragraph (a) above;
- (c) any other body whose activities and objects appear to the Board to qualify it for registration.
- (2) If the Board are satisfied that an applicant for registration is entitled to be registered, they may register the applicant generally or in relation to any description of loan specified in the register, with effect from such date as may be so specified; and a body which is so registered shall become a qualifying lender in accordance with the terms of its registration.
- (3) The registration of any body may be varied by the Board—
- (a) where it is general, by providing for it to be in relation to a specified description of loan, or
- (b) where it is in relation to a specified description of loan, by removing or varying the reference to that description of loan,
and where they do so, they shall give the body written notice of the variation and of the date from which it is to have effect.
- (4) If it appears to the Board at any time that a body which is registered under this section would not be entitled to be registered if it applied for registration at that time, the Board may by written notice given to the body cancel its registration with effect from such date as may be specified in the notice.
- (5) The date specified in a notice under subsection (3) or (4) above shall not be earlier than the end of the period of 30 days beginning with the date on which the notice is served.
- (6) Any body which is aggrieved by the failure of the Board to register it under this section, or by the variation or cancellation of its registration, may, by notice given to the Board before the end of the period of 30 days beginning with the date on which the body is notified of the Board’s decision, require the matter to be determined by the Special Commissioners; and the Special Commissioners shall thereupon hear and determine the matter in like manner as an appeal.
### Losses from UK property business or overseas property business
##### 379A
- (1) Subject to the following provisions of this section, where for any year of assessment any person sustains any loss in a UK property business carried on by him either solely or in partnership—
- (a) the loss shall be carried forward to the following year of assessment and, to the extent that it does not exceed them, set against any profits of that business for the year to which it is carried forward; and
- (b) where there are no profits for the following year or the profits for that year are exceeded by the amount of the loss, the loss or, as the case may be, the remainder of it shall be so carried forward to the next following year, and so on.
- (2) Subsection (3) below shall apply where a loss is sustained in a UK property business for any year of assessment (“the year of the loss”) and one or both of the following conditions is satisfied, that is to say—
- (a) the amount of the . . . capital allowances treated as expenses of that business in computing that loss exceeds, by any amount (“the net capital allowances”), the amount of any charges under the Capital Allowances Act which are treated as receipts of that business in computing that loss;
- (b) the UK property business has been carried on in relation to land that consists of or includes an agricultural estate to which allowable agricultural expenses deducted in computing that loss are attributable;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where the person carrying on the UK property business in a case to which this subsection applies makes a claim, in relation to the year of the loss or the year following that year, for relief under this subsection in respect of the loss—
- (a) relief from income tax may be given, for the year to which the claim relates, on an amount of that person’s income for that year which is equal to the amount of relief available for that year in respect of the loss; and
- (b) the loss which is to be or has been carried forward under subsection (1) above shall be treated as reduced (if necessary to nil) by an amount equal to the amount on which relief is given;
but a claim for relief under this subsection shall not be made after the end of twelve months from the 31st January next following the end of the year to which it relates and shall be accompanied by all such amendments as may be required by virtue of paragraph (b) above of any return made by the claimant under section 8 or 8A of the Management Act.
- (4) Subject to subsection (5) below, the reference in subsection (3) above to the amount of the relief available for any year in respect of a loss is a reference to whichever is the smallest of the following amounts, that is to say—
- (a) the amount of the relievable income for the year to which the claim relates;
- (b) the loss sustained in the UK property business in the year of the loss; and
- (c) the amount which, according to whether one or both of the conditions mentioned in subsection (2) above is satisfied in relation to the year of the loss, is equal—
- (i) to the net capital allowances,
- (ii) to the amount of the allowable agricultural expenses for the year of the loss, or
- (iii) to the sum of the net capital allowances and the amount of those expenses.
- (5) Where relief under subsection (3) above is given in respect of a loss in relation to either of the years in relation to which relief may be claimed in respect of that loss, relief shall not be available in respect of the same loss for the other year except, in a case where the relief already given is of an amount determined in accordance with subsection (4)(a) above, to the extent that the smaller of the amounts applicable by virtue of subsection (4)(b) and (c) above exceeds the amount of relief already given.
- (6) For the purposes of subsection (4)(a) above the amount of relievable income for any year, in relation to any person, shall be equal to the amount of his income for that year—
- (a) after effect has been given to subsection (1) above in relation to any amount carried forward to that year in respect of a loss sustained in any year before the year of the loss, and
- (b) in the case of a claim under subsection (3) above in relation to the year of the loss, after effect has been given to any claim under that subsection in respect of a loss sustained in the preceding year.
- (7) For the purposes of this section the loss sustained in any UK property business shall be computed in like manner as the profits arising from such a business are computed under the provisions of the Income Tax Acts applicable to UK property businesses.
- (8) In this section “*allowable agricultural expenses*”, in relation to an agricultural estate, means any disbursements or expenses attributable to the estate which are deductible in respect of maintenance, repairs, insurance or management of the estate and otherwise than in respect of the interest payable on any loan.
- (9) For the purposes of this section the amount of any disbursements or expenses attributable to an agricultural estate shall be determined as if—
- (a) disbursements and expenses were to be disregarded to the extent that they would not have been attributable to the estate if it did not include the parts of it used wholly for purposes other than purposes of husbandry, and
- (b) disbursements and expenses in respect of parts of the estate used partly for purposes of husbandry and partly for other purposes were to be reduced to an extent corresponding to the extent to which those parts were used for other purposes.
- (10) In this section—
- “*agricultural estate*” means any land (including any houses or other buildings) which is managed as one estate and which consists of or includes any agricultural land; and
- “*agricultural land*” means land, houses or other buildings in the United Kingdom occupied wholly or mainly for the purposes of husbandry.
##### 379B
The provisions of section 379A apply in relation to an overseas property business (within the meaning given by Chapter 2 of Part 3 of ITTOIA 2005) as they apply in relation to a UK property business.
#### Meaning of “adjusted net income”
##### 384A
- (1) Relief shall not be given to an individual under sections 380 and 381 by reference to a first-year allowance under Part 2 of the Capital Allowances Act (plant and machinery allowances) in the circumstances specified in subsection (2) or (4) below.
- (2) The circumstances are that the allowance is in respect of expenditure incurred on the provision of plant or machinery for leasing in the course of a qualifying activity and—
- (a) at the time when the expenditure was incurred, the qualifying activity was carried on by the individual in question in partnership with a company (with or without other partners), or
- (b) a scheme has been effected or arrangements have been made (whether before or after that time) with a view to the qualifying activity being so carried on by that individual.
- (3) For the purposes of subsection (2) above letting a ship on charter shall be regarded as leasing it if, apart from this subsection, it would not be so regarded.
- (4) The circumstances are that the allowance is made in connection with—
- (a) a qualifying activity which at the time when the expenditure was incurred was carried on by the individual in partnership or which has subsequently been carried on by him in partnership or transferred to a person who was connected with him, or
- (b) an asset which after that time has been transferred by the individual to a person who was connected with him or, at a price lower than its market value, to any other person,
and the condition in subsection (5) below is met.
- (5) The condition is that a scheme has been effected or arrangements have been made (whether before or after the time referred to in subsection (4) above) such that the sole or main benefit that might be expected to accrue to the individual from the transaction under which the expenditure was incurred was the obtaining of a reduction in tax liability by means of relief under sections 380 and 381.
- (6) Where relief has been given in circumstances in which subsection (1) applies it shall be withdrawn by the making of an assessment to income tax.
- (7) Section 839 (how to tell whether persons are connected) applies for the purposes of subsection (4) above.
- (8) Expressions used in this section and in Part 2 of the Capital Allowances Act have the same meaning as in that Part.
### Losses from Schedule A business or overseas property business
##### 392A
- (1) Where a company incurs a Schedule A loss in an accounting period, the loss shall be set off for the purposes of corporation tax against the company’s total profits for that period.
- (2) To the extent that a company’s Schedule A loss cannot be set off under subsection (1), it shall, if the company continues to carry on the Schedule A business in the succeeding accounting period, be carried forward to that period and be treated for the purposes of this section as a Schedule A loss of that period.
- (3) Where a company with investment business—
- (a) ceases to carry on a Schedule A business, but
- (b) continues to be a company with investment business,
any Schedule A loss that cannot be used under the preceding provisions shall be carried forward to the succeeding accounting period and be treated for the purposes of section 75 as if it were expenses of management deductible for that period.
- (4) In this section—
- (a) a “*Schedule A loss*” means a loss incurred by a company in a Schedule A business carried on by it; and
- (b) “*company with investment business*” has the same meaning as in Part IV.
- (5) The preceding provisions of this section apply to a Schedule A business only to the extent that it is carried on—
- (a) on a commercial basis, or
- (b) in the exercise of statutory functions.
- (6) For the purposes of subsection (5)(a)—
- (a) a business or part is not carried on on a commercial basis unless it is carried on with a view to making a profit, but if it is carried on so as to afford a reasonable expectation of profit it is treated as carried on with a view to making a profit; and
- (b) if there is a change in the manner in which a business or part is carried on, it is treated as having been carried on throughout an accounting period in the way in which it was being carried on by the end of the period.
- (7) In subsection (5)(b) “*statutory functions*” means functions conferred by or under any enactment (including an enactment contained in a local or private Act).
##### 392B
- (1) Where in any accounting period a company incurs a loss in an overseas property business (whether carried on by it solely or in partnership)—
- (a) the loss shall be carried forward to the succeeding accounting period and set against any profits of the business for that period,
- (b) if there are no profits of the business for that period, or if the profits for that period are exceeded by the amount of the loss, the loss or the remainder of it shall be carried forward again and set against any profits of the business for the next succeeding accounting period,
and so on.
- (2) Subsections (5) to (7) of section 392A apply in relation to relief under subsection (1) above and an overseas property business as they apply in relation to relief under section 392A(1) to (3) and a Schedule A business.
##### 393A
- (1) Subject to section 492(3), where in any accounting period ending on or after 1st April 1991 a company carrying on a trade incurs a loss in the trade, then, subject to subsection (3) below, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against profits (of whatever description)—
- (a) of that accounting period, and
- (b) if the company was then carrying on the trade and the claim so requires, of preceding accounting periods falling wholly or partly within the period specified in subsection (2) below;
and, subject to that subsection and to any relief for an earlier loss, the profits of any of those accounting periods shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this subsection against profits of a later accounting period.
- (2) The period referred to in paragraph (b) of subsection (1) is (subject to subsection (2A) below) the period of twelve months immediately preceding the accounting period in which the loss is incurred; but the amount of the reduction that may be made under that subsection in the profits of an accounting period falling partly before the beginning of that period shall not exceed a part of those profits proportionate to the part of the accounting period falling within that period.
- (2A) This section shall have effect in relation to any loss to which this subsection applies as if, in subsection (2) above, the words “three years” were substituted for the words “twelve months”.
- (2B) Where a company ceases to carry on a trade at any time, subsection (2A) above applies to the following—
- (a) the whole of any loss incurred in that trade by that company in an accounting period beginning twelve months or less before that time; and
- (b) the part of any loss incurred in that trade by that company in an accounting period ending, but not beginning, in that twelve months which is proportionate to the part of that accounting period falling within those twelve months.
- (2C) Where—
- (a) a loss is incurred by a company in a ring fence trade carried on by that company, and
- (b) the accounting period in which the loss is incurred is an accounting period for which an allowance under section 164 of the Capital Allowances Act (abandonment expenditure incurred before cessation of ring fence trade) is made to that company,
subsection (2A) above applies to so much of the amount of that loss not falling within subsection (2B) above as does not exceed the amount of that allowance.
- (3) Subsection (1) above shall not apply to trades falling within Case V of Schedule D; and a loss incurred in a trade in any accounting period shall not be relieved under that subsection unless—
- (a) the trade is one carried on in the exercise of functions conferred by or under any enactment (including an enactment contained in a local or private Act), or
- (b) for that accounting period the trade was being carried on on a commercial basis and with a view to the realisation of gain in the trade or in any larger undertaking of which the trade formed part;
but this subsection is without prejudice to section 397.
- (4) For the purposes of subsection (3) above—
- (a) where at any time a trade is carried on so as to afford a reasonable expectation of gain, it shall be treated as being carried on at that time with a view to the realisation of gain; and
- (b) where in an accounting period there is a change in the manner in which a trade is being carried on, it shall be treated as having throughout the accounting period been carried on in the way in which it was being carried on by the end of that period.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subject to subsection (7A) below, where a company ceases to carry on a trade, subsection (9) of section 393 shall apply in computing for the purposes of this section a loss in the trade in an accounting period ending with the cessation, or ending at any time in the twelve months immediately preceding the cessation, as it applies in computing a loss in an accounting period for the purposes of subsection (1) of that section.
- (7A) For the purposes of this section where—
- (a) subsection (7) above has effect for computing the loss for any accounting period, and
- (b) that accounting period is one beginning before the beginning of the twelve months mentioned in that subsection,
the part of that loss that is not the part falling within subsection (2B)(b) above shall be treated as reduced (without any corresponding increase in the part of the loss that does fall within subsection (2B)(b) above) by an amount equal to so much of the aggregate of the charges on income treated as expenses by virtue of subsection (7) above as is proportionate to the part of the accounting period that does not fall within those twelve months.
- (8) Relief shall not be given by virtue of subsection (1)(b) above in respect of a loss incurred in a trade so as to interfere with any relief under section 338 in respect of payments made wholly and exclusively for the purposes of that trade.
- (9) For the purposes of this section—
- (a) the amount of a loss incurred in a trade in an accounting period shall be computed in the same way as trading income from the trade in that period would have been computed;
- (b) “*trading income*” means, in relation to any trade, the income which falls or would fall to be included in respect of the trade in the total profits of the company; and
- (c) references to a company carrying on a trade refer to the company carrying it on so as to be within the charge to corporation tax in respect of it.
- (10) A claim under subsection (1) above may only be made within the period of two years immediately following the accounting period in which the loss is incurred or within such further period as the Board may allow.
- (11) In any case where—
- (a) by virtue of section 165 of the Capital Allowances Act (abandonment expenditure within 3 years of ceasing ring fence trade) the qualifying expenditure of the company for the chargeable period related to the cessation of its ring fence trade is treated as increased by any amount, or
- (b) by virtue of section 416 of that Act (expenditure on restoration within 3 years of ceasing to trade) any expenditure is treated as qualifying expenditure incurred by the company on the last day of trading,
then, in relation to any claim under subsection (1) above to the extent that it relates to an increase falling within paragraph (a) above or to expenditure falling within paragraph (b) above, subsection (10) above shall have effect with the substitution of “five years” for “two years”.
- (12) In this section “*ring fence trade*” has the same meaning as in section 162 of the Capital Allowances Act.
##### 393B
- (1) This section applies if these conditions are met—
- (a) a company makes a claim under section 393A(1) requiring that a loss incurred in a ring fence trade be set off against profits;
- (b) section 393A(2A) applies in relation to that claim (three year set off period) by virtue of—
- (i) section 393A(2B) (loss precedes cessation of trade), or
- (ii) section 393A(2C) (loss arises in year when general decommissioning expenditure incurred); and
- (c) the loss incurred in the ring fence trade that may be set off under section 393A (“L”) exceeds the profits against which L may be set off under section 393A (“P”).
- (2) The profits of the ring fence trade of an accounting period are to be relieved under subsection (3) if that period—
- (a) falls wholly or partly before the three year set off period, and
- (b) ends on or after 17 April 2002.
- (3) Subject to any relief for an earlier loss, those profits of that accounting period shall be treated as reduced by—
- (a) the amount by which L exceeds P, or
- (b) so much of that amount as cannot be relieved under this subsection against profits of the ring fence trade of a later accounting period.
- (4) Subsection (3) is subject to subsection (5) in the case of an accounting period that falls partly (but not wholly) before the three year set off period.
- (5) The amount of the reduction of the profits of the ring fence trade that may be made under subsection (3) shall not exceed a part of those profits proportionate to the part of the accounting period that falls before the three year set off period.
- (6) Subsection (3) is subject to subsection (7) in the case of an accounting period that begins before 17 April 2002 and ends on or after that date.
- (7) The amount of the reduction of the profits of the ring fence trade that may be made under subsection (3) shall not exceed a part of those profits proportionate to the part of the accounting period that falls after 16 April 2002.
- (8) In this section—
- “*ring fence*” has the same meaning as in section 162 of the Capital Allowances Act;
- “*three year set off period*” means the period of three years that applies to the claim under section 393A(1) by virtue of section 393A(2A) and section 393A(2B) or (2C).
#### Children’s tax credit.
##### 403ZA
- (1) For the purposes of section 403 a trading loss means a loss incurred by the surrendering company in the surrender period in carrying on a trade, computed as for the purposes of section 393A(1).
- (2) That section does not apply to a trading loss which would be excluded from section 393A(1) by—
- (a) section 393A(3) (foreign trades and certain trades not carried on with a view to gain), or
- (b) section 397 (farming and market gardening: restriction on loss relief).
- (3) Where a company owned by a consortium—
- (a) has in any relevant accounting period incurred a trading loss, and
- (b) has profits (of whatever description) of that accounting period against which that loss could be set off under section 393A(1),
the amount of the loss available to a member of the consortium on a consortium claim shall be determined on the assumption that the company has made a claim under section 393A(1) requiring the loss to be so set off.
- (4) Where the company mentioned in subsection (3) is a group/consortium company, the amount of the loss available under that subsection shall be determined before any reduction is made under section 405(1) to (3).
##### 403ZB
- (1) For the purposes of section 403 excess capital allowances means capital allowances falling to be made to the surrendering company for the surrender period to the extent that they are to be given effect under section 260 of the Capital Allowances Act (special leasing: excess allowance).
- (2) In determining the amount of the allowances falling to be made for the surrender period, no account shall be taken of any allowances carried forward from an earlier period.
- (3) The amount of the company’s income of the relevant class means its amount before deduction of—
- (a) losses of any other period, or
- (b) capital allowances.
##### 403ZC
- (1) For the purposes of section 403 a non-trading deficit on its loan relationships means a deficit of the surrendering company to which section 83 of the Finance Act 1996 applies.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZD
- (1) References in section 403 to charges on income, Schedule A losses and management expenses shall be construed as follows.
- (2) Charges on income means the aggregate of the amounts paid by the surrendering company in the surrender period by way of charges on income.
- (3) A Schedule A loss means a loss incurred by the surrendering company in the surrender period in a Schedule A business carried on by the company.
It does not include—
- (a) an amount treated as such a loss by section 392A(2) (losses carried forward from earlier period), or
- (b) a loss which would be excluded from section 392A by subsection (5) of that section (certain businesses not carried on with a view to gain).
- (4) Management expenses means the aggregate of the amounts deductible under section 75(1) (expenses of management of company with investment business) by the surrendering company for this period.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) A non-trading loss on intangible fixed assets means a non-trading loss on intangible fixed assets, within the meaning of Schedule 29 to the Finance Act 2002, for the surrender period.
It does not include so much of any such loss as is attributable to an amount being carried forward under paragraph 35(3) of that Schedule (amounts carried forward from earlier periods).
##### 403ZE
- (1) For the purposes of section 403 the surrendering company’s gross profits of the surrender period means its profits for that period—
- (a) without any deduction in respect of such losses, allowances and other amounts as are mentioned in paragraph (a) or (b) of subsection (1) of that section, and
- (b) without any deduction falling to be made—
- (i) in respect of losses, allowances or other amounts of any other period (whether or not of a description within subsection (1) of that section), or
- (ii) by virtue of section 75(9) or 392A(3) (other amounts carried forward).
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403A
- (1) The amount which, on a claim for group relief, may be set off against the total profits of the claimant company for an accounting period (“*the claim period*”), and accordingly the amount to which any consent required in respect of that claim may relate, shall not exceed whichever is the smaller of the following amounts—
- (a) the unused part of the surrenderable amount for the overlapping period; and
- (b) the unrelieved part of the claimant company’s total profits for the overlapping period.
- (2) For the purposes of any claim for group relief—
- (a) the unused part of the surrenderable amount for the overlapping period is the surrenderable amount for that period reduced by the amount of any prior surrenders attributable to the overlapping period; and
- (b) the unrelieved part of the claimant company’s total profits for the overlapping period is the amount of its total profits for that period reduced by the amount of any previously claimed group relief attributable to the overlapping period.
- (3) For the purposes of any claim for group relief—
- (a) the surrenderable amount for the overlapping period is so much of the surrenderable amount for the accounting period of the surrendering company to which the claim relates as is attributable, on an apportionment in accordance with section 403B, to the overlapping period;
- (b) the surrenderable amount for an accounting period of the surrendering company is the total amount for that accounting period of the losses and other amounts which (disregarding this section and section 403C) are available in that company’s case for set off by way of group relief; and
- (c) the amount of the claimant company’s total profits for the overlapping period is so much of its total profits for the claim period as is attributable, on an apportionment in accordance with section 403B, to the overlapping period.
- (4) In relation to any claim for group relief (“*the relevant claim*”) the amount of the prior surrenders attributable to the period which is the overlapping period in the case of the relevant claim is equal to the aggregate amount (if any) produced by—
- (a) taking the amount of every claim for group relief (whether a group claim or a consortium claim) which—
- (i) has been made before the relevant claim,
- (ii) was made in respect of the whole or any part of the amount which, in relation to the relevant claim, is the surrenderable amount for the accounting period of the surrendering company to which the claim relates, and
- (iii) has not been withdrawn;
- (b) treating the amount of group relief which (having regard to the provisions of this section) is allowable under each such claim as an amount of relief for the period which is the overlapping period in the case of that claim;
- (c) determining how much of each amount treated in accordance with paragraph (b) above as an amount of relief for a particular period is attributable, on an apportionment in accordance with section 403B, to the period (if any) which is common to both—
- (i) that period; and
- (ii) the period which is the overlapping period in the case of the relevant claim;
and
- (d) aggregating all the amounts determined under paragraph (c) above in respect of the previously made claims.
- (5) In relation to any claim for group relief (“*the relevant claim*”), the amount of previously claimed group relief attributable to the period which is the overlapping period in the case of that claim is the aggregate amount produced by—
- (a) taking the amount of every claim for group relief (whether a group claim or a consortium claim) which—
- (i) has been made before the relevant claim,
- (ii) was a claim to set off an amount by way of group relief against the claimant company’s total profits for the period which, in relation to the relevant claim, is the claim period, and
- (iii) has not been withdrawn;
- (b) treating the amount of group relief which (having regard to the provisions of this section) is allowable under each such claim as an amount of relief for the period which is the overlapping period in the case of that claim;
- (c) determining how much of each amount treated in accordance with paragraph (b) above as an amount of relief for a particular period is attributable, on an apportionment in accordance with section 403B, to the period (if any) which is common to both—
- (i) that period; and
- (ii) the period which is the overlapping period in the case of the relevant claim;
and
- (d) aggregating all the amounts determined under paragraph (c) above in respect of the previously made claims.
- (6) For the purposes of this section the amount of group relief allowable on any claim (“*the finalised claim*”) shall fall to be determined as at the time when that claim ceases to be capable of being withdrawn as if—
- (a) every claim that became incapable of being withdrawn before that time were a claim made before the finalised claim; and
- (b) every claim that remains capable of being withdrawn at that time were a claim made after the finalised claim.
- (7) Subject to subsection (6) above and without prejudice to any power to withdraw and resubmit claims, where (but for this subsection) more than one claim for group relief would be taken for the purposes of subsections (4) and (5) above to have been made at the same time, those claims shall be deemed, instead, to have been made—
- (a) in such order as the company or companies making them may, by notice to any officer of the Board, elect or, as the case may be, jointly elect; and
- (b) if there is no such election, in such order as an officer of the Board may direct.
- (8) In this section “*the overlapping period*”, in relation to a claim for group relief, means (subject to subsection (9) below and section 406(3) and (7)) the period which is common to both—
- (a) the claim period; and
- (b) the accounting period of the surrendering company to which the claim relates.
- (9) For the purposes of this section any time in the period which, in relation to any claim for group relief, is common to both the accounting periods mentioned in subsection (8) above but which is a time when the qualifying conditions were not satisfied—
- (a) shall be treated as not comprised in the period which is the overlapping period in the case of that claim; and
- (b) shall be treated instead, in relation to each of those accounting periods, as if it constituted a part of that accounting period which was not common to both periods.
- (10) For the purposes of subsection (9) above the qualifying conditions are satisfied in relation to any claim for group relief at the following times, that is to say—
- (a) if (or so far as) the claim is a group claim for the surrender of any loss or other amount other than a qualifying overseas loss, whenever the conditions in paragraphs (a) to (c) of section 402(2) are satisfied;
- (ab) if (or so far as) the claim is a group claim for the surrender of a qualifying overseas loss, whenever the condition specified in section 402(2A) is satisfied; and
- (b) if the claim is a consortium claim, whenever the conditions specified in section 402(3) for the making of that claim and the condition specified in section 402(3B) are satisfied in the case of the claimant company and the surrendering company.
- (11) For the purposes of subsection (10) above a “*qualifying overseas loss*” means a loss or other amount that is available for surrender by way of group relief in accordance with sections 403F and 403G and Schedule 18A (relief in respect of overseas losses of non-resident companies).
##### 403B
- (1) Subject to subsection (2) below, where an apportionment falls to be made under section 403A for the purpose of determining how much of an amount for any period (“*the first period*”) is attributable to any other period (“*the second period*”) which comprises the whole or a part of the first period—
- (a) the whole of that amount shall be attributed to the second period if the first and second periods begin and end at the same times; and
- (b) in any other case, the apportionment shall be made on a time basis according to how much of the first period coincides with the second period.
- (2) Where the circumstances of a particular case are such that the making on the time basis mentioned in subsection (1)(b) above of some or all of the apportionments to be made in that case would work in a manner that would be unjust or unreasonable in relation to any person, those apportionments shall be made instead (to the extent only that is necessary in order to avoid injustice and unreasonableness) in such other manner as may be just and reasonable.
##### 403C
- (1) In the case of a consortium claim the amount that may be set off against the total profits of the claimant company is limited by this section.
- (2) Where the claimant company is a member of the consortium, the amount that may be set off against the total profits of that company for the overlapping period is limited to the relevant fraction of the surrenderable amount.
That fraction is whichever is the lowest in that period of the following percentages—
- (a) the percentage of the ordinary share capital of the surrendering company that is beneficially owned by the claimant company;
- (b) the percentage to which the claimant company is beneficially entitled of any profits available for distribution to equity holders of the surrendering company; and
- (c) the percentage to which the claimant company would be beneficially entitled of any assets of the surrendering company available for distribution to its equity holders on a winding-up.
If any of those percentages have fluctuated in that period, the average percentage over the period shall be taken.
- (3) Where the surrendering company is a member of the consortium, the amount that may be set off against the total profits of the claimant company for the overlapping period is limited to the relevant fraction of the claimant company’s total profits for the overlapping period.
That fraction is whichever is the lowest in that period of the following percentages—
- (a) the percentage of the ordinary share capital of the claimant company that is beneficially owned by the surrendering company;
- (b) the percentage to which the surrendering company is beneficially entitled of any profits available for distribution to equity holders of the claimant company; and
- (c) the percentage to which the surrendering company would be beneficially entitled of any assets of the claimant company available for distribution to its equity holders on a winding-up.
If any of those percentages have fluctuated in that period, the average percentage over the period shall be taken.
- (4) In any case where the claimant or surrendering company is a subsidiary of a holding company which is owned by a consortium, for the references in subsection (2) or (3) above to the claimant or surrendering company there shall be substituted references to the holding company.
- (5) Expressions used in this section and in section 403A have the same meanings in this section as in that section.
- (6) Schedule 18 has effect for supplementing this section.
##### 403D
- (1) In determining for the purposes of this Chapter the amounts for any accounting period of the losses and other amounts available for surrender by way of group relief by a non-resident company carrying on a trade in the United Kingdom through a permanent establishment, no loss or other amount shall be treated as so available (but see also subsection (11) below) except in so far as—
- (a) it is attributable to activities of that company the income and gains from which for that period are, or (were there any) would be, brought into account in computing the company’s chargeable profits for that period for corporation tax purposes;
- (b) it is not attributable to activities of the company which are made exempt from corporation tax for that period by any double taxation arrangements; and
- (c) no part of—
- (i) the loss or other amount, or
- (ii) any amount brought into account in computing it,
corresponds to, or is represented in, any amount which, for the purposes of any foreign tax, is (in any period) deductible from or otherwise allowable against non-UK profits of the company or any other person.
- (2) In determining for the purposes of sections 403A and 403C the total profits for an accounting period of a non-resident company, there shall be disregarded—
- (a) amounts not falling to be comprised for corporation tax purposes in the chargeable profits of the company for that accounting period, and
- (b) so far as not falling within paragraph (a) above, any amounts arising from activities which are made exempt from corporation tax for that period by any double taxation arrangements.
- (3) In this section “*non-UK profits*”, in relation to any person, means amounts which—
- (a) are taken for the purposes of any foreign tax to be the amount of the profits, income or gains on which (after allowing for deductions) that person is charged with that tax, and
- (b) are not amounts corresponding to, and are not represented in, the total profits (of that or any other person) for any accounting period,
or amounts taken into account in computing such amounts.
- (4) Subsection (2) above applies for the purposes of subsection (3)(b) above as it applies for the purposes of sections 403A and 403C.
- (5) For the purposes of this section an amount shall not be taken to be an amount which for the purposes of any foreign tax is deductible from or otherwise allowable against any non-UK profits of any person by reason only that it is—
- (a) an amount of profits brought into account for the purpose of being excluded from the profits that are non-UK profits of that person by reference to that foreign tax; or
- (b) an amount brought into account in computing the amount of any profits falling to be so excluded.
- (6) So much of the law of any territory outside the United Kingdom as for the purposes of any foreign tax makes the deductibility of any amount dependent on whether or not it is deductible for tax purposes in the United Kingdom shall be disregarded for the purposes of this section.
- (7) For the purposes of this section activities of a company are made exempt from corporation tax for any period by double taxation arrangements if the effect of any such arrangements is that the income and gains (if any) arising for that period from those activities is to be disregarded in computing the company’s chargeable profits.
- (8) In this section “*double taxation arrangements*” means any arrangements having effect by virtue of section 788.
- (9) In this section “*foreign tax*” means any tax chargeable under the law of any territory outside the United Kingdom which—
- (a) is charged on income and corresponds to United Kingdom income tax; or
- (b) is charged on income or chargeable gains or both and corresponds to United Kingdom corporation tax;
but for the purposes of this section a tax shall not be treated as failing to correspond to income tax or corporation tax by reason only that it is chargeable under the law of a province, state or other part of a country, or is levied by or on behalf of a municipality or other local body.
- (10) In determining for the purposes of this section whether any activities are made exempt from corporation tax for any period by any double taxation arrangements any requirement that a claim is made before effect is given to any provision of the arrangements shall be disregarded.
- (11) Any loss or other amount that is available for surrender by way of group relief in accordance with this section is in addition to any loss or other amount that is so available in accordance with sections 403F and 403G and Schedule 18A (relief in respect of overseas losses of non-resident companies).
##### 403E
- (1) In determining, for the purposes of this Chapter, the amounts for any accounting period of the losses and other amounts available for surrender by way of group relief by any company resident in the United Kingdom (“*the resident company*”), a loss or other amount shall be treated as not so available in so far as it—
- (a) is attributable to an overseas permanent establishment of that company, and
- (b) is a loss or other amount falling within subsection (2) below.
- (2) Subject to subsection (3) below, a loss or other amount attributable to an overseas permanent establishment falls within this subsection if the whole or any part of it is, or represents, an amount which, for the purposes of foreign tax under the law of the territory where that permanent establishment is situated, is (in any period) deductible from or otherwise allowable against non-UK profits of a person other than the resident company.
- (3) A loss or other amount does not fall within subsection (2) above if it is referable to life assurance business (within the meaning of Chapter I of Part XII) carried on by the resident company.
- (4) The reference in subsections (1) and (2) above to a loss or other amount attributable to an overseas permanent establishment of a company is a reference to the loss or other amount (if any) that would be surrenderable by that company by way of group relief if the amount surrenderable by that company were computed—
- (a) by reference only to that permanent establishment, and
- (b) by the application in relation to that permanent establishment of principles corresponding in all material respects to those applicable for the purposes of corporation tax to the computation of the equivalent losses or other amounts in the case of the UK permanent establishment of a non-resident company.
- (5) In subsection (4)(b) above the reference to the UK permanent establishment of a non-resident company is a reference to any permanent establishment through which a company which is not resident in the United Kingdom carries on a trade in the United Kingdom.
- (6) References in this section to an overseas permanent establishment of a company are references to any permanent establishment through which that company carries on a trade in a territory outside the United Kingdom.
- (7) In this section “*foreign tax*” and “*non-UK profits*” have the same meaning as in section 403D.
- (8) Where the deductibility of any amount for the purposes of any foreign tax is dependent on whether or not that amount, or a corresponding amount, is deductible for tax purposes in the United Kingdom, this section shall have effect as if that amount were deductible for the purposes of that foreign tax if, and only if, the resident company is treated for the purposes of that tax as resident in the territory where that tax is charged.
##### 403F
- (1) This section has effect for determining for the purposes of this Chapter the extent to which a loss or other amount is available for surrender by way of group relief by a non-resident company—
- (a) which is resident in an EEA territory, or
- (b) which is not so resident but which carries on a trade in an EEA territory through a permanent establishment,
in a case where a group claim may be made as a result of the condition in section 402(2A) being satisfied.
- (2) A loss or other amount is not available for surrender by way of group relief by the non-resident company except in so far as, in relation to the EEA territory, the amount meets—
- (a) the equivalence condition,
- (b) the EEA tax loss condition,
- (c) the qualifying loss condition, and
- (d) the precedence condition.
- (3) Part 1 of Schedule 18A determines, in the case of any amount and any EEA territory, the extent to which those conditions are met.
- (4) In so far as a loss or other amount meets those conditions, Part 2 of Schedule 18A applies—
- (a) for calculating the amount of the loss or other amount (if any) that is available for surrender by way of group relief, and
- (b) otherwise for making provision in relation to the application of this Chapter to the non-resident company.
- (5) This section is subject to section 403G (unallowable overseas losses of non-resident companies).
##### 403G
- (1) This section applies in the case of a loss or other amount arising to a non-resident company—
- (a) which is resident in any EEA territory, or
- (b) which is not so resident but which carries on a trade in an EEA territory through a permanent establishment,
where the amount is not attributable for corporation tax purposes to any UK permanent establishment of the non-resident company.
- (2) The amount is not available for surrender by way of group relief by the non-resident company in so far as conditions A and B are met.
- (3) Condition A is that—
- (a) the amount would not qualify for group relief but for any relevant arrangements, or
- (b) the amount would not have arisen to the non-resident company but for any relevant arrangements.
- (4) Condition B is that the main purpose, or one of the main purposes, of the relevant arrangements was to secure that the amount would qualify for group relief.
- (5) In this section references to relevant arrangements, in relation to any amount, are to—
- (a) arrangements made on or after 20th February 2006, or
- (b) arrangements made before that date where the amount would (but for this section) first qualify for group relief on or after that date or (as the case may be) the amount arises on or after that date.
- (6) In this section—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),
- “*UK permanent establishment*”, in relation to the non-resident company, means any permanent establishment through which it carries on a trade in the United Kingdom.
##### 411ZA
- (1) This section applies if the surrendering company is prevented from obtaining a deduction in respect of an amount by section 520 of CTA 2009 (provision not at arm's length: non-deductibility of relevant return).
- (2) The amount may not be surrendered by way of group relief.
##### 411A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Elections as to transfer of relief under section 257A.
#### Further interpretation of sections 135 to 139.
#### Interpretation.
#### Relief for contributions in respect of share option gains.
#### Exemptions from section 148.
##### 431ZA
- (1) An insurance company may, in its company tax return for the first accounting period of the company beginning on or after 1 January 2008 in which any of the assets of the company's long-term insurance fund would (apart from this section) be foreign business assets, elect that none of the assets of the company's long-term insurance fund are to be regarded for the purposes of this Act as being foreign business assets.
- (2) The election has effect for that accounting period and all subsequent accounting periods of the company.
- (3) An election under subsection (1) is irrevocable.
##### 431A
- (1) The Treasury may by order amend any insurance company taxation provision where it is expedient to do so in consequence of the exercise of any power under the Financial Services and Markets Act 2000, in so far as that Act relates to insurance companies.
- (2) Where any exercise of a power under that Act has effect for a period ending on or before, or beginning before and ending after, the day on which an order containing an amendment in consequence of that exercise is made under subsection (1) above, the power conferred by that subsection includes power to provide for the amendment to have effect in relation to that period.
- (3) The Treasury may by order amend any of the following provisions—
- (a) sections 432ZA, 432A, 432B to 432G and 755A and Schedule 19AA;
- (b) sections 83A, 85, 88 and 89 of the Finance Act 1989;
- (c) section 210A of the Taxation of Chargeable Gains Act 1992.
- (4) An order under subsection (3) above may only be made so as to have effect in relation to periods of account—
- (a) beginning on or after 1st January 2005, and
- (b) ending before 1st October 2006.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Any power conferred by this section to make an order includes power to make—
- (a) different provision for different cases or different purposes, and
- (b) incidental, supplemental, consequential or transitional provision and savings.
- (7) In this section “*insurance company taxation provision*” means any of the following—
- (a) a provision of this Chapter;
- (b) any other provision of the Tax Acts so far as relating to insurance companies.
##### 431AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432A
- (1) This section has effect for determining for the purposes of any provision of the Corporation Tax Acts in relation to any period for which an insurance company carries on business what parts of—
- (a) income arising from the assets of the company’s long-term insurance fund, or
- (b) gains or losses accruing on the disposal of such assets,
are referable to any category of business.
- (1A) If the company carries on only one category of business in the period, all of the income and gains or losses referred to in subsection (1) above shall be referable to that category of business; but if the company carries on more than one category of business in the period, the following provisions shall apply.
- (2) The categories of business referred to in subsections (1) and (1A) above are—
- (a) pension business;
- (b) life reinsurance business;
- (c) overseas life assurance business;
- (d) basic life assurance and general annuity business; and
- (f) long-term business other than life assurance business.
- (3) Income arising from, and gains or losses accruing on the disposal of, assets linked to any category of business (apart from overseas life assurance business) shall be referable to that category of business.
- (4) Income arising from, and gains or losses accruing on the disposal of, assets of the overseas life assurance fund (and no other assets) shall be referable to overseas life assurance business.
- (5) There shall be referable to any category of business (apart from overseas life assurance business) the relevant fraction of any income, gains or losses not directly referable to any category of business.
- (6) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to basic life assurance and general annuity business, is the fraction of which—
- (a) the numerator is the aggregate of—
- (i) the mean of the opening and closing liabilities of that category of business, reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, . . .
- (ii) if there has been a relevant reattribution, the mean of the opening and closing amounts of the shareholders' excess assets, and
- (iii) the mean of the appropriate parts of the opening and closing amounts of the free assets amounts; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by subsection (6A)(a) below in relation to the other categories of business.
- (6A) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to any other category of business other than basic life assurance and general annuity business and overseas life assurance business, is the fraction of which—
- (a) the numerator is the aggregate of—
- (i) the mean of the opening and closing liabilities of the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to the category, and
- (ii) the mean of the appropriate parts of the opening and closing amounts of the free assets amounts; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above
- (ii) the numerators given by that paragraph in relation to the other categories of business; and
- (iii) the numerators given by subsection (6)(a) above in relation to the basic life assurance and general annuity business.
- (7) For the purposes of subsections (5), (6) and (6A) above—
- (a) income, gains or losses are directly referable to a category of business if referable to that category by virtue of subsection (3) or (4) above, . . .
- (b) assets are directly referable to a category of business if income arising from the assets is, and gains or losses accruing on the disposal of the assets are, so referable by virtue of subsection (3) above, and
- (c) amounts are directly referable to basic life assurance and general annuity business if they fall within any of the following provisions—
- (i) sections 438B, 441B and 442A,
- (ii) section 85(2C)(c) of the Finance Act 1989.
- (8) In subsections (6) and (6A) above—
- (a) “*appropriate part*”, in relation to the free assets amount, means—
- (i) where none (or none but an insignificant proportion) of the liabilities of the long-term business are with-profits liabilities, the part of that amount which bears to the whole the proportion A/B where—
A is the amount of the liabilities of the category of business in question;
B is the whole amount of the liabilities of the long-term business; and
- (ii) in any other case the part of the free assets amount which bears to the whole the proportion C/D where—
C is the amount of the with-profits liabilities of the category of business in question;
D is the whole amount of the with-profits liabilities of the long-term business; and
- (b) the amount of the shareholders' excess assets in relation to any period of account of the company is the amount equal to SXA — L27 where—
- (i) SXA is the aggregate amount of the assets shown in its non-participating funds which are attributed to its shareholders as a result of a relevant reattribution; and
- (ii) L27 is the amount (if any) shown in line 27 of Form 19 in its periodical return for the relevant period of account.
- (8A) In this section—
- “*non-participating funds*” means accounts which relate exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus;
- “*reattribution*” in relation to an insurance company which has an inherited estate, means the attribution of assets to shareholders' interests as a result of—an agreement between the company and the relevant regulator as to the amount of that estate and its attribution between shareholders and policy holders; ora decision of the company to specify and identify an amount of assets (otherwise than in connection with a transfer to the company's long-term insurance fund) as attributable only to shareholders' interests;a reattribution is “relevant” if it arises as a result of any of the following—a transfer of business under—section 49 of, or Schedule 2C to, the Insurance Companies Act 1982;an insurance business transfer scheme (within the meaning of section 431(2));a scheme of arrangement under section 425 of the Companies Act 1985;an order under section 68 of the Insurance Companies Act 1982;a waiver under section 148 of the Financial Services and Markets Act 2000;an amendment to the company's memorandum, articles of association or other instrument regulating the company.
- (8B) In subsection (8A) above—
- “*inherited estate*” has the same meaning as it has in the Insurance Prudential Sourcebook; and
- “*relevant regulator*” means the Financial Services Authority, the Treasury or the Secretary of State.
- (9) Where a company carries on overseas life assurance business—
- (a) references in this section to liabilities do not include liabilities of that business, and
- (b) the appropriate part of the free assets amount as defined by paragraph 4(2)(a) of Schedule 19AA shall be left out of account in determining that amount for the purposes of this section.
- (9A) In this section and sections 432C and 432D “*net value*”, in relation to any assets, means the excess of the value of the assets over the value of money debts (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996) attributable to an internal linked fund which are not owed in respect of liabilities.
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432B
- (1) This section and sections 432C to 432F have effect where it is necessary in accordance with section 83 of the Finance Act 1989 to determine what parts of any items brought into account, within the meaning of that section, are referable to life assurance business or any category of life assurance business.
- (2) Where for that purpose reference falls to be made to more than one account recognised for the purposes of that section, the provisions of sections 432C to 432F apply separately in relation to each account.
- (3) Sections 432C and 432D apply where the business with which an account is concerned (“*the relevant business*”) relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus; and sections 432E and 432F apply where the relevant business relates wholly or partly to other policies or contracts.
- (4) The following provisions of this section have effect where sections 432C and 432D—
- (a) apply in relation to any account for a fund in which shareholders' excess assets are held, and
- (b) apply in relation to that account in relation to any period of account beginning on or after 1st January 2005 . . . .
- (5) The part of the amount brought into account as income which is referable in accordance with section 432C to any category of business apart from—
- (a) basic life assurance and general annuity business, and
- (b) overseas life assurance business,
is reduced by the relevant fraction of the shareholders' excess income.
- (6) The part of the amount brought into account as the increase or decrease in the value of assets or as other income which is referable in accordance with section 432D to any category of business apart from basic life assurance and general annuity business is reduced or increased as follows.
- (7) The part of that amount is—
- (a) reduced by the relevant fraction of the shareholders' excess gains, or
- (b) increased by the relevant fraction of the shareholders' excess losses,
as the case may be.
- (8) But if, in relation to the fund in question, an election in accordance with Rule 9.10(c) of the Prudential Sourcebook (Insurers) has effect for the period of account, the following rules apply.
- (8A) In any case where there are adjusted shareholders' excess gains (“amount A”) and an adjusted increase in value of inherited estate assets (“amount B”), the part of the amount mentioned in subsection (6) (“*the relevant amount*”) is reduced by the relevant fraction of the lower of amounts A and B.
- (8B) The difference between amounts A and B is carried forward to the next period of account—
- (a) as shareholders' excess gains (if amount A is the greater amount), or
- (b) as an increase in value of inherited estate assets (if amount B is the greater amount).
- (8C) In any case where there are adjusted shareholders' excess losses (“amount C”) and an adjusted decrease in value of inherited estate assets (“amount D”), the relevant amount is increased by the relevant fraction of the lower of amounts C and D.
- (8D) The difference between amounts C and D is carried forward to the next period of account—
- (a) as shareholders' excess losses (if amount C is the greater amount), or
- (b) as a decrease in value of inherited estate assets (if amount D is the greater amount).
- (8E) In any other case—
- (a) the relevant amount is neither reduced nor increased, and
- (b) the adjusted shareholders' excess gains or losses, and the adjusted increase or decrease in value of inherited estate assets, are carried forward to the next period of account as shareholders' excess gains or losses and an increase or decrease in value of inherited estate assets (as the case may be).
- (8F) For the purposes of subsections (8A) to (8E), in relation to any period of account (“*the relevant period*”), the adjusted shareholders' excess gains or losses, and the adjusted increase or decrease in value of inherited estate assets, are determined as follows.
*Step 1*Find the amount of shareholders' excess gains or losses, and the amount of the increase or decrease in value of inherited estate assets, for the relevant period.
*Step 2*Find the amount (if any) of shareholders' excess gains or losses, and the amount (if any) of the increase or decrease in value of inherited estate assets, carried forward to the relevant period (without being taken into account for the purposes of step 3 or 4 in any previous period of account).
*Step 3*This step applies if, for the relevant period, there are shareholders' excess gains or an increase in value of inherited estate assets.In such a case—increase that amount by the amount of any such gains or (as the case may be) of any such increase in value so carried forward to the relevant period, orreduce that amount (but not below nil) by the amount of any shareholders' excess losses or (as the case may be) of any decrease in value of inherited estate assets so carried forward to the relevant period.The resulting amount is the adjusted shareholders' excess gains or (as the case may be) the adjusted increase in value of inherited estate assets for the relevant period.
*Step 4*This step applies if, for the relevant period, there are shareholders' excess losses or a decrease in value of inherited estate assets.In such a case—increase that amount by the amount of any such losses or (as the case may be) of any such decrease in value so carried forward to the relevant period, orreduce that amount (but not above nil) by the amount of any shareholders' excess gains or (as the case may be) of any increase in value of inherited estate assets so carried forward to the relevant period.The resulting amount is the adjusted shareholders' excess losses or (as the case may be) the adjusted decrease in value of inherited estate assets for the relevant period.8GFor the purposes of subsections (8A) to (8F), in relation to any company and any period of account,—“*decrease in value of inherited estate assets*” means so much of the amount of the decrease in value of assets brought into account in line 13 of Form 40 in the periodical return of the company for that period as relates to shareholders' excess assets;“*increase in value of inherited estate assets*” means so much of the amount of the increase in value of assets brought into account in line 13 of Form 40 in the periodical return of the company for that period as relates to shareholders' excess assets.9For the purposes of this section—“*the relevant fraction*”, in relation to a category of business, is the fraction of which—athe numerator is the section 83 net amount referable to the category; andbthe denominator is the section 83 net amount referable to all categories of business apart from basic life assurance and general annuity business and overseas life assurance business;“*the section 83 net amount*” means the net amount (before giving effect to subsections (5) to (8B) above) to be taken into account in accordance with section 83(2) of the Finance Act 1989 (that is to say, the aggregate amount to be taken into account as receipts reduced by the aggregate amount to be taken into account as expenses);“*shareholders' excess gains*” means the amount by which—athe aggregate amount of investment gains and amounts chargeable under Case VI of Schedule D by virtue of section 85(2C)(c) of the Finance Act 1989 for the accounting periods comprised in the period of account exceedsbthe aggregate amount that would be found under paragraph (a) if section 432A(6) were amended in accordance with subsection (10) below;“*shareholders' excess income*” means the amount by which—athe investment income referable to basic life assurance and general annuity business in accordance with section 432A for the accounting periods comprised in the period of account exceedsbthe amount that would be so referable if section 432A(6) were amended in accordance with subsection (10) below;“*shareholders' excess losses*” means the amount by which—ainvestment losses for the accounting periods comprised in the period of account exceedsbthe amount that would be found under paragraph (a) if section 432A(6) were amended in accordance with subsection (10) below.10For the purposes of the definitions of “shareholders' excess gains”, “shareholders' excess income” and “shareholders' excess losses”, the amendments of section 432A(6) mentioned in those definitions are—ain paragraph (a)(ii) the insertion after “the mean of” of “the appropriate parts of”;bin paragraph (a)(ii) the insertion after “assets” of—(and for this purpose the definition of “appropriate part” in subsection (8)(a) below applies in relation to the shareholders' excess assets as it applies in relation to the free assets amount); andcin paragraph (b) the substitution for sub-paragraph (ii) of—iithe numerators that would be given by that paragraph in relation to the other categories of business if this subsection applied in relation to any category of business..11For the purposes of subsection (9)—athe amount of a company's investment gains is the greater of LG + OIG + NTC - NTD and nil where—iLG is the amount of BLAGAB chargeable gains accruing from disposals of assets of the company's long-term insurance fund in each accounting period comprised in the period of account after deducting the aggregate of BLAGAB allowable losses so accruing in the accounting period and in any accounting period to which section 8(1)(b) of the Taxation of Chargeable Gains Act 1992 (company's total profits to include chargeable gains) applies;iaOIG is the amount of offshore income gains accruing in each such accounting period and charged to corporation tax under Case VI of Schedule D by virtue of section 761(1)(b)(ii);iiNTC is the amount of non-trading credits for the period of account which arise to the company from increases in the fair value of the company's loan relationships or from related transactions; andiiiNTD is the amount of non-trading debits for the period of account which arise to the company from decreases in the fair value of the company's loan relationships or from related transactions;b“*investment income*” means the aggregate of—ithe non-trading credits for the period of account which do not arise to the company from increases in the fair value of the company's loan relationships or from related transactions;iaannuities or other annual payments in each accounting period comprised in the period of account that are chargeable under Case III of Schedule D by virtue of paragraph (b) of that Case;iiincome for each such accounting period falling with Schedule A; andiiiincome for each such accounting period falling within Case V of Schedule D; andcthe amount of a company's investment losses is the greater ofLA + NTD – OIG – NTC (where there is an amount LA in the period of account)orNTD – NTC – LG – OIG (where there is an amount LG in the period of account)and nil where—iLA is the amount of the company's BLAGAB allowable losses accruing from disposals of assets of the company's long-term insurance fund in each accounting period comprised in the period of account after deducting BLAGAB chargeable gains so accruing; andiiLG, OIG, NTC and NTD have the same meanings as they have in relation to a company's investment gains.12In subsection (11)—“*BLAGAB allowable losses*” means allowable losses referable in accordance with section 432A to the company's basic life assurance and general annuity business;“*BLAGAB chargeable gains*” means chargeable gains referable in accordance with section 432A to the company's basic life assurance and general annuity business;“*related transaction*” has the meaning given by section 84(5) of the Finance Act 1996.
##### 432C
- (1) To the extent that the amount brought into account as income is attributable to assets linked to pension business, life reinsurance business, basic life assurance and general annuity business or long-term business other than life assurance business, it shall be referable to the category of business concerned.
- (2) To the extent that that amount is attributable to assets of the overseas life assurance fund or land in the United Kingdom linked to overseas life assurance business, it shall be referable to overseas life assurance business.
- (3) There shall be referable to any category of business (apart from overseas life assurance business) the relevant fraction of so much of the amount brought into account as income as is not directly referable to any category of business.
- (4) For the purposes of subsection (3) above “*the relevant fraction*”, in relation to a category of business, is the fraction of which—
- (a) the numerator is the mean of the opening and closing liabilities of the relevant business so far as referable to the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets of the relevant business directly referable to the category; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by that paragraph in relation to the other categories of business.
- (5) For the purposes of subsections (3) and (4) above—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the part of the amount brought into account as income which is directly referable to a category of business is the part referable to the category by virtue of subsection (1) or (2) above and assets are directly referable to a category of business if such part of the amount brought into account as income as is attributable to them is so referable.
- (6) For the purposes of this section, where a company carries on overseas life assurance business “*liabilities*” does not include liabilities of that business.
##### 432D
- (1) To the extent that the amount brought into account as the increase or decrease in the value of assets or as other income is attributable to assets linked to pension business, life reinsurance business, basic life assurance and general annuity business or long-term business other than life assurance business, or to assets of the overseas life assurance fund which are linked to overseas life assurance business, it shall be referable to the category of business concerned.
- (2) There shall be referable to any category of business the relevant fraction of the amount brought into account as the increase or decrease in the value of assets or as other income except so far as the amount is attributable to assets which are directly referable to any category of business.
- (3) For the purposes of subsection (2) above “the relevant fraction”, in relation to a category of business, is the fraction of which—
- (a) the numerator is the mean of the opening and closing liabilities of the relevant business so far as referable to the category, reduced (but not below nil) by the mean of the opening and closing net values of any assets of the relevant business directly referable to the category; and
- (b) the denominator is the aggregate of—
- (i) the numerator given by paragraph (a) above; and
- (ii) the numerators given by that paragraph in relation to the other categories of business.
- (4) For the purposes of subsections (2) and (3) above, the part of the amount brought into account as the increase or decrease in the value of assets or as other income which is directly referable to a category of business is the part referable to the category by virtue of subsection (1) above and assets are directly referable to a category of business if such part of the amount brought into account as the increase or decrease in the value of assets or as other income as is attributable to them is so referable.
##### 432E
- (1) The part of the net amount to be taken into account in accordance with section 83(2) of the Finance Act 1989 (that is to say, the aggregate amount to be taken into account as receipts reduced by the aggregate amount to be taken into account as expenses) which is referable to a particular category of business shall be the amount determined in accordance with subsections (2) and (2A) below or, if greater, the amount determined in accordance with subsection (3) below but subject to section 432G.
- (2) For the purposes of subsection (1) above there shall be determined the amount which is such as to secure—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . that
$$CS-CAS=(S-AS)×CASAS$where—S is the surplus of the relevant business;AS is so much of that surplus as is allocated to persons entitled to the benefits provided for by the policies or contracts to which the relevant business relates;CAS is so much of the surplus so allocated as is attributable to policies or contracts of the category of business concerned; andCS is so much of the surplus of the relevant business as would remain if the relevant business were confined to business of the category concerned.$
- (2A) In a case where an amount or amounts are taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of subsection (2B) of that section or by virtue of section 444ACA(2) , 444AF(2) or 444AK(2) of this Act, the amount determined under subsection (2) above is increased by—
$$CASAS×RP$where—CAS and AS have the same meanings as in subsection (2) above; andRP is the amount or the aggregate of the amounts taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of any of the following provisions—subsection (2B) of that section;section 444ACA(2) of this Act;subsection (2) of section 444AF of this Act (and see subsections (5) and (6) of that section);subsection (2) of section 444AK of this Act (but only for the purposes mentioned in subsection (3) of that section).$
- (3) For the purposes of subsection (1) above there shall also be determined the aggregate of—
- (a) the applicable percentage of what is left of the mean of the opening and closing liabilities of the relevant business so far as referable to the category of business concerned after deducting from it the mean of the opening and closing values of any assets of the relevant business linked to that category of business, and
- (b) the part of the net amount mentioned in subsection (1) above that is attributable to assets linked to that category of business.
- (4) For the purposes of subsection (3) above “*the applicable percentage*”, in any case, is such percentage as may be determined for that case by or in accordance with an order made by the Treasury.
- (5) Where the part of the net amount referable to a particular category or categories of business (“*the subsection (3) category or categories*”) is the amount determined in accordance with subsection (3) above, the amount determined in accordance with subsection (2) above in relation to any other category (“*the relevant category*”) shall be reduced by—
$$XYZ$where—X is the excess of the amount determined in accordance with subsection (3) above in the case of the subsection (3) category (or each of them) over the amount determined in its case (or the case of each of them) in accordance with subsection (2) above;Y is so much of the surplus of the relevant business as is allocated to persons entitled to the benefits provided for by policies or contracts of the relevant category; andZ is so much of the surplus of the relevant business as is allocated to persons entitled to the benefits provided for by policies or contracts of the category (or each of the categories) which is not a subsection (3) category.$
References in this subsection to the amount determined in accordance with subsection (3) above are to that amount after making any deduction required by section 432F.
- (6) Where the category of business concerned is overseas life assurance business—
- (a) if the part of the income brought into account that is attributable to assets of the overseas life assurance fund not linked to overseas life assurance business is greater than the amount arrived at under subsection (3)(a) above, this section shall have effect as if that part of that income were the amount so arrived at; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of reliefs.
##### 434A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the provisions of this Act applicable to Case I of Schedule D—
- (a) the loss resulting from the computation shall be reduced (but not below nil) by the aggregate of—
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) any relevant non-trading deficit for that period on the company’s debtor relationships; and
- (iii) any loss for that period under section 441; and
- (b) if the whole or any part of that loss as so reduced is set off—
- (i) under section 393A, or
- (ii) under section 403(1),
any losses for that period under section 436 or 439B shall be reduced to nil, unless the aggregate of those losses exceeds the total of the amounts set off as mentioned in sub-paragraphs (i) and (ii) above, in which case each of those losses shall be reduced by an amount which bears to that total the proportion which the loss in question bears to that aggregate.
- (2A) The reference in subsection (2)(a)(ii) above to a relevant non-trading deficit for any period on a company’s debtor relationships is a reference to the non-trading deficit on the company’s loan relationships which would be produced by any separate computation made under paragraph 2 of Schedule 11 to the Finance Act 1996 for the company’s basic life assurance and general annuity business if credits and debits given in respect of the company’s creditor relationships (within the meaning of Chapter II of Part IV of that Act) were disregarded.
- (3) In the case of a company carrying on life assurance business, no relief shall be allowable —
- (a) under Chapter II (loss relief) or Chapter IV (group relief) of Part X, or
- (b) in respect of any amount representing a non-trading deficit on the company’s loan relationships that has been computed otherwise than by reference to debits and credits referable to that business,
against the policy holders’ share of the relevant profits for any accounting period.
#### Meaning of “distribution”.
##### 438A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for contributions in respect of share option gains.
##### 440A
- (1) Subsection (2) below applies where the assets of an insurance company include securities of a class all of which would apart from this section be regarded for the purposes of corporation tax on chargeable gains as one holding.
- (2) Where this subsection applies—
- (a) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of—
- (i) pension business, or
- (ii) life reinsurance business, or
- (iii) basic life assurance and general annuity business,
shall be treated for the purposes of corporation tax as a separate holding linked solely to that business,
- (c) so many of the securities as are included in the overseas life assurance fund shall be treated for those purposes as a separate holding which is an asset of that fund,
- (d) so many of the securities as are included in the company’s long-term insurance fund but do not fall within any of the preceding paragraphs shall be treated for those purposes as a separate holding which is an asset of that fund (but not of any of the descriptions mentioned in those paragraphs, and
- (e) any remaining securities shall be treated for those purposes as a separate holding which is not of any of the descriptions mentioned in the preceding paragraphs.
- (3) Subsection (2) above also applies where the assets of an insurance company include securities of a class and apart from this section some of them would be regarded as a 1982 holding, and the rest as a section 104 holding, for the purposes of corporation tax on chargeable gains.
- (4) In a case within subsection (3) above—
- (a) the reference in any paragraph of subsection (2) above to a separate holding shall be construed, where necessary, as a reference to a separate 1982 holding and a separate section 104 holding, and
- (b) the questions whether such a construction is necessary in the case of any paragraph and, if it is, how many securities falling within the paragraph constitute each of the two holdings shall be determined in accordance with paragraph 12 of Schedule 6 to the Finance Act 1990 and the identification rules applying on any subsequent acquisitions and disposals.
- (5) Section 105 of the 1992 Act shall have effect where subsection (2) above applies as if securities regarded as included in different holdings by virtue of that subsection were securities of different kinds.
- (6) In this section—
- “*1982 holding*” has the same meaning as in section 109 of the 1992 Act;
- “*section 104 holding*” has the same meaning as in section 104(3) of that Act; and
- “*securities*” means shares, or securities of a company, and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed or acquired.
- (7) In a case where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D this section has effect with the modification specified in section 440B(4).
##### 441A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444A
- (1) Subject to subsection (7) below, this section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“the transferor”) to another (“the transferee”).
- (2) Any expenses payable which (assuming the transferor had continued to carry on the business transferred after the transfer) would have fallen to be brought into account by the transferor in determining the deduction for expenses payable to be allowed under section 76 in computing profits for an accounting period following the period which ends with the day on which the transfer takes place shall, instead, be brought into account under and in accordance with that section by the transferee as expenses payable by him (and giving effect in the case of acquisition expenses, to section 86(6) to (9) of the Finance Act 1989).
- (3) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer)—
- (a) would have been available under section 436(3)(c) or 439B(3)(c) to be set off against profits of the transferor for the accounting period following that which ends with the day on which transfer takes place, or
- (b) where the transfer relates to any overseas life assurance business or in connection with the transfer the transferor also transfers the whole or part of any such business, would have been so available under section 441(4)(b),
shall, instead, be treated as a loss of the transferee (and available to be set off against profits of the same category of business as that in which it arose) if the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to the transfer).
- (3ZA) Where subsection (3) above has effect, sections 343(4), (5) and (7) to (12) and 344 apply in relation to the business in which the loss arose construing—
- (a) references to the predecessor and the successor as to (respectively) the transferor and the transferee, and
- (b) references to section 343(3) as to subsection (3) of this section,
except that nothing in section 343(8) to (10) and (12) applies in relation to the transferee.
- (3A) Any subsection (2) excess (within the meaning of section 432F(2)) which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available under section 432F(3) or (4) to reduce a subsection (3) figure (within the meaning of section 432F(1)) of the transferor in an accounting period following that which ends with the day on which transfer takes place—
- (a) shall, instead, be treated as a subsection (2) excess of the transferee, and
- (b) shall be taken into account in the first accounting period of the transferee ending after the date of the transfer (to reduce the subsection (3) figure or, as the case may be, to produce or increase a subsection (2) excess for that period),
in relation to the revenue account of the transferee dealing with or including the business transferred.
- (4) Where acquisition expenses are treated as expenses payable by the transferee by virtue of subsection (2) above, the amount deductible for the first accounting period of the transferee ending after the transfer takes place shall be calculated as if that accounting period began with the day after the transfer.
- (5) Where the transfer is of part only of the transferor’s long-term business, subsection (2), (3) or (3A) above shall apply only to such part of any amount to which it would otherwise apply as is appropriate.
- (6) Any question arising as to the operation of subsection (5) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and transferee shall be entitled to appear and be heard or to make representations in writing.
- (7) Subject to subsection (8) below, this section shall not apply unless the transfer is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to corporation tax.
- (8) Subsection (7) above shall not affect the operation of this section in any case where, before the transfer, the Board have, on the application of the transferee, notified the transferee that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any scheme or arrangements such as are mentioned in that subsection; and subsections (2) to (5) of section 138 of the 1992 Act shall have effect in relation to this subsection as they have effect in relation to subsection (1) of that section.
### Classes of life assurance business
##### 431B
- (1) In this Chapter “*pension business*” means so much of a company’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme or is the reinsurance of such business.
- (2) Where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the company’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the company in which the pension scheme so ceases to be a registered pension scheme.
- (3) Where—
- (a) immediately before 6th April 2006 an annuity contract falls within any of the descriptions of contracts specified in subsection (2) of this section as it had effect immediately before that date, but
- (b) on or after that date the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,
the contract is to be treated for the purposes of this section as having been entered into for such purposes.
##### 431BA
- (1) In this Chapter “*child trust fund business*” means so much of a company's life assurance business as is referable to child trust fund policies (but not including the reinsurance of such business).
- (2) In this section “*child trust fund policy*” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).
##### 431BB
- (1) In this Chapter “*individual savings account business*” means so much of a company's life assurance business as is referable to individual savings account policies (but not including the reinsurance of such business).
- (2) In this section “*individual savings account policy*” means a policy of life insurance which is an investment of a kind specified in regulations made by virtue of section 695(1) of ITTOIA 2005.
##### 431C
- (1) In this Chapter “*life reinsurance business*” means reinsurance of life assurance business other than pension business or business of any description excluded from this section by regulations made by the Board.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
##### 431D
- (1) In this Chapter “*overseas life assurance business*” means life assurance business, other than pension business , life reinsurance business or business of any description excluded from this section by regulations made by the Board, which—
- (a) in the case of life assurance business other than reinsurance business, is business with a policy holder or annuitant not residing in the United Kingdom, and
- (b) in the case of reinsurance business, is—
- (i) reinsurance of life assurance business with a policy holder or annuitant not residing in the United Kingdom, or
- (ii) reinsurance of business within sub-paragraph (i) above or this sub-paragraph.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
- (3) The Board may by regulations—
- (a) make provision as to the circumstances in which a trustee who is a policy holder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not so residing; and
- (b) provide that nothing in Chapter II of Part XIII or Chapter 9 of Part 4 of ITTOIA 2005 shall apply to a policy or contract which constitutes overseas life assurance business by virtue of any such provision as is mentioned in paragraph (a) above.
- (4) Regulations under subsection (1) or (3) above may contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431E
- (1) The Board may by regulations make provision for giving effect to section 431D.
- (2) Such regulations may, in particular—
- (a) provide that, in such circumstances as may be prescribed, any prescribed issue as to whether business is or is not overseas life assurance business (or overseas life assurance business of a particular kind) shall be determined by reference to such matters (including the giving of certificates or undertakings, the giving or possession of information or the making of declarations) as may be prescribed,
- (b) require companies to obtain certificates, undertakings, information or declarations from policy holders or annuitants, or from trustees or other companies, for the purposes of the regulations,
- (c) make provision for dealing with cases where any issue such as is mentioned in paragraph (a) above is (for any reason) wrongly determined, including provision allowing for the imposition of charges to tax (with or without limits on time) on the insurance company concerned or on the policy holders or annuitants concerned,
- (d) require companies to supply information and make available books, documents and other records for inspection on behalf of the Board, and
- (e) make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.
- (3) The regulations may—
- (a) make different provision for different cases, and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431EA
In this Chapter “*gross roll-up business*” means business of any of the following kinds—
- (a) pension business;
- (b) child trust fund business;
- (c) individual savings account business;
- (d) life reinsurance business; and
- (e) overseas life assurance business.
##### 431F
In this Chapter “*basic life assurance and general annuity business*” means life assurance business (including reinsurance business) other than pension business, life reinsurance business or overseas life assurance business.
### Separation of different categories of business
##### 431G
- (1) This section applies in relation to an insurance company which carries on life assurance business (whether or not it also carries on insurance business of any other kind).
- (2) Subject as follows, the profits of the life assurance business for any accounting period shall be charged to tax under the I minus E basis.
- (3) Where in the case of an insurance company for an accounting period either—
- (a) all of its life assurance business is reinsurance business and none of that business is of a type excluded from this subsection by regulations made by the Board, or
- (b) all, or substantially all, of its life assurance business is gross roll-up business,
the profits of that business for the accounting period shall be charged to tax in accordance with Case I of Schedule D and not otherwise.
- (4) Where—
- (a) the profits of the life assurance business of an insurance company for any accounting period are charged to tax under the I minus E basis, and
- (b) had those profits been charged to tax in accordance with Case I of Schedule D, a loss would have arisen to the company from that business for the period,
the loss (after being reduced in accordance with section 434A(2)(a)) may be set-off under section 393A or section 403(1).
- (5) The application, in relation to the life assurance business of an insurance company, of any provision of Case I of Schedule D is not to be taken—
- (a) to prevent the application of the I minus E basis in relation to that business of the company for any accounting period, or
- (b) to affect the operation of the I minus E basis in relation to the that business of the company for any accounting period except as specifically provided by the Corporation Tax Acts.
##### 431H
- (1) This section applies in relation to an insurance company which carries on life assurance business and insurance business of any other kind.
- (2) For the purposes of the Corporation Tax Acts—
- (a) the life assurance business, and
- (b) the other insurance business,
are to be treated as separate businesses.
- (3) The profits of the other insurance business shall be charged to tax under Case I of Schedule D as the profits of a separate trade.
- (4) But subsection (3) above does not apply where that business is mutual business.
- (5) As to the profits of the life assurance business, see section 431G.
##### 432YA
- (1) This section applies in the case of—
- (a) a company which is a non-profit company, or
- (b) the non-profit fund of a company which is not a non-profit company,
if an amount (other than nil) is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for the first period of account which ends on or after 31st December 2006.
- (2) In computing profits of long-term business which is not life assurance business in accordance with the provisions applicable to Case I of Schedule D an amount (“*the relevant amount*”) shall be added—
- (a) to the closing long term business provision of the company for the first period of account which ends on or after 31st December 2006, and
- (b) to the opening long term business provision of the company for the next period of account.
- (3) The relevant amount is, subject to subsection (4), the amount by which B exceeds A. Here—
- A is the company's long term business provision in respect of business which is not life assurance business for the first period of account which ends on or after 31st December 2006, calculated after taking into account the company's ability to—make provision for non-attributable expenses by reference to a homogeneous risk group instead of by reference to individual policies or contracts;make provision for the voluntary discontinuance of policies or contracts using a prudent lapse rate assumption; andset negative liabilities against positive liabilities (subject to overall liabilities not being less than nil);in accordance with the Insurance Prudential Sourcebook; and
- B is the company's long term business provision for that period of account in respect of business which is not life assurance business, calculated without taking into account the matters referred to in paragraphs (a) to (c) of the definition of A.
- (4) In a case falling within subsection (1)(b)—
- (a) the relevant amount shall be reduced (but not below nil) by so much (if any) of the amount shown in paragraph 4(12) of Appendix 9.4 to the periodical return as is reflected in column 1 of line 51 of the Form 14 for that period of account relating to the non-profit fund in question; and
- (b) the references in subsection (3) to long term business provision and to liabilities are respectively to long term business provision and to liabilities relating to the non-profit fund in question.
- (5) In this section—
- “*long term business provision*” has the same meaning as in Schedule 9A to the Companies Act 1985;
- “*non-profit company*” has the meaning given in section 83YA(8) of the Finance Act 1989; and
- “*non-profit fund*” has the same meaning as in the Insurance Prudential Sourcebook.
##### 432ZA
- (1) In this Chapter “*linked assets*” means assets of an insurance company which are identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined and in a case where only part of an asset is so identified, references to a linked asset are references to that part.
- (2) Linked assets shall be taken—
- (a) to be linked to long-term business of a particular category if the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category; and
- (b) to be linked solely to long-term business of a particular category if all (or all but an insignificant proportion) of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category.
- (3) Where an asset is linked to more than one category of long-term business, a part of the asset shall be taken to be linked to each category; and references in this Chapter to assets linked (but not solely linked) to any category of business shall be construed accordingly.
- (4) Where subsection (3) above applies, the part of the asset linked to any category of business shall be a proportion determined as follows—
- (a) where in the records of the company values are shown for the asset in funds referable to particular categories of business, the proportion shall be determined by reference to those values;
- (b) in any other case the proportion shall be equal to the proportion A/B where—
A is the total of the linked liabilities of the company which are liabilities of the internal linked fund in which the asset is held and are referable to that category of business;
B is the total of the linked liabilities of the company which are liabilities of that fund.
- (5) For the purposes of sections 432A to 432F—
- (a) income arising in any period from assets linked but not solely linked to a category of business,
- (b) gains arising in any period from the disposal of such assets, and
- (c) increases and decreases in the value of such assets,
shall be treated as arising to that category of business in the proportion which is the mean of the proportions determined under subsection (4) above at the beginning and end of the period.
- (6) In this section—
- “*internal linked fund*”, in relation to an insurance company, means an account—to which linked assets are appropriated by the company; andwhich may be divided into units the value of which is determined by the company by reference to the value of those assets;
- “*linked liabilities*” means liabilities in respect of benefits to be determined by reference to the value of linked assets.
- (7) In the case of a policy or contract the effecting of which constitutes a class of life assurance business the fact that it also constitutes long-term business other than life assurance business shall be disregarded for the purposes of this section unless the benefits to be provided which constitute long-term business other than life assurance business are to be determined by reference to the value of assets.
##### 432AA
- (1) An insurance company is treated as carrying on separate Schedule A businesses, or overseas property businesses, in accordance with the following rules.
- (2) The exploitation of land held as an asset of the company’s long-term insurance fund is treated as a separate business from the exploitation of land not so held.
- (3) The exploitation of land held as an asset of the company’s overseas life assurance fund is treated as a separate business from the exploitation of other land held as an asset of its long-term insurance fund.
- (4) The exploitation of land held as an asset linked to any of the following categories of business is regarded as a separate business—
- (a) pension business;
- (b) life reinsurance business;
- (c) basic life assurance and general annuity business;
- (d) long-term business other than life assurance business.
- (5) Accordingly, the exploitation of land held as an asset of the company’s long-term insurance fund otherwise than as mentioned in subsection (3) or (4) is treated as a separate business from any other.
- (6) In this section “*land*” means any estate, interest or rights in or over land.
##### 432AB
- (1) This section applies to any loss arising in a Schedule A business or overseas property business.
- (2) A loss arising from any category of business mentioned in section 432A(2) shall be apportioned under that section in the same way as income.
- (3) So far as a loss is referable to basic life assurance and general annuity business, it shall be treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.
- (4) Where a company is treated under section 432AA as carrying on—
- (a) more than one Schedule A business, or
- (b) more than one overseas property business,
then, in relation to either kind of business, the reference in subsection (3) above to a loss referable to basic life assurance and general annuity business shall be construed as a reference to any aggregate net loss after setting the losses from those businesses which are so referable against any profits from those businesses that are so referable.
- (5) The provisions of section 392A or 392B (loss relief) do not apply to a loss referable to life assurance business or any category of life assurance business.
- (6) Where a company is treated under section 432AA as carrying on—
- (a) more than one Schedule A business, or
- (b) more than one overseas property business,
and, in relation to either kind of business, there are losses and profits referable to business which is not life assurance business, those losses shall be set against those profits before being used under section 392A or 392B.
##### 432CA
- (1) This section applies where—
- (a) an insurance company is not a non-profit company in relation to a period of account (“the current period of account”),
- (b) in the case of any business with which an account of the company for the current period of account is concerned (“the relevant business”), an amount is a relevant brought into account amount for that period of account (see subsection (2)),
- (c) section 432C applies for determining the extent to which the relevant brought into account amount is referable to life assurance business or to gross roll-up business, and
- (d) the line 51 reduction condition is met (see subsection (3)).
- (2) An amount is a relevant brought into account amount for a period of account if—
- (a) it is brought into account as mentioned in subsection (2)(b) of section 83 of the Finance Act 1989 (increases in value of non-linked assets) for that period,
- (b) it is deemed to be brought into account for that period by subsection (2B) of that section in consequence of the transfer of non-linked assets, or
- (c) it is taken into account under subsection (2) of that section for that period by virtue of section 444AB as being the relevant amount in relation to non-linked assets.
- (3) The line 51 reduction condition is met if—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for the current period of account, is less than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant reduction”.
- (4) Section 432C applies in relation to so much of the relevant brought into account amount as does not exceed the relevant reduction (“the affected amount”) as if it were brought into account as an increase in the value of assets in the case of the relevant business for the applicable appropriate period of account of the company.
- (5) A period of account is an “appropriate period of account” if it ended before the current period of account and—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for it, was more than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant increase.”
- (6) The “applicable” appropriate period of account is the one which ended most recently (“the most recent appropriate period of account”).
- (7) But if the relevant increase in the case of the most recent appropriate period of account is less than the affected amount, the most recent appropriate period of account is the applicable appropriate period of account in relation to only so much of the affected amount as does not exceed that relevant increase.
- (8) In that case, the appropriate period of account which ended most recently before the most recent appropriate period of account is the applicable appropriate period of account in relation to so much of the remainder as does not exceed the relevant increase in the case of that appropriate period of account (and, where necessary, so on until the applicable appropriate period of account is established in relation to all of the affected amount or there are no more appropriate periods of account).
- (9) If the current period of account is not the first in relation to which this section has applied in the case of the business concerned, the amount of the relevant increase in the case of any appropriate period of account (“*the period in question*”) is to be treated as reduced by the relevant aggregate.
- (10) The “relevant aggregate” is the aggregate of so much of the affected amount for any period or periods of account earlier than the current period of account as was an amount to which section 432C applied as if it were brought into account as mentioned in subsection (4) for the period in question.
- (11) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
##### 432CB
- (1) This section applies where, under an insurance business transfer scheme, there is a transfer of long-term business—
- (a) from a non-profit fund of an insurance company (“*the transferor*”) which is not a non-profit company in relation to the relevant period of account,
- (b) to another insurance company (“*the transferee*”) to constitute or form part of a non-profit fund of the transferee (“*the transferee's non-profit fund*”),
(“*the transfer*”) and conditions A and B are met.
- (2) Condition A is that the fair value of the assets transferred by the transfer exceeds by an amount (“the chargeable excess”) the amount of the relevant liabilities transferred by the transfer.
For this purpose “relevant” liabilities are liabilities of a type shown (or treated as shown) in any of lines 14, 17, 21 to 23 and 31 to 38 of Form 14 of a periodical return of an insurance company.
- (3) Condition B is that the main purpose, or one of the main purposes, of the transferor or the transferee (or both) in entering into any part of the transfer scheme arrangements is to secure a reduction in tax as a result of section 432C having effect in the case of the transferee, rather than the transferor, in relation to the business transferred by the transfer.
- (4) The chargeable excess is to be brought into account by the transferor as mentioned in section 83(2)(b) of the Finance Act 1989 for the relevant period of account.
- (5) Where there is no amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first period of account of the transferee ending on or after the transfer date (“the first post-transfer period of account”), the chargeable excess is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the first post-transfer period of account.
- (6) Where—
- (a) there is an amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first post-transfer period of account, and
- (b) the amount so shown in column 1 of line 51 of Form 14 of the periodical return of the transferee for that period of account, or for any other period of account of the transferee ending after the transfer date, (an “affected period of account”) is less than the total chargeable excess amount,
the relevant amount is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the affected period of account.
- (7) For this purpose “the relevant amount” is the amount by which—
- (a) the amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the affected period of account, is less than
- (b) the total chargeable excess amount less any amount brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for any earlier period of account by virtue of the operation of this section in relation to the transferee's non-profit fund.
- (8) In subsections (6) and (7) “*the total chargeable excess amount*” means the aggregate of—
- (a) the chargeable excess, and
- (b) any amount which is the chargeable excess in relation to any other transfer of business to the transferee's non-profit fund.
- (9) In this section “*the relevant period of account*” means—
- (a) the period of account of the transferor ending immediately before the transfer date, or
- (b) if no period of account of the transferor so ends, the period of account of the transferor covering the transfer date.
- (10) In this section “*the transfer scheme arrangements*” means the insurance business transfer scheme and any relevant associated operations; and for this purpose “*relevant associated operations*” means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance, or
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee,
which is effected in connection with the insurance business transfer scheme.
- (11) In subsection (10)—
- “dependant”, and
- “insurance undertaking”,
have the same meaning as in the Insurance Prudential Sourcebook.
- (12) In this section “*the transfer date*” means the date on which the insurance business transfer scheme takes effect.
- (13) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432F
- (1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).
- (2) For each category of business in relation to which section 432E falls to be applied there shall be determined for each accounting period the amount (if any) by which the subsection (2) figure, after making any reduction required by section 432E(5), exceeds the subsection (3) figure (“the subsection (2) excess”).
- (3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.
- (4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.
##### 432G
- (1) This section applies where an amount falls within section 83(2)(e) of the Finance Act 1989.
- (2) Where—
- (a) this section applies, and
- (b) it is necessary in accordance with section 83 to determine what part of a business transfer-in is referable to life assurance business or any category of life assurance business,
a business transfer-in shall be apportioned to the categories of business of the transferee in the proportions which the amount of the liabilities transferred for each of those categories bear to the whole of the liabilities transferred.
### Miscellaneous provisions relating to life assurance business
##### 434AZA
- (1) Where this section applies in the case of a company carrying on life assurance business, relief allowable under section 393A or Chapter 4 of Part 10 in respect of losses incurred by the company in the life assurance business in an accounting period is reduced in accordance with section 434AZB.
- (2) This section applies in the case of a company where—
- (a) there has been a relevant addition to one or more non-profit funds in a period of account ending no later than the accounting period (“the relevant period of account”) (see subsection (3)),
- (b) the company is not a non-profit company in relation to the relevant period of account and has not elected under subsection (9) of section 83YA of the Finance Act 1989 to be treated for the purposes of that section as if it were, and
- (c) condition A or B is met,
and, if the relevant period of account is not the period of account ending with the accounting period (“the current period of account”), condition C is also met.
- (3) For the purposes of subsection (2), there is a relevant addition to a non-profit fund in the relevant period of account if an amount is shown as a transfer from non-technical account in line 32 of the Form 58 of the non-profit fund in the periodical return for that period of account.
- (4) Condition A is that there is a relevant book value election in relation to assets of a non-profit fund of the company.
- (5) For the purposes of subsection (4), there is a relevant book value election in relation to assets of a non-profit fund if an amount is shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account.
- (6) Condition B is that the company is party to arrangements the main purpose, or one of the main purposes, of which is to reduce the relevant admissible value of assets of a non-profit fund of the company, other than any structural assets.
- (7) For the purposes of subsection (6) (and section 434AZB), the “*relevant admissible value*” means the value reflected in line 89 of Form 13 of the periodical return for the current period of account.
- (8) Condition C is that the surplus arising since the last valuation shown in line 34 of the Form 58 of the non-profit fund, or any of the non-profit funds, in relation to which condition A or B is met in the periodical return for the current period of account is a negative amount.
#### U.K. company distributions not generally chargeable to corporation tax.
##### 434AZB
- (1) The amount of the relief allowable as mentioned in section 434AZA(1) is reduced by whichever of the following is the least—
- (a) the amount of the loss,
- (b) the amount specified in subsection (2), and
- (c) the amount specified in subsection (4).
- (2) The amount mentioned in subsection (1)(b) is—
- (a) where only condition A in section 434AZA is met, the relevant amount relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant amounts relating to them,
- (b) where only condition B is met, the amount of the relevant reduction relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant reductions relating to them, and
- (c) where both condition A and condition B are met, the aggregate of the amounts in paragraphs (a) and (b).
- (3) In subsection (2)—
- (a) “*relevant amount*”, in relation to a non-profit fund, means the amount shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account (as reduced by any amount which has had effect to reduce relief for losses for a previous accounting period), and
- (b) “*relevant reduction*”, in relation to a non-profit fund, means the reduction of the relevant admissible value of assets of the non-profit fund (other than structural assets) which is attributable to the arrangements (as so reduced).
- (4) The amount mentioned in subsection (1)(c) is—
- (a) if the relevant period of account is the current period of account, the amount referred to in section 434AZA(3) in the case of the non-profit fund, or of each of the non-profit funds, to which there has been a relevant addition in the relevant period of account, and
- (b) otherwise, so much of the amount shown in line 31 of the Form 58 of the non-profit fund or non-profit funds in the periodical return for the current period of account as is attributable to the amount so referred to.
##### 434AZC
- (1) For the purposes of sections 434AZA and 434AZB, a non-profit fund required to support a with-profits fund is to be treated as not being a non-profit fund.
- (2) Sections 434AZA and 434AZB apply to a non-profit part of a with-profits fund as if references to something shown in the Form 14 or Form 58 of the non-profit fund in a periodical return were to what would be so shown if there were a Form 14 or Form 58 of the non-profit part of the with-profits fund in the periodical return.
- (3) In sections 434AZA and 434AZB—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*structural assets*” has the same meaning as in section 83XA of the Finance Act 1989 (see subsection (3) of that section and any regulations made under it).
##### 434B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 436A
- (1) Profits arising to an insurance company from gross roll-up business—
- (a) are to be treated as income within Schedule D, and
- (b) are chargeable under Case VI of that Schedule.
- (2) For that purpose—
- (a) the gross roll-up business is to be treated separately, and
- (b) the profits from it are to be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) In making that computation, sections 82 and 82B to 83AB 83ZA of the Finance Act 1989 apply with the necessary modifications.
- (4) If in any accounting period an insurance company incurs a loss, to be computed on the same basis as the profits, arising from its gross roll-up business—
- (a) the loss must be set off against the amount of any profits chargeable under this section for any subsequent accounting period, and
- (b) accordingly, the amount of the company's profits so charged in any such accounting period is to be treated as reduced by the amount of the loss or so much of that amount as cannot be relieved under this section against profits of an earlier accounting period.
- (5) Section 396 does not apply to a loss incurred by an insurance company on its gross roll-up business.
- (6) No loss to which section 396 applies may be set off under subsection (4) above against the amount of any profits chargeable under this section.
- (7) This section does not apply in relation to an insurance company for an accounting period if the profits of its long-term business for the accounting period are charged to tax under Case I of Schedule D.
##### 436B
- (1) Gains referable to gross roll-up business are not chargeable gains.
- (2) For the purposes of this section “*gains referable to gross roll-up business*” means gains which—
- (a) accrue to an insurance company on the disposal by it of assets of its long-term insurance fund, and
- (b) are referable (in accordance with section 432A) to gross roll-up business.
##### 437A
- (1) For the purposes of section 437 an annuity is a steep-reduction annuity if—
- (a) the amount of any payment in respect of the annuity (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives;
- (b) the annuitant is entitled in respect of the annuity to payments of different amounts at different times; and
- (c) those payments include a payment (“*a reduced payment*”) of an amount which is substantially smaller than the amount of at least one of the earlier payments in respect of that annuity to which the annuitant is entitled.
- (2) Where there are different intervals between payments to which an annuitant is entitled in respect of any annuity, the question whether or not the conditions in subsection (1)(b) and (c) above are satisfied in the case of that annuity shall be determined by assuming—
- (a) that the annuitant’s entitlement, after the first payment, to payments in respect of that annuity is an entitlement to payments at yearly intervals on the anniversary of the first payment; and
- (b) that the amount to which the annuitant is assumed to be entitled on each such anniversary is equal to the annuitant’s assumed entitlement for the year ending with that anniversary.
- (3) For the purposes of subsection (2) above an annuitant’s assumed entitlement for any year shall be determined as follows—
- (a) the annuitant’s entitlement to each payment in respect of the annuity shall be taken to accrue at a constant rate during the interval between the previous payment and that payment; and
- (b) his assumed entitlement for any year shall be taken to be equal to the aggregate of the amounts which, in accordance with paragraph (a) above, are treated as accruing in that year.
- (4) In the case of an annuity to which subsection (2) above applies, the reference in section 437(1CB)(a) to the making of a reduced payment shall be construed as if it were a reference to the making of a payment in respect of that annuity which (applying subsection (3)(a) above) is taken to accrue at a rate that is substantially less than the rate at which at least one of the earlier payments in respect of that annuity is taken to accrue.
- (5) Where—
- (a) any question arises for the purposes of this section whether the amount of any payment in respect of any annuity—
- (i) is substantially smaller than the amount of, or
- (ii) accrues at a rate substantially less than,
an earlier payment in respect of that annuity, and
- (b) the annuitant or, as the case may be, every annuitant is an individual who is beneficially entitled to all the rights conferred on him as such an annuitant,
that question shall be determined without regard to so much of the difference between the amounts or rates as is referable to a reduction falling to be made as a result of the occurrence of a death.
- (6) Where the amount of any one or more of the payments to which an annuitant is entitled in respect of an annuity depends on any contingency, his entitlement to payments in respect of that annuity shall be determined for the purposes of section 437(1CA) to (1CC) and this section according to whatever (applying any relevant actuarial principles) is the most likely outcome in relation to that contingency.
- (7) Where any agreement or arrangement has effect for varying the rights of an annuitant in relation to a payment in respect of any annuity, that payment shall be taken, for the purposes of section 437(1CA) to (1CC) and this section, to be a payment of the amount to which the annuitant is entitled in accordance with that agreement or arrangement.
- (8) References in this section to a contingency include references to a contingency that consists wholly or partly in the exercise by any person of any option.
##### 438B
- (1) Where an asset held by an insurance company as an asset of its long-term insurance fund is held by the company as a member of a property investment LLP, the policy holders’ share of any income arising from, or chargeable gains accruing on the disposal of, the asset which—
- (a) is attributable to the company, and
- (b) would otherwise be referable by virtue of section 432A to pension business,
shall be treated for the purposes of the Corporation Tax Acts as referable to basic life assurance and general annuity business.
- (2) For the purposes of this section the property business of the insurance company for the purposes of which the asset is held shall be treated as a separate business.
- (3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business, it shall be treated as carrying on such business if any income or chargeable gains of the company are treated as referable to the business by virtue of subsection (1) above.
- (4) A company may be charged to tax by virtue of this section—
- (a) notwithstanding section 439A, and
- (b) whether or not the income or chargeable gains to which subsection (1) above applies is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.
- (5) The policy holders’ share of income or chargeable gains to which subsection (1) above applies—
- (a) shall not be treated as relevant profits for the purposes of section 88 of the Finance Act 1989 (corporation tax on policy holders’ fraction of profits), . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
but the whole of the income or gains to which that subsection applies shall be chargeable to tax at the rate provided by that section.
- (6) So far as income is brought into account as mentioned in section 83(2) of the Finance Act 1989, sections 432B to 432F (apportionment of receipts brought into account) have effect as if subsection (1) above did not apply.
##### 438C
- (1) For the purposes of section 438B the policy holders’ share of any income or chargeable gains to which subsection (1) of that section applies is what remains after deducting the shareholders’ share.
- (2) The shareholders’ share is found by applying to the whole the fraction—
$$AB$where—A is the amount of the profits of the company for the period which are chargeable to tax under section 436; andB is an amount equal to the excess of—(a) the amount taken into account as receipts of the company in computing those profits (apart from premiums and sums received by virtue of a claim under a reinsurance contract), over(b) the amounts taken into account as expenses in computing those profits.$
- (3) Where there is no such excess as is mentioned in subsection (2) above, or where the profits are greater than any excess, the whole of the income or gains is treated as the shareholders’ share.
- (4) Subject to that, where there are no profits none of the income or gains is treated as the shareholders’ share.
##### 439A
If a company does not carry on life assurance business other than reinsurance business, and none of that business is of a type excluded from this section by regulations made by the Board, the profits of that business shall be charged to tax in accordance with Case I of Schedule D and not otherwise.
##### 439B
- (1) Where a company carries on life reinsurance business and the profits arising from that business are not charged to tax in accordance with the provisions applicable to Case I of Schedule D, then, subject as follows, those profits shall be treated as income within Schedule D and be chargeable to tax under Case VI of that Schedule, and for that purpose—
- (a) that business shall be treated separately, and
- (b) subject to paragraph (a) above, the profits from it shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (2) Subsection (1) above does not apply to so much of reinsurance business of any description excluded from that subsection by regulations made by the Board.
- (3) In making the computation referred to in subsection (1) above—
- (a) sections 82 and 82B to 83AB of the Finance Act 1989 shall apply with the necessary modifications . . . , and
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from life reinsurance business in any previous accounting period beginning on or after 1st January 1995.
- (4) Section 396 shall not be taken to apply to a loss incurred by a company on life reinsurance business.
- (5) Nothing in section 128 or 399(1) shall affect the operation of this section.
- (6) Gains accruing to a company which are referable (in accordance with section 432A) to its life reinsurance business shall not be chargeable gains.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440B
- (1) The following provisions apply where the profits of a company’s life assurance business are charged to tax in accordance with Case I of Schedule D.
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Section 440(1) and (2) apply as if the only categories set out in subsection (4) of that section were—
- (a) assets of the long-term insurance fund, and
- (b) other assets.
- (4) Section 440A applies as if for paragraphs (a) to (e) of subsection (2) there were substituted—
- (”) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of long-term business, shall be treated for the purposes of corporation tax as a separate holding linked solely to that business, and
- (b) any remaining securities shall be treated for those purposes as a separate holding which is not of the description mentioned in the preceding paragraph.”.
- (5) Section 212(1) of the 1992 Act does not apply, but without prejudice to the bringing into account of any amounts deferred under section 213(1) or 214A(2) of that Act from any accounting period beginning before 1st January 1995.
##### 440C
- (1) Subsection (2) makes provision for a case where—
- (a) subsection (4) of section 431G applies in relation to the profits of the life assurance business of an insurance company for any accounting period, but
- (b) the profits of that business for a succeeding accounting period fall to be charged to tax in accordance with Case I of Schedule D by virtue of subsection (3) of that section.
- (2) The loss referred to in section 431G(4)(b) (less any loss for the same accounting period set off under section 436A for any intervening accounting period and any amount deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989) may be set off under section 393 against profits of that succeeding accounting period (without being reduced in accordance with section 434A(2)(a)).
- (3) In determining whether any loss has been set off under section 436A for any intervening accounting period, or whether any amount has been deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989, losses of earlier accounting periods are to be assumed to be set off before those of later accounting periods.
- (4) Subsection (5) makes provision for a case where—
- (a) a loss arises to an insurance company for an accounting period for which the profits of its life assurance business fall to be charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3)(b),
- (b) the profits of that business for a subsequent accounting period are charged to tax under the I minus E basis, and
- (c) had those profits (instead) been charged to tax in accordance with Case I of Schedule D, any of that loss would have been available to be set off against them under section 393.
- (5) The loss is to be treated for the purposes of the operation of section 436A in relation to the subsequent accounting period as if it were a loss arising from its gross roll-up business in the accounting period in which it arose.
- (6) Subsections (7) and (8) make provision for a case where—
- (a) the profits of the life assurance business of an insurance company for an accounting period are charged to tax under the I minus E basis,
- (b) the profits of that business for its next accounting period fall to be charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3), and
- (c) that prevents the giving of relief in accordance with section 86(8) of the Finance Act 1989 (acquisition expenses relieved in fractions under section 76).
- (7) Any relief which would have been so given in—
- (a) the next accounting period, or
- (b) any subsequent accounting period for which the profits of the company's life assurance business continue to be charged to tax in accordance with Case I of Schedule D,
may be given by set-off against any gains treated as accruing under section 213(1) of the 1992 Act at the end of the accounting period.
- (8) But if the profits of the company's life assurance business for a subsequent accounting period are charged to tax under the I minus E basis, any relief not previously given under subsection (7) is to be treated for the purposes of the operation of section 76 in relation to the first subsequent accounting period for which profits are so charged as if it were an amount which is to be relieved under that section by virtue of section 86(8) and (9) of the Finance Act 1989.
#### Application of lower rate to company distributions.
##### 440D
Schedule 19ABA (which makes modifications of this Act in relation to BLAGAB group reinsurers) shall have effect.
##### 441B
- (1) This section applies to land in the United Kingdom which—
- (a) is held by a company as an asset linked to the company’s overseas life assurance business, or
- (b) is held by a company which is charged to tax under Case I of Schedule D in respect of its life assurance business as an asset by reference to the value of which benefits under any policy or contract are to be determined, where the policy or contract (or, in the case of a reinsurance contract, the underlying policy or contract) is held by a person not residing in the United Kingdom.
- (2) Income arising from land to which this section applies shall be treated for the purposes of this Chapter as referable to basic life assurance and general annuity business.
- (2A) For the purposes of subsection (2) above a Schedule A business for the exploitation of any land to which this section applies shall be treated as a separate business from any other such business.
- (3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business it shall be treated as carrying on such business if any income of the company is treated as referable to such business by subsection (2) above.
- (4) A company may be charged to tax by virtue of this section—
- (a) notwithstanding section 439A, and
- (b) whether or not the income to which subsection (2) above relates is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.
- (5) In this section “*land*” has the same meaning as in Schedule 19AA.
##### 442A
- (1) Where an insurance company reinsures any risk in respect of a policy or contract attributable to its basic life assurance and general annuity business, the investment return on the policy or contract shall be treated as accruing to the company while the risk remains reinsured by the company under the reinsurance arrangement and shall be charged to tax under Case VI of Schedule D.
- (2) The Board may make provision by regulations as to the amount of investment return to be treated as accruing in each accounting period during which the reinsurance arrangement is in force.
- (3) The regulations may, in particular, provide that the investment return to be treated as accruing to the company in respect of a policy or contract in any accounting period shall be calculated by reference to—
- (a) the aggregate of the sums paid by the company to the reinsurer during that accounting period and any earlier accounting periods by way of premium or otherwise;
- (b) the aggregate of the sums paid by the reinsurer to the company during that accounting period and any earlier accounting periods by way of commission or otherwise;
- (c) the aggregate amount of the net investment return treated as accruing to the company in any earlier accounting periods, that is to say, net of tax at such rate as may be prescribed; and
- (d) such percentage rate of return as may be prescribed.
- (3A) Where a transfer of the reinsurance arrangement from one insurance company (“*the transferor*”) to another (“*the transferee*”) is effected by novation or an insurance business transfer scheme, for the purpose of calculating the investment return to be treated as accruing to the transferee in respect of the policy or contract after the transfer, the references to the company in subsection (3)(a), (b) and (c) above include (as well as the transferee)—
- (a) the transferor, and
- (b) any insurance company from which the reinsurance arrangement was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.
- (4) The regulations shall provide that the amount of investment return to be treated as accruing . . . in respect of a policy or contract in the final accounting period during which the policy or contract is in force is the amount, ascertained in accordance with regulations, by which the profit over the whole period during which the policy or contract, and the reinsurance arrangement, were in force exceeds the aggregate of the amounts treated as accruing in earlier accounting periods.
- (5) Regulations under this section—
- (a) may exclude from the operation of this section such descriptions of insurance company, such descriptions of policies or contracts and such descriptions of reinsurance arrangements as may be prescribed;
- (b) may make such supplementary provision as to the ascertainment of the investment return to be treated as accruing to the company as appears to the Board to be appropriate, including provision requiring payments made during an accounting period to be treated as made on such date or dates as may be prescribed; and
- (c) may make different provision for different cases or descriptions of case.
- (6) In this section “*prescribed*” means prescribed by regulations under this section.
##### 444AZA
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in respect of that business under the I minus E basis,
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3), and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits chargeable under section 436A (a “Case VI loss”) shall instead be treated as a loss of the transferee (a “Case I loss”) available to be set off against GRBP in relation to a period of account.
- (3) For the purposes of subsection (2) above “*GRBP*”, in relation to a period of account, is—
$P×GRBTLTL$
where—
- *P* is the amount of such profits of the transferee's life assurance business for the period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable),
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of any Case VI loss to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and the transferee shall be entitled to appear and be heard or to make representations in writing.
#### Married couple's allowance (post-5th December 2005 marriages and civil partnerships etc.)
##### 444AZB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in accordance with Case I of Schedule D by virtue of section 431G(3),
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under the I minus E basis, and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) The relevant fraction of any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits of that business (a “Case I loss”) shall instead be treated as a loss of the transferee (a “Case VI loss”) available to be set off against the amount of such profits chargeable under section 436A for a period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable).
- (3) For the purposes of subsection (2) above “*the relevant fraction*”, in relation to a period of account, is—
$GRBTLTL$
where—
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of the amount of any Case I loss to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined by the Special Commissioners who shall determine the question in the same manner as they determine appeals; but both the transferor and the transferee shall be entitled to appear and be heard or to make representations in writing.
##### 444AA
- (1) This section applies where an insurance business transfer scheme has effect to transfer the whole of the long-term business of one person (“*the transferor*”).
- (2) Where the last period covered by a periodical return of the transferor ends otherwise than immediately before the transfer, there is to be deemed for the purposes of corporation tax to be a periodical return of the transferor covering the period—
- (a) beginning immediately after the last period ending before the transfer which is covered by an actual periodical return of the transferor, and
- (b) ending immediately before the transfer,
containing such entries as would have been included in an actual periodical return of the transferor covering that period (and so making that period a period of account of the transferor).
- (3) Where the last period covered by a periodical return of the transferor (whether or not by virtue of subsection (2) above) ends immediately before the transfer, there is to be deemed for the relevant purpose to be a periodical return of the transferor—
- (a) covering the time of the transfer, and
- (b) containing such entries as would have been included in an actual periodical return covering the time of the transfer,
(and so making the time of the transfer a period of account of the transferor for the relevant purpose).
- (4) Where the last period covered by a periodical return of the transferor ends after the transfer, the periodical return covering that period is to be ignored for all purposes of corporation tax other than the relevant purpose.
- (5) In this section “*the relevant purpose*” means determining for the purposes of section 83(2B) of the Finance Act 1989 whether a transfer is brought into account as part of total expenditure.
- (6) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
- (7) Where this section applies in relation to a transfer in a case in which the transferor continues, after the transfer, to carry on insurance business which is not long-term business—
- (a) references in this section to the last period covered by a periodical return (or deemed periodical return) of the transferor shall be taken to be references to the last period covered by a periodical return (or deemed periodical return) of the transferor containing entries relating to long-term business;
- (b) subsection (4) above is to be read as if after “other than” there were inserted the purposes of sections 444BA to 444BD and.
##### 444AB
- (1) This section applies where, immediately after an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to one or more others (“*the transferee*” or “*the transferees*”), the transferor—
- (a) does not carry on long-term business, but
- (b) holds assets which, immediately before the transfer, were assets of its long-term insurance fund.
- (2) The transferor shall be charged to tax under Case VI of Schedule D in respect of the taxable amount as if it had been received by the transferor during the accounting period beginning immediately after the day of the transfer.
- (3) If the transferor was charged to tax on the profits of its life assurance business under Case I of Schedule D for the accounting period ending immediately before the transfer, the taxable amount is the whole of the previously untaxed amount.
- (4) Otherwise, the taxable amount is the non-BLAGAB fraction of the previously untaxed amount.
- (5) The previously untaxed amount is the lesser of—
- (a) if there are no retained liabilities, the fair value of the retained assets or, if there are, so much of the fair value of the retained assets as exceeds the amount of the retained liabilities, and
- (b) the amount by which the fair value of the assets of the transferor’s long-term insurance fund immediately before the transfer exceeds the amount of the relevant pre-transfer liabilities.
- (6) In subsection (5) above “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount.
- (6A) In subsection (5) above—
- (a) “*the retained assets*” means such of the assets held by the transferor immediately after the transfer as were assets of its long-term insurance fund immediately before the transfer; and
- (b) “*the retained liabilities*” means such of the liabilities of the transferor immediately after the transfer as were included in column 1 of line 14, 17, 22, 31 or 38 of Form 14 in the periodical return of the transferor covering the period of account ending immediately before the transfer.
- (7) Subject to subsection (8) below, the amount of the relevant pre-transfer liabilities is the aggregate of the amounts shown in column 1 of lines 14 and 49 of Form 14 in the periodical return of the transferor covering the period of account ending immediately before the transfer.
- (8) If the amount of the liabilities transferred exceeds the value of the assets so transferred, as brought into account for the first period of account of the transferee (or any of the transferees) ending after the transfer, the amount of the relevant pre-transfer liabilities is the amount arrived at by deducting the excess from the aggregate of the amounts shown as mentioned in subsection (7) above.
- (9) For the purposes of subsection (4) above the non-BLAGAB fraction of the previously untaxed amount is the fraction of which—
- (a) the numerator is the amount of the liabilities transferred, apart from those which are liabilities of basic life assurance and general annuity business, and
- (b) the denominator is the amount of the liabilities transferred.
- (10) References in this section to assets held by the transferor after the transfer do not include any held on trust for the transferee or any of the transferees.
- (11) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444ABA
- (1) This section applies where—
- (a) section 444AB applies in relation to a transfer in the case of which there are retained liabilities, and
- (b) in any accounting period of the transferor beginning after the day of the transfer there is a reduction in the amount of the retained liabilities occasioned otherwise than by the making of a payment in or towards their discharge.
- (2) The transferor shall be charged to tax under Case VI of Schedule D in respect of the taxable amount as if it had been received by the transferor in the accounting period in which the reduction occurs.
- (3) If the transferor was charged to tax on the profits of its life assurance business under Case I of Schedule D for the accounting period ending immediately before the transfer, the taxable amount is the whole amount of the reduction.
- (4) Otherwise the taxable amount is the non-BLAGAB fraction of the amount of the reduction.
- (5) The non-BLAGAB fraction of the amount of the reduction is the fraction of which—
- (a) the numerator is the amount of the liabilities transferred, apart from those which are liabilities of basic life assurance and general annuity business, and
- (b) the denominator is the amount of the liabilities transferred.
- (6) Where in any accounting period of the transferor beginning after the transfer there is an increase in the amount of the retained liabilities, this section applies in relation to subsequent accounting periods of the transferor as if the amount of the retained liabilities were reduced by the amount of the increase.
- (7) Where an amount is shown as post-transfer reduction liabilities in the transferor’s accounts for any accounting period beginning after the transfer, this section applies as if the amount of the retained liabilities at the end of that accounting period (and the beginning of the next) were increased by the amount so shown.
- (8) In subsection (7) above “*post-transfer reduction liabilities*” means liabilities of the transferor to make payments to relevant persons which, in accordance with the terms of the insurance business transfer scheme, have arisen in consequence of a reduction in the amount of the retained liabilities at any time after the transfer.
- (9) In subsection (8) above “*relevant persons*” means—
- (a) if the transferor’s life assurance business immediately before the transfer was mutual business, persons who were policy holders or annuitants, or members of the transferor, at that time, and
- (b) in any other case, persons who were policy holders or annuitants at that time.
##### 444ABAA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are non-profit fund transferred assets is—
$$FVA-(ABTO+TL)$where—FVA is the fair value of the assets on the transfer date,ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andTL is the amount of any non-profit fund transferred liabilities which are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38, but not in line 61, in Form 14 in the periodical return for the period of account of the transferor ending (or treated as ending by section 444AA) immediately before the transfer date or, if there is no period of account of the transferor so ending (or treated as so ending), the amount of any liabilities which would be so shown if one did.$
- (2) In subsection (1) “*non-profit fund transferred liabilities*” means such of the liabilities of the transferor's long-term insurance fund as are transferred from the transferor to the transferee by the insurance business transfer scheme and were, immediately before their transfer, liabilities of a non-profit fund of the transferor.
- (3) See section 444AA for the meaning of “the transfer date” in this section.
#### Meaning of “distribution”.
##### 444ABB
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are retained assets is the lesser of FVA and UTA, where—
- (a) FVA is the fair value of the assets on the transfer date, and
- (b) UTA is the amount by which the fair value of the assets of the long-term insurance fund of the transferor immediately before the transfer date exceeds the amount shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor covering the transfer date.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABBA
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, the transferee (and not the transferor) is chargeable to any amount of additional corporation tax to which the transferor would otherwise be chargeable by virtue of section 444AB(4) in relation to relevant non-transferred assets.
- (3) An election under subsection (2) above—
- (a) is to be irrevocable, and
- (b) is to be made by notice to an officer of Revenue and Customs no later than the end of the period of 90 days beginning with the day following the transfer date,
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer. Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) Where an election under subsection (2) above has been made, the transferor must inform the transferee of—
- (a) the amount of any additional corporation tax to which the transferor considers the election to apply, and
- (b) the day on which that tax is due and payable,
no later than the end of the period of 8 months beginning with the day following the transfer date.
- (5) Tax chargeable on the transferee by virtue of an election under subsection (2) above—
- (a) is due in accordance with section 59D of the Management Act on the day on which it would have been due if no election had been made, and
- (b) for the purposes of that section, is to be treated as tax payable by the transferor (and not as tax payable by the transferee).
- (6) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABC
- (1) This section applies where an insurance business transfer scheme has effect to transfer part (but not the whole or substantially the whole) of the long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) That condition is that any of the assets of the transferor's long-term insurance fund which are transferred from the transferor to the transferee by the insurance business transfer scheme are not, immediately after their transfer—
- (a) if the transferee is an insurance company, assets of the transferee's long-term insurance fund, or
- (b) if the transferee is not an insurance company, assets of a with-profits fund of the transferee,
(“relevant non-transferred assets”).
- (3) The relevant amount in relation to the relevant non-transferred assets (see subsection (4) below) is to be taken into account under section 83(2) of the Finance Act 1989 as an increase in value of the assets of the long-term insurance fund of the transferor for the period of account covering the transfer date.
- (4) The relevant amount in relation to the relevant non-transferred assets is—
$$FVA-BTO$whereFVA is the fair value of the assets on the transfer date, andBTO is any amount brought into account in respect of the assets as a business transfer-out.$
- (5) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABD
- (1) Any profits representing the amount by which—
- (a) the value of the liabilities transferred by an insurance business transfer scheme, exceeds
- (b) the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in line 32 of the periodical return of the transferor for the period of account of the transferor including the transfer date,
are to be taken into account as profits of that period of account.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AC
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If—
- (a) the transferee's line 31 amount in relation to the transfer, exceeds
- (b) the aggregate amount of the liabilities to policy holders and annuitants transferred to the transferee and of any relevant debts,
the excess is not to be regarded as a business transfer-in of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989.
- (2A) Subject to subsections (2C) and (2D) below, subsection (2B) below applies if—
- (a) the aggregate amount of the liabilities to policy holders and annuitants transferred to the transferee and of any relevant debts, exceeds
- (b) the transferee's line 31 amount in relation to the transfer.
- (2B) Where this subsection applies—
- (a) the life assurance part of the excess is to be taken into account as a receipt of the transferee in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of its life assurance business for the period of account of the transferee in which the transfer takes place (“*the relevant period of account*”); and
- (b) the relevant proportion of the excess is to be taken into account as a receipt of the transferee in so computing the profits of each category of its life assurance business for the relevant period of account;
and, for this purpose, “*the life assurance part of the excess*” means the proportion of the excess that the liabilities of the transferee's life assurance business that are transferred bear to the total liabilities transferred and “*the relevant proportion*”, in relation to a category of the transferee's life assurance business, is the proportion that the liabilities of that category that are transferred bear to the total liabilities transferred.
- (2C) Subsection (2B) above does not require the life assurance part of the excess to be taken into account as a receipt of the transferee in so computing the profits of its life assurance business for the relevant period of account if—
- (a) transferred liabilities of an aggregate amount equal to the life assurance part of the excess are not taken into account in so computing those profits for that period of account, and
- (b) the amount of the closing liabilities of that period of account is taken into account as opening liabilities in so computing those profits for the next period of account.
- (2D) Subsection (2B) above does not require the relevant proportion of the excess to be taken into account as a receipt of the transferee in so computing the profits of a category of its life assurance business for the relevant period of account if—
- (a) transferred liabilities of an aggregate amount equal to the relevant proportion of the excess are not taken into account in so computing those profits for that period of account, and
- (b) the amount of the closing liabilities of that period of account is taken into account as opening liabilities in so computing those profits for the next period of account.
- (2E) In subsections (2C)(a) and (2D)(a) above “*transferred liabilities*” means—
- (a) liabilities to policy holders or annuitants at the end of the relevant period of account that were transferred to the transferee, and
- (b) payments made to discharge, during that period of account, liabilities to policy holders or annuitants that were transferred to the transferee.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In this section “*relevant debts*” means debts which become debts of the transferee's long-term insurance fund as a result of the transfer.
- (5) But if—
- (a) the aggregate amount of any relevant reinsurance amounts and of the fair value, as at the date of the transfer, of the assets which become assets of the transferee's long-term insurance fund as a result of the transfer, exceeds
- (b) the transferee's line 31 amount in relation to the transfer,
the amount of any relevant debts for the purposes of this section is to be reduced (but not below nil) by the excess.
- (5A) In subsection (5)(a) above “*relevant reinsurance amounts*” means—
- (a) amounts which are comprised in line 16 of Form 14 in the periodical return of the transferor covering the period ending immediately before the transfer (or would be so comprised if the transferor drew up a periodical return covering that period), or
- (b) other amounts which arise under contracts of reinsurance in relation to which the reinsurer is the transferee and which, as at the date of the transfer, have fallen due to the transferor,
and which (in either case) do not become assets of the transferee's long-term insurance fund as a result of the transfer because (and only because) they arise under contracts of reinsurance in relation to which the reinsurer is the transferee.
- (6) In determining the amount of the liabilities transferred for the purposes of this section, there is to be disregarded any reduction in the transferee's liabilities resulting from reinsurance under a contract of reinsurance which is a relevant financial reinsurance contract (within the meaning of section 82C of the Finance Act 1989).
- (7) But where—
- (a) such a reduction results from reinsurance under a contract which was entered into by the transferor as cedant before the day on which the transfer takes place, and
- (b) the transferor's rights and obligations under the contract are transferred to the transferee under the transfer,
the amount of the reduction that would (apart from this subsection) be disregarded under subsection (6) above shall be reduced (but not below nil) by the amount given by subsection (8) below or, if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the amount by which the liabilities at the end of the closing period which fell to be taken into account in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the transferor's business for that period were reduced as a result of reinsurance under the contract.
- (9) The amount given by this subsection is the amount given by paragraph (a) below reduced (but not below nil) by the amount given by paragraph (b) below—
- (a) the amount given by this paragraph is the aggregate of the relevant amounts for any accounting period, and for this purpose the relevant amount for an accounting period is the amount in sub-paragraph (i) or (ii) below or, where applicable, the aggregate of those amounts—
- (i) the amount by which the profits of the transferor's business, computed in accordance with the provisions of this Act applicable to Case I of Schedule D, were increased for that accounting period as a result of reinsurance under the contract;
- (ii) the amount by which the losses of the transferor's business, so computed, were reduced for that accounting period as a result of reinsurance under the contract; and
- (b) the amount given by this paragraph is the aggregate of the relevant amounts for any accounting period, and for this purpose the relevant amount for an accounting period is the amount in sub-paragraph (i) or (ii) below or, where applicable, the aggregate of those amounts—
- (i) the amount by which the profits of the transferor's business, so computed, were reduced for that accounting period as a result of a reduction in reinsurance under the contract;
- (ii) the amount by which the losses of the transferor's business, so computed, were increased for that accounting period as a result of a reduction in reinsurance under the contract.
- (10) In subsections (8) and (9) above—
- “*the closing period*” means the accounting period of the transferor ending with the day on which the transfer takes place;
- “the transferor's business” means—the transferor's life assurance business, andany category of its life assurance business to which the liabilities relate.
- (11) For the purposes of this section and section 444ACA—
- “*fair value*” has the meaning given by section 444AB(6);
- “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444ACZA
- (1) This section applies where an insurance business transfer scheme has effect to transfer part (but not the whole or substantially the whole) of the long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) The condition is that the transferor did not carry on life assurance business that is mutual business during the period of account of the transferor covering the transfer date.
- (3) The amount which (apart from this section) would be regarded as other income of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989 for the period of account of the transferee which includes the transfer date is to be reduced by an amount equal to the transferred surplus.
- (4) In subsection (4) above “*the transferred surplus*” means such part of the amount shown (or treated as shown) in line 13 of Form 14 in the periodical return of the transferor covering the last period of account of the transferor ending before the transfer date as it is just and reasonable to regard as being attributable to the transfer.
- (5) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ACA
- (1) This section applies where an insurance business transfer scheme (see section 444AC(11)) has effect to transfer long-term business from one company (“*the transferor*”) to another (“*the transferee*”).
- (2) If—
- (a) immediately before the transfer, the assets of the long-term insurance fund of the transferee comprise or include relevant shares or an interest in such shares, and
- (b) the fair value (see section 444AC(11)) of the relevant shares, or of that interest, is reduced (whether or not to nil) as a result of the transfer,
an amount equal to that reduction in fair value is to be taken into account under section 83(2) of the Finance Act 1989 as a receipt of the transferee of the period of account of the transferee in which the transfer takes place.
- (3) But if—
- (a) the assets transferred to the transferee under the transfer comprise or include assets (“*the relevant assets*”) which, immediately before the transfer,—
- (i) were assets of the transferor, but
- (ii) were not assets of the transferor's long-term insurance fund, and
- (b) in respect of the transfer of the relevant assets, an amount is—
- (i) brought into account by the transferee as other income of the transferee of the period of account of the transferee in which the transfer takes place, and
- (ii) taken into account in computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the transferee's life assurance business and any category of its life assurance business to which the amount is referable,
the amount taken into account under section 83(2) of the Finance Act 1989 by virtue of subsection (2) above shall be reduced (but not below nil) by an amount equal to the amount referred to in paragraph (b) above.
- (4) In subsection (2) above “*relevant shares*” means—
- (a) some or all of the shares in the transferor, or
- (b) some or all of the shares in a company (whether or not an insurance company) which owns, directly or indirectly,—
- (i) some or all of the shares in the transferor, or
- (ii) an interest in some or all of those shares.
- (5) In subsection (4) above “*shares*”, in relation to a company, includes any interests in the company possessed by members of the company.
##### 444AD
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, section 83(2B) of the Finance Act 1989 does not apply to the transferor by reason of the transfer as respects so much of the value of the assets to which it would otherwise so apply as does not exceed the amount specified in subsection (4) below.
- (3) An election under subsection (2) above—
- (a) is irrevocable, and
- (b) is to be made by notice to an officer of the Board no later than the end of the period of 28 days beginning with the day following that on which the transfer takes place;
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer.
Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) The amount referred to in subsection (2) above is the amount by which—
- (a) the fair value of such of the assets of the long-term insurance fund of the transferee immediately after the transfer as were assets of the transferor’s long-term insurance fund immediately before the transfer, is greater than
- (b) the transferee's line 31 amount in relation to the transfer representing the transferor’s long-term insurance fund.
- (5) In subsection (4) above “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount.
- (6) For the purposes of this section “*insurance business transfer scheme*” includes a scheme which would be such a scheme but for section 105(1)(b) of the Financial Services and Markets Act 2000 (which requires the business transferred to be carried on in an EEA State).
##### 444AE
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If a contingent loan made to the transferor (within the meaning of subsection (1) of section 83ZA of the Finance Act 1989) is transferred to the transferee, that section has effect as if—
- (a) the contingent loan had become repayable by the transferor immediately before the transfer, and
- (b) the contingent loan were made to the transferee immediately after the transfer.
##### 444AEA
- (1) This section applies where—
- (a) as a result of the whole or any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a Case I advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of the whole or any part of the transfer scheme arrangements is the obtaining of that Case I advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” means an insurance business transfer scheme (“*the relevant transfer scheme*”) together with any relevant associated operations.
- (3) If a Case I advantage is obtained by the transferor (see subsection (1) of section 444AEB), the amount of the transferor's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor for the period of account of the transferor covering the transfer date.
- (4) If a Case I advantage is obtained by the transferee (see subsection (1) of section 444AEC), the amount of the transferee's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the first period of account of the transferee ending after the transfer date.
- (5) In this section and sections 444AEB and 444AEC “*relevant associated operations*”, in relation to the relevant transfer scheme, means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance,
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee, or
- (d) any surplus-increasing transfer of assets,
which is effected in connection with the relevant transfer scheme.
- (6) In subsection (5) above—
- “*dependant*” and “*insurance undertaking*” have the same meaning as in the Insurance Prudential Sourcebook, and
- “*surplus-increasing transfer of assets*” means a transfer of assets of the transferor's long-term insurance fund to the transferee which is not brought into account for any period of account of the transferee but increases the amount of total surplus shown in line 39 of Form 58 in any periodical return of the transferee.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AEB
- (1) A Case I advantage is obtained by the transferor if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are less than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are greater than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements.
- (2) If a Case I advantage is obtained by the transferor, the amount of the Case I advantage is the aggregate of—
- (a) the amounts (if any) by which Case I profits for each period of account to which this section applies are less than they would be but for the transfer scheme arrangements or part, and
- (b) the amounts (if any) by which Case I losses for each such period of account are greater than they would be but for the transfer scheme arrangements or part.
- (3) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (4) In this section and section 444AEC “Case I profits” and “*Case I losses*” means profits and losses computed in accordance with the provisions of Case I of Schedule D.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AEC
- (1) A Case I advantage is obtained by the transferee if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are less than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are greater than they would be but for the transfer scheme arrangements or any part of the transfer scheme arrangements.
- (2) If a Case I advantage is obtained by the transferee, the amount of the Case I advantage is—
- (a) the amount by which Case I profits for each period of account to which this section applies are less than they would be but for the transfer scheme arrangements or part, or
- (b) the amount by which Case I losses for each such period of account are greater than they would be but for the transfer scheme arrangements or part.
- (3) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (4) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “Case I profits” and “Case I losses”, in this section.
##### 444AECA
- (1) This section applies where—
- (a) as a result of any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a Case I advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of that part of the transfer scheme arrangements is the obtaining of that Case I advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” has the same meaning as in section 444AEA.
- (3) If a Case I advantage is obtained by the transferor (see subsection (1) of section 444AECB), the amount of the transferor's Case I advantage (see subsection (3) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a Case I advantage is obtained by the transferee (see subsection (1) of section 444AECC), the amount of the transferee's Case I advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AECB
- (1) A Case I advantage is obtained by the transferor if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the Case I profits to be greater or the Case I losses to be less than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a Case I advantage is obtained by the transferor.
- (3) If a Case I advantage is obtained by the transferor, the amount of the Case I advantage is the aggregate of—
- (a) the amounts (if any) by which Case I profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, and
- (b) the amounts (if any) by which Case I losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (5) In this section and section 444AECC “*the relevant part of the arrangements*” means, in relation to a Case I advantage, the part of the transfer scheme arrangements as a result of which the Case I advantage is obtained.
- (6) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “Case I profits” and “Case I losses” and “the relevant time”, in this section.
##### 444AECC
- (1) A Case I advantage is obtained by the transferee if—
- (a) Case I profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) Case I losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the Case I profits to be greater, or the Case I losses to be less, than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a Case I advantage is obtained by the transferor.
- (3) If a Case I advantage is obtained by the transferee, the amount of the Case I advantage is—
- (a) the amount by which Case I profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, or
- (b) the amount by which Case I losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (5) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations”, section 444AEB for the meaning of “Case I profits” and “Case I losses” and “the relevant time” and section 444AECB for the meaning of “the relevant part of the arrangements”, in this section.
##### 444AED
- (1) Section 444AEA does not apply in relation to the transferor or the transferee if, on an application under this section, the Commissioners for Her Majesty's Revenue and Customs (“the HMRC Commissioners”) have given a notice under subsection (2) below.
- (2) A notice under this subsection is a notice stating that the HMRC Commissioners are satisfied—
- (a) that the obtaining of a Case I advantage by the applicant is not the sole or main purpose of the whole or any part of the transfer scheme arrangements, or
- (b) that the transferor and the transferee are members of the same group of companies and that there is no advantage to the group arising from any Case I advantage obtained by the transferor or by the transferee.
- (3) For the purposes of this section there is no advantage to a group arising from any Case I advantage obtained by the transferor or by the transferee if—
- (a) as a result of transfer scheme arrangements, there is an increase in the liability to corporation tax of one or more companies which are members of the group of companies, and
- (b) the amount (or aggregate amount) of that increase is not less than the reduction in the liability to corporation tax of the transferor or the transferee (or both) arising from the obtaining of the Case I advantage.
- (4) An application under this section must be in writing and contain particulars of the transfer scheme arrangements.
- (5) The HMRC Commissioners may by notice require the applicant to provide further particulars in order to enable them to determine the application.
- (6) A requirement may be imposed under subsection (5) above within 30 days of the receipt of the application or of any further particulars required under that subsection.
- (7) If a notice under subsection (5) above is not complied with within 30 days or such longer period as the HMRC Commissioners may allow, they need not proceed further on the application.
- (8) The HMRC Commissioners must give notice of their decision on an application under this section to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of that notice being complied with.
- (9) If the HMRC Commissioners—
- (a) give notice to the applicant under subsection (8) above that they are not satisfied as mentioned in subsection (2) above, or
- (b) do not comply with subsection (8) above,
the applicant may require them to transmit the application to the Special Commissioners.
- (10) A requirement under subsection (9) above must be imposed within 30 days of the giving of the notice or the failure to comply and must be accompanied by any notice given under subsection (5) above and further particulars provided pursuant to any such notice.
- (11) Any notice given by the Special Commissioners has effect for the purposes of subsection (1) above as if it were given by the HMRC Commissioners.
- (12) If any particulars provided under this section do not fully and accurately disclose all facts and considerations material for the decision of the HMRC Commissioners or the Special Commissioners, any resulting notice that they are satisfied as mentioned in subsection (2) above is void.
- (13) For the purposes of this section two companies are members of the same group of companies if they are for the purposes of Chapter 4 of Part 10.
### Surpluses of mutual and former mutual businesses
##### 444AF
- (1) This section applies in relation to a period of account of an insurance company (“*the relevant period*”) if—
- (a) at any time in the relevant period the company carries on life assurance business that is not mutual business,
- (b) the company has an amount of undistributed demutualisation surplus for the relevant period (see subsection (7)), and
- (c) there is a reduction in the amount of the company's unappropriated surplus over the relevant period (see section 444AI).
- (2) Where this section applies in relation to the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund whichever of the following amounts is the smallest—
- (a) the amount of the reduction mentioned in subsection (1)(c) above;
- (b) the amount of the company's undistributed demutualisation surplus for the relevant period;
- (c) the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (4) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which sections 432C and 432D apply,
that subsection shall have effect as if for “smallest” there were substituted smaller and as if paragraph (c) were omitted.
- (5) This section shall have effect—
- (a) for the purposes of computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits of the company's life assurance business, and
- (b) for the purposes of so computing the profits of any category of the company's life assurance business chargeable to tax under Case VI of Schedule D.
- (6) But for the purposes mentioned in subsection (5)(b) above, this section and section 444AG have effect subject to the modification in section 444AH; and the Corporation Tax Acts have effect accordingly (so that there may, in particular, be a difference between—
- (a) the amount deemed to be brought into account by virtue of subsection (2) above for a period of account for those purposes, and
- (b) the amount so deemed to be brought into account for that period of account for the purposes mentioned in subsection (5)(a) above).
- (7) For the purposes of this section, the undistributed demutualisation surplus of an insurance company for the relevant period is—
- (a) an amount equal to (UDSP – AD + DTSI – DTSO); or
- (b) if that amount is a negative amount, nil.
For this purpose—
- UDSP is the undistributed demutualisation surplus of the company for the period of account immediately preceding the relevant period,
- AD is any amount deemed under this section to be brought into account for the period of account immediately preceding the relevant period as an increase in the value of the assets of the company's long-term insurance fund,
- DTSI is the total amount of any demutualisation transfer surpluses accruing to the company during the relevant period (see section 444AG),
- DTSO is the total amount of any demutualisation transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
##### 444AG
- (1) For the purposes of section 444AF and this section, a demutualisation transfer surplus accrues to an insurance company where—
- (a) life assurance business is transferred to the company by a person (“*the transferor*”),
- (b) after the transfer, the company carries on the transferred business otherwise than as mutual business, and
- (c) the condition in subsection (2) below is satisfied in relation to the transfer.
- (2) The condition is that—
- (a) immediately before the transfer, the transferor carried on the transferred business as mutual business, or
- (b) where paragraph (a) above does not apply, some or all of the transferred business was carried on by an insurance company as mutual business at a time on or after 1st January 1990 and before the transfer (“former mutual business”).
- (3) The demutualisation transfer surplus accrues to the company on the date of the transfer.
- (4) The amount of the demutualisation transfer surplus is given by subsection (5) or (6) below.
- (5) Where subsection (2)(a) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer, the aggregate of—
- (i) the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer, and
- (ii) the amount of any added surplus accruing to the company in connection with the transfer (see subsection (10));
- (b) otherwise, a just and reasonable portion of that aggregate amount, having regard to how much of the transferor's life assurance business was transferred to the company under the transfer.
- (6) Where subsection (2)(b) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer and all of the transferred business is former mutual business, the former mutual surplus of the transferor on the transfer date (see subsection (7));
- (b) otherwise, so much of that former mutual surplus as it is just and reasonable to attribute to the company, having regard in particular to—
- (i) how much of the transferor's life assurance business was transferred to the company under the transfer, and
- (ii) how much of the transferred business is former mutual business.
- (7) For the purposes of subsection (6) above, the former mutual surplus of the transferor on the transfer date is—
- (a) the amount given by subsection (8) below, or
- (b) if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the total amount of any demutualisation transfer surpluses accruing to the transferor—
- (a) on or after 1st January 1990, and
- (b) on or before the date of the transfer.
- (9) The amount given by this subsection is the lowest amount of unappropriated surplus of the transferor at the end of any period of account ending—
- (a) on or after the date of the last occasion on which a demutualisation transfer surplus accrued to it as mentioned in subsection (8) above, and
- (b) on or before the date of the transfer.
- (10) For the purposes of this section, added surplus accrues to the company in connection with the transfer if—
- (a) an amount of assets is received by the company in connection with the transfer, no later than six months after the date of the transfer,
- (b) the amount is not brought into account by the company,
- (c) the amount is added to the unappropriated surplus of the company, and
- (d) the amount does not derive from any unappropriated surplus of the transferor;
and the amount of the added surplus is the amount referred to in paragraphs (a) to (d) above.
##### 444AH
- (1) The modification in this section has effect for the purposes mentioned in section 444AF(5)(b) only.
- (2) In relation to any demutualisation transfer surplus accruing to a company in a post-2002 period of account—
- (a) the references in section 444AG(5) to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer shall be taken to be references to—
- (i) the amount of that unappropriated surplus, or
- (ii) if less, the unappropriated surplus of the transferor at the end of the period of account immediately preceding the first post-2002 period of account of the transferor; and
- (b) the references in sections 444AF and 444AG to the amount of any demutualisation transfer surplus are to have effect accordingly.
- (3) In this section “*post-2002 period of account*”, in relation to an insurance company, means a period of account of the company beginning on or after 1st January 2003 and ending on or after 9th April 2003.
##### 444AI
- (1) For the purposes of section 444AF—
- (a) there is a reduction in the amount of the company's unappropriated surplus over the relevant period if CUS is less than (OUS + TSI – TSO);
- (b) the amount of that reduction is the amount by which CUS is less than (OUS + TSI – TSO).
- (2) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- TSI is the total amount of any transfer surpluses accruing to the company during the relevant period (see subsections (3) to (7)),
- TSO is the total amount of any transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
- (3) For the purposes of this section, a transfer surplus accrues to an insurance company where life assurance business is transferred to the company by a person (“*the transferor*”).
- (4) The transfer surplus accrues to the company on the date of the transfer.
- (5) The amount of the transfer surplus is equal to so much of the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer as is transferred to the company under the transfer.
- (6) But if, immediately before the transfer, the transferor carried on the transferred business as mutual business, the amount of the transfer surplus is the aggregate of—
- (a) the amount given by subsection (5) above, and
- (b) the amount of any added surplus accruing to the company in connection with the transfer.
- (7) Subsection (10) of section 444AG applies for the purposes of subsection (6) above as it applies for the purposes of that section.
##### 444AJ
- (1) For the purposes of sections 444AF and 444AK, the amount of the company's relevant receipts reduction for the relevant period is to be calculated by—
- (a) determining, in the case of each with-profits fund of the company, the amount given by subsection (2) or (6) below for the relevant period, and
- (b) aggregating each of those amounts.
- (2) The amount, in the case of a fund other than a policy holder participation fund, is—
- (a) where the gross transfer to non-technical account for the fund for the relevant period (see subsections (3) and (4)) is greater than the post-policy holder surplus for the fund for the relevant period (see subsection (5)), the amount of the difference;
- (b) otherwise, nil.
- (3) In this section “*the gross transfer to non-technical account*” means the amount shown in line 13 of Form 58 for the fund.
- (4) But if—
- (a) there is a transfer from a with-profits fund of the company to another fund of the company (“the initial transfer”) which is shown in (or included in an amount shown in) line 14 of Form 58 for the with-profits fund,
- (b) there is a transfer from a fund of the company (whether or not the other fund mentioned in paragraph (a) above) to the non-technical account which is shown in (or included in an amount shown in) line 13 of Form 58 for that fund, and
- (c) the transfer to the non-technical account can reasonably be regarded as connected with the initial transfer,
the amount of the gross transfer to non-technical account for the relevant period given by subsection (3) above in the case of the with-profits fund is to be increased by the amount transferred to the non-technical account.
- (5) In this section “*post-policy holder surplus*” means an amount equal to—
$$SA-TAP$where—SA is—(a) the amount shown in line 34 of Form 58 for the fund (surplus arising since last valuation), or(b) if that amount is a negative amount, nil;TAP is the amount shown in line 46 of Form 58 for the fund (total allocated to policy holders).$
- (6) The amount, in the case of a policy holder participation fund, is—
- (a) where TAP is greater than SA, the amount of the difference;
- (b) otherwise, nil;
and for this purpose “*SA*” and “*TAP*” have the same meaning as in subsection (5) above.
- (7) References in this section to Form 58 are references to that Form in the periodical return of the company for the relevant period.
- (8) In this section “*policy holder participation fund*” means a fund in the case of which an amount equal to the amount shown in line 34 of Form 58 for the fund is allocated to policy holders for the relevant period.
##### 444AK
- (1) This section applies if at any time in a period of account of an insurance company (“*the relevant period*”)—
- (a) the company carries on life assurance business as mutual business, and
- (b) the company carries on one or more categories of life assurance business chargeable to tax under Case VI of Schedule D.
- (2) If there is a reduction in the amount of the company's unappropriated surplus over the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund—
- (a) the amount of that reduction, or
- (b) if less, the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) But subsection (2) above shall have effect only for the purposes of computing in accordance with the provisions of this Act applicable to Case I of Schedule D the profits for the relevant period of any category of the company's life assurance business chargeable to tax under Case VI of Schedule D.
- (4) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (5) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which sections 432C and 432D apply,
that subsection shall have effect as if paragraph (b) and the word “or” before it were omitted.
- (6) For the purposes of this section, there is a reduction in the amount of the company's unappropriated surplus over the relevant period if—
- (a) CUS is less than OUS, and
- (b) CUS is less than UUS.
- (7) The amount of that reduction is—
- (a) the amount by which CUS is less than OUS, or
- (b) if OUS is greater than UUS, the amount by which CUS is less than UUS.
- (8) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- UUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the first period of account of the company to begin on or after 1st January 2003 and to end on or after 9th April 2003.
##### 444AL
- (1) This section applies for the purposes of sections 444AF to 444AK.
- (2) References to mutual business, in relation to any time, include business which at that time is treated for the purposes of section 432E as mutual business.
- (3) “*Unappropriated surplus*”, in relation to a period of account of an insurance company, means an unappropriated surplus on valuation as shown in the periodical return of the company for the period of account.
- (4) References to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer are, where a period of account of the transferor does not end at that time, references to the unappropriated surplus on valuation that would have been shown in a periodical return of the transferor for that period had such a return been drawn up.
### Provisions applying in relation to overseas life insurance companies
##### 444B
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#### Meaning of “distribution”.
##### 444C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Equalisation reserves
##### 444BA
- (1) Subject to the following provisions of this section and to sections 444BB to 444BD, the rules in subsection (2) below shall apply in making any computation, for the purposes of Case I or V of Schedule D, of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of equalisation reserve rules, to maintain an equalisation reserve.
- (2) Those rules are—
- (a) that amounts which, in accordance with equalisation reserve rules, are transferred into the equalisation reserve in respect of the company’s business for the accounting period in question are to be deductible;
- (b) that amounts which, in accordance with any such regulations, are transferred out of the reserve in respect of the company’s business for that period are to be treated as receipts of that business; and
- (c) that it must be assumed that all such transfers as are required by equalisation reserve rules to be made into or out of the reserve in respect of the company’s business for any period are made as required.
- (3) Where an insurance company having any business in respect of which it is required, by virtue of equalisation reserve rules, to maintain an equalisation reserve ceases to trade—
- (a) any balance which exists in the reserve at that time for the purposes of the Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade; and
- (b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company so ceases and to have been required by equalisation reserve rules.
- (4) Where—
- (a) an amount is transferred into an equalisation reserve in respect of the business of an insurance company for any accounting period,
- (b) the rule in subsection (2)(a) above would apply to the transfer of that amount but for this subsection,
- (c) that company by notice in writing to an officer of the Board makes an election in relation to that amount for the purposes of this subsection, and
- (d) the notice of the election is given not more than two years after the end of that period,
the rule mentioned in subsection (2)(a) above shall not apply to that transfer of that amount and, instead, the amount transferred (the “unrelieved transfer”) shall be carried forward for the purposes of subsection (5) below to the next accounting period and (subject to subsection (6) below) from accounting period to accounting period.
- (5) Where—
- (a) in accordance with equalisation reserve rules, a transfer is made out of an equalisation reserve in respect of an insurance company’s business for any accounting period,
- (b) the rule in subsection (2)(b) above would apply to the transfer but for this subsection, and
- (c) the accounting period is one to which any amount representing one or more unrelieved transfers has been carried forward under subsection (4) above,
that rule mentioned in subsection (2)(b) above shall not apply to that transfer except to the extent (if any) that the amount of the transfer exceeds the aggregate of the amounts representing unrelieved transfers carried forward to that period.
- (6) Where in the case of any company—
- (a) any amount representing one or more unrelieved transfers is carried forward to an accounting period in accordance with subsection (4) above, and
- (b) by virtue of subsection (5) above the rule in subsection (2)(b) above does not apply to an amount representing the whole or any part of any transfer out of an equalisation reserve in respect of the company’s business for that period,
the amount mentioned in paragraph (a) above shall not be carried forward under subsection (4) above to the next accounting period except to the extent (if any) that it exceeds the amount mentioned in paragraph (b) above.
- (7) To the extent that any actual or assumed transfer in accordance with equalisation reserve rules of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—
- (a) the rule in subsection (2)(a) above shall not apply to that transfer; and
- (b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with equalisation reserve rules;
and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.
- (8) For the purposes of this section the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—
- (a) the sole or main purpose of which is, or
- (b) the sole or main benefit accruing from which might (but for subsection (7) above) be expected to be,
the reduction by virtue of this section of any liability to tax.
- (9) Where—
- (a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with equalisation reserve rules in respect of business carried on by that company over a period (“the equalisation period”), and
- (b) parts of the equalisation period are in different accounting periods,
the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.
- (10) The Treasury may by regulations provide in relation to any accounting periods ending on or after 1st April 1996 for specified transitional provisions contained in equalisation reserve rules to be disregarded for the purposes of the Tax Acts in determining how much is required, on any occasion, to be transferred into or out of any equalisation reserve in accordance with the rules.
- (11) In this section, and in sections 444BB to 444BD, “equalisation reserves rules” means the rules in chapter 7.5 of the Integrated Prudential Sourcebook.
##### 444BB
- (1) The Treasury may by regulations make provision modifying section 444BA so as, in cases mentioned in subsection (2) below—
- (a) to require—
- (i) sums by reference to which the amount of any transfer into or out of an equalisation reserve falls to be computed, or
- (ii) the amount of any such transfer,
to be apportioned between different parts of the business carried on for any period by an insurance company; and
- (b) to provide for the purposes of corporation tax for the amounts taken to be transferred into or out of an equalisation reserve to be computed disregarding any such sum or, as the case may be, any such part of a transfer as is attributed, in accordance with the regulations, to a part of the business described for the purpose in the regulations.
- (2) Those cases are cases where an insurance company which, in accordance with equalisation reserve rules, is required to make transfers into or out of an equalisation reserve in respect of any business carried on by that company for any period is carrying on, for the whole or any part of that period—
- (a) any business the income and gains of which fall to be disregarded in making a computation of the company’s profits in accordance with the rules applicable to Case I of Schedule D, or
- (b) any business by reference to which double taxation relief is afforded in respect of any income or gains.
- (3) Section 444BA shall have effect (subject to any regulations under subsection (1) above) in the case of an equalisation reserve maintained by an insurance company which—
- (a) is not resident in the United Kingdom, and
- (b) carries on business in the United Kingdom through a permanent establishment,
only if such conditions as may be prescribed by regulations made by the Treasury are satisfied in relation to that company and in relation to transfers into or out of that reserve.
- (4) Regulations under this section prescribing conditions subject to which section 444BA is to apply in the case of any equalisation reserve maintained by an insurance company may—
- (a) contain conditions imposing requirements on the company to furnish the Board with information with respect to any matters to which the regulations relate, or to produce to the Board documents or records relating to any such matters; and
- (b) provide that, where any prescribed condition is not, or ceases to be, satisfied in relation to the company or in relation to transfers into or out of that reserve, there is to be deemed for the purposes of the Tax Acts to have been a transfer out of that reserve of an amount determined under the regulations.
- (5) Regulations under this section may—
- (a) provide for apportionments under the regulations to be made in such manner, and by reference to such factors, as may be specified or described in the regulations;
- (b) make different provision for different cases;
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit;
- (d) make provision having retrospective effect in relation to accounting periods beginning not more than one year before the time when the regulations are made;
and the powers conferred by this section in relation to transfers into or out of any reserve shall be exercisable in relation to both actual and assumed transfers.
- (6) In this section “*double taxation relief*” means—
- (a) relief under double taxation arrangements which takes the form of a credit allowed against corporation tax, or
- (b) unilateral relief under section 790(1) which takes that form;
and “*double taxation arrangements*” here means arrangements having effect by virtue of section 788.
##### 444BC
- (1) The Treasury may by regulations make provision modifying the operation of section 444BA in relation to cases where an insurance company has, for the purpose of preparing the documents it is required to prepare for the purposes of section 9.3 of the Prudential Sourcebook (Insurers), applied for any period an accounting method described in paragraph 52 or 53 of Schedule 9A to the Companies Act 1985 (accounting on a non-annual basis).
- (2) Subsection (5) of section 444BB applies for the purposes of this section as it applies for the purposes of that section.
##### 444BD
- (1) The Treasury may by regulations provide for section 444BA to have effect, in such cases and subject to such modifications as may be specified in the regulations, in relation to any equivalent reserves as it has effect in relation to equalisation reserves maintained by virtue of equalisation reserve rules.
- (2) For the purposes of this section a reserve is an equivalent reserve if—
- (a) it is maintained, otherwise than by virtue of equalisation reserve rules, either—
- (i) by an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (ii) by a firm which has permission under paragraph 4 of Schedule 4 to that Act (as a result of qualifying for authorisation under paragraph 2 of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (iii) in respect of any business which consists of the effecting or carrying out of contracts of insurance and which is carried on outside the United Kingdom by a company resident in the United Kingdom;
- (b) the purpose for which, or the manner in which, it is maintained is such as to make it equivalent to an equalisation reserve maintained by virtue of equalisation reserve rules.
- (3) For the purposes of this section a reserve is also an equivalent reserve if it is maintained in respect of any credit insurance business in accordance with requirements imposed either—
- (a) by or under any enactment, or
- (b) under so much of the law of any territory as secures compliance with the requirements of Article 1 of the credit insurance directive (equalisation reserves for credit insurance).
- (4) Without prejudice to the generality of subsection (1) above, the modifications made by virtue of that subsection may—
- (a) provide for section 444BA to apply in the case of an equivalent reserve only where such conditions as may be specified in the regulations are satisfied in relation to the company maintaining the reserve or in relation to transfers made into or out of it; and
- (b) contain any other provision corresponding to any provision which, in the case of a reserve maintained by virtue of equalisation reserve rules, may be made under sections 444BA to 444BC.
- (5) Subsections (4) and (5) of section 444BB shall apply for the purposes of this section as they apply for the purposes of that section.
- (6) Without prejudice to the generality of section 444BB(5), the transitional provision which by virtue of subsection (5) above may be contained in regulations under this section shall include—
- (a) provision for treating the amount of any transfers made into or out of an equivalent reserve in respect of business carried on for any specified period as increased by the amount by which they would have been increased if no transfers into the reserve had been made in respect of business carried on for an earlier period; and
- (b) provision for excluding from the rule in section 444BA(2)(b) so much of any amount transferred out of an equivalent reserve as represents, in pursuance of an apportionment made under the regulations, the transfer out of that reserve of amounts in respect of which there has been no entitlement to relief by virtue of section 444BA(2)(a).
- (7) In this section—
- “credit insurance business” means business which consists of the effecting or carrying out of contracts of insurance against risks of loss to the persons insured arising from—the insolvency of debtors of theirs, orfrom the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;
- “*the credit insurance directive*” means Council Directive [87/343/EEC](https://www.legislation.gov.uk/european/directive/1987/0343) of 22nd June 1987 amending, as regards credit insurance and suretyship insurance, First Directive 73/239 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance; . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 458A
- (1) The Treasury may by regulations provide for the life assurance provisions of the Corporation Tax Acts to have effect in relation to companies carrying on capital redemption business as if capital redemption business were, or were a category of, life assurance business.
- (2) Regulations under this section may provide that the provisions applied by the regulations are to have effect as respects capital redemption business with such modifications and exceptions as may be provided for in the regulations.
- (3) Regulations under this section may—
- (a) make different provision for different cases;
- (b) include such incidental, supplemental, consequential and transitional provision (including provision modifying provisions of the Corporation Tax Acts other than the life assurance provisions) as the Treasury consider appropriate; and
- (c) include retrospective provision.
- (4) In this section references to the life assurance provisions of the Corporation Tax Acts are references to the following—
- (a) the provisions of this Chapter so far as they relate to life assurance business or companies carrying on such business; and
- (b) any other provisions of the Corporation Tax Acts making separate provision by reference to whether or not the business of a company is or includes life assurance business or any category of insurance business that includes life assurance business.
- (5) In this section “*capital redemption business*” has the same meaning as in section 458.
##### 461A
- (1) For the purposes of sections 461B and 461C, a “*qualifying society*” is an incorporated friendly society which—
- (a) immediately before its incorporation, was a registered friendly society to which section 461(2) did not apply,
- (b) was formed otherwise than by the incorporation of a registered friendly society or the amalgamation of two or more friendly societies and satisfies subsection (2) below, or
- (c) was formed by the amalgamation of two or more friendly societies and satisfies subsection (3) below,
and in respect of which no direction under section 461C(5) is in force.
- (2) A society satisfies this subsection if its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board.
- (3) If at the time of the amalgamation referred to in subsection (1)(c) above—
- (a) section 461(2) applied to none of the registered friendly societies being amalgamated (if any), and
- (b) all of the incorporated friendly societies being amalgamated (if any) were qualifying societies,
the society formed by the amalgamation satisfies this subsection.
- (4) For the purposes of this section and section 461C, any group of persons which was approved for the purposes of this section (as mentioned in subsection (2) above) by the Friendly Societies Commission immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date.
##### 461B
- (1) Subject to the following provisions of this section, a qualifying society shall, on making a claim, be entitled to exemption from income tax and corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) Subsection (1) above shall not apply to any profits arising or accruing to the society from, or by reason of its interest in, a body corporate which is a subsidiary (within the meaning of the Friendly Societies Act 1992) of the society or of which the society has joint control (within the meaning of that Act).
- (2A) Subsection (1) above shall not apply to any profits arising or accruing to the society from or by reason of its membership of a property investment LLP.
- (3) If an incorporated friendly society which is not a qualifying society makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (4) In relation to an incorporated friendly society which, immediately before its incorporation, was a registered friendly society to which section 461(2) applied—
- (a) the references in subsection (3) above to sums paid to the society shall include sums paid to the registered friendly society,
- (b) the reference in subsection (3)(a) above to any payment made by the society shall include any payment made by the registered friendly society after 26 March 1974 or such later date as was specified in any direction under section 461 (7) relating to it, and
- (c) the reference in subsection (3)(b) above to any repayment shall include any repayment made by the registered friendly society.
- (5) Where a qualifying society at any time ceases by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, the company into which the society is converted shall be exempt from income tax or corporation tax on its profits arising from any part of its business, other than life or endowment business, which relates to contracts made before that time.
- (6) Subsection (5) above shall apply so long as there is no increase in the scale of benefits which the company undertakes to provide in the course of carrying on the relevant part of its business.
- (7) Any part of a company’s business to which an exemption under subsection (5) above relates shall be treated for the purposes of the Corporation Tax Acts as a separate business from any other business carried on by the company.
##### 461C
- (1) Subject to subsection (2) below, subsections (3) and (4) below apply where a qualifying society—
- (a) begins to carry on business other than life or endowment business, or
- (b) in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character.
- (2) Subsections (3) and (4) below do not apply if—
- (a) the society’s business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of section 461 or 461A by the Board, or
- (b) the society’s rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as is authorised for the purposes of section 461.
- (3) If it appears to the Board, having regard to the restrictions imposed by section 461 on registered friendly societies registered after 31st May 1973, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the society to which it is given shall cease to be a qualifying society as from the date of the direction.
- (5) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction to the Special Commissioners on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (1) above;
- (b) subsections (3) and (4) above do not apply to it by reason of subsection (2) above; or
- (c) the direction is not necessary for the protection of the revenue.
##### 461D
- (1) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was exempt from corporation tax on profits arising from that business,
the transferee is so exempt after that time.
- (2) But if during an accounting period of the transferee there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on that business, the transferee shall not be exempt from corporation tax by virtue of subsection (1) above for that or any subsequent accounting period.
- (3) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was not exempt from corporation tax on profits arising from that business,
the transferee is not so exempt after that time.
- (4) The Treasury may by regulations provide that, where any business of a friendly society is exempt from corporation tax by virtue of subsection (1) above, or not so exempt by virtue of subsection (3) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (5) Regulations under subsection (4) above—
- (a) may make different provision for different cases,
- (b) may include any incidental, supplementary, consequential or transitional provisions which the Treasury consider appropriate, and
- (c) may include retrospective provision.
##### 462A
- (1) Where a registered friendly society has tax exempt life or endowment business which includes contracts—
- (a) made before 20th March 1991, and
- (b) expressed at the outset not to be made in the course of such business,
the society may by notice to the inspector elect that section 460(1) shall not apply to so much of the profits arising from such business as is attributable to such contracts.
- (2) Where a registered friendly society has tax exempt life or endowment business which includes contracts falling within subsection (3) below, the society may by notice to the inspector elect that section 460(1) shall not apply to so much of the profits arising from such business as is attributable to such contracts.
- (3) A contract falls within this subsection if—
- (a) at the outset, it is neither expressed to be made in the course of tax exempt life or endowment business nor expressed not to be so made but is assumed by the society not to be so made, and
- (b) the policy issued in pursuance of it falls within paragraph 21(1)(b) of Schedule 15.
- (4) An election under subsection (2) above shall only be valid if the society satisfies the inspector (or the Commissioners on appeal) that it is possible to identify all the contracts to which the election relates.
- (5) If the inspector decides that he is not satisfied as mentioned in subsection (4) above, he shall give notice of his decision to the society; and section 42(3), (4) and (9) of, and paragraph 1(1) to (1E) of Schedule 2 to, the Management Act shall apply in relation to such a decision as they apply in relation to a decision of an inspector on a claim.
- (6) An election under subsection (1) or (2) above shall have effect for accounting periods ending on or after the day on which the Finance Act 1991 was passed.
- (7) No election under subsection (1) or (2) above may be made after 31st July 1992.
- (8) Where a friendly society has made an election under subsection (1) or (2) above, then, for any accounting period for which the election has effect—
- (a) section 460(1) shall apply to profits arising from life or endowment business which would have been included in the society’s tax exempt life or endowment business had no account been taken of the contracts to which the election relates, and
- (b) section 462(1), in its application to the society, shall have effect with the insertion after “policies” of “and all policies issued in pursuance of contracts to which an election under section 462A(1) or (2) relates”.
- (9) If a friendly society which (or a branch of which) has made an election under subsection (1) or (2) above becomes an incorporated friendly society, the election shall have effect in relation to the incorporated friendly society as it had effect in relation to the society (or branch) which made the election (and accordingly, in relation to accounting periods of the incorporated friendly society, “*the society*” in subsection (8)(a) and (b) above shall be read as referring to the incorporated friendly society).
#### Tax credits for certain recipients of qualifying distributions.
##### 465A
- (1) This section applies where any assets of a branch of a registered friendly society have been identified in a scheme under section 6(5) of the Friendly Societies Act 1992 (property, rights etc. excluded from transfer to the society on its incorporation).
- (2) In relation to any time after the incorporation of the society, the assets shall be treated for the purposes of the Tax Acts as assets of the society (and, accordingly, any tax liability arising in respect of them shall be a liability of the society rather than of the branch).
- (3) Where, by virtue of this section, tax in respect of any of the assets becomes chargeable on and is paid by the society, the society may recover from the trustees in whom those assets are vested the amount of the tax paid.
##### 468AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement.
##### 468C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### No tax credit for original owner under repurchase agreement in respect of certain manufactured dividends.
##### 468EE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions of authorised unit trusts: general
##### 468H
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##### 468I
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### Dividend and foreign income distributions
##### 468J
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##### 468K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Interest distributions
##### 468L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax credits for non-U.K. residents.
##### 468M
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468N
- (1) Subsection (2) below applies where—
- (a) an interest distribution is made for a distribution period to a unit holder; and
- (b) the gross income entered in the distribution accounts for the purposes of computing the total amount available for distribution to unit holders does not derive from eligible income entirely.
- (2) Where this subsection applies, the obligation to deduct under section 349(2) shall not apply to the relevant amount of the interest distribution to the unit holder if the residence condition is on the distribution date fulfilled with respect to him.
- (3) Section 468O makes provision with respect to the circumstances in which the residence condition is fulfilled with respect to a unit holder.
- (4) This is how to calculate the relevant amount of the interest distribution—
$$R=AxBC$Where—R = the relevant amount;A = the amount of the interest distribution before deduction of tax to the unit holder in question;B = such amount of the gross income as derives from eligible income;C = the amount of the gross income.$
- (5) In subsection (4) above the references to the gross income are references to the gross income entered as mentioned in subsection (1)(b) above.
##### 468O
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##### 468P
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##### 468PA
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##### 468PB
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### Distributions to corporate unit holder
##### 468Q
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##### 468R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 469A
- (1) The Tax Acts shall have effect in relation to any common investment fund established under section 42 of the Administration of Justice Act 1982 (common investment funds for money paid into court) as if—
- (a) the fund were an authorised unit trust;
- (b) the person who is for the time being the investment manager of the fund were the trustee of that authorised unit trust; and
- (c) the persons with qualifying interests were the unit holders in that authorised unit trust.
- (1A) For the purposes of subsection (1)(c) above, the persons with qualifying interests are—
- (a) in relation to shares in the fund held by the Accountant General, the persons whose interests entitle them, as against him, to share in the fund’s investments;
- (b) in relation to shares in the fund held by any other person authorised by the Lord Chancellor to hold such shares on behalf of others (an “authorised person”)—
- (i) if there are persons whose interests entitle them, as against the authorised person, to share in the fund’s investments, those persons;
- (ii) if not, the authorised person;
- (c) in relation to shares in the fund held by persons authorised by the Lord Chancellor to hold such shares on their own behalf, those persons.
- (2) In this section “*the Accountant General*” means . . . the Accountant General of the Supreme Court of Judicature in England and Wales or the Accountant General of the Supreme Court of Judicature of Northern Ireland.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 472A
- (1) This section applies in relation to securities—
- (a) which are held by a company carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities; and
- (b) which are such that a profit on their sale would form part of the trading profits of that business.
- (2) Profits and losses arising from such securities that in accordance with generally accepted accounting practice are—
- (a) calculated by reference to the fair value of the securities, and
- (b) recognised in that company's statement of recognised gains and losses or statement of changes in equity,
shall be brought into account in computing the profits or losses of a business in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (2) does not apply—
- (a) to an amount to the extent that it derives from or otherwise relates to an amount brought into account under that subsection in an earlier period of account, or
- (b) to an amount recognised for accounting purposes by way of correction of a fundamental error.
- (4) In this section, “securities”—
- (a) includes shares and any rights, interests or options that by virtue of section 99, 135(5) or 136(5) of the Taxation of Chargeable Gains Act 1992 are treated as shares for the purposes of sections 126 to 136 of that Act; but
- (b) does not include a loan relationship (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996).
##### 477A
- (1) The Board may by regulations make provision with respect to any year of assessment requiring any building society—
- (a) in such cases as may be prescribed by the regulations to deduct out of any dividend or interest paid or credited in the year in respect of shares in, or deposits with or loans to, the society a sum representing the amount of income tax on it, and
- (b) to account for and pay any amount required to be deducted by the society by virtue of this subsection.
- (1A) Regulations under subsection (1) above may not make provision with respect to any dividend or interest paid or credited, on or after the day on which the Finance Act 1991 was passed, in respect of a security (other than a qualifying certificate of deposit and other than a qualifying deposit right) which was quoted, or capable of being listed, on a recognised stock exchange at the time the dividend or interest became payable.
- (2) Regulations under subsection (1) above may—
- (a) make provision with respect to the furnishing of information by building societies or their investors, including, in the case of societies, the inspection of books, documents and other records on behalf of the Board;
- (b) contain such incidental and consequential provisions as appear to the Board to be appropriate, including provisions requiring the making of returns.
- (2A) Without prejudice to the generality of subsection (2)(a) above, regulations under subsection (1) above may make provision with respect to the furnishing of information to or by building societies corresponding to any provision that is made by, or may be made under, section 482 with respect to the furnishing of information to or by deposit-takers.
- (3) For any year of assessment to which regulations under subsection (1) above apply, dividends or interest payable in respect of shares in, or deposits with or loans to, a building society shall be dealt with for the purposes of corporation tax as follows—
- (a) to the extent that it would not otherwise fall to be so regarded, liability to pay the dividends or interest shall be treated for the purposes of Chapter II of Part IV of the Finance Act 1996 as a liability arising under a loan relationship of the building society;
- (aa) if the dividends or interest are payable to a company, then, to the extent that they would not otherwise fall to be so regarded, they shall be treated for those purposes as payable to that company in pursuance of a right arising under a loan relationship of that company;
- (b) no part of any such dividends or interest paid or credited in the year of assessment shall be treated as a distribution of the society or as franked investment income of any company resident in the United Kingdom.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (3)(a) above shall apply to any interest paid by the society under a certified SAYE savings arrangement as if it were a dividend on a share in the society.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Notwithstanding anything in sections 348 to 350, for any year of asessment to which regulations under subsection (1) above apply income tax shall not be deducted upon payment to the society of any interest on advances, being interest payable in that year.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) In this section “*dividend*” has the meaning given by regulations under subsection (1) above . . . .
- (10) In this section—
- “*certified SAYE savings arrangement*” has the meaning given by section 703 of ITTOIA 2005
- “*qualifying certificate of deposit*” has the same meaning as in section 349, and
- “*qualifying deposit right*” has the meaning given by section 349(4), reading “paid” as “paid or credited”, and
- “*security*” includes share.
##### 477B
- (1) In computing for the purposes of corporation tax the income of a building society from the trade carried on by it, there shall be allowed as a deduction, if subsection (2) below applies, the incidental costs of obtaining finance by means of issuing shares in the society which are qualifying shares.
- (1A) A deduction shall not be allowed by virtue of subsection (1) above to the extent that the costs in question fall to be brought into account as debits for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships).
- (2) This subsection applies if any amount payable in respect of the shares by way of dividend or interest is deductible in computing for the purposes of corporation tax the income of the society from the trade carried on by it.
- (3) In subsection (1) above, “*the incidental costs of obtaining finance*” means expenditure on fees, commissions, advertising, printing and other incidental matters (but not including stamp duty), being expenditure wholly and exclusively incurred for the purpose of obtaining the finance (whether or not it is in fact obtained), or of providing security for it or of repaying it.
- (4) This section shall not be construed as affording relief—
- (a) for any sums paid in consequence of, or for obtaining protection against, losses resulting from changes in the rate of exchange between different currencies, or
- (b) for the cost of repaying qualifying shares so far as attributable to their being repayable at a premium or to their having been issued at a discount.
- (5) In this section—
- “*dividend*” has the same meaning as in section 477A, and
- “*qualifying share*” has the same meaning as in section 117(4) of the 1992 Act.
##### 480A
- (1) Any deposit-taker making a payment of interest in respect of a relevant deposit shall, on making the payment, deduct out of it a sum representing the amount of income tax on it for the year of assessment in which the payment is made.
- (2) Any payment of interest out of which an amount is deductible under subsection (1) above shall be a relevant payment for the purposes of Schedule 16 whether or not the deposit-taker making the payment is resident in the United Kingdom.
- (3) Schedule 16 shall apply in relation to any payment which is a relevant payment by virtue of subsection (2) above—
- (a) with the substitution for any reference to a company of a reference to a deposit-taker,
- (b) as if paragraph 5 applied only in relation to payments received by the deposit-taker and falling to be taken into account in computing his income chargeable to corporation tax, and
- (c) as if in paragraph 7 the reference to section 7(2) included a reference to sections 11(3) and 349(1).
- (4) In relation to any deposit-taker who is not a company, Schedule 16 shall have effect as if—
- (a) paragraph 5 were omitted, and
- (b) references to accounting periods were references to periods for which the deposit-taker makes up his accounts.
- (5) For the purposes of this section, crediting interest shall be treated as paying it.
##### 480B
- (1) The Board may by regulations provide that section 480A(1) shall not apply as regards a payment of interest if such conditions as may be prescribed by the regulations are fulfilled.
- (2) In particular, the regulations may include—
- (a) provision for a certificate to be supplied to the effect that the person beneficially entitled to a payment is unlikely to be liable to pay any amount by way of income tax for the year of assessment in which the payment is made;
- (b) provision for the certificate to be supplied by that person or such other person as may be prescribed by the regulations;
- (c) provision about the time when, and the manner in which, a certificate is to be supplied;
- (d) provision about the form and contents of a certificate.
- (3) Any provision included under subsection (2)(d) above may allow the Board to make requirements, in such manner as they see fit, as to the matters there mentioned.
- (4) For the purposes of this section, crediting interest shall be treated as paying it.
#### Procedure for making election.
##### 480C
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#### Treatment of cash dividend retained and then later paid out
##### 482A
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### PETROLEUM EXTRACTION ACTIVITIES
##### 494AA
- (1) This section applies where—
- (a) a company (“*the seller*”) carrying on a trade has disposed of an asset which was used for the purposes of that trade, or an interest in such an asset;
- (b) the asset is used, under a lease, by the seller or a company associated with the seller (“*the lessee*”) for the purposes of a ring fence trade carried on by the lessee; and
- (c) the lessee uses the asset before the end of the period of two years beginning with the disposal.
- (2) Subject to subsection (4) below, subsection (3) below applies to so much (if any) of the expenditure incurred by the lessee under the lease as—
- (a) falls, in accordance with generally accepted accounting practice, to be treated in the accounts of the lessee as a finance charge;. . . or
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) falls, if the case is one where the lease is a long funding operating lease, to be deductible in computing the profits of the lessee for the purposes of corporation tax (after first making against any such expenditure any reductions falling to be made by virtue of section 502K).
- (3) The expenditure shall not be allowable in computing for the purposes of Schedule D the profits of the ring fence trade.
- (4) Expenditure shall not be disallowed by virtue of subsection (3) above to the extent that the disposal referred to in subsection (1) above is made for a consideration which—
- (a) is used to meet expenditure incurred by the seller in carrying on oil extraction activities or in acquiring oil rights otherwise than from a company associated with the seller; or
- (b) is appropriated to meeting expenditure to be so incurred by the seller.
- (5) Where any expenditure—
- (a) would apart from subsection (3) above be allowable in computing for the purposes of Schedule D the profits of the ring fence trade for an accounting period, but
- (b) by virtue of that subsection is not so allowable,
that expenditure shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 as if it were a non-trading debit in respect of a loan relationship of the lessee for that accounting period.
- (6) In this section —
- “*long funding operating lease*” means a long funding operating lease for the purposes of Part 2 of the Capital Allowances Act (see section 70YI(1) of that Act);
- “*lease*”, in relation to an asset, has the same meaning as in sections 781 to 784.
##### 494A
- (1) In section 403(3) (availability of charges, Schedule A losses and management expenses for surrender as group relief) the reference to the gross profits of the surrendering company for an accounting period does not include the company’s relevant ring fence profits for that period.
- (2) If for that period—
- (a) there are no charges on income paid by the company that are allowable under section 338, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
all the company’s ring fence profits are relevant ring fence profits.
- (3) In any other case the company’s relevant ring fence profits are so much of its ring fence profits as exceeds the amount of the charges on income paid by the company as—
- (a) are allowable under section 338 for that period, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 496A
Schedule 19B to this Act (exploration expenditure supplement) shall have effect.
##### 496B
Schedule 19C to this Act (ring fence expenditure supplement) shall have effect.
#### “Gross rate” and “gross amount” of distributions to include ACT.
##### 501A
- (1) Where in any accounting period beginning on or after 17th April 2002 a company carries on a ring fence trade, a sum equal to 20 per cent of its adjusted ring fence profits for that period shall be charged on the company as if it were an amount of corporation tax chargeable on the company.
- (2) A company’s adjusted ring fence profits for an accounting period are the amount which, on the assumption mentioned in subsection (3) below, would be determined for that period (in accordance with this Chapter) as the profits of the company’s ring fence trade chargeable to corporation tax.
- (3) The assumption is that financing costs are left out of account in computing—
- (a) the amount of the profits or loss of any ring fence trade of the company’s for each accounting period beginning on or after 17th April 2002; and
- (b) where for any such period the whole or part of any loss relief is surrendered to the company in accordance with section 492(8), the amount of that relief or, as the case may be, that part.
- (4) For the purposes of this section, “*financing costs*” means the costs of debt finance.
- (5) In calculating the costs of debt finance for an accounting period the matters to be taken into account include—
- (a) any costs giving rise to debits in respect of debtor relationships of the company under Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) , other than debits in respect of exchange losses from such relationships (see section 103(1A) and (1B) of that Act);
- (b) any exchange gain or loss from a debtor relationship, within the meaning of that Chapter (see section 103(1A) and (1B) of that Act), in relation to debt finance;
- (c) any credit or debit falling to be brought into account under Schedule 26 to the Finance Act 2002 (derivative contracts) in relation to debt finance;
- (d) the financing cost implicit in a payment under a finance lease;
- (dd) where the company is the lessee under a long funding operating lease, the amount deductible in respect of payments under the lease in computing the profits of the lessee for the purposes of corporation tax (after first making against any such amount any reductions falling to be made by virtue of section 502K); and
- (e) any other costs arising from what would be considered in accordance with generally accepted accounting practice to be a financing transaction.
- (6) Where an amount representing the whole or part of a payment falling to be made by a company—
- (a) falls (or would fall) to be treated as a finance charge under a finance lease for the purposes of accounts relating to that company and one or more other companies and prepared in accordance with generally accepted accounting practice, but
- (b) is not so treated in the accounts of the company,
the amount shall be treated for the purposes of this section as financing costs falling within subsection (5)(d) above.
- (7) If—
- (a) in computing the adjusted ring fence profits of a company for an accounting period, an amount falls to be left out of account by virtue of subsection (5)(d) above, but
- (b) the whole or any part of that amount is repaid,
the repayment shall also be left out of account in computing the adjusted ring fence profits of the company for any accounting period.
- (8) In this section “*finance lease*” means any arrangements—
- (a) which provide for an asset to be leased or otherwise made available by a person to another person (“*the lessee*”), and
- (b) which, under generally accepted accounting practice,—
- (i) fall (or would fall) to be treated, in the accounts of the lessee or a person connected with the lessee, as a finance lease or a loan, or
- (ii) are comprised in arrangements which fall (or would fall) to be so treated.
- (9) For the purposes of applying subsection (8)(b) above, the lessee and any person connected with the lessee are to be treated as being companies which are incorporated in a part of the United Kingdom.
- (10) In this section “*accounts*”, in relation to a company, includes any accounts which—
- (a) relate to two or more companies of which that company is one, and
- (b) are drawn up in accordance with generally accepted accounting practice.
- (11) In this section “*long funding operating lease*” means a long funding operating lease for the purposes of Part 2 of the Capital Allowances Act (see section 70YI(1) of that Act).
##### 501B
- (1) Subject to subsection (3) below, the provisions of section 501A(1) relating to the charging of a sum as if it were an amount of corporation tax shall be taken as applying, subject to the provisions of the Taxes Acts, and to any necessary modifications, all enactments applying generally to corporation tax, including—
- (a) those relating to returns of information and the supply of accounts, statements and reports;
- (b) those relating to the assessing, collecting and receiving of corporation tax;
- (c) those conferring or regulating a right of appeal; and
- (d) those concerning administration, penalties, interest on unpaid tax and priority of tax in cases of insolvency under the law of any part of the United Kingdom.
- (2) Accordingly (but without prejudice to subsection (1) above) the Management Act shall have effect as if any reference to corporation tax included a reference to a sum chargeable under section 501A(1) as if it were an amount of corporation tax.
- (3) In any regulations made under section 32 of the Finance Act 1998 (as at 17th April 2002, the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999)—
- (a) references to corporation tax do not include a reference to a sum chargeable on a company under section 501A(1) as if it were corporation tax; and
- (b) references to profits charged to corporation tax do not include a reference to adjusted ring fence profits, within the meaning of section 501A(1).
- (4) In this section “*the Taxes Acts*” has the same meaning as in the Management Act.
### Chapter 5A — Special rules for long funding leases of plant or machinery: corporation tax
### Introductory
##### 502A
This Chapter has effect for the purposes of corporation tax only.
### Lessors under long funding finance leases
##### 502B
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessor of any plant or machinery under a long funding finance lease.
- (2) The amount to be brought into account as the lessor's taxable income from the lease for the period of account is the amount of the rental earnings in respect of the lease for the period of account.
- (3) The “rental earnings” for any period is the amount which, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment for that period in respect of the lease where it meets the finance lease test.
- (4) If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan in the accounts in question, so much of the rentals under the lease as fall (or would fall) to be treated as interest are to be treated for the purposes of this section as rental earnings.
##### 502C
- (1) This section applies for determining for the purposes of corporation tax the profits of a company which is or has been the lessor under a long funding finance lease.
- (2) This section has effect where a profit or loss (whether of an income or capital nature)—
- (a) arises to the company in connection with the lease, and
- (b) in accordance with generally accepted accounting practice falls to be recognised for accounting purposes in a period of account, but
- (c) would not, apart from this section, be brought into account in computing the profits of the company for the purposes of corporation tax.
- (3) The profit or loss is to be treated—
- (a) in the case of a profit, as income of the company attributable to the lease,
- (b) in the case of a loss, as a revenue expense incurred by the company in connection with the lease.
- (4) Any reference in this section to an amount falling to be recognised for accounting purposes in a period of account is a reference to an amount falling to be recognised for accounting purposes—
- (a) in the company's profit and loss account or income statement,
- (b) in the company's statement of recognised gains and losses or statement of changes in equity, or
- (c) in any other statement of items brought into account in computing the company's profits or losses for that period.
##### 502D
- (1) This section applies for determining the liability to corporation tax of a company which is or has been the lessor under a long funding finance lease.
- (2) Where—
- (a) the lease terminates, and
- (b) a sum calculated by reference to the termination value is paid to the lessee,
no deduction in respect of the sum paid to the lessee is allowed in computing the profits of the company.
- (3) This section does not prevent a deduction in respect of a sum to the extent that the sum is brought into account in determining the company's rental earnings.
### Lessors under long funding operating leases
##### 502E
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account—
- (a) for the whole of which, or
- (b) for any part of which,
the company is the lessor of any plant or machinery under a long funding operating lease.
- (2) A deduction is allowed in computing the profits of the company for the period of account.
- (3) The amount of the deduction for any period of account is to be determined as follows.
- (4) First, find the “*relevant value*” for the purposes of subsection (6)(a) below, which is—
- (a) if the only use of the plant or machinery by the lessor has been the leasing of it under the long funding operating lease as a qualifying activity, cost;
- (b) if the last previous use of the plant or machinery by the lessor was the leasing of it under another long funding operating lease as a qualifying activity, market value;
- (c) if the last previous use of the plant or machinery by the lessor was the leasing of it under a long funding finance lease as a qualifying activity, the recognised value;
- (d) if the last previous use of the plant or machinery by the lessor was for the purposes of a qualifying activity other than leasing under a long funding lease, the lower of cost and market value;
- (e) if the lessor owns the plant or machinery as a result of having incurred expenditure on its provision for purposes other than those of a qualifying activity, but—
- (i) the plant or machinery is brought into use by the lessor for the purposes of a qualifying activity on or after 1st April 2006, and
- (ii) that qualifying activity is the leasing of the plant or machinery under the long funding operating lease,
the relevant value is the lower of first use market value and first use amortised value.
- (5) In subsection (4) above—
- “*cost*” means the amount of the expenditure incurred by the lessor on the provision of the plant or machinery;
- “*first use amortised value*” means the value that the plant or machinery would have at the time when it is first brought into use for the purposes of the qualifying activity, on the assumption that—the cost of acquiring the plant or machinery had been written off on a straight line basis over the remaining useful economic life of the plant or machinery, andany further capital expenditure incurred had been written off on a straight line basis over so much of the remaining economic life of the plant or machinery as remains at the time when the expenditure is incurred;
- “*first use market value*” means the market value of the plant or machinery at the time when it is first brought into use for the purposes of the qualifying activity;
- “*market value*” means the market value of the plant or machinery at the commencement of the term of the long funding operating lease;
- “*recognised value*” means the value at which the plant or machinery is recognised in the books or other financial records of the lessor at the commencement of the long funding operating lease.
- (6) From—
- (a) the relevant value determined in accordance with subsection (4) above,
subtract
- (b) the amount which, at the commencement of the term of the lease, is (or, in a case falling within subsection (4)(e) above, would have been) expected to be the residual value of the plant or machinery,
to find the expected gross reduction in value over the term of the lease.
- (7) Apportion the amount of that expected gross reduction in value to each period of account in which any part of the term of the lease falls.
- (8) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each period of account.
- (9) The amount of the deduction for any period of account is the amount so apportioned to that period.
##### 502F
- (1) This section applies if in any period of account—
- (a) a company is the lessor of any plant or machinery under a long funding operating lease,
- (b) the company incurs capital expenditure in relation to the plant or machinery, and
- (c) that capital expenditure (the “additional expenditure”) is not reflected in the market value of the plant or machinery at the commencement of the term of the lease.
- (2) In a case falling within section 502E(4)(e) above, subsection (1)(c) above has effect as if the reference to the commencement of the term of the lease were a reference to the time when the plant or machinery is first brought into use by the lessor for the purposes of the qualifying activity.
- (3) Where this section applies, an additional deduction is allowed in computing the profits of the company for each post-expenditure period of account in which the company is the lessor of the plant or machinery under the lease.
- (4) The amount of the deduction for any such period of account is to be determined as follows.
- (5) Find ARV, CRV, PRV, and TRV where—
- “ARV” is the amount which, at the time when the additional expenditure is incurred, is expected to be the residual value of the plant or machinery;
- “CRV” is the amount which, at the commencement of the term of the lease, is expected to be the residual value of the plant or machinery;
- “PRV” is the sum of any amounts that fell to be taken into account as RRV (see subsection (6)) in the application of this section in relation to any previous additional expenditure incurred by the company in relation to the leased plant or machinery;
- “TRV” is the total of CRV and PRV.
- (6) Find RRV, where—
- (a) if ARV exceeds TRV, RRV is the portion of the excess that is a result of the additional expenditure, but
- (b) if ARV does not exceed TRV, RRV is nil.
- (7) From—
- (a) the amount of the additional expenditure,
subtract
- (b) RRV,
to find the expected partial reduction in value over the remainder of the term of the lease.
- (8) Apportion the amount of that expected partial reduction in value to each post-expenditure period of account in which any part of the term of the lease falls.
- (9) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each post-expenditure period of account.
- (10) The amount of the additional deduction for any period of account is the amount so apportioned to that period.
- (11) In this section “*post-expenditure period of account*” means any period of account ending after the incurring of the additional expenditure.
##### 502G
- (1) This section applies for determining the liability to corporation tax of a company which is the lessor immediately before the termination of a long funding operating lease.
- (2) Step 1 is to find—
- (a) the termination amount (TA);
- (b) the total of any sums paid to the lessee that are calculated by reference to the termination value (LP).
- (3) Step 2 is to find—
- (a) the relevant value for the purposes of section 502E(6)(a) (RV);
- (b) the total of the deductions allowable under section 502E for periods of account for the whole or part of which the company was the lessor before the termination of the lease (TD1);
- (c) the amount, if any, (ERV) by which RV exceeds TD1.
- (4) Step 3 is to find—
- (a) the total of any amounts of capital expenditure incurred by the company which constitute additional expenditure for the purposes of section 502F in the case of the lease (TAE);
- (b) the total of any deductions allowable under section 502F for periods of account for the whole or part of which the company was the lessor before the termination of the lease (TD2);
- (c) the amount, if any, (EAE) by which TAE exceeds TD2.
- (5) Step 4 is to find the total of ERV and EAE (T).
- (6) If (TA – LP) exceeds T, treat a profit of an amount equal to the excess as arising to the company in the period of account in which the lease terminates.
- (7) If T exceeds (TA – LP), treat a loss of an amount equal to the excess as arising to the company in that period of account.
- (8) A profit or loss treated as arising to the company under subsection (6) or (7) above is to be treated—
- (a) in the case of a profit, as income of the company attributable to the lease,
- (b) in the case of a loss, as a revenue expense incurred by the company in connection with the lease.
- (9) In computing the profits of the company, no deduction is allowed in respect of any sums paid to the lessee that are calculated by reference to the termination value.
### Lessors under long funding finance or operating leases: avoidance etc
#### Meaning of “the minimum amount”
##### 502GA
- (1) Sections 502B to 502G do not apply in the case of a company which is or has been the lessor of any plant or machinery under a long funding lease if the following condition is met.
- (2) The condition is that any part of the expenditure incurred by the company on the acquisition of the plant or machinery for leasing under the lease—
- (a) is (apart from those sections) allowable as a deduction in calculating its profits or losses for the purposes of corporation tax, and
- (b) is so allowable as a result of the plant or machinery forming part of its trading stock.
- (3) For the purposes of this section the cases in which expenditure incurred by a company on the acquisition of any plant or machinery for leasing under a lease is allowable as such a deduction include any case where—
- (a) the company becomes entitled to the deduction at any time after the expenditure is incurred, and
- (b) the deduction arises as a result of the plant or machinery forming part of its trading stock at that time.
- (4) If—
- (a) at any time any of sections 502B to 502G has applied for determining the amounts to be taken into account in calculating the profits or losses of the company for the purposes of corporation tax, and
- (b) the condition in subsection (2) is met at any subsequent time,
those amounts, and any other amounts which (as a result of this section) are to be so taken into account, are subject to such adjustments as are just and reasonable.
- (5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (4).
##### 502GB
- (1) This section applies if—
- (a) a company is the lessee of any plant or machinery under a lease (“lease A”) that is not a long funding lease,
- (b) it enters into a lease (“lease B”) of any of that plant or machinery (as lessor), and
- (c) lease B is a long funding lease.
- (2) Sections 502B to 502G do not apply in relation to lease B.
- (3) If by virtue of section 70H of the Capital Allowances Act (tax return by lessee treating lease as long funding lease) lease A becomes a long funding lease (and does not cease to be such a lease), treat this section as never having applied in relation to lease B.
##### 502GC
- (1) Sections 502B to 502G do not apply in the case of a company which is or has been the lessor of any plant or machinery under a long funding lease if conditions A to C are met.
- (2) Condition A is that the long funding lease forms part of any arrangement entered into by the company which includes one or more other transactions (whether the arrangement is entered into before or after or at the inception of the lease).
- (3) Condition B is that the main purpose, or one of the main purposes, of the arrangement is to secure that, over the relevant period, there would be a substantial difference between—
- (a) the total amount of the amounts under the arrangement which are, in accordance with generally accepted accounting practice, recognised in determining the company's profit or loss for any period or taken into account in calculating the amounts which are so recognised, and
- (b) the total amount of the amounts under the arrangement which are taken into account in calculating the profits or losses of the company for the purposes of corporation tax.
- (4) For the purposes of condition B “*the relevant period*” means the period which begins with the inception of the lease and ends with the end of the term of the lease.
- (5) Condition C is that the difference would be attributable (wholly or partly) to the application of any of sections 502B to 502G in relation to the company by reference to the plant or machinery under the lease.
- (6) The reference in this section to an amount being recognised in determining a company's profit or loss for a period is to an amount being recognised for accounting purposes—
- (a) in the company's profit and loss account or income statement,
- (b) in the company's statement of recognised gains and losses or statement of changes in equity, or
- (c) in any other statement of items brought into account in calculating the company's profits and losses for that period.
- (7) For the purposes of this section it does not matter whether the parties to any transaction which forms part of the arrangement differ from the parties to any of the other transactions.
- (8) For the purposes of this section the cases in which two or more transactions are to be taken as forming part of an arrangement include any case in which it would be reasonable to assume that one or more of them—
- (a) would not have been entered into independently of the other or others, or
- (b) if entered into independently of the other or others, would not have taken the same form or been on the same terms.
- (9) If—
- (a) at any time any of sections 502B to 502G has applied for determining the amounts to be taken into account in calculating the profits or losses of the company for the purposes of corporation tax, and
- (b) conditions A to C are met at any subsequent time,
those amounts, and any other amounts which (as a result of this section) are to be so taken into account, are subject to such adjustments as are just and reasonable.
- (10) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (9).
##### 502GD
- (1) If a company is or has been a lessor under a long funding lease of a film, sections 502B to 502G do not apply in respect of the lease.
- (2) “*Film*” has the same meaning as in Part 15 of CTA 2009 (see section 1181 of that Act).
### Insurance company as lessor
##### 502H
- (1) This section applies to a company carrying on life assurance business if it is the lessor under a long funding lease in a period of account.
- (2) In this section—
- (a) subsections (3) to (7) have effect in relation to—
- (i) basic life assurance and general annuity business, and
- (ii) long-term business which is not life assurance business, and
- (b) subsections (8) to (10) have effect in relation to certain computations falling to be made in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (3) Subsection (4) below applies in the case of each of the following amounts—
- (a) an amount of rental earnings which the company is required by section 502B (long funding finance lease) to bring into account as taxable income,
- (b) an amount treated under section 502C(3)(a) (long funding finance lease: lessor's exceptional items) as a profit arising to the company,
- (c) an amount of rental income arising to the company from a long funding operating lease,
- (d) an amount treated under section 502G(8)(a) (long funding operating lease: lessor's excess termination amount) as a profit arising to the company,
but only if the leased asset is an asset of the company's long-term insurance fund.
- (4) In determining for the purposes of the Corporation Tax Acts in any such case the extent to which any such amount is referable to—
- (a) basic life assurance and general annuity business, or
- (b) long-term business which is not life assurance business,
section 432A (apportionment of insurance companies' income) is to have effect in relation to the amount as it has effect in relation to the income arising from an asset.
This subsection is subject to subsections (5) and (6) below.
- (5) Before applying subsection (4) above in a case where—
- (a) that subsection applies by virtue of subsection (3)(a) above in relation to an amount of rental earnings, and
- (b) there is an amount which is deductible as a revenue expense by virtue of section 502C(3)(b) (long funding finance lease: lessor's exceptional items),
the amount so deductible is to be given effect by applying it, so far as possible, in reducing the amount of the rental earnings.
- (6) Before applying subsection (4) above by virtue of subsection (3)(c) above in relation to an amount of rental income,—
- (a) any deduction falling to be made under section 502E, or
- (b) any reduction falling to be made under section 502F,
is to be given effect by applying it, so far as possible, in reducing (or further reducing) the amount of the rental income.
- (7) Where, after applying amounts in making reductions required by subsection (5) or (6) above, there remains unapplied an amount in respect of—
- (a) a deduction falling to be made under section 502E,
- (b) a reduction falling to be made under section 502F, or
- (c) an amount deductible as a revenue expense by virtue of section 502C(3)(b),
the amount is to be apportioned under section 432A in the same way as income.
- (8) Where—
- (a) the leased asset is an asset of the company's long-term insurance fund, and
- (b) a computation falling within subsection (9) below falls to be made,
subsection (10) below applies to the computation.
- (9) A computation falls within this subsection if it is a computation of profits of—
- (a) life assurance business carried on by the company, or
- (b) any category of life assurance business carried on by the company,
and falls to be made in accordance with the provisions of this Act applicable to Case I of Schedule D.
- (10) In making the computation, no amount shall be brought into account by virtue of any of the following provisions—
- (a) section 502B (long funding finance lease: rental earnings),
- (b) section 502C(3)(a) or (b) (long funding finance lease: profit or loss in respect of exceptional items),
- (c) section 502E (long funding operating lease: periodic deduction),
- (d) section 502F (long funding operating lease: lessor's additional expenditure),
- (e) section 502G(8)(a) or (b) (long funding operating lease: lessor's profit or loss in respect of termination amount).
### Lessees under long funding finance leases
#### Elections as to transfer of relief under section 257A or 257AB.
##### 502I
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessee of any plant or machinery under a long funding finance lease.
- (2) In calculating the company's profits for the period of account,—
- (a) the amount deducted in respect of amounts payable under the lease,
must not exceed
- (b) the amounts which, in accordance with generally accepted accounting practice, fall (or would fall) to be shown in the company's accounts as finance charges in respect of the lease.
- (3) If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan, subsection (2) above applies as if the lease were one which, under generally accepted accounting practice, fell to be treated as a finance lease.
##### 502J
- (1) This section applies where—
- (a) a company is or has been the lessee under a long funding finance lease, and
- (b) in connection with the termination of the lease, a payment calculated by reference to the termination value falls to be made to the company.
- (2) The payment is not to be brought into account in determining for the purposes of corporation tax the profits of the company for any period of account.
- (3) Subsection (2) above does not affect the amount of any disposal value that falls to be brought into account by the company under the Capital Allowances Act.
### Lessees under long funding operating leases
##### 502K
- (1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessee of any plant or machinery under a long funding operating lease.
- (2) The deductions that may be allowed in computing the profits of the company for the period of account are to be reduced in accordance with the following provisions of this section.
- (3) The amount of the reduction for any period of account is to be determined as follows.
- (4) First, find the “*relevant value*” for the purposes of subsection (6)(a) below, which is—
- (a) the market value of the plant or machinery at the commencement of the term of the lease, unless paragraph (b) below applies;
- (b) if the lessee—
- (i) has the use of the plant or machinery as a result of having incurred expenditure on its provision for purposes other than those of a qualifying activity, but
- (ii) brings the plant or machinery into use for the purposes of a qualifying activity on or after 1st April 2006,
the lower of first use market value and first use amortised market value.
- (5) In subsection (4) above—
- “*first use amortised market value*” means the value that the plant or machinery would have—at the time when it is first brought into use for the purposes of the qualifying activity, buton the assumption that the market value of the plant or machinery at the commencement of the term of the lease had been written off on a straight line basis over the remaining useful economic life of the plant or machinery;
- “*first use market value*” means the market value of the plant or machinery at the time when it is first brought into use for the purposes of the qualifying activity.
- (6) From—
- (a) the relevant value determined in accordance with subsection (4) above,
subtract
- (b) the amount which, at the commencement of the term of the lease, is (or, in a case falling within subsection (4)(b) above, would have been) expected to be the market value of the plant or machinery at the end of the term of the lease,
to find the expected gross reduction over the term of the lease.
- (7) Apportion the amount of that expected gross reduction to each period of account in which any part of the term of the lease falls.
- (8) The apportionment must be on a time basis according to the proportion of the term of the lease that falls in each period of account.
- (9) The amount of the reduction for any period of account is the amount so apportioned to that period.
### Interpretation of Chapter
##### 502L
- (1) This section has effect for the interpretation of this Chapter.
- (2) In this Chapter—
- “*qualifying activity*” has the same meaning as in Part 2 of the Capital Allowances Act;
- “*residual value*”, in relation to any plant or machinery leased under a long funding operating lease, means—the estimated market value of the plant or machinery on a disposal at the end of the term of the lease,lessthe estimated costs of that disposal.
- (3) Any reference in this Chapter to a sum being written off on a straight line basis over a period of time (the “writing-off period”) is a reference to—
- (a) the sum being apportioned between each of the periods of account in which any part of the writing-off period falls,
- (b) that apportionment being made on a time basis, according to the proportion of the writing-off period that falls in each of the periods of account, and
- (c) the sum being written off accordingly.
- (4) Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases) applies in relation to this Chapter as it applies in relation to that Part.
##### 504A
- (1) For the purposes specified in subsection (2)—
- (a) a UK property business which consists in, or so far as it consists in, the commercial letting of furnished holiday accommodation is treated as if it were a trade the profits of which are chargeable to income tax under Part 2 of ITTOIA 2005, and
- (b) all such lettings made by a particular person or partnership or body of persons are treated as one trade.
The “*commercial letting of furnished holiday accommodation*” has the same meaning as it has for the purposes of Chapter 6 of Part 3 of ITTOIA 2005.
- (2) Subsection (1) applies for the purposes of—
- (a) Chapter 1 of Part 10 (loss relief for income tax),
- (b) section 833(4)(c) (income regarded as earned income), and
- (c) section 189(2)(b) of the Finance Act 2004 (income regarded as relevant UK earnings for pension purposes).
- (3) Chapter 1 of Part 10 as applied by this section has effect with the following adaptations—
- (a) no relief is to be given to an individual under section 381 (relief for losses in early years of trade) in respect of a year of assessment if any of the accommodation in respect of which the trade is carried on in that year was first let by that person as furnished accommodation more than three years before the beginning of that year of assessment;
- (b) section 384 (restrictions on right of set-off) has effect with the omission of subsections (6) to (8) (which relate to certain losses attributable to capital allowances);
- (c) section 390 (treatment of interest as loss) has effect as if the reference to a trade carried on wholly or partly in the United Kingdom were a reference to the UK property business so far as it is treated as a trade.
- (4) If there is a letting of accommodation only part of which is holiday accommodation, such apportionments are to be made for the purposes of this section as are just and reasonable.
- (5) Relief is not to be given for the same loss, or the same portion of a loss, both under a provision of Chapter 1 of Part 10 as applied by this section and under any other provision of the Income Tax Acts.
#### Transfer of relief under section 257A where relief exceeds income.
#### Transfer of relief under section 257A.
##### 506A
- (1) This section applies to the following transactions—
- (a) the sale or letting of property by a charity to a substantial donor,
- (b) the sale or letting of property to a charity by a substantial donor,
- (c) the provision of services by a charity to a substantial donor,
- (d) the provision of services to a charity by a substantial donor,
- (e) an exchange of property between a charity and a substantial donor,
- (f) the provision of financial assistance by a charity to a substantial donor,
- (g) the provision of financial assistance to a charity by a substantial donor, and
- (h) investment by a charity in the business of a substantial donor.
- (2) For the purposes of this section a person is a substantial donor to a charity in respect of a chargeable period if—
- (a) the charity receives relievable gifts of at least £25,000 from him in a period of 12 months in which the chargeable period wholly or partly falls, or
- (b) the charity receives relievable gifts of at least £100,000 from him in a period of six years in which the chargeable period wholly or partly falls;
and if a person is a substantial donor to a charity in respect of a chargeable period by virtue of paragraph (a) or (b), he is a substantial donor to the charity in respect of the following five chargeable periods.
- (3) A payment made by a charity to a substantial donor in the course of or for the purposes of a transaction to which this section applies shall be treated for the purposes of section 505 as non-charitable expenditure.
- (4) If the terms of a transaction to which this section applies are less beneficial to the charity than terms which might be expected in a transaction at arm's length, the charity shall be treated for the purposes of section 505 as incurring non-charitable expenditure equal to that amount which the Commissioners for Her Majesty's Revenue and Customs determine as the cost to the charity of the difference in terms.
- (5) A payment by a charity of remuneration to a substantial donor shall be treated for the purposes of section 505 as non-charitable expenditure unless it is remuneration, for services as a trustee, which is approved by—
- (a) the Charity Commission,
- (b) another body with responsibility for regulating charities by virtue of legislation having effect in respect of any Part of the United Kingdom, or
- (c) a court.
##### 506B
- (1) Section 506A shall not apply to a transaction within section 506A(1)(b) or (d) if the Commissioners for Her Majesty's Revenue and Customs determine that the transaction—
- (a) takes place in the course of a business carried on by the substantial donor,
- (b) is on terms which are no less beneficial to the charity than those which might be expected in a transaction at arm's length, and
- (c) is not part of an arrangement for the avoidance of any tax.
- (2) Section 506A shall not apply to the provision of services to a substantial donor if the Commissioners determine that the services are provided—
- (a) in the course of the actual carrying out of a primary purpose of the charity, and
- (b) on terms which are no more beneficial to the substantial donor than those on which services are provided to others.
- (3) Section 506A shall not apply to the provision of financial assistance to a charity by a substantial donor if the Commissioners determine that the assistance—
- (a) is on terms which are no less beneficial to the charity than those which might be expected in a transaction at arm's length, and
- (b) is not part of an arrangement for the avoidance of any tax.
- (4) Section 506A shall not apply to investment by a charity in the business of a substantial donor where the investment takes the form of the purchase of shares or securities listed on a recognised stock exchange.
- (5) A disposal at an undervalue to which section 587B applies shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (6) A disposal at an undervalue to which section 257(2) of the 1992 Act (gifts of chargeable assets) applies shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (7) In the application of section 506A payments by a charity, or benefits arising to a substantial donor from a transaction, shall be disregarded in so far as they—
- (a) relate to a donation by the donor, and
- (b) do not exceed the relevant limit in relation to the donation for the purposes of section 339 or section 25 of the Finance Act 1990.
- (8) A company which is wholly owned by a charity within the meaning of section 339(7AB) shall not be treated as a substantial donor in relation to the charity which owns it (or any of the charities which own it).
- (9) A registered social landlord or housing association shall not be treated as a substantial donor in relation to a charity with which it is connected; and for that purpose—
- (a) “*registered social landlord or housing association*” means a body entered on a register maintained under—
- (i) section 1 of the Housing Act 1996,
- (ii) section 57 of the Housing (Scotland) Act 2001, or
- (iii) Article 14 of the Housing (Northern Ireland) Order 1992, and
- (b) a body and a charity are connected if (and only if)—
- (i) the one is wholly owned, or subject to control, by the other, or
- (ii) both are wholly owned, or subject to control, by the same person.
##### 506C
- (1) A gift is “*relievable*” for the purposes of section 506A(2) if relief is available in respect of it under—
- (a) section 83A,
- (b) section 339,
- (c) sections 587B and 587C,
- (d) section 25 of the Finance Act 1990 (individual gift aid),
- (e) section 257 of the 1992 Act (gifts of chargeable assets),
- (f) section 63 of the Capital Allowances Act (gifts of plant and machinery),
- (g) sections 713 to 715 of ITEPA 2003 (payroll giving),
- (h) section 108 of ITTOIA 2005 (gifts of trading stock), or
- (i) sections 628 and 630 of ITTOIA 2005 (gifts from settlor-interested trusts).
- (2) A charity is treated as incurring expenditure in accordance with section 506A(4) at such time (or times) as the Commissioners determine.
- (3) Section 506A applies to a transaction entered into in a chargeable period with a person who is a substantial donor in respect of that period, even if it was not until after the transaction was entered into that he first satisfied the definition of “substantial donor” in respect of that period.
- (4) Either or both of subsections (3) and (4) of section 506A may be applied to a single transaction; but any amount of non-charitable expenditure which a charity is treated as incurring under section 506A(3) in respect of a transaction shall be deducted from any amount which it would otherwise be treated as incurring under section 506A(4) in respect of the transaction.
- (5) Two or more connected charities shall be treated as a single charity for the purposes of section 506A and 506B and this section; and for this purpose “*connected*” means connected in a matter relating to the structure, administration or control of a charity.
- (6) Where remuneration is paid otherwise than in money, section 506A(5) shall apply as to a payment in money of the amount that would, under Part 3 of ITEPA 2003, be the cash equivalent of the remuneration as a benefit.
- (7) In sections 506A and 506B and this section—
- (a) a reference to a substantial donor or other person includes a reference to a person connected with him within the meaning of section 839,
- (b) “*financial assistance*” includes, in particular—
- (i) the provision of a loan, guarantee or indemnity, and
- (ii) entering into alternative finance arrangements within the meaning of section 46 of the Finance Act 2005, and
- (c) a reference to a gift of a specified amount includes a reference to a non-monetary gift of that value.
- (8) On an appeal against an assessment the Special Commissioners may review a decision of the Commissioners in connection with section 506A.
- (9) The Treasury may by regulations vary a sum, or a period of time, specified in section 506A(2).
#### Transfer of relief under section 257A where relief exceeds income or 257AB.
##### 508A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 508B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 510A
- (1) In this section “*grouping*” means a European Economic Interest Grouping formed in pursuance of Council Regulation [(EEC) No. 2137/85](https://www.legislation.gov.uk/european/regulation/1985/2137) of 25th July 1985, whether registered in Great Britain, in Northern Ireland, or elsewhere.
- (2) Subject to the following provisions of this section, for the purposes of charging tax in respect of income and gains a grouping shall be regarded as acting as the agent of its members.
- (3) In accordance with subsection (2) above—
- (a) for the purposes mentioned in that subsection the activities of the grouping shall be regarded as those of its members acting jointly and each member shall be regarded as having a share of its property, rights and liabilities; and
- (b) for the purposes of charging tax in respect of chargeable gains a person shall be regarded as acquiring or disposing of a share of the assets of the grouping not only where there is an acquisition or disposal of assets by the grouping while he is a member of it, but also where he becomes or ceases to be a member of a grouping or there is a change in his share of the property of the grouping ;
but paragraph (a) above is subject to subsection (6A) below.
- (4) Subject to subsection (5) below, for the purposes of this section a member’s share of any property, rights or liabilities of a grouping shall be determined in accordance with the contract under which the grouping is established.
- (5) Where the contract does not make provision as to the shares of members in the property, rights or liabilities in question a member’s share shall be determined by reference to the share of the profits of the grouping to which he is entitled under the contract (and if the contract makes no provision as to that, the members shall be regarded as having equal shares).
- (6) . . . Where any trade or profession is carried on by a grouping it shall be regarded for the purposes of charging tax in respect of income and gains as carried on in partnership by the members of the grouping.
- (6A) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) shall have effect in relation to a grouping as it has effect in relation to a partnership (see in particular section 87A of, and paragraphs 19 and 20 of Schedule 9 to, that Act).
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 519A
- (1) A health service body—
- (a) shall be exempt from income tax in respect of its income, and
- (b) shall be exempt from corporation tax,
and, so far as the exemption from income tax conferred by this subsection calls for repayment of tax, effect shall be given thereto by means of a claim.
- (2) In this section “*health service body*” means—
- (a) a Strategic Health Authority established under section 13 of the National Health Service Act 2006. . . . . . ;
- (aa) a Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006;
- (ab) a Primary Care Trust;
- (aba) a Local Health Board;
- (b) a National Health Service trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006;
- (bb) an NHS foundation trust
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) a Health Board or Special Health Board, the Common Services Agency for the Scottish Health Service and a National Health Service trust respectively constituted under sections 2, 10 and 12A of the National Health Service (Scotland) Act 1978;
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (g) the Scottish Dental Practice Board; . . .
- (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (i) a Health and Social Services Board and the Northern Ireland Central Services Agency for the Health and Social Services established under Articles 16 and 26 respectively of the Health and Personal Social Services (Northern Ireland) Order 1972;
- (j) a special health and social services agency established under the Health and Personal Social Services (Special Agencies) (Northern Ireland) Order 1990; and
- (k) a Health and Social Services trust established under the Health and Personal Social Services (Northern Ireland) Order 1991.
- (3) The Treasury may by order disapply subsection (1)(b) in relation to a specified activity, or class of activity, of an NHS foundation trust.
- (4) An order under subsection (3) shall make provision for determining the amount of the profits relating to an activity that are to be charged to corporation tax as a result of the disapplication of subsection (1)(b).
- (5) An order under subsection (3) may, in particular—
- (a) make provision for disregarding profits of less than a specified amount in respect of a financial year or accounting period or a specified part of a financial year or accounting period;
- (b) make provision for disregarding a specified part of profits in respect of a financial year or accounting period or a specified part of a financial year or accounting period;
- (c) make provision for disregarding all or part of profits relating to activity in respect of which receipts or turnover (as defined by the order) are less than a specified amount in respect of a financial year or accounting period or a specified part of a financial year or accounting period.
- (6) An order under subsection (3)—
- (a) may apply, with or without modification, a provision of the Tax Acts,
- (b) may disapply a provision of the Tax Acts,
- (c) may make provision similar to a provision of the Tax Acts, and
- (d) may make provision generally or in relation to a specified body or class of bodies.
- (7) The Treasury may make an order under subsection (3) only—
- (a) in relation to an activity or class of activity that appears to the Treasury to be of a commercial nature,
- (b) where it appears to the Treasury to be expedient for the purpose of avoiding, removing or reducing differences between—
- (i) the fiscal treatment of the body undertaking the activity, and
- (ii) the fiscal treatment of another body or class of body which is of a commercial nature and which undertakes or might undertake the same or a similar activity, and
- (c) if a draft has been laid before, and approved by resolution of, the House of Commons.
- (8) An activity authorised under section 43(1) of the National Health Service Act 2006 shall not be treated as an activity of a commercial nature for the purposes of subsection (7)(a).
#### Transfer of relief under section 257A where relief exceeds income or 257AB.
#### Transfer of relief under section 257A.
#### Indexation of amounts in sections 257 , 257A and 257AB.
#### Life assurance premiums paid by employer
#### Expenditure and houses of ministers of religion.
### Designs
##### 537A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 537B
- (1) Where the usual place of abode of the owner of a right in a design is not within the United Kingdom, section 349(1) shall apply to any payment of or on account of any royalties or sums paid periodically for or in respect of that right as it applies to annual payments not payable out of profits or gains brought into charge to income tax.
- (2) In subsection (1) above—
- (a) “*right in a design*” means design right or the right in a registered design,
- (b) the reference to the owner of a right includes a person who, notwithstanding that he has assigned the right to some other person, is entitled to receive periodical payments in respect of the right, and
- (c) the reference to royalties or other sums paid periodically for or in respect of a right does not include royalties or sums paid in respect of articles which . . . have been exported from the United Kingdom for distribution outside the United Kingdom.
- (3) Where a payment to which subsection (1) above applies is made through an agent resident in the United Kingdom and that agent is entitled as against the owner of the right to deduct any sum by way of commission in respect of services rendered, the amount of the payment shall for the purpose of section 349(1) be taken to be diminished by the sum which the agent is entitled to deduct.
- (4) Where the person by or through whom the payment is made does not know that any such commission is payable or does not know the amount of any such commission, any income tax deducted by or assessed and charged on him shall be computed in the first instance on, and the account to be delivered of the payment shall be an account of, the total amount of the payment without regard being had to any diminution thereof . . . .
- (5) The time of the making of a payment to which subsection (1) above applies shall, for all tax purposes, be taken to be the time when it is made by the person by whom it is first made and not the time when it is made by or through any other person.
- (6) Any agreement for the making of any payment to which subsection (1) above applies in full and without deduction of income tax shall be void.
#### Aggregation of wife’s income with husband’s.
##### 539ZA
- (1) This section applies where, for the purposes of determining the application of this Chapter in relation to a policy or contract at any time, it is necessary to have regard to its application at another time.
- (2) It makes no difference to the application of this Chapter at that other time whether liability in respect of a gain arising at that time would have arisen or (as the case may be) would arise because of the application of this Chapter or Chapter 9 of Part 4 of ITTOIA 2005 (which makes provision for income tax purposes corresponding to that made by this Chapter).
- (3) References in this section to this Chapter include references to paragraph 20 of Schedule 15 to this Act and section 79 of the Finance Act 1997 (payments under certain life insurance policies).
##### 539A
- (1) The conditions mentioned in section 539(2)(f) (excepted group life policies) are those set out in the following provisions of this section.
- (2) Condition 1 is that under the terms of the policy a sum or other benefit of a capital nature is payable or arises on the death of each of the individuals insured under the policy who dies without attaining an age which is specified in the policy and is not greater than 75 years.
In determining whether this condition is satisfied, disregard any terms of the policy which exclude from benefit the death of a person in specified circumstances, if the exclusion applies in relation to death in those circumstances in the case of each of the individuals insured under the policy.
- (3) Condition 2 is that under the terms of the policy—
- (a) the same method is to be used for calculating the sums or other benefits of a capital nature payable or arising on each death, and
- (b) if there is any limitation on those sums or other benefits, the limitation is the same in the case of any death.
- (4) Condition 3 is that the policy does not have, and is not capable of having, on any day—
- (a) a surrender value that exceeds the proportion of the premiums paid which, on a time apportionment, is referable to the unexpired paid-up period beginning with that day, or
- (b) if there is no such period, any surrender value.
For the purposes of this subsection the unexpired paid-up period beginning with any day is the period (if any) which—
- (i) begins with that day, and
- (ii) ends with the earliest subsequent day on which—
- (a) a payment of premium falls due under the policy, or
- (b) the term of the policy ends.
- (5) Condition 4 is that no sums or other benefits may be paid or conferred under the policy, except as mentioned in condition 1 or condition 3.
- (6) Condition 5 is that any sums payable or other benefits arising under the policy must (whether directly or indirectly) be paid to or for, or conferred on, or applied at the direction of—
- (a) an individual or charity beneficially entitled to them, or
- (b) a trustee or other person acting in a fiduciary capacity who will secure that the sums or other benefits are paid to or for, or conferred on, or applied in favour of, an individual or charity beneficially.
In this subsection “*charity*” means any body of persons or trust established for charitable purposes only.
- (7) Condition 6 is that no person—
- (a) who is an individual whose life is insured under the policy, or
- (b) who is, within the meaning of section 839, connected with an individual whose life is so insured,
may, by virtue of a group membership right relating to that individual, receive (directly or indirectly) any death benefit in respect of another group member.
In this subsection—
- (i) “*group membership right*”, in relation to an individual, means any right (including the right of any person to be considered by trustees in their exercise of a discretion) that is referable to that individual’s being one of the individuals whose lives are insured by the policy; and
- (ii) “*death benefit in respect of another group member*” means—
- (a) any sums or other benefits payable or arising under the policy on the death of any other of those individuals, or
- (b) anything representing any such sums or benefits.
- (8) Condition 7 is that a tax avoidance purpose is not the main purpose, or one of the main purposes, for which a person is at any time—
- (a) the holder, or one of the holders, of the policy, or
- (b) the person, or one of the persons, beneficially entitled under the policy.
In this subsection—
- (i) “*tax avoidance purpose*” means any purpose that consists in securing a tax advantage (whether for the holder of the policy or any other person); and
- (ii) “*tax advantage*” has the same meaning as in Chapter 1 of Part 17 (tax avoidance).
#### Aggregation of wife’s income with husband’s.
##### 546A
- (1) This section applies in any case where—
- (a) as a result of any transaction (the “*material transaction*”) the whole or part of or a share in the rights conferred by a policy or contract (“*the material interest*”) becomes beneficially owned by one person or by two or more persons jointly or in common (“*the new ownership*”);
- (b) immediately before the material transaction, the material interest was in the beneficial ownership of one person or of two or more persons jointly (“*the old ownership*”); and
- (c) at least one person who is a member of the old ownership is also a member of the new ownership.
- (2) In any such case, the material transaction shall, in accordance with the following provisions of this section, be taken for the purposes of this Chapter (other than this section) to be one or more assignments, of part only of the rights conferred by the policy or contract.
- (3) For the purposes of this Chapter (other than this section), the members of the old ownership shall be treated—
- (a) where the old ownership consists of two or more persons beneficially entitled jointly, as if the material interest had been in their beneficial ownership in equal shares instead of jointly;
- (b) where the new ownership consists of two or more persons beneficially entitled jointly, as if the result of the material transaction had been that the material interest was in the beneficial ownership of those persons in equal shares instead of jointly; and
- (c) as if the material transaction had been the assignment by each member of the old ownership of so much (if any) of his old share as exceeds his new share (or, if he does not have a new share, the whole of his old share).
- (4) In this section—
- “*new share*”, in relation to the material interest and a person who is a member of the new ownership, means—if there is only one member of the new ownership, the material interest;if there are two or more members of the new ownership beneficially entitled to the material interest in common, the member’s share in the material interest; orif there are two or more members of the new ownership beneficially entitled to the material interest jointly, the share attributed to the member by subsection (3)(b) above;
- “*old share*”, in relation to the material interest and a person who is a member of the old ownership, means—if there is only one member of the old ownership, the material interest; orif there are two or more members of the old ownership, the share attributed to the member by subsection (3)(a) above.
##### 546B
- (1) This section applies in relation to a policy or contract in any case where—
- (a) a section 546 excess occurs at the end of any year (including the final year, whether or not ending with a terminal chargeable event); and
- (b) the condition in subsection (2) below is satisfied in relation to that year.
This subsection is subject to subsection (1A) below.
- (1A) In the case of a policy which is a qualifying policy (whether or not the premiums under the policy are eligible for relief under section 266) this section applies only if—
- (a) the section 546 excess occurs within the time described in section 540(1)(b)(i); or
- (b) the policy has been converted into a paid-up policy within that time.
- (2) The condition is that—
- (a) during the year there has been an assignment for money or money’s worth of part of or a share in the rights conferred by the policy or contract; or
- (b) during the year there has been both—
- (i) an assignment, otherwise than for money or money’s worth, of the whole or part of or a share in the rights conferred by the policy or contract; and
- (ii) an earlier surrender of part of or a share in the rights conferred by the policy or contract.
- (3) Where this section applies—
- (a) the occurrence of the section 546 excess shall be treated for the purposes of this Chapter as not being a chargeable event; but
- (b) the amount of the section 546 excess shall be charged to tax in accordance with the provisions of section 546C.
- (4) In this section—
- “*final year*” has the meaning given by section 546(4);
- “*section 546 excess*”, in relation to any year, means an excess, occurring at the end of the year, of—the reckonable aggregate value mentioned in subsection (2) of section 546, overthe allowable aggregate amount mentoned in subsection (3) of that section;
- “*terminal chargeable event*” means any chargeable event other than—
- (a) an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract;
- (b) the occurrence of a section 546 excess; or
- (c) a chargeable event by virtue of section 546C(7)(a);
##### 546C
- (1) This section applies where, in relation to any policy or contract, the amount of a section 546 excess occurring at the end of any year falls to be charged to tax in accordance with this section by virtue of section 546B(3)(b).
- (2) The following amounts shall be calculated as at the end of that year—
- (a) the aggregate of the values calculated under section 546(1)(a) in respect of any part of or share in the rights conferred by the policy or contract which has been assigned for money or money’s worth, or surrendered, during the year;
- (b) the amount by which—
- (i) the reckonable aggregate value mentioned in section 546(2), as at the end of the year, exceeds
- (ii) the aggregate calculated under paragraph (a) above;
and
- (c) the amount by which—
- (i) the allowable aggregate amount mentioned in section 546(3), as at the end of the year, exceeds
- (ii) the amount calculated under paragraph (b) above.
- (3) In this section—
- (a) “*relevant transaction*” means any assignment for money or money’s worth, or any surrender, of a part of or share in the rights conferred by the policy or contract which has happened during the year;
- (b) “*transaction value*”, in relation to any relevant transaction, means the value calculated in accordance with section 546(1)(a) in the case of that transaction;
- (c) “*the amount of available premium*” means—
- (i) in relation to the earliest relevant transaction, the amount calculated under subsection (2)(c) above (that amount being taken to be nil if there is no such excess as is there mentioned); and
- (ii) in relation to each successive relevant transaction, that amount as successively reduced under subsections (5) to (7) below.
- (4) Subsection (5) below shall apply successively to each of the relevant transactions that happened in the year, in the order in which they happened.
If the year is the final year and ends with a terminal chargeable event, this subsection is subject to section 546D.
- (5) Where this subsection applies in relation to a relevant transaction—
- (a) the transaction value shall be compared to the amount of available premium; and
- (b) if the amount of available premium exceeds or is equal to the transaction value, subsection (6) below shall apply in relation to the transaction; but
- (c) if the transaction value exceeds the amount of available premium, subsection (7) below shall apply in relation to the transaction.
- (6) Where this subsection applies in relation to a relevant transaction—
- (a) the amount of available premium shall be reduced (or further reduced) by the transaction value; and
- (b) that reduction shall have effect in relation to the next subsequent relevant transaction.
- (7) Where this subsection applies in relation to a relevant transaction—
- (a) the relevant transaction shall for the purposes of this Chapter be a chargeable event in relation to the policy or contract, except as provided by sections 540(3) and 542(3);
- (b) a gain of an amount equal to that by which the transaction value exceeds the amount of available premium shall be treated for the purposes of this Chapter as arising in connection with the policy or contract on the happening of that chargeable event; and
- (c) in relation to any subsequent relevant transaction, the amount of available premium shall be reduced to nil.
- (8) Where the whole or any part of the amount of any gain treated as arising by subsection (7)(b) above falls to be treated under section 547(1)(b) as forming part of the income of any company for—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the accounting period in which the chargeable event in question happened,
that . . . accounting period shall be taken to be the one which includes the end of the year as at which the section 546 excess in question occurs, instead of the one (if different) in which the relevant transaction happened.
- (9) Where this section applies in relation to the final year and that year ends with a terminal chargeable event—
- (a) effect shall be given to this section before applying the provisions of this Chapter in relation to the terminal chargeable event; and
- (b) in applying this Chapter in relation to the terminal chargeable event, any chargeable event by virtue of subsection (7)(a) above accordingly falls to be regarded as having occurred before the terminal chargeable event.
- (10) This section shall be construed as one with section 546B.
##### 546D
- (1) This section applies in any case where the year mentioned in section 546C(4) is the final year and that year ends with a terminal chargeable event.
- (2) In any such case there shall be calculated, as at the end of the year, the amount of the gain (“*the gains limit*”) that would have been treated as arising on the happening of the terminal chargeable event, apart from the application of sections 546B and 546C in relation to that year.
- (3) Subsection (5) of section 546C shall apply successively to each of the relevant transactions that happened in the year, in the order in which they happened, unless and until the transaction in question (the “*final transaction*”) is such that the aggregate of—
- (a) its transaction value apart from subsection (4) below, and
- (b) the sum of the transaction values of any relevant transactions to which subsection (5) of that section has previously applied,
exceeds the gains limit.
- (4) If, in the case of the final transaction,—
- (a) the aggregate mentioned in subsection (3) above exceeds the gains limit, but
- (b) the sum mentioned in paragraph (b) of that subsection is less than that limit,
subsection (5) of section 546C shall apply in relation to that transaction, but for the purposes of subsections (5) to (7) of that section its transaction value shall be reduced to an amount equal to the difference between the gains limit and the sum mentioned in paragraph (b) above.
- (5) Except as provided by subsection (4) above, subsection (5) of section 546C shall not apply in relation to the final transaction or any subsequent relevant transaction.
- (6) This section shall be construed as one with sections 546B and 546C.
##### 547A
- (1) If—
- (a) immediately before the happening of a chargeable event, two or more persons have relevant interests in the rights conferred by the policy or contract in question, and
- (b) any of those persons is a company,
section 547 shall have effect in relation to each such company as if it had been the only person with a relevant interest in those rights, but with references to the amount of the gain construed as references to the company's proportionate share of the amount of the gain.
- (2) References in this section to the rights conferred by a policy or contract are, in the case of an assignment or surrender of only a part of or share in any rights, references to that part or share.
- (3) For the purposes of this section, a person has a “relevant interest" in the rights conferred by a policy or contract—
- (a) in the case of an individual, if a share in the rights is vested in him as beneficial owner, or is held on non-charitable trusts created, or as security for a debt owed, by him;
- (b) in the case of a company, if a share in the rights is in the beneficial ownership of the company, or is held on non-charitable trusts created, or as security for a debt owed, by the company;
- (c) in the case of personal representatives, if a share in the rights is vested in them;
- (cc) in the case of trustees of a charitable trust, if a share in the rights is held by them or as security for a debt owed by them;
- (d) in the case of trustees of a non-charitable trust—
- (i) if a share in the rights is held by them, and the person who created the trusts is not resident in the United Kingdom or has died or (in the case of a company or foreign institution) has been dissolved or wound up or has otherwise come to an end;
- (ia) if a share in the rights is held by them which does not also fall within paragraph (a), (b) or (c) above or sub-paragraph (i) above; or
- (ii) if a share in the rights is held as security for a debt owed by them;
- (e) in the case of a foreign institution, if a share in the rights is in the beneficial ownership of the foreign institution, or is held as security for a debt owed by the foreign institution.
- (4) For the purposes of subsection (1) above, a person’s “proportionate share" of the amount of a gain is that share of it which is proportionate to the share of the rights by reference to which he has the relevant interest in question.
- (5) Where, immediately before the happening of a chargeable event, the rights conferred by the policy or contract in question are, or a share in those rights is, held as security for one or more debts owed by two or more persons, this section shall effect in relation to the chargeable event as if—
- (a) each of those persons were instead the sole debtor in respect of a separate debt; and
- (b) the security for that separate debt were the appropriate share of the security for the actual debt or debts (so far as consisting of the rights, or a share in the rights, conferred by the policy or contract);
and for the purposes of paragraph (b) above the appropriate share, in the case of any person, is a share which is proportionate to that share of the actual debt or, as the case may be, the aggregate of the two or more actual debts, for which he is liable as between the debtors.
- (6) Where, immediately before the happening of a chargeable event, the rights conferred by the policy or contract in question are, or a share in those rights is, held on non-charitable trusts created by two or more persons, this section shall have effect in relation to that chargeable event as if—
- (a) each of those persons had instead been the sole settlor in relation to a separate share of the rights or share so held; and
- (b) that separate share were proportionate to the share which originates from him of the whole of the property subject to the trusts immediately before the happening of the chargeable event.
- (7) The reference in subsection (6)(b) above to the share of the property which originates from a person is a reference to the share of the property which consists of—
- (a) property which that person has provided directly or indirectly for the purposes of the trusts;
- (b) property representing property which that person has so provided; and
- (c) so much of any property which represents both property so provided and other property as, on a just apportionment, represents the property so provided.
- (8) References in subsection (7) above to property which a person has provided directly or indirectly—
- (a) include references to property which has been provided directly or indirectly by another in pursuance of reciprocal arrangements with the person, but
- (b) do not include references to property which the person has provided directly or indirectly in pursuance of reciprocal arrangements with another.
- (9) References in subsection (7) above to property which represents other property include references to property which represents accumulated income from that other property.
- (10) Where immediately before the happening of a chargeable event—
- (a) the rights conferred by the policy or contract in question are, or a share in those rights is, held subject to any non-charitable trusts, and
- (b) different shares of the whole of the property subject to those trusts originate (within the meaning of subsection (6)(b) above) from different persons,
the rights or share shall, in relation to that chargeable event, be taken for the purposes of this section to be held on non-charitable trusts created by those persons.
- (11) Where the rights conferred by a policy or contract are, or an interest in any such rights is, in the beneficial ownership of two or more persons jointly, the rights or interest shall be treated for the purposes of this section as if they were in the beneficial ownership of those persons in equal shares.
- (12) A non-fractional interest in the rights conferred by a policy or contract shall be treated for the purposes of this section as if it were instead such a share in those rights as may justly and reasonably be regarded for those purposes as representing the non-fractional interest.
- (13) For the purposes of subsection (12) above, a “non-fractional interest" in the rights conferred by a policy or contract is an interest in some or all of those rights which is not a share in all of those rights (otherwise than by virtue only of subsection (2) above).
- (14) This section applies in a case where the same person has two or more relevant interests in the rights conferred by a policy or contract as it applies in a case where two or more persons have separate relevant interests, unless—
- (a) that person is the only person with a relevant interest in those rights, and
- (b) he has all the relevant interests in the same capacity,
in which case section 547 applies.
- (15) In this section—
- “*foreign institution*” means a person which is a company or other institution resident or domiciled outside the United Kingdom;
- “*personal representatives*” has the same meaning as in Part XVI.
- (16) For the purposes of this section, property held for the purposes of a foreign institution shall be regarded as in the beneficial ownership of the foreign institution.
- (17) Any reference in this section to trusts created by an individual includes a reference to trusts arising under—
- (a) section 11 of the Married Women's Property Act 1882;
- (b) section 2 of the Married Women's Policies of Assurance (Scotland) Act 1880; or
- (c) section 4 of the Law Reform (Husband and Wife) Act (Northern Ireland) 1964;
and references to the settlor or to the person creating the trusts shall be construed accordingly.
##### 548A
- (1) This section applies if—
- (a) a relevant chargeable event occurs in respect of a policy or contract,
- (b) commission in respect of the policy or contract has at any time been rebated or reinvested, and
- (c) condition A or B is met.
- (2) For the purposes of performing the calculation under section 541(1)(b) or (c) or 543(1)(a) or (b) for the chargeable event, the total amount paid under the policy or contract by way of premiums in any period is to be reduced by the total amount of commission attributable to those premiums that has been rebated or reinvested.
- (3) Condition A is that the total amount paid under the policy or contract by way of premiums in a relevant period exceeds £100,000.
- (4) Condition B is that—
- (a) at a time when the policy or contract was the taxable person's, the taxable person's policies and contracts exceeded the relevant threshold as respects a relevant period, and
- (b) payments under the policy or contract by way of premiums were made in that relevant period.
- (5) In subsection (4)(a) “*taxable person*” means the person whose policy or contract the policy or contract is, immediately before the chargeable event.
- (6) For the purposes of subsection (4)(a) a person's policies and contracts “exceed the relevant threshold” as respects a relevant period if the total amount of payments under them by way of premiums in that relevant period exceeds the sum specified in subsection (3).
- (7) In this section “*relevant chargeable event*” means a chargeable event within—
- (a) any of sub-paragraphs (ii) to (iv) of section 540(1)(a) (including those sub-paragraphs as they apply in relation to a qualifying policy),
- (b) section 542(1)(a) or (b), or
- (c) section 545(1)(a) to (c).
- (8) In this section “*relevant period*” means—
- (a) the period beginning with the beginning of the year of assessment in which the chargeable event occurs and ending with the chargeable event, or
- (b) any of the 3 preceding years of assessment.
- (9) References in this section to a premium include, in relation to a contract for a life annuity, lump sum consideration.
- (10) The Treasury may by order—
- (a) substitute another sum for the sum for the time being specified in subsection (3);
- (b) amend the definition of “relevant period”.
#### Eligibility for relief.
##### 548B
- (1) This section supplements section 548A.
- (2) “*Commission*”, in relation to a policy or contract, includes any passing of value to or for the benefit of an intermediary, or a person connected with an intermediary, that can reasonably be taken to represent a reward in respect of the policy or contract.
- (3) Commission in respect of a policy or contract is “reinvested” if, as a result of a waiver of an entitlement to it, there is an increase in the total value of a relevant person's policies and contracts.
- (4) The amount of commission reinvested is the amount of the increase.
- (5) Commission in respect of a policy or contract is “rebated” if—
- (a) value passes (directly or indirectly) from an intermediary, or a person connected with an intermediary, to or for the benefit of a relevant person (and the passing of value does not amount to the reinvestment of the commission), and
- (b) the passing of value can reasonably be taken to be in respect of the commission.
- (6) The amount of commission rebated is the amount of value passed.
- (7) A policy or contract is a person's policy or contract if a gain arising in connection with it would be—
- (a) a gain for which the person, or (if the person is an individual) the person's spouse or civil partner, would be liable to tax under Chapter 9 of Part 4 of ITTOIA 2005, or
- (b) treated by virtue of section 547(1) above as forming part of the person's income.
- (8) Any necessary apportionment is to be made (on a just and reasonable basis) as regards—
- (a) commission which is attributable to two or more premiums, and
- (b) any part of such commission that has been rebated or reinvested.
- (9) Commission which is in respect of one or more policies or contracts (but is not attributable to particular premiums) is to be attributed to such premiums as is just and reasonable.
- (10) In subsections (3) and (5), “*relevant person*” means—
- (a) any of the policyholders (including any of the persons who hold the contract),
- (b) a person who beneficially owns the rights under the policy or contract,
- (c) if those rights are held on trust, any of the trustees, or
- (d) a person connected (within the meaning of section 839) with a person within any of paragraphs (a) to (c).
- (11) In subsections (8) and (9), references to a premium include, in relation to a contract for a life annuity, lump sum consideration.
##### 551A
- (1) Where—
- (a) an amount is included in a company’s income by virtue of section 547(1)(b), and
- (b) the rights, or the part or share, in question were held immediately before the happening of the chargeable event on non-charitable trusts,
the company shall be entitled to recover from the trustees, to the extent of any sums, or to the value of any benefits, received by them by reason of the event, the amount (if any) by which T1 exceeds T2.
- (2) For the purposes of subsection (1) above—
- T1 is the tax with which the company is chargeable for the accounting period in question; and
- T2 is the tax with which the company would have been chargeable for the accounting period if the amount mentioned in subsection (1)(a) above had not been included as there mentioned.
- (3) A company may require the Board to certify any amount recoverable by the company by virtue of this section, and the certificate shall be conclusive evidence of the amount.
##### 552ZA
- (1) This section supplements section 552 and shall be construed as one with it.
- (2) Where the obligations under any policy or contract of the body that issued, entered into or effected it (“*the original insurer*”) are at any time the obligations of another body (“*the transferee*”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, section 552 shall have effect in relation to that time, except where the chargeable event—
- (a) happened before the transfer, and
- (b) in the case of a death or an assignment, is an event of which the notification mentioned in subsection (6) or (7) of that section was given before the transfer,
as if the policy or contract had been issued, entered into or effected by the transferee.
- (3) Where, in consequence of section 546C(7)(a) of this Act and section 514(1) of ITTOIA 2005, paragraph (a) or (b) of section 552(1) requires certificates to be delivered in respect of two or more surrenders, happening in the same year, of part of or a share in the rights conferred by the policy or contract, a single certificate may be delivered under the paragraph in question in respect of all those surrenders (and may treat them as if they together constituted a single surrender) unless between the happening of the first and the happening of the last of them there has been—
- (a) an assignment of part of or a share in the rights conferred by the policy or contract; or
- (b) an assignment, otherwise than for money or money’s worth, of the whole of the rights conferred by the policy or contract.
- (4) Where the appropriate policy holder is two or more persons—
- (a) section 552(1)(a) requires a certificate to be delivered to each of them; but
- (b) nothing in section 552 or this section requires a body to deliver a certificate under subsection (1)(a) of that section to any person whose address has not been provided to the body (or to another body, at a time when the obligations under the policy or contract were obligations of that other body).
- (5) A certificate under section 552(1)(b) or (3)—
- (a) shall be in a form prescribed for the purpose by the Board; and
- (b) shall be delivered by any means prescribed for the purpose by the Board;
and different forms, or different means of delivery, may be prescribed for different cases or different purposes.
- (6) The Board may by regulations make such provision as they think fit for securing that they are able—
- (a) to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 or this section; and
- (b) to verify any certificate under that section.
- (7) Regulations under subsection (6) above may include, in particular, provisions requiring persons to whom premiums under any policy are or have at any time been payable—
- (a) to supply information to the Board; and
- (b) to make available books, documents and other records for inspection on behalf of the Board.
- (8) Regulations under subsection (6) above may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 552ZB
- (1) The Commissioners for Her Majesty's Revenue and Customs may make regulations—
- (a) requiring relevant persons—
- (i) to provide prescribed information to persons who apply for the issue of qualifying policies or who are, or may be, required to make statements under paragraph B3(2) of Schedule 15;
- (ii) to provide to an officer of Revenue and Customs prescribed information about qualifying policies which have been issued by them or in relation to which they are or have been a relevant transferee;
- (b) making such provision (not falling within paragraph (a)) as the Commissioners think fit for securing that an officer of Revenue and Customs is able—
- (i) to ascertain whether there has been or is likely to be any contravention of the requirements of the regulations or of paragraph B3(2) of Schedule 15;
- (ii) to verify any information provided to an officer of Revenue and Customs as required by the regulations.
- (2) The provision that may be made by virtue of subsection (1)(b) includes, in particular, provision requiring relevant persons to make available books, documents and other records for inspection by or on behalf of an officer of Revenue and Customs.
- (3) The regulations may—
- (a) make different provision for different cases or circumstances, and
- (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.
- (4) In this section—
- “*prescribed*” means prescribed by the regulations,
- “*qualifying policy*” includes a policy which would be a qualifying policy apart from—paragraph A1(2), B1(2), B2(2) or B3(3) of Schedule 15, orparagraph 17(2)(za) of that Schedule (including as applied by paragraph 18), and
- “*relevant person*” means a person—who issues, or has issued, qualifying policies, orwho is, or has been, a relevant transferee in relation to qualifying policies.
- (5) For the purposes of this section a person (“X”) is at any time a “*relevant transferee*” in relation to a qualifying policy if the obligations under the policy of its issuer are at that time the obligations of X as a result of there having been a transfer to X of the whole or any part of a business previously carried on by the issuer.
##### 552A
- (1) This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative.
- (2) In this section “*overseas insurer*” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of—
- (a) policies of life insurance;
- (b) contracts for life annuities; or
- (c) capital redemption policies.
- (3) This section applies to an overseas insurer—
- (a) if the condition in subsection (4) below is satisfied on the designated day; or
- (b) where that condition is not satisfied on that day, if it has subsequently become satisfied.
- (4) The condition mentioned in subsection (3) above is that—
- (a) there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and
- (b) the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more.
- (5) In this section “*relevant insurance*” means any policy of life insurance, contract for a life annuity or capital redemption policy . . . in the case of which—
- (a) the holder is resident in the United Kingdom;
- (b) the obligations of the insurer are obligations of a person not resident in the United Kingdom; and
- (c) those obligations are not attributable to a branch or agency of that person’s in the United Kingdom.
- (6) Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative.
- (7) A person shall not be a tax representative unless—
- (a) if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or
- (b) if he is not an individual, he has a business establishment in the United Kingdom,
and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board.
- (8) A person shall not be an overseas insurer’s tax representative unless—
- (a) his nomination by the overseas insurer has been approved by the Board; or
- (b) he has been appointed by the Board.
- (9) The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to—
- (a) the making of a nomination by an overseas insurer of a person to be his tax representative;
- (b) the information which is to be provided in connection with such a nomination;
- (c) the form in which such a nomination is to be made;
- (d) the powers and duties of the Board in relation to such a nomination;
- (e) the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so;
- (f) the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative;
- (g) the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made);
- (h) the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative;
- (j) circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative;
- (k) appeals to the Special Commissioners against decisions of the Board under this section or regulations under it.
- (10) The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B.
- (b) . . . the sixth anniversary of the end of the accounting period in which the disposal was made.
- (11) Section 839 (connected persons) applies for the purposes of this section.
- (12) In this section—
- “*capital redemption policy*” means a capital redemption policy in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*contract for a life annuity*” means a contract for a life annuity in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*the designated day*” means such day as the Board may specify for the purpose in regulations;
- “*policy of life insurance*” means a policy of life insurance in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;
- “*tax representative*” means a tax representative under this section.
##### 552B
- (1) It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer.
- (2) For the purposes of this section “*the relevant duties*” are—
- (a) the duties imposed by section 552,
- (b) the duties imposed by section 552ZA(2), (4) or (5), and
- (c) any duties imposed by regulations made under subsection (6) of section 552ZA by virtue of subsection (7) of that section,
so far as relating to relevant insurances under which the overseas insurer in question has any obligations.
- (3) An overseas insurer’s tax representative shall be personally liable—
- (a) in respect of any failure to secure the discharge of the relevant duties, and
- (b) in respect of anything done for purposes connected with acting on the overseas insurer’s behalf,
as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer.
- (4) In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment.
- (5) This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made.
- (5A) In subsection (5) “*chargeable event*” has the same meaning as in section 552 (see subsection (10) of that section).
- (6) Expressions used in this section and in section 552A have the same meaning in this section as they have in that section.
##### 553A
- (1) A policy of life insurance which, immediately before the happening of a chargeable event or a relevant event—
- (a) is an overseas policy, but
- (b) is not a new non-resident policy,
shall, in relation to that event, be treated for the purposes of this Chapter as if it were a new non-resident policy.
- (2) A policy of life insurance which, immediately before the happening of a relevant event—
- (a) is an overseas policy, and
- (b) is a new non-resident policy,
shall, in relation to that event, be taken for the purposes of this Chapter not to be a qualifying policy.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) In this section—
- “*new non-resident policy*” means a new non-resident policy as defined in paragraph 24 of Schedule 15 (and in subsection (2) above includes a policy treated as such by virtue of subsection (1) above);
- “*overseas policy*” means a policy of life insurance which, by virtue of section 431D(1)(a), forms part of the overseas life assurance business of an insurance company or friendly society;
- “*relevant event*”, in relation to a policy of life insurance, means an event which would be a chargeable event in relation to that policy if the policy were assumed not to be a qualifying policy.
- (5) This section applies in relation to chargeable events and relevant events happening on or after 17th March 1998 in relation to policies of life insurance issued in respect of insurances made on or after that date.
- (6) A policy of life insurance issued in respect of an insurance made before 17th March 1998 shall be treated for the purposes of this section as issued in respect of one made on or after that date if it is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance; and any exercise of rights conferred by the policy shall be regarded for this purpose as a variation.
##### 553B
- (1) A capital redemption policy which immediately before the happening of a chargeable event—
- (a) is an overseas policy, but
- (b) is not a new offshore capital redemption policy,
shall, in relation to that event, be treated for the purposes of this Chapter as if it were a new offshore capital redemption policy.
- (2) In this section—
- “*new offshore capital redemption policy*” has the same meaning as in section 553;
- “*overseas policy*” means a capital redemption policy which, by virtue of section 431D(1)(a), forms part of the overseas life assurance business of an insurance company.
- (3) This section applies in relation to capital redemption policies where the contract is made after the coming into force of the first regulations under section 458A in consequence of which capital redemption business forms part of the overseas life assurance business of an insurance company.
##### 553C
- (1) The Treasury may by regulations make provision imposing a yearly charge to corporation tax in relation to personal portfolio bonds (“yearly" being construed for this purpose by reference to years as defined in section 546(4)).
- (2) Subject to any provision to the contrary made by the regulations, any charge to corporation tax under this section is in addition to any other charge to corporation tax under this Chapter.
- (3) The regulations may make provision with respect to or in connection with all or any of the following—
- (a) the method by which the charge to corporation tax, or any relief, allowance or deduction against or in respect of the tax, is to be imposed or given effect;
- (b) the person who is to be liable for the tax;
- (c) the periods for or in respect of which the tax is to be charged;
- (d) the amounts in respect of which, or by reference to which, the tax is to be charged;
- (e) the period or periods by reference to which those amounts are to be determined;
- (f) the rate or rates at which the tax is to be charged;
- (g) any reliefs, allowances or deductions which are to be given or made against or in respect of the tax;
- (h) the administration of the tax.
- (4) The provision that may be made by the regulations includes provision for imposing the charge to corporation tax by a method which involves—
- (a) treating an event described in the regulations as if it were a chargeable event;
- (b) treating an amount determined in accordance with the regulations as if it were a gain treated as arising on the happening of a chargeable event; or
- (c) deeming an amount determined in accordance with the regulations to be income of a company; . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) The provision that may be made in the regulations includes provision for the amount or amounts in respect of which, or by reference to which, the tax is to be charged for periods beginning after the coming into force of the regulations to be determined in whole or in part by reference to periods beginning or ending, premiums paid, or events happening, before, on or after the day on which the Finance Act 1998 is passed.
- (6) The regulations may make provision excluding, or applying (with or without modification), other provisions of this Chapter in relation to policies or contracts which are also personal portfolio bonds.
- (7) In this section, “*personal portfolio bond*” means a policy of life insurance, contract for a life annuity or capital redemption policy under whose terms—
- (a) some or all of the benefits are determined by reference to the value of, or the income from, property of any description (whether or not specified in the policy or contract) or fluctuations in, or in an index of, the value of property of any description (whether or not so specified); and
- (b) some or all of the property, or such an index, may be selected by, or by a person acting on behalf of, the holder of the policy or contract or a person connected with him (or the holder of the policy or contract and a person connected with him);
but a policy or contract is not a personal portfolio bond if the only property or index which may be so selected is of a description prescribed for this purpose in the regulations.
- (8) The regulations may prescribe additional conditions which must be satisfied if a policy or contract is to be a personal portfolio bond.
- (9) The regulations—
- (a) may make different provision for different cases, different circumstances or different periods; and
- (b) may make incidental, consequential, supplemental or transitional provision.
- (9A) The Treasury may by regulations make provision, in relation to any policy or contract to which this subsection applies, for—
- (a) treating an event described in the regulations as if it were a chargeable event, and
- (b) treating an amount determined in accordance with the regulations as if it were a gain treated as arising on the happening of a chargeable event.
- (9B) Regulations under subsection (9A) may make such provision for the purposes only of enabling the gain to be taken into account in the application of this Chapter to the policy or contract on the later happening of a chargeable event.
- (9C) Regulations under subsection (9A) may make any provision for the calculation of the amount of the gain which regulations under subsection (1) may make for the calculation of the amount charged to corporation tax by virtue of regulations under that subsection.
- (9D) Subsections (6), (8) and (9) apply to regulations under subsection (9A).
- (9E) Subsection (9A) applies to a policy or contract if—
- (a) it is a personal portfolio bond, and
- (b) liability in respect of a gain arising in relation to it would arise by virtue of any of sections 464 to 468 of ITTOIA 2005 (persons liable for tax under Chapter 9 of Part 4 of that Act).
- (10) In this section, “holder", in the case of a policy or contract held by two or more persons, includes a reference to any of those persons.
- (11) Section 839 (connected persons) applies for the purposes of this section.
##### 559A
- (1) A sum deducted under section 559 from a payment made by a contractor—
- (a) shall be paid to the Board, and
- (b) shall be treated for the purposes of income tax or, as the case may be, corporation tax as not diminishing the amount of the payment.
- (2) If the sub-contractor is not a company a sum deducted under section 559 and paid to the Board shall be treated as being income tax paid in respect of the sub-contractor’s relevant profits.
If the sum is more than sufficient to discharge his liability to income tax in respect of those profits, so much of the excess as is required to discharge any liability of his for Class 4 contributions shall be treated as being Class 4 contributions paid in respect of those profits.
- (3) If the sub-contractor is a company—
- (a) a sum deducted under section 559 and paid to the Board shall be treated, in accordance with regulations, as paid on account of any relevant liabilities of the sub-contractor;
- (b) regulations shall provide for the sum to be applied in discharging relevant liabilities of the year of assessment in which the deduction is made;
- (c) if the amount is more than sufficient to discharge the sub-contractor’s relevant liabilities, the excess may be treated, in accordance with the regulations, as being corporation tax paid in respect of the sub-contractor’s relevant profits; and
- (d) regulations shall provide for the repayment to the sub-contractor of any amount not required for the purposes mentioned in paragraphs (b) and (c).
- (4) For the purposes of subsection (3) the “*relevant liabilities*” of a sub-contractor are any liabilities of the sub-contractor, whether arising before or after the deduction is made, to make a payment to a collector of inland revenue in pursuance of an obligation as an employer or contractor.
- (5) In this section—
- (a) “*the sub-contractor*” means the person for whose labour (or for whose employees’ or officers’ labour) the payment is made;
- (b) references to the sub-contractor’s “*relevant profits*” are to the profits from the trade, profession or vocation carried on by him in the course of which the payment was received;
- (c) “*Class 4 contributions*” means Class 4 contributions within the meaning of the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
- (6) References in this section to regulations are to regulations made by the Board.
- (7) Regulations under this section—
- (a) may contain such supplementary, incidental or consequential provision as appears to the Board to be appropriate, and
- (b) may make different provision for different cases.
#### Individuals qualifying for relief.
### Chapter 5A — Share loss relief
### Relief for losses on unquoted shares in trading companies
##### 576A
- (1) For the purposes of this Chapter a qualifying trading company is a company which meets each of conditions A to D.
- (2) Condition A is that the company either—
- (a) meets each of the following requirements on the date of the disposal—
- (i) the trading requirement (see section 576B),
- (ii) the control and independence requirement (see section 576D),
- (iii) the qualifying subsidiaries requirement (see section 576E), and
- (iv) the property managing subsidiaries requirement (see section 576F), or
- (b) has ceased to meet any of those requirements at a time which is not more than 3 years before that date and has not since that time been an excluded company, an investment company or a trading company.
- (3) Condition B is that the company either—
- (a) has met each of the requirements mentioned in condition A for a continuous period of 6 years ending on that date or at that time, or
- (b) has met each of those requirements for a shorter continuous period ending on that date or at that time and has not before the beginning of that period been an excluded company, an investment company or a trading company.
- (4) Condition C is that the company—
- (a) met the gross assets requirement (see section 576G) both immediately before and immediately after the issue of the shares in respect of which the relief is claimed under this Chapter, and
- (b) met the unquoted status requirement (see section 576H) at the relevant time within the meaning of that section.
- (5) Condition D is that the company has carried on its business wholly or mainly in the United Kingdom throughout the period—
- (a) beginning with the incorporation of the company or, if later, 12 months before the shares in question were issued, and
- (b) ending with the date of the disposal.
### Qualifying trading companies: the requirements
##### 576B
- (1) The trading requirement is that—
- (a) the company, disregarding any incidental purposes, exists wholly for the purpose of carrying on one or more qualifying trades, or
- (b) the company is a parent company and the business of the group does not consist wholly or as to a substantial part in the carrying on of non-qualifying activities.
- (2) If the company intends that one or more other companies should become its qualifying subsidiaries with a view to their carrying on one or more qualifying trades—
- (a) the company is treated as a parent company for the purposes of subsection (1)(b), and
- (b) the reference in subsection (1)(b) to the group includes the company and any existing or future company that will be its qualifying subsidiary after the intention in question is carried into effect.
This subsection does not apply at any time after the abandonment of that intention.
- (3) For the purpose of subsection (1)(b) the business of the group means what would be the business of the group if the activities of the group companies taken together were regarded as one business.
- (4) For the purpose of determining the business of a group, activities are disregarded to the extent that they are activities carried on by a mainly trading subsidiary otherwise than for its main purpose.
- (5) For the purposes of determining the business of a group, activities of a group company are disregarded to the extent that they consist in—
- (a) the holding of shares in or securities of a qualifying subsidiary of the parent company,
- (b) the making of loans to another group company,
- (c) the holding and managing of property used by a group company for the purpose of one or more qualifying trades carried on by a group company, or
- (d) the holding and managing of property used by a group company for the purpose of research and development from which it is intended—
- (i) that a qualifying trade to be carried on by a group company will be derived, or
- (ii) that a qualifying trade carried on or to be carried on by a group company will benefit.
- (6) Any reference in subsection (5)(d)(i) or (ii) to a group company includes a reference to any existing or future company which will be a group company at any future time.
- (7) In this section—
- “*excluded activities*” has the meaning given by section 192 of ITA 2007 read with sections 193 to 199 of that Act,
- “*group*” means a parent company and all its qualifying subsidiaries,
- “*group company*”, in relation to a group, means the parent company or any of its qualifying subsidiaries,
- “*incidental purposes*” means purposes having no significant effect (other than in relation to incidental matters) on the extent of the activities of the company in question,
- “*mainly trading subsidiary*” means a subsidiary which, apart from incidental purposes, exists wholly for the purpose of carrying on one or more qualifying trades, and any reference to the main purpose of such a subsidiary is to be read accordingly,
- “*non-qualifying activities*” means—excluded activities, andactivities (other than research and development) carried on otherwise than in the course of a trade,
- “*parent company*” means a company that has one or more qualifying subsidiaries,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007,
- “*qualifying trade*” has the meaning given by section 189 of that Act,
- “*research and development*” has the meaning given by section 837A.
- (8) In sections 189(1)(b) and 194(4)(c) of ITA 2007 (as applied by subsection (7) for the purposes of the definitions of “excluded activities” and “qualifying trade”) “*period B*” means the continuous period that is relevant for the purposes of section 576A(3).
- (9) In section 195 of ITA 2007 as applied by subsection (7) for the purposes mentioned in subsection (8), references to the issuing company are to be read as references to the company mentioned in subsection (1).
#### Form of relief.
##### 576C
- (1) A company is not regarded as ceasing to meet the trading requirement by reason only of anything done in consequence of the company or any of its subsidiaries being in administration or receivership.
This has effect subject to subsections (2) and (3).
- (2) Subsection (1) applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a result of the company concerned being in administration or receivership,
is for genuine commercial reasons, and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
- (3) A company ceases to meet the trading requirement if before the time that is relevant for the purposes of section 576A(2)—
- (a) a resolution is passed, or an order is made, for the winding up of the company or any of its subsidiaries (or, in the case of a winding up otherwise than under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989, any other act is done for the like purpose), or
- (b) the company or any of its subsidiaries is dissolved without winding up.
This is subject to subsection (4).
- (4) Subsection (3) does not apply if —
- (a) the winding up is for genuine commercial reasons, and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax, and
- (b) the company continues, during the winding up, to be a trading company.
- (5) References in this section to a company being “in administration” or “in receivership” are to be read in accordance with section 252 of ITA 2007.
##### 576D
- (1) The control element of the requirement is that—
- (a) the company must not control (whether on its own or together with any person connected with it) any company which is not a qualifying subsidiary of the company, and
- (b) no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 576A(3) or otherwise).
- (2) The independence element of the requirement is that—
- (a) the company must not—
- (i) be a 51% subsidiary of another company, or
- (ii) be under the control of another company (or of another company and any other person connected with that other company), without being a 51% subsidiary of that other company, and
- (b) no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 576A(3) or otherwise).
- (3) This section is subject to section 576J(3).
- (3A) Section 839 (connected persons) applies for the purposes of this section.
- (4) In this section—
- “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable,
- “control” is to be read as follows—in subsection (1)(a), in accordance with section 416(2) to (6),in subsection (2)(a), in accordance with section 840,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007.
#### Restriction of relief where amounts raised exceed permitted maximum.
##### 576E
- (1) The qualifying subsidiaries requirement is that any subsidiary that the company has must be a qualifying subsidiary of the company.
- (2) In this section “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007.
##### 576F
- (1) The property managing subsidiaries requirement is that any property managing subsidiary that the company has must be a qualifying 90% subsidiary of the company.
- (2) In this section—
- “*property managing subsidiary*” has the meaning given by section 188(2) of ITA 2007,
- “*qualifying 90% subsidiary*” has the meaning given by section 190 of that Act.
##### 576G
- (1) The gross assets requirement in the case of a single company is that the value of the company's gross assets—
- (a) must not exceed £7 million immediately before the shares in respect of which the relief is claimed under this Chapter are issued, and
- (b) must not exceed £8 million immediately afterwards.
- (2) The gross assets requirement in the case of a parent company is that the value of the group assets—
- (a) must not exceed £7 million immediately before the shares in respect of which the relief is claimed under this Chapter are issued, and
- (b) must not exceed £8 million immediately afterwards.
- (3) The value of the group assets means the aggregate of the values of the gross assets of each of the members of the group, disregarding any that consist in rights against, or shares in or securities of, another member of the group.
- (4) In this section—
- “*group*” means a parent company and its qualifying subsidiaries,
- “*parent company*” means a company that has one or more qualifying subsidiaries,
- “*qualifying subsidiary*” is to be read in accordance with section 191 of ITA 2007, and
- “*single company*” means a company that does not have one or more qualifying subsidiaries.
##### 576H
- (1) The unquoted status requirement is that, at the time (“*the relevant time*”) at which the shares in respect of which the relief is claimed under this Chapter are issued—
- (a) the company must be an unquoted company,
- (b) there must be no arrangements in existence for the company to cease to be an unquoted company, and
- (c) there must be no arrangements in existence for the company to become a subsidiary of another company (“the new company”) by virtue of an exchange of shares, or shares and securities, if—
- (i) section 576J applies in relation to the exchange, and
- (ii) arrangements have been made with a view to the new company ceasing to be an unquoted company.
- (2) The arrangements referred to in subsection (1)(b) and (c)(ii) do not include arrangements in consequence of which any shares, stocks, debentures or other securities of the company or the new company are at any subsequent time—
- (a) listed on a stock exchange that is a recognised stock exchange by virtue of an order made under section 1005 of ITA 2007, or
- (b) listed on an exchange, or dealt in by any means, designated by an order made for the purposes of section 184(3)(b) or (c) of that Act,
if the order was made after the relevant time.
- (3) In this section—
- “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable,
- “*debenture*” has the meaning given by section 744 of the Companies Act 1985,
- “*unquoted company*” has the meaning given by section 184(2) of ITA 2007.
##### 576I
The Treasury may by order make such amendments of sections 576B to 576H as they consider appropriate.
### Qualifying trading companies: supplementary provisions
##### 576J
- (1) This section and section 576K apply in relation to shares if—
- (a) a company (“the new company”) in which the only issued shares are subscriber shares acquires all the shares (“old shares”) in another company (“the old company”),
- (b) the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company,
- (c) the consideration for the new shares of each description consists wholly of old shares of the corresponding description,
- (d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of and in proportion to their holdings, and
- (e) by virtue of section 127 of the 1992 Act as applied by section 135(3) of that Act (company reconstructions etc), the exchange of shares is not to be treated as involving a disposal of the old shares or an acquisition of the new shares.
In this subsection references to shares, except the first and that in the expression “subscriber shares”, include securities.
- (2) For the purposes of this Chapter the exchange of shares is not regarded as involving any disposal of the old shares or any acquisition of the new shares.
- (3) Nothing in section 576D (the control and independence requirement) applies in relation to such an exchange of shares, or shares and securities, as is mentioned in subsection (1), or arrangements with a view to such an exchange.
- (4) For the purposes of this section old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights.
- (5) References in section 576K to “old shares”, “new shares”, “the old company” and “the new company” are to be read in accordance with this section.
##### 576K
- (1) Subsection (2) applies if, in the case of any new shares held by a company or by a nominee for a company, the old shares for which they were exchanged were shares that had been subscribed for by the company (“the investor”).
- (2) This Chapter has effect as if—
- (a) the new shares had been subscribed for by the investor at the time when, and for the amount for which, the old shares were subscribed for by the investor,
- (b) the new shares had been issued by the new company at the time when the old shares were issued to the investor by the old company, and
- (c) any requirements of this Chapter which were met at any time before the exchange by the old company had been met at that time by the new company.
- (3) Section 573(6) applies for the purposes of this section.
- (4) Nothing in subsection (2) applies in relation to section 195(7) of ITA 2007 as applied by section 576B(7) above for the purposes mentioned in section 576B(8).
### Supplemental
##### 576L
- (1) In this Chapter (subject to subsections (2) to (5))—
- “*excluded company*” means a company which—has a trade which consists wholly or mainly of dealing in land, in commodities or futures or in shares, securities or other financial instruments,has a trade which is not carried on on a commercial basis and in such a way that profits in the trade can reasonably be expected to be realised,is a holding company of a group other than a trading group, oris a building society or a registered industrial and provident society,
- “group” (except in sections 576B and 576G) means a company which has one or more 51% subsidiaries together with that or those subsidiaries,
- “*holding company*” means a company whose business consists wholly or mainly in the holding of shares or securities of companies which are its 51% subsidiaries,
- “*investment company*” has the meaning given by section 130 except that it does not include the holding company of a trading group,
- “*registered industrial and provident society*” means a society registered or treated as registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) Act 1969,
- “shares”—includes stock, butdoes not include shares or stock not forming part of a company's ordinary share capital,
- “*trading company*” means a company other than an excluded company which is—a company whose business consists wholly or mainly of the carrying on of a trade or trades, orthe holding company of a trading group, and
- “*trading group*” means a group the business of whose members, when taken together, consists wholly or mainly in the carrying on of a trade or trades.
- (2) Except as provided by subsection (3), paragraph (b) of the definition of “shares” in subsection (1) does not apply in the definition of “excluded company” in subsection (1) or in section 576J(1) to (4).
- (3) Paragraph (b) of that definition applies in relation to the first reference to “shares” in section 576J(1).
- (4) The definition of “shares” in subsection (1) does not apply in sections 576B(5)(a), 576G(3) and 576H(1)(c) and (2).
- (5) For the purposes of the definition of “trading group” in subsection (1), any trade carried on by a subsidiary which is an excluded company is treated as not constituting a trade.
#### Individuals qualifying for relief.
##### 577A
- (1) In computing profits chargeable to corporation tax under . . . Schedule D, no deduction shall be made for any expenditure incurred —
- (a) in making a payment the making of which constitutes the commission of a criminal offence, or
- (b) in making a payment outside the United Kingdom where the making of a corresponding payment in any part of the United Kingdom would constitute a criminal offence there.
- (1A) In computing profits chargeable to corporation tax under . . . Schedule D, no deduction shall be made for any expenditure incurred in making a payment induced by a demand constituting—
- (a) the commission in England or Wales of the offence of blackmail under section 21 of the Theft Act 1968,
- (b) the commission in Northern Ireland of the offence of blackmail under section 20 of the Theft Act (Northern Ireland) 1969, or
- (c) the commission in Scotland of the offence of extortion.
- (2) Any expenditure mentioned in subsection (1) or (1A) above—
- (a) shall not be included in computing any expenses of management in respect of which relief may be given under the Corporation Tax Acts; and
- (b) shall not be brought into account under section 76 as expenses payable.
##### 578A
- (1) This section provides for a reduction in the amounts—
- (a) allowable as deductions in computing profits chargeable to corporation tax under Case I or II of Schedule D, or
- (b) which can be included as expenses of management of a company with investment business (as defined by section 130),. . . or
- (bb) which can be brought into account under section 76 as expenses payable,
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for expenditure on the hiring of a car to which this section applies.
- (2) This section applies to the hiring of a car—
- (a) which is not a qualifying hire car, and
- (b) the retail price of which when new exceeds £12,000.
“Car” and “qualifying hire car” are defined by section 578B.
- (2A) This section does not apply to the hiring of a car, other than a motorcycle, if—
- (a) it is an electrically-propelled car, or
- (b) it is a car with low CO₂ emissions.
- (2B) In subsection (2A) above—
- “*car*” has the meaning given by section 578B;
- “*car with low CO₂ emissions*” has the meaning given by section 45D of the Capital Allowances Act 2001 (expenditure on cars with low CO₂ emissions to be first-year qualifying expenditure);
- “*electrically-propelled car*” has the meaning given by that section.
- (3) The amount which would, apart from this section, be allowable or capable of being included must be reduced by multiplying it by the fraction—
$£12,000+P2P$
where P is the retail price of the car when new.
- (4) If an amount has been reduced under subsection (3) and subsequently—
- (a) there is a rebate (however described) of the rentals, or
- (b) there occurs in connection with the rentals a transaction that falls within section 94 (debts deducted and subsequently released),
the amount otherwise taxable in respect of the rebate or transaction must be reduced by multiplying it by the fraction in subsection (3) above.
##### 578B
- (1) In section 578A “car” means a mechanically propelled road vehicle other than one—
- (a) of a construction primarily suited for the conveyance of goods or burden of any description, or
- (b) of a type not commonly used as a private vehicle and unsuitable for such use.
References to a car accordingly include a motor cycle.
- (2) For the purposes of section 578A, a car is a qualifying hire car if—
- (a) it is hired under a hire-purchase agreement (within the meaning of section 784(6)) under which there is an option to purchase exercisable on the payment of a sum equal to not more than 1 per cent. of the retail price of the car when new, or
- (b) it is a qualifying hire car for the purposes of Part 2 of the Capital Allowances Act (under section 82 of that Act).
- (3) In section 578A and this section “*new*” means unused and not second-hand.
- (4) The power under section 74(4) of the Capital Allowances Act to increase or further increase the sums of money specified in Chapter 8 of Part 2 of that Act includes the power to increase or further increase the sum of money specified in section 578A(2)(b) or (3).
##### 580A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Valuation of interests in land for purposes of section 294(1)(b).
##### 581A
Interest within section 755(1) of ITTOIA 2005 (interest on foreign currency securities etc.) shall be paid without deduction of income tax.
##### 582A
- (1) The Treasury may by order designate for the purposes of any one or more of subsections (2) and (4) to (6) below . . . any international organisation of which the United Kingdom is a member; and in those subsections “*designated*” means designated under this subsection.
- (2) Section 43 shall not apply in the case of payment made by an organisation designated for the purposes of this subsection.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Section 349(1) shall not apply in the case of a payment of an amount payable by an organisation designated for the purposes of this subsection.
- (5) Section 349(2) shall not apply in the case of interest payable by—
- (a) an organisation designated for the purposes of this subsection, or
- (b) a partnership of which such an organisation is a member.
- (6) An organisation designated for the purposes of this subsection shall not be a person to whom section 59 of the Finance Act 2004 applies.
#### Interpretation of Chapter III.
##### 587A
- (1) This section applies where—
- (a) securities (old securities) of a particular kind are issued by way of the original issue of securities of that kind,
- (b) on a later occasion securities (new securities) of the same kind are issued,
- (c) a sum (the extra return) is payable in respect of the new securities, by the person issuing them, to reflect the fact that interest is accruing on the old securities,
- (d) the issue price of the new securities includes an element (whether or not separately identified) representing payment for the extra return, and
- (e) the extra return is equal to the amount of interest payable for the relevant period on so many old securities as there are new (or, if there are more new securities than old, the amount of interest which would be so payable if there were as many old securities as new),
but this section shall not apply for the purposes of corporation tax, except where the issue of the new securities was before 1st April 1996.
- (2) Anything payable or paid by way of the extra return shall be treated for the purposes of the Tax Acts as payable or paid by way of interest (to the extent that it would not be so treated apart from this subsection).
- (3) But as regards any payment by way of the extra return, relief shall not be given under any provision of the Tax Acts to the person by whom the new securities are issued; and “*relief*” here means relief by way of deduction in computing profits or gains or deduction or set off against income or total profits.
- (4) For the purposes of this section securities are of the same kind if they are treated as being of the same kind by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange.
- (5) For the purposes of this section the relevant period is the period beginning with the day following the relevant day and ending with the day on which the new securities are issued.
- (6) For the purposes of this section the relevant day is—
- (a) the last (or only) interest payment day to fall in respect of the old securities before the day on which the new securities are issued, or
- (b) the day on which the old securities were issued, in a case where no interest payment day fell in respect of them before the day on which the new securities are issued;
and an interest payment day, in relation to the old securities, is a day on which interest is payable under them.
##### 587B
- (1) Subsections (2) and (3) below apply where, otherwise than by way of a bargain made at arm’s length, an individual, or a company which is not itself a charity, disposes of the whole of the beneficial interest in a qualifying investment to a charity.
- (2) On a claim made in that behalf to an officer of the Board—
- (a) the relevant amount shall be allowed—
- (i) in the case of a disposal by an individual, as a deduction in calculating his total income for the purposes of income tax for the year of assessment in which the disposal is made;
- (ii) in the case of a disposal by a company, as a charge on income for the purposes of corporation tax for the accounting period in which the disposal is made; and
- (b) no relief in respect of the disposal shall be given under section 83A of this Act, section 108 of ITTOIA 2005 or any other provision of the Income Tax Acts;
but paragraph (a)(i) above shall not apply for the purposes of any computation under sections 535 to 537 of ITTOIA 2005.
- (3) The consideration for which the charity’s acquisition of the qualifying investment is treated by virtue of section 257(2) of the 1992 Act as having been made—
- (a) shall be reduced by the relevant amount; or
- (b) where that consideration is less than that amount, shall be reduced to nil.
- (4) Subject to subsections (5) to (7) below, the relevant amount is an amount equal to—
- (a) where the disposal is a gift, the value of the net benefit to the charity at, or immediately after, the time when the disposal is made (whichever time gives the lower value);
- (b) where the disposal is at an undervalue, the amount by which—
- (i) the value described in paragraph (a) above, exceeds
- (ii) the amount or value of the consideration for the disposal,
or, if there is no such excess, nil.
- (5) Where there are one or more benefits received in consequence of making the disposal which are received by the person making the disposal or a person connected with him, the relevant amount shall be reduced by the value of that benefit or, as the case may be, the aggregate value of those benefits; and section 839 applies for the purposes of this subsection.
- (6) Where the disposal is a gift, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the person making it.
- (7) Where the disposal is at an undervalue—
- (a) to the extent that the consideration for the disposal is less than that for which the disposal is treated as made by virtue of section 257(2)(a) of the 1992 Act, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the person making it; and
- (b) section 48 of that Act (consideration due after time of disposal) shall apply in relation to the computation of the relevant amount as it applies in relation to the computation of a gain.
- (8) In the case of a disposal by a company which is carrying on life assurance business—
- (a) if the company is charged to tax under Case I of Schedule D in respect of such business, subsections (2) and (3) above shall not apply;
- (b) if the company is not so charged to tax in respect of such business—
- (i) subsection (2)(a)(ii) above shall have effect as if for “a charge on income" there were substituted “expenses payable falling to be brought into account at Step 3 in section 76(7)”; and
- (ii) the relevant amount given by subsection (4) above shall be reduced by so much (if any) of that amount as is not referable to basic life assurance and general annuity business;
and for the purpose of determining how much (if any) of that amount is not so referable, section 432A shall have effect as if that amount were a gain accruing on the disposal of the qualifying investment to the company.
- (8A) The value of the net benefit to the charity is—
- (a) the market value of the qualifying investment, unless subsection (8B) below applies;
- (b) where that subsection applies, that market value reduced by the aggregate amount of the related liabilities of the charity (see subsections (8E) to (8G)).
- (8B) This subsection applies in any case where—
- (a) the charity is, or becomes, subject to an obligation to any person (whether or not the person making the disposal or a person connected with him), and
- (b) one or more of the conditions in subsection (8C) below is satisfied.
- (8C) For the purposes of subsection (8B) above—
- (a) condition 1 is that, taking into account all the circumstances (including, in particular, the difference in the value of the net benefit to the charity if subsection (8B) applies and if it does not), it is reasonable to suppose that the disposal of the qualifying investment to the charity would not have been made in the absence of the obligation;
- (b) condition 2 is that the obligation (whether in whole or in part) relates to, is framed by reference to, or is conditional on the charity receiving, the qualifying investment or a related investment (see subsection (8D)).
- (8D) In subsection (8C) above “*related investment*” means any of the following—
- (a) any asset of the same class or description as the qualifying investment (irrespective of size, quantity or amount);
- (b) any asset derived from, or representing, the qualifying investment whether in whole or in part and whether directly or indirectly;
- (c) any asset from which the qualifying investment is derived, or which the qualifying investment represents, whether in whole or in part and whether directly or indirectly.
- (8E) For the purposes of this section, the liabilities which are related liabilities in the case of any qualifying investment are the liabilities of the charity under each of the obligations that fall within subsection (8B) above (as read with subsection (8C) above) in relation to that investment.
- (8F) Where an obligation is contingent and the contingency occurs, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, under the obligation is the amount or value of the liability actually incurred in consequence of the occurrence of the contingency.
- (8G) Where an obligation is contingent and the contingency does not occur, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, is nil.
- (9) In this section—
- “*authorised unit trust*” and “*open-ended investment company*” have the meanings given by section 468;
- “*charity*” has the same meaning as in section 506 and includes each of the bodies mentioned in section 507(1);
- “*the incidental costs of making the disposal to the person making it*” shall be construed in accordance with section 38(2) of the 1992 Act;
- “*life assurance business*” and related expressions have the same meaning as in Chapter I of Part XII;
- “*obligation*” includes a reference to each of the following—any scheme, arrangement or understanding of any kind, whether or not legally enforceable;a series of obligations (whether or not between the same parties);
- “*offshore fund*” has the same meaning as in Chapter 5 of Part 17;
- “*qualifying investment*” means any of the following—shares or securities which are listed or dealt in on a recognised stock exchange;units in an authorised unit trust;shares in an open-ended investment company;. . . an interest in an offshore fund; anda qualifying interest in land;
- “*related liabilities*” shall be construed in accordance with subsection (8E) above;
- “*value of the net benefit to the charity*” shall be construed in accordance with subsection (8A) above.
- (9A) In this section a “*qualifying interest in land*” means—
- (a) a freehold interest in land, or
- (b) a leasehold interest in land which is a term of years absolute,
where the land in question is in the United Kingdom.
This subsection is subject to subsections (9B) to (9D) below.
- (9B) Where a person makes a disposal to a charity of—
- (a) the whole of his beneficial interest in such freehold or leasehold interest in land as is described in subsection (9A)(a) or (b) above, and
- (b) any easement, servitude, right or privilege so far as benefiting that land,
the disposal falling within paragraph (b) above is to be regarded for the purposes of this section as a disposal by the person of the whole of his beneficial interest in a qualifying interest in land.
- (9C) Where a person who has a freehold or leasehold interest in land in the United Kingdom grants a lease for a term of years absolute (or, in the case of land in Scotland, grants a lease) to a charity of the whole or part of that land, the grant of that lease is to be regarded for the purposes of this section as a disposal by the person of the whole of the beneficial interest in the leasehold interest so granted.
- (9D) For the purposes of subsection (9A) above, an agreement to acquire a freehold interest and an agreement for a lease are not qualifying interests in land.
- (9E) In the application of this section to Scotland—
- (a) references to a freehold interest in land are references to the interest of the owner,
- (b) references to a leasehold interest in land which is a term of years absolute are references to a tenant’s right over or interest in a property subject to a lease, and
- (c) references to an agreement for a lease do not include references to missives of let that constitute an actual lease.
- (10) Subject to subsection (11) below, the market value of any qualifying investment shall be determined for the purposes of this section as for the purposes of the 1992 Act.
- (10A) Section 839 (connected persons) applies for the purposes of this section.
- (11) In the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 272(5) of the 1992 Act (meaning of “*market value*” in relation to rights of unit holders in a unit trust scheme) shall apply with any necessary modifications for determining the market value of the interest for the purposes of this section.
- (12) This section is supplemented by section 587C below.
##### 587BA
- (1) This section applies for the purposes of section 587B where a qualifying investment is a qualifying interest in land.
- (2) Where two or more persons (“the owners”)—
- (a) are jointly beneficially entitled to the qualifying interest in land, or
- (b) are, taken together, beneficially entitled in common to the qualifying interest in land,
relief under section 587B is available if at least one of the owners is a qualifying company and all the owners dispose of the whole of their beneficial interests in the qualifying interest in land to the charity.
- (3) Subsection (4) applies if one or more of the owners is not a company.
- (4) For the purpose of determining whether the owners' beneficial interests are disposed of as mentioned in subsection (2), section 587B(9B) and (9C) applies as if references to a company included a reference to a person who is not a company.
- (5) Relief under section 587B is available to each of the owners which is a qualifying company.
- (6) If one or more of the owners is an individual—
- (a) the relevant amount is taken to be the relievable amount calculated for the purposes of Chapter 3 of Part 8 of ITA 2007, and
- (b) the amount of relief under section 587B to be given to a qualifying company is such share of the relievable amount as is allocated to the company by the agreement mentioned in section 442(5) of ITA 2007.
- (7) Subsections (8) to (12) apply if none of the owners is an individual.
- (8) The amount of relief under section 587B to be given to a qualifying company is such share of the relevant amount as is allocated to the company by an agreement made between those owners which are qualifying companies.
- (9) Calculate the relevant amount as if—
- (a) the owners were a single qualifying company, and
- (b) the disposals of the owners' beneficial interests were a single disposal by that single company of the whole of the beneficial interest in the qualifying interest in land.
- (10) In particular, for the purposes of section 587B(7) calculate the consideration for which the disposal is made by virtue of section 257(2)(a) of the 1992 Act by—
- (a) calculating, for each owner, the consideration for which the disposal of the owner's beneficial interest is so made, and
- (b) adding together all the consideration calculated under paragraph (a).
- (11) If one or more of the owners is not a qualifying company, in calculating the relevant amount make just and reasonable adjustments to reduce the relevant amount to reflect the fact that relief under section 587B is not available to that owner or to those owners.
- (12) If one or more of the owners is within paragraph (b) of section 587B(8), in calculating the relevant amount make just and reasonable adjustments to reduce the relevant amount to reflect the requirements of sub-paragraph (ii) of that paragraph.
- (13) A company is a qualifying company if—
- (a) it is not itself a charity, and
- (b) it is not within section 587B(8)(a).
##### 587C
- (1) This section applies for the purposes of section 587B where a qualifying investment is a qualifying interest in land.
- (2) Where two or more persons—
- (a) are jointly beneficially entitled to the qualifying interest in land, or
- (b) are, taken together, beneficially entitled in common to the qualifying interest in land,
section 587B applies only if each of those persons disposes of the whole of his beneficial interest in the qualifying interest in land to the charity.
- (3) Relief under section 587B shall be available to each of the persons referred to in subsection (2) above, but the amount that may be allowed as respects any of them shall be only such share of the relevant amount as they may agree in the case of that person.
- (4) No person may make a claim for a relief under subsection (2) of section 587B unless he has received a certificate given by or on behalf of the charity.
- (5) The certificate must—
- (a) specify the description of the qualifying interest in land which is the subject of the disposal,
- (b) specify the date of the disposal, and
- (c) contain a statement that the charity has acquired the qualifying interest in land.
- (6) If, in the case of a disposal of a qualifying interest in land, a disqualifying event occurs at any time in the relevant period, the person (or each of the persons) who made the disposal to the charity shall be treated as never having been entitled to relief under section 587B in respect of the disposal.
- (7) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (6) above.
- (8) For the purposes of subsection (6) above a disqualifying event occurs if the person (or any one of the persons) who made the disposal or any person connected with him (or any one of them)—
- (a) becomes entitled to an interest or right in relation to all or part of the land to which the disposal relates, or
- (b) becomes party to an arrangement under which he enjoys some right in relation to all or part of that land,
otherwise than for full consideration in money or money’s worth.
- (9) A disqualifying event does not occur, for the purposes of subsection (6) above, if a person becomes entitled to an interest or right as mentioned in subsection (8)(a) above as a result of a disposition of property on death, whether the disposition is effected by will, under the law relating to intestacy or otherwise.
- (10) For the purposes of subsection (6) above the relevant period is the period beginning with the date of the disposal of the qualifying interest in land and ending with—
- (a) in the case of an individual, the fifth anniversary of the 31st January next following the end of the year of assessment in which the disposal was made, and
- (b) in the case of a company, the sixth anniversary of the end of the accounting period in which the disposal was made.
- (11) Section 839 (connected persons) applies for the purposes of this section.
- (12) This section shall be construed as one with section 587B.
#### Divers and diving supervisors.
#### Losses of ring fence trade: set off against profits of an earlier accounting period
##### 589A
@@ -38706,7 +33010,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charges on income: interest payable to non-residents.
#### Terminal losses.
##### 596A
@@ -38748,5172 +33052,4576 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions in deposits with and without certificates or in debts.
#### Company reconstructions without a change of ownership.
##### 631A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 634A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 636A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 637A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses etc. which may be surrendered by way of group relief.
##### 640A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 641A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Computation of gross profits.
##### 646A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Annuities: charge to tax
##### 648A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 648B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 650A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 651A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 653A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 658A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659A
- (1) For the purposes of sections . . . 613(4), 614(3) and (4) . . . —
- (a) “*investments*” (or “*investment*”) includes futures contracts and options contracts, and
- (b) income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.
##### 659B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659E
- (1) The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP (see section 1004 of ITA 2007).
- (2) The exemptions are those provided by—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 613(4) (Parliamentary pension funds),
- section 614(3) (certain colonial, &c. pension funds),
- section 614(4) (the Overseas Service Pension Fund),
- section 614(5) (other pension funds for overseas employees),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.
- (4) Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.
### Chapter IA — Liability of settlor
### Main provisions
#### Interpretative provisions relating to insurance companies.
##### 660A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660C
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Income which is treated for income tax purposes as the income of the settlor alone by virtue of section 624 or 629 of ITTOIA 2005 is accordingly not the income of any company for corporation tax purposes.
##### 660D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
##### 660E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 674A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions to section 349 for payments between companies etc
#### Section 432B apportionment: income of non-participating funds.
##### 682A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### . . .
### . . .
##### 685A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of asset value increase where line 51 amount decreases
##### 685F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The conditions mentioned in section 349A(1)
#### Company reconstructions without a change of ownership.
##### 631A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 634A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 636A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 637A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company reconstructions involving business of leasing plant or machinery
##### 640A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 641A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying maintenance payments.
##### 646A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Annuities: charge to tax
##### 648A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 648B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 650A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 651A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 653A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 658A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659A
- (1) For the purposes of sections . . . 613(4), 614(3) and (4) . . . —
- (a) “*investments*” (or “*investment*”) includes futures contracts and options contracts, and
- (b) income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.
##### 659B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659E
- (1) The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP.
- (2) The exemptions are those provided by—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 613(4) (Parliamentary pension funds),
- section 614(3) (certain colonial, &c. pension funds),
- section 614(4) (the Overseas Service Pension Fund),
- section 614(5) (other pension funds for overseas employees),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.
- (4) Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.
### Chapter IA — Liability of settlor
### Main provisions
##### 686A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The conditions mentioned in section 349A(1)
##### 660A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660C
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to section 833(3), income which is treated by virtue of section 624 or 629 of ITTOIA 2005 (income where settlor retains an interest or income paid to relevant children of settlor) as income of a settlor shall be deemed for the purposes of section 619 of that Act (charge to tax under Chapter 5 of Part 5 of that Act) so far as relating to income so treated to be the highest part of his income.
- (4) Income which is treated for income tax purposes as the income of the settlor alone by virtue of section 624 or 629 of ITTOIA 2005 is accordingly not the income of any company for corporation tax purposes.
##### 660D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
##### 660E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 674A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions to section 349 for payments between companies etc
#### The conditions mentioned in section 349A(1)
##### 682A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### . . .
### . . .
##### 685A
- (1) For the purposes of the Tax Acts, unless the context otherwise requires,
- (a) “*settled property*” means any property held in trust other than—
- (i) property held by a person as nominee for another,
- (ii) property held by a person as trustee for another person who is absolutely entitled as against the trustee, and
- (iii) property held by a person as trustee for another person who would be absolutely entitled as against the trustee if he were not an infant or otherwise under a disability, and
- (b) references, however expressed, to property comprised in a settlement are references to settled property.
- (2) For the purposes of the Tax Acts, a reference to a person who is or would be absolutely entitled to property as against the trustee—
- (a) means a person who has the exclusive right (subject to satisfying the right of the trustees to resort to the property for the payment of duty, taxes, costs or other outgoings) to direct how the property shall be dealt with, and
- (b) includes two or more persons who are or would be jointly absolutely entitled as against the trustee.
##### 685B
- (1) In the Tax Acts, unless the context otherwise requires—
- (a) “*settlor*” in relation to a settlement means the person, or any of the persons, who has made or is treated for the purposes of the Tax Acts as having made the settlement, and
- (b) a person is a settlor of property which—
- (i) is settled property by reason of his having made the settlement (or by reason of an event which causes him to be treated under this Act as having made the settlement), or
- (ii) derives from property to which sub-paragraph (i) applies.
- (2) A person is treated for the purposes of the Tax Acts as having made a settlement if—
- (a) he has made or entered into the settlement, directly or indirectly, or
- (b) the settled property, or property from which the settled property is derived, is or includes property of which he was competent to dispose immediately before his death and the settlement arose on his death, whether by will, on his intestacy, or otherwise.
- (3) A person is, in particular, treated for the purposes of the Tax Acts as having made a settlement if—
- (a) he has provided property directly or indirectly for the purposes of the settlement, or
- (b) he has undertaken to provide property directly or indirectly for the purposes of the settlement.
- (4) Where one person (A) makes or enters into a settlement in accordance with reciprocal arrangements with another person (B), for the purposes of the Tax Acts—
- (a) B shall be treated as having made the settlement, and
- (b) A shall not be treated as having made the settlement by reason only of the reciprocal arrangements.
- (5) In subsection (2)(b) the reference to property of which a deceased person was competent to dispose is a reference to property of the deceased which (otherwise than in right of a power of appointment or of the testamentary power conferred by statute to dispose of entailed interests) he could, if of full age and capacity, have disposed of by his will, assuming that all the property were situated in England and, if he was not domiciled in the United Kingdom, that he was domiciled in England, and includes references to his severable share in any property to which, immediately before his death, he was beneficially entitled as a joint tenant.
- (6) A person who has been a settlor in relation to a settlement shall be treated for the purposes of the Tax Acts as having ceased to be a settlor in relation to the settlement if—
- (a) no property of which he is the settlor is comprised in the settlement,
- (b) he has not undertaken to provide property directly or indirectly for the purposes of the settlement in the future, and
- (c) he has not made reciprocal arrangements with another person for that other person to enter into the settlement in the future.
- (7) For the purpose of this section and sections 685C and 685D property is derived from other property—
- (a) if it derives (directly or indirectly and wholly or partly) from that property or any part of it, and
- (b) in particular, if it derives (directly or indirectly and wholly or partly) from income from that property or any part of it.
- (8) In this section “*arrangements*” includes any scheme, agreement or understanding, whether or not legally enforceable.
##### 685C
- (1) This section applies in relation to a transfer of property from the trustees of one settlement (“Settlement 1”) to the trustees of another (“Settlement 2”) otherwise than—
- (a) for full consideration, or
- (b) by way of a bargain made at arm's length.
- (2) In this section “*transfer of property*” means—
- (a) a disposal of property by the trustees of Settlement 1, and
- (b) the acquisition by the trustees of Settlement 2 of—
- (i) property disposed of by the trustees of Settlement 1, or
- (ii) property created by the disposal;
and a reference to transferred property is a reference to property acquired by the trustees of Settlement 2 on the disposal.
- (3) For the purposes of the Tax Acts, except where the context otherwise requires—
- (a) the settlor (or each settlor) of the property disposed of by the trustees of Settlement 1 shall be treated from the time of the disposal as having made Settlement 2, and
- (b) if there is more than one settlor of the property disposed of by the trustees of Settlement 1, each settlor shall be treated in relation to Settlement 2 as the settlor of a proportionate part of the transferred property.
- (4) For the purposes of the Tax Acts, except where the context otherwise requires, if and to the extent that the property disposed of by the trustees of Settlement 1 was provided for the purposes of Settlement 1, or is derived from property provided for the purposes of Settlement 1, the transferred property shall be treated from the time of the disposal as having been provided for the purposes of Settlement 2.
- (5) If transferred property is treated by virtue of subsection (4) as having been provided for the purposes of Settlement 2—
- (a) the person who provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1 shall be treated as having provided the transferred property, and
- (b) if more than one person provided the property disposed of by the trustees of Settlement 1, or property from which it was derived, for the purposes of Settlement 1, each of them shall be treated as having provided a proportionate part of the transferred property.
- (6) But subsections (3) and (4) do not apply in relation to a transfer of property—
- (a) which occurs by reason only of the assignment or assignation by a beneficiary under Settlement 1 of an interest in that settlement to the trustees of Settlement 2,
- (b) which occurs by reason only of the exercise of a general power of appointment, or
- (c) to which section 685D(6) applies.
- (7) There is an acquisition or disposal of property for the purposes of this section if there would be an acquisition or disposal of property for the purposes of the 1992 Act.
##### 685D
##### 686E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 687A
- (1) This section applies where—
- (a) a disposition of property following a person's death is varied, and
- (b) section 62(6) of the 1992 Act applies in respect of the variation.
- (2) Where property becomes settled property in consequence of the variation (and would not, but for the variation, have become settled property), a person mentioned in subsection (3) shall be treated for the purposes of the Tax Acts, except where the context otherwise requires—
- (a) as having made the settlement, and
- (b) as having provided the property for the purposes of the settlement.
- (3) Those persons are—
- (a) a person who immediately before the variation was entitled to the property, or to property from which it derives, absolutely as legatee,
- (b) a person who would have become entitled to the property, or to property from which it derives, absolutely as legatee but for the variation,
- (c) a person who immediately before the variation would have been entitled to the property, or to property from which it derives, absolutely as legatee but for being an infant or other person under a disability, and
- (d) a person who would, but for the variation, have become entitled to the property, or to property from which it derives, absolutely as legatee if he had not been an infant or other person under a disability.
- (a) the trustees of a settlement make a payment to a company;
- (b) sections 494 and 495 of ITA 2007 apply in relation to the payment; and
- (c) the company is chargeable to corporation tax and does not fall within subsection (2) below.
- (2) A company falls within this subsection if it is—
- (a) a charitable company, as defined in section 506(1);
- (b) a body mentioned in section 507 (heritage bodies); or
- (c) an Association of a description specified in section 508 (scientific research organisations).
- (3) Where this section applies—
- (a) none of the following provisions, namely—
- (i) section 7(2),
- (ii) section 11(3),
- (iii) section 952 of ITA 2007 (set off of income tax suffered against income tax payable),
shall apply in the case of the payment;
- (b) the payment shall be left out of account in calculating the profits of the company for the purposes of corporation tax; and
- (c) no repayment shall be made of the amount treated under section 494 of ITA 2007 as income tax paid by the company in the case of the payment.
- (4) If the company is not resident in the United Kingdom, this section applies only in relation to so much (if any) of the payment as is comprised in the company’s chargeable profits for the purposes of corporation tax.
### Chapter ID — Trust management expenses
##### 689A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 689B
- (1) The expenses of the trustees of a settlement in any year of assessment, so far as they are properly chargeable to income (or would be so chargeable but for any express provisions of the trust), shall be treated—
- (a) as set against so much (if any) of any income as is income falling within subsection (2) , (2A) or (3) below before being set against other income; and
- (b) as set against so much (if any) of any income as is income falling within subsection (2) or (2A) below before being set against income falling within subsection (3) below; and
- (c) as set against so much (if any) of any income as is income falling within subsection (2) below before being set against income falling within subsection (2A) below.
- (2) Income falls within this subsection if it is—
- (a) so much of the income of the trustees as is income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
- (b) income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies); or
- (c) income chargeable under Chapter 6 of that Part (release of loan to participator in close company).
- (2A) Income falls within this subsection if it is —
- (a) income chargeable under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies); or
- (b) a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).
- (2B) In subsection (2A) “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.
- (3) Income falls within this subsection if it is income of the trustees which is savings income (within the meaning of section 18 of ITA 2007).
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) This section applies for corporation tax purposes only.
##### 698A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 699A
- (1) In this section “*a relevant amount*” means so much of any amount which a person is deemed by virtue of this Part to receive or to have a right to receive as is or would be paid out of sums which—
- (a) are included in the aggregate income of the estate of the deceased by virtue of any of paragraphs (c) to (e) of section 701(8) below; and
- (b) are sums in respect of which the personal representatives are not directly assessable to United Kingdom income tax;
or out of any sums included in the aggregate income of the estate of the deceased which fall within subsection (1A) below.
- (1A) A sum falls within this subsection if it is a sum in respect of—
- (a) a distribution chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.); . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) Any reference in this Part to a sum to which subsection (1)(a) and (b) above applies includes a reference to a sum falling within subsection (1A) above which is included in the aggregate income of the estate of the deceased.
- (2) In determining for the purposes of this Part whether any amount is a relevant amount—
- (a) such apportionments of any sums to which subsection (1)(a) and (b) above applies shall be made between different persons with interests in the residue of the estate as are just and reasonable in relation to their different interests; and
- (b) subject to paragraph (a) above, the assumptions in section 701(3A)(b) shall apply, but (subject to that) it shall be assumed that payments are to be made out of other sums comprised in the aggregate income of the estate before they are made out of any sums to which subsection (1)(a) and (b) above applies.
- (3) In the case of a foreign estate, and notwithstanding anything in section 695(4)(b) or 696(6), a relevant amount shall be deemed—
- (a) to be income of such amount as would, after deduction of income tax for the year in which it is deemed to be paid, be equal to the relevant amount; and
- (b) to be income that has borne tax at the applicable rate.
- (4) Sums to which subsection (1)(a) and (b) above applies shall be assumed, for the purpose of determining the applicable rate in relation to any relevant amount, to bear tax—
- (a) in the case of sums included by virtue of section 701(8)(c) or (d), at the dividendordinary rate, and
- (b) in the case of sums included by virtue of section 701(8)(e), at the savings rate; and
- (c) in the case of sums falling within subsection (1A) above, at the dividend ordinary rate.
- (5) No repayment shall be made of any income tax which by virtue of this Part is treated as having been borne by the income that is represented by a relevant amount.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substitution of security: supplemental.
#### Computation of losses and limitation on relief.
##### 705A
- (1) Immediately after the determination by the tribunal of an appeal re-heard by them under section 705 of this Act, the appellant or the Board, if dissatisfied with the determination as being erroneous in point of law, may declare its or their dissatisfaction to the tribunal.
- (2) The appellant or the Board, as the case may be, having declared its or their dissatisfaction, may, within thirty days after the determination, by notice in writing require the tribunal to state and sign a case for the opinion of the High Court.
- (3) The party requiring the case shall pay to the tribunal a fee of £25 for and in respect of the same, before that party is entitled to have the case stated.
- (4) The case shall set forth the facts and the determination of the tribunal, and the party requiring it shall transmit the case, when stated and signed, to the High Court, within thirty days after receiving the same.
- (5) At or before the time when that party transmits the case to the High Court, that party shall send notice in writing of the fact that the case has been stated on that party's application, together with a copy of the case, to the other party.
- (6) The High Court shall hear and determine any question of law arising on the case, and may reverse, affirm or amend the determination in respect of which the case has been stated, or remit the matter to the tribunal with the Court’s opinion on it, or make such other order in relation to the matter as the Court thinks fit.
- (7) The High Court may cause the case to be sent back for amendment, and thereupon the case shall be amended accordingly, and judgment shall be delivered after it has been amended.
- (8) Subject to subsection (9) below and to Part II of the Administration of Justice Act 1969 (appeal from High Court to House of Lords), an appeal shall, in England and Wales, lie from the decision of the High Court to the Court of Appeal and thence to the House of Lords.
- (9) No appeal shall lie to the House of Lords from the Court of Appeal unless leave has been given under and in accordance with section 1 of the Administration of Justice (Appeals) Act 1934.
- (10) Subject to subsection (11) below, where the determination of the tribunal is in respect of an assessment made in accordance with a notice under subsection (3) of section 703, then notwithstanding that a case has been required to be stated or is pending before the High Court in respect of the determination, corporation tax shall be paid in accordance with the determination.
- (11) If the amount charged by the assessment is altered by the order or judgment of the High Court, then—
- (a) if too much corporation tax has been paid the amount overpaid shall be refunded with such interest, if any, as the High Court may allow; or
- (b) if too little corporation tax has been charged, the amount undercharged shall be due and payable at the expiration of a period of thirty days beginning with the date on which the Board issue to the other party a notice of the total amount payable in accordance with the order or judgment of that Court.
- (12) All matters within the jurisdiction of the High Court under this section shall be assigned in Scotland to the Court of Session sitting as the Court of Exchequer (references in this section to the High Court being construed accordingly); and an appeal shall lie from the decision under this section of the Court of Session, as the Court of Exchequer in Scotland, to the House of Lords.
##### 705B
- (1) A case which is stated by the tribunal under section 705A in proceedings in Northern Ireland shall be a case for the opinion of the Court of Appeal in Northern Ireland, and the Management Act and the Corporation Tax Acts shall have effect as if that section applied in relation to such proceedings—
- (a) with the substitution for references to the High Court of references to the Court of Appeal in Northern Ireland;
- (b) with the omission of subsections (4), (5), (8) and (9) of that section.
- (2) The procedure relating to the transmission of the case to, and the hearing and determination of the case by, the Court of Appeal in Northern Ireland shall be that for the time being in force in Northern Ireland as respects cases stated by a county court in exercise of its general jurisdiction, and an appeal shall lie from the Court of Appeal to the House of Lords in accordance with section 42 of the Judicature (Northern Ireland) Act 1978.
- (3) Where in proceedings in Northern Ireland an application is made for a case to be stated by the tribunal under this section, the case must be settled and sent to the applicant as soon after the application as is reasonably practicable.
- (4) For the purposes of this section “proceedings in Northern Ireland” means proceedings as respects which the place given by the rules in Schedule 3 to the Management Act is in Northern Ireland.
#### Section 349A(1): consequences of reasonable but incorrect belief
#### Income or gains arising from property investment LLP
#### Loan to buy life annuity.
##### 722A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relevant loan interest.
##### 726A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 727A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of pure reinsurance business.
##### 730A
- (1) Subject to subsection (8) below, this section applies where—
- (a) a person (“the original owner”) has transferred any securities to another person (“the interim holder”) under an agreement to sell them;
- (b) the original owner or a person connected with him—
- (i) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (ii) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises; and
- (c) the sale price and the repurchase price are different.
- (2) The difference between the sale price and the repurchase price shall be treated for the purposes of the Corporation Tax Acts—
- (a) where the repurchase price is more than the sale price, as a payment of interest made by the repurchaser on a deemed loan from the interim holder of an amount equal to the sale price; and
- (b) where the sale price is more than the repurchase price, as a payment of interest made by the interim holder on a deemed loan from the repurchaser of an amount equal to the repurchase price.
- (3) Where any amount is deemed under subsection (2) above to be a payment of interest, that payment shall be deemed for the purposes of the Corporation Tax Acts to be one that becomes due at the time when the repurchase price becomes due and, accordingly, is treated as paid when that price is paid.
- (4) Where any amount is deemed under subsection (2) above to be a payment of interest, the repurchase price shall be treated for the purposes of the Corporation Tax Acts(other than the excepted provisions specified in subsection (4A) below) and (in cases where section 263A of the 1992 Act does not apply) for the purposes of the 1992 Act—
- (a) in a case falling within paragraph (a) of that subsection, as reduced by the amount of the deemed payment; and
- (b) in a case falling within paragraph (b) of that subsection, as increased by the amount of the deemed payment.
This subsection is subject to subsection (4B) below.
- (4A) The excepted provisions are—
- (a) this section,
- (b) section 730BB, apart from subsection (7),
- (c) section 737A, and
- (d) section 737C.
- (4B) Where section 730BB(7) has effect (repurchase price to be treated as increased or reduced for certain purposes), subsection (4) above does not have effect for any purpose other than that of determining the amount that falls to be increased or reduced under section 730BB(7).
- (5) For the purposes of section 209(2)(d) . . . any amount which is deemed under subsection (2)(a) above to be a payment of interest shall be deemed to be interest in respect of securities issued by the repurchaser and held by the interim holder.
- (5A) For the purposes of the Corporation Tax Acts, a company has a relationship to which this section applies in any case where—
- (a) the circumstances are as set out in subsection (1) above; and
- (b) interest on a deemed loan is deemed by virtue of subsection (2) above to be paid by or to the company;
and references to a relationship to which this section applies, and to a company’s being party to such a relationship, shall be construed accordingly.
- (6) Where a company has a relationship to which this section applies—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) shall, as respects that company, have effect in relation to the interest deemed by virtue of subsection (2) above to be paid or received by the company under that relationship as it would have effect if it were interest under a loan relationship to which the company is a party,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and
- (c) the only debits or credits to be brought into account for the purposes of that Chapter by virtue of this subsection in respect of a relationship are those relating to that deemed interest,
and, subject to paragraph (c) above, references in the Corporation Tax Acts to a loan relationship accordingly include a reference to a relationship to which this section applies.
- (6A) Any question whether debits or credits brought into account in accordance with subsection (6) above in relation to any company—
- (a) are to be brought into account under section 82(2) of the Finance Act 1996 (trading loan relationships), or
- (b) are to be treated as non-trading debits or credits,
shall be determined (subject to Schedule 11 to that Act (insurance companies)) according to the extent (if any) to which the company is a party to the repurchase in the course of activities forming an integral part of a trade carried on by the company.
- (6B) To the extent that debits or credits fall to be brought into account by a company under section 82(2) of the Finance Act 1996 in the case of a relationship to which this section applies, the company shall be regarded for the purposes of Chapter 2 of Part 4 of that Act as being party to the relationship for the purposes of a trade carried on by the company.
- (7) The Treasury may by regulations provide for any amount which is deemed under subsection (2) above to be received as a payment of interest to be treated, in such circumstances and to such extent as may be described in the regulations, as comprised in income that is eligible for relief from corporation tax by virtue of section 438 . . . .
- (8) Except where regulations under section 737E otherwise provide, this section does not apply if—
- (a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) all of the benefits and risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrue to, or fall on, the interim holder.
- (8A) In this section references to the sale price are to be construed—
- (a) in a case where the securities are bought back by the transferor or a person connected with him in compliance with a requirement imposed in consequence of the exercise of an option acquired under the agreement to sell the securities or any related agreement, as references to what would otherwise be the sale price plus the amount of any consideration given for the option, and
- (b) in a case where the securities are so bought back in the exercise of an option so acquired, as references to what would otherwise be the sale price less the amount of any consideration so given,
unless the consideration is brought into account under Schedule 26 to the Finance Act 2002 (derivative contracts).
- (9) In this section references to the repurchase price are to be construed—
- (a) in cases where section 737A applies, and
- (b) in cases where section 737A would apply if it were in force in relation to the securities in question,
as references to the repurchase price which is or, as the case may be, would be applicable by virtue of section 737C(3)(b), (9) or (11)(c).
##### 730B
- (1) For the purposes of section 730A agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (2) References in section 730A to buying back securities—
- (a) shall include references to buying similar securities; and
- (b) in relation to a person connected with the original owner, shall include references to buying securities sold by the original owner or similar securities,
notwithstanding (in each case) that the securities bought have not previously been held by the purchaser; and references in that section to repurchase or to a repurchaser shall be construed accordingly.
- (3) In section 730A and this section “*securities*”means United Kingdom equities, United Kingdom securities or overseas securities.
- (3A) In this section “*United Kingdom equities*”, “*United Kingdom securities*” and “*overseas securities*” have the meanings given by paragraph 1(1) of Schedule 23A.
- (4) For the purposes of this section securities are similar if they entitle their holders—
- (a) to the same rights against the same persons as to capital, interest and dividends, and
- (b) to the same remedies for the enforcement of those rights,
notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.
- (5) Section 839 (connected persons) applies for the purposes of section 730A.
##### 730BB
- (1) For the purposes of the Corporation Tax Acts, a company has a relationship to which this section applies in any case where—
- (a) the circumstances are as set out in section 730A(1)(a) and (b);
- (b) the company is the repurchaser of the securities or (subject to subsection (11) below) the interim holder;
- (c) the conditions in subsection (2) or (3) below are satisfied; and
- (d) subsection (10) below does not prevent this section from applying,
and references to a relationship to which this section applies, and to a company’s being a party to such a relationship, shall be construed accordingly.
- (2) The conditions in this subsection are that—
- (a) the sale price and the repurchase price are expressed in a currency other than sterling;
- (b) there is a difference between—
- (i) the sterling equivalent of the sale price as at the date of the transfer of the securities to the interim holder (“*the first sum*”); and
- (ii) the sterling equivalent of the sale price as at the date they are bought back by the repurchaser (“*the second sum*”); and
- (c) the case is not one where section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling) applies in relation to the company.
- (3) The conditions in this subsection are that—
- (a) the case is one where section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling) applies in relation to the company;
- (b) the sale price and the repurchase price are expressed in a currency other than the relevant currency; and
- (c) there is a difference between—
- (i) the relevant currency equivalent of the sale price as at the date of the transfer of the securities to the interim holder (“*the first sum*”); and
- (ii) the relevant currency equivalent of the sale price as at the date they are bought back by the repurchaser (“*the second sum*”).
- (3A) In subsection (3), references to the relevant currency are—
- (a) in cases in which section 92B of the Finance Act 1993 applies, to the functional currency (within the meaning of that section), and
- (b) in cases in which section 92C of the Finance Act 1993 applies, to the accounts currency (within the meaning of that section).
- (4) Where a company has a relationship to which this section applies and—
- (a) the company is the repurchaser and the first sum exceeds the second sum; or
- (b) the company is the interim holder and the second sum exceeds the first sum,
the amount of the excess shall be treated for the purposes of the Corporation Tax Acts as an exchange gain (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships)) arising to the company from the relationship.
- (5) Where a company has a relationship to which this section applies and—
- (a) the company is the repurchaser and the second sum exceeds the first sum; or
- (b) the company is the interim holder and the first sum exceeds the second sum,
the amount of the excess shall be treated for the purposes of the Corporation Tax Acts as an exchange loss (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships)) arising to the company from the relationship.
- (6) Where an exchange gain or loss is treated by virtue of subsection (4) or (5) above as arising to a company from a relationship to which this section applies—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 shall have effect in relation to the exchange gain or loss as it would have effect if it were an exchange gain or loss (as the case may be) arising to the company from a loan relationship to which it is a party; but
- (b) the only debits and credits to be brought into account for the purposes of that Chapter by virtue of this section in respect of the relationship to which this section applies are those relating to the exchange gains and losses,
and, subject to paragraph (b) above, references in the Corporation Tax Acts to a loan relationship accordingly include a reference to a relationship to which this section applies.
- (7) Where a company has a relationship to which this section applies, the repurchase price shall be treated for the purposes of the Tax Acts (other than the excepted provisions specified in subsection (7A) below) and (in cases where section 263A of the 1992 Act does not apply) for the purposes of the 1992 Act—
- (a) in a case where an exchange gain arises to the company by virtue of subsection (4)(a) above or an exchange loss arises to the company by virtue of subsection (5)(b) above, as increased by the amount by which the first sum exceeds the second sum, and
- (b) in a case where an exchange gain arises to the company by virtue of subsection (4)(b) above or an exchange loss arises to the company by virtue of subsection (5)(a) above, as reduced by the amount by which the second sum exceeds the first sum.
- (7A) The excepted provisions are—
- (a) this section,
- (b) section 730A,
- (c) section 737A,
- (d) section 737C,
- (e) Chapter 4 of Part 11 of ITA 2007 (deemed manufactured payments), and
- (f) Chapter 5 of Part 11 of ITA 2007 (price differences under repos).
- (8) Any question whether debits or credits brought into account in accordance with subsection (6) above in relation to any company—
- (a) are to be brought into account under section 82(2) of the Finance Act 1996 (trading loan relationships); or
- (b) are to be treated as non-trading debits or credits,
shall be determined (subject to Schedule 11 to that Act (insurance companies)) according to the extent (if any) to which the company is a party to the repurchase in the course of activities forming an integral part of a trade carried on by that company.
- (9) To the extent that debits or credits fall to be brought into account by a company under section 82(2) of that Act in the case of a relationship to which this section applies, the company shall be regarded for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 as being a party to the relationship for the purposes of a trade carried on by the company.
- (10) Except where regulations under section 737E otherwise provide, this section does not apply if—
- (a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) all of the benefits and risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrue to, or fall on, the interim holder.
- (11) Where—
- (a) the repurchase price is more than the sale price, so that by virtue of section 730A(2)(a) a payment of interest is treated as made by the repurchaser on a deemed loan from the interim holder; but
- (b) the payment of interest is treated as made to a person other than the interim holder,
references to the “*interim holder*” in subsections (1), (4) and (5) above shall be read as references to the person to whom the payment of interest is treated as made.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) Expressions used in this section and in section 730A have the same meaning in this section as in that section.
##### 730C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Modifications where tax charged under Case I of Schedule D.
##### 736A
Schedule 23A to this Act shall have effect in relation to certain cases where under a contract or other arrangements for the transfer of shares or other securities a person is required to pay to the other party an amount representative of a dividend or payment of interest on the securities.
#### Modifications in relation to BLAGAB group reinsurers
##### 736B
- (1) This section applies where—
- (a) any interest on securities transferred by the lender under a stock lending arrangement is paid, as a consequence of the arrangement, to a person other than the lender; and
- (b) no provision is made for securing that the lender receives payments representative of that interest.
- (2) Where this section applies, Schedule 23A and the provisions for the time being contained in any regulations under that Schedule , and section 97 of the Finance Act 1996 (loan relationships: manufactured interest), shall apply for corporation tax purposes, subject to subsection (2A) below, as if—
- (a) the borrower were required under the stock lending arrangement to pay the lender an amount representative of the interest mentioned in subsection (1)(a) above;
- (b) a payment were made by the borrower in discharge of that requirement; and
- (c) that payment were made on the same date as the payment of the interest of which it is representative.
- (2A) The borrower is not entitled, by virtue of anything in Schedule 23A or any provision of regulations under that Schedule, or otherwise—
- (a) to any deduction in computing profits or gains for the purposes of . . . corporation tax, or
- (b) to any deduction against . . . total profits,
in respect of any such deemed requirement or payment as is provided for by subsection (2) above.
Where the borrower is a company, an amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection.
- (3) In this section—
- “*interest*” includes dividends; and
- “*stock lending arrangement*” and “*securities*” have the same meanings as in section 263B of the 1992 Act.
- (4) See section 736D for provision treating certain arrangements as stock lending arrangements for the purposes of this section.
##### 736C
- (1) This section applies where—
- (a) the borrower under a stock lending arrangement is treated under section 736B(2) as paying under that arrangement an amount representative of interest on any securities (“the relevant securities”),
- (b) an amount of money (“cash collateral”) is payable to or for the benefit of the lender for the purpose of securing the discharge of the requirement to transfer the relevant securities back to the lender,
- (c) the stock lending arrangement is designed to produce a return to the borrower which equates, in substance, to the return on an investment of money at interest, and
- (d) the main purpose, or one of the main purposes, of the stock lending arrangement is the obtaining of a tax advantage.
- (2) Where this section applies—
- (a) the Corporation Tax Acts are to apply as if the borrower receives an amount of interest payable in respect of the cash collateral, and
- (b) the amount of the interest is calculated in accordance with the following provisions of this section (see, in particular, subsections (3) to (7)).
- (3) The interest is treated for the purposes of the Corporation Tax Acts as if it were received on the date (“the return date”) on which the borrower transfers the relevant securities back to the lender.
- (4) The interest is treated for the purposes of the Corporation Tax Acts as if it were payable in respect of the period (“*the interest period*”)—
- (a) beginning with the date on which the lender transfers the relevant securities to the borrower, and
- (b) ending with the return date.
- (5) The rate of interest payable in respect of the cash collateral is a rate that is reasonably comparable to the rate that the borrower could obtain by placing the cash collateral on deposit for the interest period.
- (6) For the purposes of this section, the amount of the cash collateral on which the interest is payable is taken to be—
- (a) in any case where the amount of the cash collateral varies at any time on or before the return date, the highest amount of the cash collateral at any time on or before the return date, and
- (b) in any other case, the amount of the cash collateral as at the return date.
- (7) The amount of the interest which the borrower is treated as receiving in respect of the cash collateral for the interest period is reduced (but not below nil) by any interest which the borrower actually receives in respect of that collateral for that period.
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) If the borrower is a company within the charge to corporation tax—
- (a) the interest which the borrower is treated as receiving is treated for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) as payable to it on a money debt,
- (b) that money debt is treated for those purposes as a relationship to which section 100 of the Finance Act 1996 applies (money debts etc not arising from the lending of money), and
- (c) the credits to be brought into account for those purposes in respect of the interest must be determined using an amortised cost basis of accounting.
- (10) The fact that the borrower is treated as receiving an amount of interest is not to be taken as implying that the interest is payable by the lender or any other person.
- (11) For the purposes of this section—
- “*money*” includes money expressed in a currency other than sterling,
- “*stock lending arrangement*” and “*securities*” have the same meanings as in section 263B of the 1992 Act,
- “*tax advantage*” has the meaning given by section 840ZA.
- (12) For the purposes of this section—
- (a) any reference to the transfer of securities back has the same meaning as in section 263B of the 1992 Act (see, in particular, sections 263B(5) and 263C(1) of that Act), but
- (b) if it becomes apparent that the borrower will not comply with the requirement to transfer any securities back, the borrower is treated as if he transfers them back on the date on which it becomes so apparent.
- (13) For the purposes of this section it does not matter—
- (a) whether the cash collateral is payable by the borrower or by any other person,
- (b) whether the cash collateral is payable under the stock lending arrangement or under any other arrangement,
- (c) whether collateral in another form is also provided in connection with the stock lending arrangement.
- (14) See section 736D—
- (a) for provision treating certain arrangements as stock lending arrangements for the purposes of this section, and
- (b) for provision treating certain amounts as cash collateral for those purposes.
##### 736D
- (1) In this section “*quasi-stock lending arrangement*” means so much of any arrangements between two or more persons as are not stock lending arrangements, but are arrangements under which—
- (a) a person (“*the lender*”) transfers securities to another person (“*the borrower*”), and
- (b) a requirement is imposed on a person to transfer any or all of the securities, or any other property, back to the lender or any other person,
and it does not matter whether the person on whom that requirement is imposed is the borrower or any other person.
- (2) In this section “*quasi-cash collateral*”, in relation to any stock lending arrangement or quasi-stock lending arrangement, means—
- (a) any money which is payable for a relevant purpose, plus
- (b) any other property which is transferable for a relevant purpose.
- (3) Money or other property is payable or transferable for a relevant purpose if it is payable or transferable to or for the benefit of—
- (a) the lender under the stock lending arrangement or quasi-stock lending arrangement, or
- (b) a person connected with that lender,
for the purpose of securing the discharge of the requirement to transfer any or all of the securities, or any other property, back to that lender or any other person.
- (4) For the purposes of sections 736B and 736C, a quasi-stock lending arrangement is treated as if it were a stock lending arrangement.
- (5) For the purposes of section 736C, in relation to any stock lending arrangement or quasi-stock lending arrangement,—
- (a) quasi-cash collateral is treated as if it were cash collateral, and
- (b) the amount of the quasi-cash collateral in relation to the stock lending arrangement or quasi-stock lending arrangement is taken to be the amount of the cash collateral.
- (6) If any property other than money is transferable for a relevant purpose, the amount of the quasi-cash collateral so far as relating to that property is determined by reference to its market value.
- (7) In any case where—
- (a) section 736C applies in relation to a quasi-stock lending arrangement, and
- (b) the person for whom the tax advantage was designed to be obtained is a person (“*the other person*”) other than the borrower under that arrangement,
that section has effect as if the other person were the person who receives the amount of interest mentioned in that section.
- (8) In any case where section 736C applies in relation to a quasi-stock lending arrangement—
- (a) any reference in that section to cash collateral being payable to or for the benefit of the lender includes its being payable to or for the benefit of a person connected with the lender,
- (b) the reference in subsection (1)(c) of that section to a return to the borrower includes a return to any other person, and
- (c) any reference in that section to the transfer back of the relevant securities by the borrower to the lender includes the transfer back of any or all of the securities, or any other property, by any person to the lender or any other person.
- (9) Section 839 (connected persons) applies for the purposes of this section.
- (10) In this section—
- “*money*” includes money expressed in a currency other than sterling,
- “*property*” means property in any form,
- “*stock lending arrangement*” and “*securities*” have the same meaning as in section 263B of the 1992 Act,
- “*transfer*” means a transfer otherwise than by way of sale.
#### Retained assets
##### 737A
- (1) This section applies where on or after the appointed day a person (the transferor) agrees to sell any securities, and the transferor or a person connected with him—
- (a) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (b) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises;
but this section does not apply unless either the conditions set out in subsection (2) below or the conditions set out in subsection (2A) below are fulfilled.
- (2) The first set of conditions referred to in subsection (1) above are that—
- (a) as a result of the transaction, a dividend which becomes payable in respect of the securities is receivable otherwise than by the transferor,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) there is no requirement under any agreement mentioned in subsection (1) above for a person to pay to the transferor on or before the relevant date an amount representative of the dividend, and
- (d) it is reasonable to assume that, in arriving at the repurchase price of the securities, account was taken of the fact that the dividend is receivable otherwise than by the transferor.
- (2A) The second set of conditions referred to in subsection (1) above are that—
- (a) a dividend which becomes payable in respect of the securities is receivable otherwise than by the transferor,
- (b) the transferor or a person connected with him is required under any agreement mentioned in subsection (1) above to make a payment representative of the dividend,
- (c) there is no requirement under any such agreement for a person to pay to the transferor on or before the relevant date an amount representative of the dividend, and
- (d) it is reasonable to assume that, in arriving at the repurchase price of the securities, account is taken of the circumstances referred to in paragraphs (a) to (c).
- (3) For the purposes of subsections (2) and (2A) above the relevant date is the date when the repurchase price of the securities becomes due.
- (4) Where it is a person connected with the transferor who is required to buy back the securities, or who acquires the option to buy them back, references in the following provisions of this section to the transferor shall be construed as references to the connected person.
- (5) Where this section applies, . . . Schedule 23A and dividend manufacturing regulations , and section 97 of the Finance Act 1996 (loan relationships: manufactured interest), shall apply for corporation tax purposes, subject to subsection (5A) below, as if—
- (a) the relevant person were required, under the arrangements for the transfer of the securities, to pay to the transferor an amount representative of the dividend mentioned in subsection (2)(a) or (2A)(a) above,
- (b) a payment were made by that person to the transferor in discharge of that requirement, and
- (c) the payment were made on the date when the repurchase price of the securities becomes due.
- (5A) If the relevant person is not the person to whom the transferor agreed to sell the securities, the relevant person is not entitled, by virtue of anything in Schedule 23A or any provision of dividend manufacturing regulations, or otherwise—
- (a) to any deduction in computing profits or gains for the purposes of . . . corporation tax, or
- (b) to any deduction against . . . total profits,
by virtue of subsection (5) above.
. . . An amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection.
- (6) In this section“*the relevant person*” means—
- (a) where subsection (1)(a) above applies, the person from whom the transferor is required to buy back the securities;
- (b) where subsection (1)(b) above applies, the person from whom the transferor has the right to buy back the securities;
and in this section“*dividend manufacturing regulations*” means regulations under Schedule 23A (whenever made).
##### 737B
- (1) In section 737A and this section “*securities*” means United Kingdom equities, United Kingdom securities or overseas securities; and—
- (a) where the securities mentioned in section 737A(1) are United Kingdom securities, references in section 737A to a dividend shall be construed as references to a periodical payment of interest;
- (b) where the securities mentioned in section 737A(1) are overseas securities, references in section 737A to a dividend shall be construed as references to an overseas dividend.
- (2) In this section “*United Kingdom equities*”, “*United Kingdom securities*”, “*overseas securities*” and “*overseas dividend*” have the meanings given by paragraph 1(1) of Schedule 23A.
- (3) For the purposes of section 737A agreements are related if each is entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (4) In section 737A “*the repurchase price of the securities*” means—
- (a) where subsection (1)(a) of that section applies, the amount which, under any agreement mentioned in section 737A(1), the transferor or connected person is required to pay for the securities bought back, or
- (b) where subsection (1)(b) of that section applies, the amount which under any such agreement the transferor or connected person is required, if he exercises the option, to pay for the securities bought back.
- (5) In section 737A and subsection (4) above references to buying back securities include references to buying similar securities.
- (6) For the purposes of subsection (5) above securities are similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred; and “interest” here includes dividends.
- (7) For the purposes of section 737A and subsection (4) above—
- (a) a person who is connected with the transferor and is required to buy securities sold by the transferor shall be treated as being required to buy the securities back notwithstanding that it was not he who sold them, and
- (b) a person who is connected with the transferor and acquires an option to buy securities sold by the transferor shall be treated as acquiring an option to buy the securities back notwithstanding that it was not he who sold them.
- (8) Section 839 shall apply for the purposes of section 737A and this section.
- (9) In section 737A “*the appointed day*” means such day as the Treasury may by order appoint, and different days may be appointed in relation to—
- (a) United Kingdom equities,
- (b) United Kingdom securities, and
- (c) overseas securities.
##### 737C
- (1) This section applies where section 737A applies.
- (2) Subsection (3) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is a dividend on United Kingdom equities, and
- (b) by virtue of section 737A(5), . . . paragraph 2 of Schedule 23A applies, in relation to the payment which is treated under section 737A(5) as having been made;
and in subsection (3) below “*the deemed manufactured dividend*” means that payment.
- (3) Where this subsection applies—
- (a) the amount of the deemed manufactured dividend shall be taken to be an amount equal to the amount of the dividend mentioned in section 737A(2)(a) or (2A)(a);
- (b) the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by an amount equal to the . . . amount of the deemed manufactured dividend.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subsection (9) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is a periodical payment of interest on United Kingdom securities, and
- (b) by virtue of section 737A(5), section 97 of the Finance Act 1996 applies in relation to the payment which is treated under section 737A(5) as having been made . . . ;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Where this subsection applies, the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by an amount equal to the amount of the dividend mentioned in section 737A(2)(a) or (2A)(a).
- (10) Subsection (11) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is an overseas dividend, and
- (b) by virtue of section 737A(5), paragraph 4 of Schedule 23A applies in relation to the payment which is treated under section 737A(5) as having been made;
and in subsection (11) below “*the deemed manufactured overseas dividend*” means that payment.
- (11) Where this subsection applies—
- (a) the gross amount of the deemed manufactured overseas dividend shall be taken to be the amount found under paragraph 4(5)(b) and (c) of Schedule 23A;
- (b) any deduction which, by virtue of paragraph 4 of Schedule 23A, is required to be made out of the gross amount of the deemed manufactured overseas dividend shall be deemed to have been made;
- (c) the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by the gross amount of the deemed manufactured overseas dividend.
- (11A) The deemed increase of the repurchase price which is made for the purposes of section 730A by subsection (3)(b), (9) or (11)(c) above shall also have effect—
- (a) for all the purposes of the Tax Acts, other than section 737A, and
- (b) in cases where section 263A of the 1992 Act does not apply, for the purposes of the 1992 Act,
wherever in consequence of that increase there is for the purposes of section 730A no difference between the sale price and the repurchase price or where that section is prevented from applying by subsection (8) of that section.
- (11B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) In this section—
- (a) “*United Kingdom equities*”, “*United Kingdom securities*” and “*overseas dividend*” have the meanings given by paragraph 1(1) of Schedule 23A;
- (b) “*the repurchase price of the securities*” shall be construed in accordance with section 737B(4).
##### 737D
- (1) The Treasury may by regulations provide for any manufactured payment made to any person to be treated, in such circumstances and to such extent as may be described in the regulations, as comprised in income of that person that is eligible for relief from corporation tax by virtue of section 438 . . . .
- (2) In this section “*manufactured payment*” means any . . . manufactured interest or manufactured overseas dividend, within the meaning of Schedule 23A.
##### 737E
- (1) The Treasury may by regulations make provision for all or any of sections . . . 730A , 730BB and 737A to 737C to have effect with modifications in relation to cases involving any arrangement for the sale and repurchase of securities where—
- (a) the obligation to make the repurchase is not performed or the option to repurchase is not exercised;
- (b) provision is made by or under any agreement for different or additional securities to be treated as, or as included with, securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale;
- (c) provision is made by or under any agreement for any securities to be treated as not included with securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale;
- (d) provision is made by or under any agreement for the sale price or repurchase price to be determined or varied wholly or partly by reference to fluctuations, occurring in the period after the making of the agreement for the original sale, in the value of securities transferred in pursuance of that sale, or in the value of securities treated as representing those securities; or
- (e) provision is made by or under any agreement for any person to be required, in a case where there are any such fluctuations, to make any payment in the course of that period and before the repurchase price becomes due.
- (2) The Treasury may by regulations make provision for all or any of sections . . . 730A , 730BB and 737A to 737C to have effect with modifications in relation to cases where—
- (a) arrangements, corresponding to those made in cases involving an arrangement for the sale and repurchase of securities, are made by any agreement, or by one or more related agreements, in relation to securities that are to be redeemed in the period after their sale; and
- (b) those arrangements are such that the person making the sale or a person connected with him (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will accrue from their redemption.
- (3) The Treasury may by regulations provide that section 730A or 730BB is to have effect with modifications in relation to cases involving any arrangement for the sale and repurchase of securities where there is an agreement relating to the sale or repurchase which is not such as would be entered into by persons dealing with each other at arm’s length.
- (4) The powers conferred by subsections (1) and (2) above shall be exercisable in relation to section 263A . . . of the 1992 Act as they are exercisable in relation to section 730A of this Act.
- (5) Regulations made for the purposes of this section may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential and transitional provision as appears to the Treasury to be appropriate.
- (6) The supplementary, incidental and consequential provision that may be made by regulations under this section shall include—
- (a) in the case of regulations relating to section 730A, provision modifying subsections (3)(b), (9), (11)(c) and (11A) of section 737C; and
- (b) in the case of regulations relating to section 263A . . . of the 1992 Act, provision modifying the operation of that Act in relation to cases where by virtue of the regulations any acquisition or disposal is excluded from those which are to be disregarded for the purposes of capital gains tax.
- (7) In this section “*modifications*” includes exceptions and omissions; and any power under this section to provide for an enactment to have effect with modifications in any case shall include power to provide for it not to apply (if it otherwise would do) in that case.
- (8) References in this section to a case involving an arrangement for the sale and repurchase of securities are references to any case where—
- (a) a person makes a sale of any securities under any agreement (“the original sale”); and
- (b) that person or a person connected with him—
- (i) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (ii) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises.
- (9) Section 730B shall apply for the purposes of this section as it applies for the purposes of section 730A.
##### 741A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer schemes transferring part of business: reduction in income of transferee
##### 747A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 748ZA
- (1) Nothing in section 748(1)(da) prevents an apportionment falling to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company (“X”) if condition A, B or C is met.
- (2) Condition A is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in the absence of this subsection, in consequence of the scheme, section 748(1)(da) would apply to prevent an apportionment falling to be made as regards the relevant accounting period of X, and
- (b) the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to secure that section 748(1)(da) prevents an apportionment falling to be made as regards that period, or that period and one or more other accounting periods of X.
- (3) Condition B is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in consequence of the scheme profits are shifted to X from another company (“Y”),
- (b) the main purpose or one of the main purposes of any party to the scheme in entering into the scheme is to ensure that section 748(1)(da) prevents an apportionment falling to be made as regards the chargeable profits of one or more controlled foreign companies for one or more accounting periods, and
- (c) the relevant accounting period of X falls wholly or partly within that accounting period or those accounting periods.
- (4) For the purposes of subsection (3), profits are shifted to X from Y if it is reasonable to suppose that in the absence of the scheme, and any similar scheme, the whole or a part of the income which is reflected in X's profits would have been reflected in Y's profits.
- (5) Condition C is that, in determining X's chargeable profits for the relevant accounting period—
- (a) section 418(5) of CTA 2009 (loan relationships involving connected debtor and creditor where debits exceed credits) has effect so as to treat X, for the purposes of Part 5 of that Act, as bringing into account for that period credits in respect of a loan relationship, or
- (b) Part 21B of CTA 2010 (group mismatch schemes) has effect so as to exclude an amount from being brought into account as a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).
- (6) For the purposes of this section—
- “*apportionment*” means an apportionment under section 747(3);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions.
##### 748A
- (1) Nothing in section 748 prevents an apportionment under section 747(3) falling to be made as regards an accounting period of a controlled foreign company if the company—
- (a) is a company incorporated in a territory to which this section applies as respects that accounting period; or
- (b) is at any time in that accounting period liable to tax in such a territory by reason of domicile, residence or place of management; or
- (c) at any time in that accounting period carries on business through a permanent establishment in such a territory.
- (2) The condition in subsection (1)(c) above is not satisfied as regards an accounting period of a controlled foreign company if the business carried on by the company in that period through permanent establishments in territories to which this section applies, taken as a whole, is only a minimal part of the whole of the business carried on by the company in that period.
- (3) The territories to which this section applies as respects an accounting period of a controlled foreign company are those specified as such in regulations made by the Treasury.
- (4) Regulations under subsection (3) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such incidental, supplemental, consequential or transitional provision as the Treasury may think fit.
- (5) A statutory instrument containing regulations under subsection (3) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
##### 749A
- (1) An election under paragraph (d) or a designation under paragraph (e) of section 749(3) shall have effect in relation to—
- (a) the accounting period in relation to which it is made (“the original accounting period"), and
- (b) each successive accounting period of the controlled foreign company in question which precedes the next one in which the eligible territories are different,
and shall so have effect notwithstanding any change in the persons who have interests in the company or any change in the interests which those persons have in the company.
- (2) For the purposes of subsection (1)(b) above, an accounting period of the controlled foreign company is one in which the eligible territories are different if in the case of that accounting period—
- (a) at least one of the two or more territories which fell within subsection (1) of section 749 in the original accounting period does not fall within that subsection; or
- (b) some other territory also falls within that subsection.
- (3) Any election under section 749(3)(d)—
- (a) must be made by notice given to an officer of the Board;
- (b) must be made no later than twelve months after the end of the controlled foreign company’s accounting period in relation to which it is made;
- (c) must state, as respects each of the persons making it, the percentage of the chargeable profits and creditable tax (if any) of the controlled foreign company for that accounting period which it is likely would be apportioned to him on an apportionment under section 747(3) if one were made;
- (d) must be signed by the persons making it; and
- (e) is irrevocable.
- (4) Nothing in—
- (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or
- (b) Schedule 1A to the Management Act (claims or elections not included in returns),
shall apply, whether by virtue of section 754 or otherwise, to an election under section 749(3)(d).
- (5) A designation under section 749(3)(e) is irrevocable.
- (6) Where the Board make a designation under section 749(3)(e), notice of the making of the designation shall be given to every company resident in the United Kingdom which appears to the Board to have had an assessable interest in the controlled foreign company at any time during the accounting period of the controlled foreign company in relation to which the designation is made.
- (7) A notice under subsection (6) above shall specify—
- (a) the date on which the designation was made;
- (b) the controlled foreign company to which the designation relates;
- (c) the accounting period of the controlled foreign company in relation to which the designation is made; and
- (d) the territory designated.
- (8) Subsection (9) of section 749 has effect for the purposes of subsection (6) above as it has effect for the purposes of subsection (8) of that section.
##### 749B
- (1) For the purposes of this Chapter, the following persons have an interest in a company—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company;
- (c) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit; and
- (d) any other person who, either alone or together with other persons, has control of the company.
- (2) Rights which a person has as a loan creditor of a company do not constitute an interest in the company for the purposes of this Chapter.
- (3) For the purposes of subsection (1)(b) above, the definition of “distribution" in Part VI shall be construed without any limitation to companies resident in the United Kingdom.
- (4) References in subsection (1) above to being entitled to do anything apply where a person—
- (a) is presently entitled to do it at a future date, or
- (b) will at a future date be entitled to do it;
but a person whose entitlement to secure that any income or assets of the company will be applied as mentioned in paragraph (c) of that subsection is contingent upon a default of the company or any other person under any agreement shall not be treated as falling within that paragraph unless the default has occurred.
- (5) Where a company has an interest in another company and a third person has, or two or more persons together have, an interest in the first company (as in a case where one company has a shareholding in a controlled foreign company and the first company is controlled by a third company or by two or more persons together) subsections (6) and (7) below apply.
- (6) Where this subsection applies, the person who has, or each of the persons who together have, the interest in the first company shall be regarded for the purposes of this Chapter as thereby having an interest in the second company.
- (7) In any case where this subsection applies, in construing references in this Chapter to one person having the same interest as another, the person or, as the case may be, each of the persons who together have, the interest in the first company shall be treated as having, to the extent of that person’s interest in that company, the same interest as the first company has in the second company.
- (8) Where two or more persons jointly have an interest in a company otherwise than in a fiduciary or representative capacity, they shall be treated for the purposes of this Chapter as having the interest in equal shares.
##### 750A
- (1) Where—
- (a) in any accounting period a company is to be regarded by virtue of any of subsections (1) to (4) of section 749 as resident in a particular territory outside the United Kingdom, and
- (b) within the meaning of section 750(1), the local tax in respect of the profits arising to the company in that accounting period is equal to or greater than three-quarters of the corresponding United Kingdom tax on those profits, but
- (c) that local tax is determined under designer rate tax provisions,
the company shall be taken for the purposes of this Chapter to be subject to a lower level of taxation in that territory in that accounting period.
- (2) In subsection (1) above “*designer rate tax provisions*” means provisions—
- (a) which appear to the Board to be designed to enable companies to exercise significant control over the amount of tax which they pay; and
- (b) which are specified in regulations made by the Board.
- (3) Regulations under subsection (2) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) The first regulations under subsection (2) above may make provision having effect in relation to accounting periods beginning not more than fifteen months before the date on which the regulations are made.
##### 751A
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) throughout that period the controlled foreign company has a business establishment in an EEA territory,
- (c) throughout that period there are individuals who work for the controlled foreign company in that territory, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) those chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in those chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the amount (if any) equal to so much of those chargeable profits as can reasonably be regarded as representing the net economic value which—
- (a) arises to the appropriate body of persons (taken as a whole), and
- (b) is created directly by qualifying work.
- (5) For the purposes of subsection (4) “*net economic value*” does not include any value which derives directly or indirectly from the reduction or elimination of any liability of any person to any tax or duty imposed under the law of any territory.
- (6) For the purposes of subsection (4) “*the appropriate body of persons*” means—
- (a) if the controlled foreign company is not a member of a group of companies, the controlled foreign company and the persons who have an interest in it at any time in the relevant accounting period, and
- (b) if the controlled foreign company is a member of a group of companies, all the persons falling within paragraph (a) and any other person who is a member of that group of companies,
and for the purposes of this subsection “*group of companies*” means a company and any other companies of which it has control.
- (7) For the purposes of subsection (4) “*qualifying work*” means work which—
- (a) is done in any EEA territory in which the controlled foreign company has a business establishment throughout the relevant accounting period, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (8) Any reference in this section to a business establishment of a controlled foreign company in an EEA territory is to be construed in accordance with paragraph 7 of Schedule 25 (but as if the reference in that paragraph to the territory in which the company is resident were to the EEA territory).
- (9) For the purposes of this section individuals are not to be regarded as working for a company in any territory unless—
- (a) they are employed by the company in the territory, or
- (b) they are otherwise directed by the company to perform duties on its behalf in the territory.
#### Carry-forward against subsequent profits.
##### 751AA
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) the chargeable profits of the controlled foreign company for the relevant accounting period would, apart from this section, include an amount of income in respect of a payment made by another company (“the payer”),
- (c) the amount that the payer brings into account for the purposes of corporation tax in respect of the payment is reduced (in part or in full) by virtue of Part 3 of Schedule 15 to FA 2009 (tax treatment of financing costs and income), and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in the relevant accounting period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the relevant amount.
- (5) In subsection (4) “*the relevant amount*” means the amount (if any) by which it is just and reasonable that the chargeable profits should be treated as reduced, having regard to the effect of Parts 3 and 4 of Schedule 15 to FA 2009 on amounts brought into account for the purposes of corporation tax by the payer, or any other company.
#### Taxation in respect of other business.
##### 751AB
- (1) This section applies if—
- (a) an apportionment under section 747(3) would fall to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) but for a relevant failure, section 748(1)(ba) or (bb) would have prevented such an apportionment, and
- (c) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) “*Relevant failure*” means—
- (a) in the case of section 748(1)(ba), one or both of the following—
- (i) a failure to satisfy the requirement of paragraph 12E of Schedule 25 (requirement as to company's UK connection) in circumstances where the requirement would be satisfied if the reference in sub-paragraph (3)(a) of that paragraph to 10% were a reference to 50%, and
- (ii) a failure to satisfy the requirement of paragraph 12F of that Schedule (finance income and relevant IP income) in circumstances where the relevant IP income of the controlled foreign company for the accounting period does not exceed 5% of the company's gross income for that period, and
- (b) in the case of section 748(1)(bb), a failure to satisfy the requirement of paragraph 12M of that Schedule (finance income).
- (3) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced to an amount specified in the application (“*the specified amount*”).
The specified amount may be nil.
- (4) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (5) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AC.
- (6) “*The relevant amount*” means—
- (a) if the relevant failure is within subsection (2)(a), the sum of—
- (i) the excess finance and IP income (if any) for the relevant accounting period, and
- (ii) in a case where there is a failure specified in subsection (2)(a)(i), so much (if any) of the net chargeable profits for that period as are not excluded by subsection (8), and
- (b) if the relevant failure is within subsection (2)(b)—
- (i) the amount (if any) by which the controlled foreign company's finance income for the relevant accounting period exceeds 5% of its gross income for that period, or
- (ii) if that amount is a negligible amount, nil.
- (7) “The excess finance and IP income” for the relevant accounting period means—
- (a) the amount (if any) by which the total of the controlled foreign company's finance income and relevant IP income for that period exceeds 5% of its gross income for that period, or
- (b) if that amount is a negligible amount, nil.
- (8) Net chargeable profits are excluded by this subsection if, and to the extent that, they can reasonably be regarded—
- (a) as representing the net economic value which—
- (i) arises to the appropriate body of persons (taken as a whole), and
- (ii) is created directly by qualifying work, or
- (b) as not being wholly or partly attributable, directly or indirectly, to transactions with persons within the charge to United Kingdom tax.
- (9) In subsection (8)(a) “*qualifying work*” means work which—
- (a) is done in the territory in which the controlled foreign company is resident, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (10) A transaction with a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there is within subsection (8)(b) only if the transaction is attributable to activities carried on through that establishment.
- (11) For the purposes of subsections (8) and (9)—
- (a) section 751A(5), (6) and (9) applies as it applies for the purposes of the equivalent provisions of section 751A, and
- (b) paragraph 5(2) to (5) of Schedule 25 (residence of controlled foreign company) applies as it applies in relation to Part 2 of that Schedule.
- (12) In this section—
- “*finance income*” has the meaning given by paragraph 12F(3) of Schedule 25 (with references to C read as references to the controlled foreign company);
- “*relevant IP income*” has the meaning given by paragraph 12F(4) of that Schedule;
- “*net chargeable profits*” means chargeable profits excluding so much of those profits as is directly attributable to the finance income or relevant IP income of the controlled foreign company;
- “*UK-connected gross income*” has the same meaning as in paragraph 12E of Schedule 25;
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G of that Schedule (gross income) applies for the purposes of this section as it applies for the purposes of Part 2A of that Schedule (with references to C read as references to the controlled foreign company).
#### Schedule A losses.
##### 751AC
- (1) This section applies if—
- (a) an exempt period in relation to a controlled foreign company ends in accordance with paragraph 15F(2) of Schedule 25 (time exempt period ends if there is an early termination event), other than by reason of an early termination event within paragraph 15F(3)(b),
- (b) an accounting period (“*the relevant accounting period*”) of the company ends after that exempt period but before the time the exempt period would have ended had paragraph 15F(2) of that Schedule not applied,
- (c) an apportionment under section 747(3) would fall to be made as regards the relevant accounting period, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for that accounting period (“the chargeable profits”) to be reduced to an amount (“*the specified amount*”) specified in the application (which may be nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AB.
- (5) “*The relevant amount*” means the amount (if any) equal to so much of the chargeable profits as it is just and reasonable to regard as referable to—
- (a) the relevant transaction which triggered the end of the exempt period, or
- (b) any later relevant transaction occurring before the time the exempt period would have ended had paragraph 15F(2) of Schedule 25 not applied.
- (6) “*Relevant transaction*” has the meaning given by paragraph 15E of Schedule 25 (and it does not matter if the transaction occurs pursuant to an agreement entered into by the controlled foreign company before the relevant time (within the meaning of paragraph 15G of that Schedule)).
#### Transfers of other business
##### 751B
- (1) An application by a company under section 751A—
- (a) must be made in such form as the HMRC Commissioners may determine,
- (b) must be accompanied by such documents (or copies of documents) in the company's possession or power as those Commissioners may reasonably require for the purpose of determining whether to grant the application, and
- (c) must contain such information as those Commissioners may reasonably require for that purpose.
- (2) An application by a company under section 751A—
- (a) may be made at any time on or before the filing date (within the meaning of Schedule 18 to the Finance Act 1998) for the relevant company tax return of the company, and
- (b) may be amended or withdrawn at any time before the application is determined by those Commissioners.
- (3) If an application by a company under section 751A is granted after the company has delivered its relevant company tax return, it has 30 days beginning with the day on which the application is granted in which to amend that return to give effect to section 751A.
- (4) The time limits otherwise applicable to an amendment of a company tax return do not prevent an amendment being made under subsection (3).
- (5) If the HMRC Commissioners refuse an application by a company under section 751A, the company may appeal to the Special Commissioners against the refusal.
- (6) Notice of an appeal must be given in writing to the HMRC Commissioners within 30 days after the application is refused.
- (7) On an appeal—
- (a) if the Special Commissioners are satisfied that the relevant amount is a different amount from the amount specified in the application, they must direct the HMRC Commissioners to grant the application as if the amount specified in it were that different amount,
- (b) if the Special Commissioners are satisfied that the relevant amount is the amount specified in the application, they must direct the HMRC Commissioners to grant the application, and
- (c) in any other case, the Special Commissioners must confirm the refusal.
- (8) For the purposes of subsection (7) “*the relevant amount*” means the amount (if any) equal to so much of the chargeable profits mentioned in subsection (4) of section 751A as can reasonably be regarded as representing the value mentioned in that subsection.
- (9) Part 5 of the Management Act (appeals against assessments to tax), apart from section 50, applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to tax.
- (10) In this section “*relevant company tax return*”, in relation to a company, means the return for the accounting period for which—
- (a) any sum is chargeable on the company under section 747(4)(a), or
- (b) any sum would be so chargeable but for section 751A,
in respect of the chargeable profits of the controlled foreign company for the accounting period mentioned in section 751A(1).
- (11) In this section “*the HMRC Commissioners*” means the Commissioners for Her Majesty's Revenue and Customs.
#### Election as to tax exempt business.
##### 752A
- (1) This section has effect for the purpose of determining for the purposes of this Chapter who has a relevant interest in a controlled foreign company at any time; and references in this Chapter to relevant interests shall be construed accordingly.
- (2) A UK resident company which has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (3) below otherwise provides.
- (3) A UK resident company which has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if it has the interest by virtue of having a direct or indirect interest in another UK resident company.
- (4) A related person who has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (5) or (6) below otherwise provides.
- (5) A related person who has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if he has the interest by virtue of having a direct or indirect interest in—
- (a) a UK resident company; or
- (b) another related person.
- (6) A related person who has a direct or indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest to the extent that a UK resident company—
- (a) has the whole or any part of the same interest indirectly, by virtue of having a direct or indirect interest in the related person, and
- (b) by virtue of that indirect interest in the controlled foreign company, has a relevant interest in the company by virtue of subsection (2) above.
- (7) A person who—
- (a) has a direct interest in a controlled foreign company, but
- (b) does not by virtue of subsections (2) to (6) above have a relevant interest in the company by virtue of that interest,
has a relevant interest in the company by virtue of that interest unless subsection (8) below otherwise provides.
- (8) A person does not by virtue of subsection (7) above have a relevant interest in a controlled foreign company by virtue of having a direct interest in the company to the extent that another person—
- (a) has the whole or any part of the same interest indirectly, and
- (b) by virtue of that indirect interest, has a relevant interest in the company by virtue of subsections (2) to (6) above.
- (9) No person has a relevant interest in a controlled foreign company otherwise than as provided by subsections (2) to (8) above.
- (10) In this section—
- “*related person*” means a person who—is not a UK resident company, butis connected or associated with a UK resident company which has by virtue of subsection (2) above a relevant interest in the controlled foreign company in question;
- “*UK resident company*” means a company resident in the United Kingdom.
##### 752B
- (1) For the purposes of section 752(3) above, where a person has a relevant interest in a controlled foreign company by virtue of indirectly holding issued ordinary shares of the company, the percentage of the issued ordinary shares of the company which the relevant interest represents is equal to—
$$P×S$where—P is the product of the appropriate fractions of that person and each of the share-linked companies through which he indirectly holds the shares in question, other than the lowest share-linked company; andS is the percentage of issued ordinary shares of the controlled foreign company which is held directly by the lowest share-linked company.$
- (2) In subsection (1) above and this subsection—
- “the appropriate fraction", in the case of a person who directly holds ordinary shares of a share-linked company, means that fraction of the issued ordinary shares of that company which his holding represents;
- “*the lowest share-linked company*”, in relation to a person who indirectly holds ordinary shares of a controlled foreign company, means the share-linked company which directly holds the shares in question;
- “*share-linked company*” means a company which is share-linked to the controlled foreign company in question.
- (3) Where a person has different indirect holdings of shares of the controlled foreign company (as in a case where different shares are held through different companies which are share-linked to the controlled foreign company)—
- (a) subsection (1) above shall apply separately in relation to the different holdings with any necessary modifications; and
- (b) for the purposes of section 752(3) above the percentage of the issued ordinary shares of the company which the relevant interest represents is the aggregate of the percentages resulting from those separate applications.
- (4) Where, for the purposes of subsection (3) of section 752, the percentage of the issued ordinary shares of the controlled foreign company which a person directly or indirectly holds varies during the relevant accounting period, he shall be treated for the purposes of that subsection as holding throughout that period that percentage of the issued ordinary shares of the company which is equal to the sum of the relevant percentages for each holding period in the relevant accounting period.
- (5) For the purposes of subsection (4) above—
- “holding period", in the case of any person, means a part of the relevant accounting period during which the percentage of the issued ordinary shares of the controlled foreign company which the person holds (whether directly or indirectly) remains the same;
- “the relevant percentage", in the case of a holding period, means the percentage equal to—$P×HA$where—P is the percentage of the issued ordinary shares of the controlled foreign company which the person in question directly or indirectly holds in the holding period, as calculated in accordance with subsections (1) to (3) above so far as applicable;H is the number of days in the holding period; andA is the number of days in the relevant accounting period.
##### 752C
- (1) In this section “*the relevant provisions*” means sections 752 to 752B and this section.
- (2) For the purposes of the relevant provisions—
- (a) a person has a direct interest in a company if (and only if) he has an interest in the company otherwise than by virtue of having an interest in another company;
- (b) a person has an indirect interest in a company if (and only if) he has an interest in the company by virtue of having an interest in another company;
- (c) a person indirectly holds shares of a controlled foreign company if (and only if) he directly holds ordinary shares of a company which is share-linked to the controlled foreign company.
- (3) For the purposes of the relevant provisions, a company is “share-linked" to a controlled foreign company if it has an interest in the controlled foreign company only by virtue of directly holding ordinary shares—
- (a) of the controlled foreign company, or
- (b) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) above, or
- (c) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) or (b) above,
and so on.
- (4) For the purposes of the relevant provisions, a company (“company A") has an intermediate interest in a controlled foreign company if (and only if)—
- (a) it has a direct or indirect interest in the controlled foreign company; and
- (b) one or more other persons have relevant interests in the controlled foreign company by virtue of having a direct or indirect interest in company A.
- (5) Any interest or shares held by a nominee or bare trustee shall be treated for the purposes of the relevant provisions as held by the person or persons for whom the nominee or bare trustee holds the interest or shares.
- (6) Where—
- (a) an interest in a controlled foreign company is held in a fiduciary or representative capacity, and
- (b) subsection (5) above does not apply, but
- (c) there are one or more identifiable beneficiaries,
the interest shall be treated for the purposes of the relevant provisions as held by that beneficiary or, as the case may be, as apportioned on a just and reasonable basis among those beneficiaries.
- (7) In the relevant provisions—
- “*bare trustee*” means a person acting as trustee—for a person absolutely entitled as against the trustee; orfor any person who would be so entitled but for being a minor or otherwise under a disability; orfor two or more persons who are or would, but for all or any of them being a minor or otherwise under a disability, be jointly so entitled;
- “ordinary shares", in the case of any company, means shares of a single class, however described, which is the only class of shares issued by the company;
- “*the relevant accounting period*” means the accounting period mentioned in section 752(1);
- “*share*” includes a reference to a fraction of a share.
##### 754A
- (1) This section applies where—
- (a) a company resident in the United Kingdom (“the UK company") has an interest in a controlled foreign company at any time during an accounting period of the controlled foreign company;
- (b) the UK company delivers a company tax return; and
- (c) at the time when the UK company delivers the company tax return, it is not established whether or not the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period.
- (2) If the UK company is of the opinion that the controlled foreign company is likely to pursue an acceptable distribution policy in relation to the accounting period, the UK company shall make the company tax return on the basis that the accounting period of the controlled foreign company is one in relation to which the controlled foreign company pursues such a policy.
- (3) If the UK company is not of the opinion that the controlled foreign company is likely to pursue an acceptable distribution policy in relation to the accounting period, the UK company shall make the company tax return on the basis that the accounting period of the controlled foreign company is one in relation to which the controlled foreign company does not pursue such a policy.
- (4) In any case where—
- (a) the UK company acts in pursuance of subsection (2) above, but
- (b) it becomes established that the controlled foreign company has not pursued an acceptable distribution policy in relation to the accounting period,
the UK company shall amend the company tax return on the basis that the accounting period is not one in relation to which the controlled foreign company pursues an acceptable distribution policy.
- (5) In any case where—
- (a) the UK company acts in pursuance of subsection (3) above, but
- (b) it becomes established that the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period,
the UK company shall amend the company tax return on the basis that the accounting period is one in relation to which the controlled foreign company pursues an acceptable distribution policy.
- (6) Any amendment required to be made to the company tax return by virtue of subsection (4) or (5) above (“*an ADP amendment*”) shall be made by the UK company before the expiration of the period of 30 days next following the end of the period allowed for establishing an ADP in relation to the accounting period of the controlled foreign company.
- (7) Subject to subsection (8) below, the making of any ADP amendment is subject to, and must be in accordance with, the other provisions of the Corporation Tax Acts as they apply for the purposes of this Chapter.
- (8) The time limits otherwise applicable to amendment of a company tax return do not apply to an ADP amendment.
- (9) A company which fails to make an ADP amendment required by subsection (4) above within the time allowed for doing so shall be liable to a tax-related penalty under paragraph 20 of Schedule 18 to the Finance Act 1998 (penalty, not exceeding amount of tax understated, for incorrect or uncorrected return).
- (10) For the purposes of this section, if it has not previously been established whether or not the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period, it shall be taken to be established immediately after the end of the period allowed for establishing an ADP in relation to that accounting period.
- (11) In this section, “*the period allowed for establishing an ADP*” means, in relation to an accounting period of a controlled foreign company, the period ending with the expiration of—
- (a) subject to paragraph (b) below, the period of eighteen months next following the end of the accounting period; or
- (b) if the Board have, in the case of the accounting period, allowed further time under paragraph 2(1)(b) of Schedule 25, the further time so allowed.
- (12) In this section any reference to a controlled foreign company pursuing an acceptable distribution policy in relation to an accounting period shall be construed in accordance with Part I of Schedule 25.
##### 754B
- (1) This section has effect where a determination requiring the Board’s sanction is made for any of the following purposes, that is to say—
- (a) the giving of a closure notice; or
- (b) the making of a discovery assessment.
- (2) If the closure notice or, as the case may be, notice of the discovery assessment is given to any person without—
- (a) the determination, so far as it is taken into account in the closure notice or the discovery assessment, having been approved by the Board, or
- (b) notification of the Board’s approval having been served on that person at or before the time of the giving of the notice,
the closure notice or, as the case may be, the discovery assessment shall be deemed to have been given or made (and in the case of an assessment notified) in the terms (if any) in which it would have been given or made had that determination not been taken into account.
- (3) A notification under subsection (2)(b) above—
- (a) must be in writing;
- (b) must state that the Board have given their approval on the basis that—
- (i) an amount of chargeable profits, and
- (ii) an amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question fall to be apportioned under section 747(3) to the person in question;
- (c) must state the amounts mentioned in sub-paragraphs (i) and (ii) of paragraph (b) above; and
- (d) subject to paragraphs (a) to (c) above, may be in such form as the Board may determine.
- (4) For the purposes of this section, the Board’s approval of a determination requiring their sanction—
- (a) must be given specifically in relation to the case in question and must apply to the amount determined; but
- (b) subject to that, may be given by the Board (either before or after the making of the determination) in any such form or manner as they may determine.
- (5) In this section references to a determination requiring the Board’s sanction are references (subject to subsection (6) below) to any determination of the amount of chargeable profits or creditable tax for an accounting period of a controlled foreign company which falls to be apportioned to a particular person under section 747(3).
- (6) For the purposes of this section, a determination shall be taken, in relation to a closure notice or a discovery assessment, not to be a determination requiring the Board’s sanction if—
- (a) an agreement about the relevant amounts has been made between an officer of the Board and the person in whose case it is made;
- (b) that agreement is in force at the time of the giving of the closure notice or, as the case may be, notice of the assessment; and
- (c) the matters to which the agreement relates include the amount determined.
- (7) In paragraph (a) of subsection (6) above, “*the relevant amounts*” means—
- (a) the amount of chargeable profits, and
- (b) the amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question which fall to be apportioned under section 747(3) to the person mentioned in that paragraph.
- (8) For the purposes of subsection (6) above an agreement made between an officer of the Board and any person (“the taxpayer") in relation to any matter shall be taken to be in force at any time if, and only if—
- (a) the agreement is one which has been made or confirmed in writing;
- (b) that time is after the end of the period of thirty days beginning—
- (i) in the case of an agreement made in writing, with the day of the making of the agreement, and
- (ii) in any other case, with the day of the agreement’s confirmation in writing; and
- (c) the taxpayer has not, before the end of that period of thirty days, served a notice on an officer of the Board stating that he is repudiating or resiling from the agreement.
- (9) The references in subsection (8) above to the confirmation in writing of an agreement are references to the service on the taxpayer by an officer of the Board of a notice—
- (a) stating that the agreement has been made; and
- (b) setting out the terms of the agreement.
- (10) The matters that may be questioned on so much of any appeal by virtue of any provision of the Management Act or Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) as relates to a determination the making of which has been approved by the Board for the purposes of this section shall not include the Board’s approval, except to the extent that the grounds for questioning the approval are the same as the grounds for questioning the determination itself.
- (11) In this section—
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998 (completion of enquiry and statement of conclusions);
- “*discovery assessment*” means a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule).
##### 755A
- (1) This section applies in any case where—
- (a) an amount (“the apportioned profit") of a controlled foreign company’s chargeable profits for an accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (b) the UK company carries on life assurance business in that one of its accounting periods (“the relevant accounting period") in which ends the accounting period of the controlled foreign company; and
- (c) the property or rights which represent the UK company’s relevant interest in the controlled foreign company constitute to any extent assets of the UK company’s long-term insurance fund.
- (2) Subsections (3) and (4) below apply if, in the case of the relevant accounting period, the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business.
- (3) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 in relation to the policy holders’ part of any BLAGAB apportioned profit shall be—
- (a) if a single rate of tax under section 88(1) of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the relevant accounting period, that rate; or
- (b) if more than one such rate of tax is applicable in relation to the relevant accounting period, the average of those rates over the whole of that period.
- (4) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 shall be nil in relation to so much of the apportioned profit as is referable to—
- (a) pension business,
- (b) life reinsurance business, or
- (c) overseas life assurance business,
carried on by the UK company.
- (4A) In any case where—
- (a) paragraph 4 of Schedule 26 to this Act applies to a dividend received by the UK company, and
- (b) but for this subsection, subsection (4) of section 804B of this Act would apply to that dividend,
the amount of credit for foreign tax in respect of that dividend shall be treated, for the purposes of that section, as wholly attributable to basic life assurance and general annuity business.
- (5) If, in the case of the relevant accounting period, the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, the “*appropriate rate*” for the purposes of—
- (a) section 747(4)(a), and
- (b) paragraph 1 of Schedule 26,
shall be nil in relation to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of its long-term insurance fund.
- (6) If, in the case of the relevant accounting period,—
- (a) the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business,
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, and
- (c) the apportioned profit is to any extent referable to a category of business specified in paragraphs (a) to (c) of subsection (4) above,
so much of the creditable tax so apportioned as is attributable to the apportioned profit so far as so referable shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (7) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, and
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company,
so much of the creditable tax so apportioned as is attributable to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of the UK company’s long-term insurance fund shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (8) Any set off under paragraph 1 . . . of Schedule 26 against the UK company’s liability to tax under section 747(4)(a) in respect of the apportioned profit shall be made against only so much of that liability as is attributable to the eligible part of the apportioned profit.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of this section, the “eligible part" of the apportioned profit is any BLAGAB apportioned profit, other than the policy holders’ part.
- (11) For the purposes of this section the policy holders' part of any BLAGAB apportioned profit is—
- (a) where subsection (11A) below applies, the whole of that profit, and
- (b) in any other case, the relevant fraction (within the meaning of subsection (11B) below) of that profit.
- (11A) This subsection applies if—
- (a) the UK company’s life assurance business is mutual business,
- (b) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is equal to all those profits, or
- (c) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is more than its BLAGAB profits for that period.
- (11B) The relevant fraction for the purposes of subsection (11)(b) above is the fraction arrived at by dividing—
- (a) the policy holders' share of the UK company’s relevant profits for the relevant accounting period, by
- (b) the UK company’s BLAGAB profits for that period.
- (11C) In subsections (11A) and (11B) above—
- (a) references to the policy holders' share of the UK company’s share of the relevant profits are to be construed in accordance with sections 88(3) and 89 of the Finance Act 1989, and
- (b) references to the UK company’s BLAGAB profits are to be construed in accordance with section 89(1B) of that Act.
- (12) In this section—
- “*BLAGAB apportioned profit*” means so much of the apportioned profit as is referable to basic life assurance and general annuity business carried on by the UK company;
- “*long-term insurance fund*” has the meaning given by section 431(2).
- (13) For the purposes of this section, the part of the apportioned profit which is referable to—
- (a) pension business,
- (b) life reinsurance business,
- (c) overseas life assurance business, or
- (d) basic life assurance and general annuity business,
carried on by the UK company is the part which would have been so referable under section 432A had the apportioned profit been a dividend paid to the UK company at the end of the accounting period mentioned in subsection (1)(a) above in respect of the property or rights which represent the UK company’s relevant interest in the controlled foreign company.
- (14) For the purposes of this section, any attribution of creditable tax to a particular part of the apportioned profit shall be made in the proportion which that part of the apportioned profit bears to the whole of the apportioned profit.
##### 755B
- (1) This section applies where—
- (a) a controlled foreign company carries on general insurance business in an accounting period;
- (b) an amount of the company’s chargeable profits, and an amount of its creditable tax (if any), for that accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (c) the UK company delivers a company tax return for that one of its accounting periods in which the controlled foreign company’s accounting period ends; and
- (d) in making or amending the return, the UK company has regard to accounts of the controlled foreign company drawn up using a method falling within subsection (2) below.
- (2) The methods which fall within this subsection are—
- (a) the method described in paragraph 52 of Schedule 9A to the Companies Act 1985 (which provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding); and
- (b) any method which would have fallen within paragraph (a) above, had final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of that Schedule, taken place, and been required to take place, no later than the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (3) Where this section applies—
- (a) the UK company may make any amendments of its company tax return arising from the replacement of the technical provision in the controlled foreign company’s accounts at any time within twelve months from the date on which the provision was replaced; and
- (b) notice of intention to enquire into the return under paragraph 24 of Schedule 18 to the Finance Act 1998 may be given at any time up to two years from that date (or at any later time in accordance with the general rule in sub-paragraph (3) of that paragraph).
- (4) If, in a case where this section applies, the accounts of the controlled foreign company are drawn up using a method falling within paragraph (b) of subsection (2) above—
- (a) the controlled foreign company, and
- (b) any person with an interest in the controlled foreign company,
shall be treated for the purposes of this section as if final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of Schedule 9A to the Companies Act 1985, had taken place at, and been required to take place no later than, the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (5) Regulations under section 755C may make provision with respect to the determination of the amount of the provision by which the technical provision is to be treated as replaced in cases falling within subsection (4) above.
- (6) In this section “general insurance business” means business which consists of the effecting or carrying out of contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
##### 755C
- (1) The Treasury may by regulations provide for the provisions of this Chapter to have effect with prescribed modifications in any case where a non-resident company—
- (a) carries on general insurance business; and
- (b) draws up accounts relating to that business using a method falling within subsection (2) of section 755B.
- (2) Regulations under subsection (1) above may—
- (a) make different provision for different cases;
- (b) make provision having effect in relation to accounting periods of non-resident companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit.
- (3) In this section—
- “*general insurance business*” has the same meaning as in section 755B;
- “*non-resident company*” means a company resident outside the United Kingdom;
- “*prescribed*” means prescribed in regulations under this section.
##### 755D
- (1) For the purposes of this Chapter “control", in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (2) Where two or more persons, taken together, have the power mentioned in subsection (1) above, they shall be taken for the purposes of this Chapter to control the company.
- (3) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing at least 40 per cent of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (4) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing—
- (a) at least 40 per cent, but
- (b) not more than 55 per cent,
of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (5) For the purposes of this Chapter any question—
- (a) whether a company is controlled by a person, or by two or more persons taken together, or
- (b) whether, in the case of any company, the applicable 40 per cent test is satisfied in the case of each of two persons who, taken together, control the company,
shall be determined after attributing to each of the persons all the rights and powers mentioned in subsection (6) below that are not already attributed to that person for the purposes of subsections (1) to (4) above.
- (6) The rights and powers referred to in subsection (5) above are—
- (a) rights and powers which the person is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of other persons, to the extent that they are rights or powers falling within subsection (7) below;
- (c) if the person is resident in the United Kingdom, rights and powers of any person who is resident in the United Kingdom and connected with the person; and
- (d) if the person is resident in the United Kingdom, rights and powers which for the purposes of subsection (5) above would be attributed to a person who is resident in the United Kingdom and connected with the person (a “*UK connected person*”) if the UK connected person were himself the person.
- (7) Rights and powers fall within this subsection to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the person;
- (ii) under the direction of the person; or
- (iii) for the benefit of the person; and
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (8) In subsections (6)(b) to (d) and (7) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (9) In paragraph (d) of subsection (6) above, the reference to rights and powers which would be attributed to a UK connected person if he were the person includes a reference to rights and powers which, by applying that paragraph wherever one person resident in the United Kingdom is connected with another person, would be so attributed to him through a number of persons each of whom is resident in the United Kingdom and connected with at least one of the others.
- (10) In determining for the purposes of this section whether one person is connected with another in relation to a company, subsection (7) of section 839 shall be disregarded.
- (11) References in this section—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
### Meaning of offshore fund
#### Losses of ring fence trade: set off against profits of an earlier accounting period
##### 756A
- (1) In this Chapter references to an offshore fund are to a collective investment scheme constituted by—
- (a) a company that is resident outside the United Kingdom, or
- (b) a unit trust scheme the trustees of which are not resident in the United Kingdom, or
- (c) arrangements not falling within paragraph (a) or (b) taking effect by virtue of the law of a territory outside the United Kingdom and which under that law create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of any part of the United Kingdom).
- (2) Subsection (1) has effect subject to—
- section 756B (treatment of umbrella funds), and
- section 756C (treatment of funds comprising more than one class of interest).
- (3) In this section “*collective investment scheme*” has the meaning given by section 235 of the Financial Services and Markets Act 2000.
### Treatment of umbrella funds
##### 756B
- (1) In this Chapter, an “*umbrella fund*” means an offshore fund—
- (a) which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are made to them; and
- (b) under which the participants are entitled to exchange rights in one pool for rights in another;
and references in this Chapter to a part of an umbrella fund are to such of the arrangements as relate to a separate pool.
- (2) For the purposes of this Chapter (except subsection (1))—
- (a) each part of an umbrella fund shall be regarded as a separate offshore fund, and
- (b) the umbrella fund as a whole shall not be regarded as an offshore fund.
- (3) In this Chapter, in relation to a part of an umbrella fund—
- (a) a reference to the assets of an offshore fund is to such of the assets of the umbrella fund as under the arrangements form part of the separate pool to which that part of the umbrella fund relates;
- (b) a reference to the income of an offshore fund is to the income arising from those assets;
- (c) a reference to a person having an interest in an offshore fund is to a person for the time being having an interest in that separate pool; and
- (d) a reference to an offshore fund being a non-qualifying fund shall be read in relation to times before the coming into force of this section as a reference to the umbrella fund being a non-qualifying fund.
### Treatment of funds comprising more than one class of interest
##### 756C
- (1) For the purposes of this Chapter where there is more than one class of interest in an offshore fund (the “*main fund*”)—
- (a) each class of interest shall be regarded as a separate offshore fund, and
- (b) the main fund shall not be regarded as an offshore fund.
- (2) In this section, references to a class of interest in an offshore fund do not include—
- (a) a part of an umbrella fund which is regarded as an offshore fund by virtue of section 756B, or
- (b) a class of interest in an offshore fund which by virtue of section 759(5), (6) or (8) is not a material interest in the fund.
- (3) In this Chapter, in relation to a class of interest in an offshore fund—
- (a) a reference to the assets of an offshore fund is to the assets of the main fund;
- (b) a reference to the income of an offshore fund is to such of the income of the main fund as is attributable to interests of that class under the arrangements constituting the main fund;
- (c) a reference to a person having an interest in an offshore fund is to a person for the time being having an interest of that class; and
- (d) a reference to an offshore fund being a non-qualifying fund shall be read in relation to times before the coming into force of this section as a reference to the main fund being a non-qualifying fund.
#### Transactions in deposits with and without certificates or in debts.
##### 762ZA
- (1) Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) applies in relation to an offshore income gain arising to a person resident or domiciled outside the United Kingdom as if the offshore income gain were income becoming payable to the person.
- (2) Income treated as arising under that Chapter by virtue of subsection (1) is regarded as “*foreign*” for the purposes of section 726, 730 or 735 of that Act.
- (3) Subsection (1) does not apply in relation to an offshore income gain if (and to the extent that) it is treated, by virtue of section 762(1), as arising to a person resident or ordinarily resident in the United Kingdom.
- (4) The following provisions apply if section 762(2) applies in relation to an offshore income gain (“the relevant offshore income gain”).
- (5) If—
- (a) by virtue of section 762(3) an offshore income gain is treated as arising in a tax year to a person resident or ordinarily resident in the United Kingdom, and
- (b) it is so treated by reason of the relevant offshore income gain (or part of it),
for that and subsequent tax years subsection (1) does not apply in relation to the relevant offshore income gain (or that part).
- (6) If, by virtue of subsection (1) as it applies in relation to the relevant offshore income gain, income is treated under Chapter 2 of Part 13 of ITA 2007 as arising in a tax year, reduce (with effect from the following tax year) the OIG amount in question by the amount of the income.
##### 762ZB
- (1) This section applies to income treated as arising under section 761(1) to an individual in a tax year if—
- (a) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for that year, and
- (b) the individual is not domiciled in the United Kingdom in that year.
- (2) Treat the income as relevant foreign income of the individual.
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis)—
- (a) treat any consideration obtained on the disposal of the asset as deriving from the income, and
- (b) unless the consideration so obtained is of an amount equal to the market value of the asset, treat the asset as deriving from the income.
- (4) In subsection (3)—
- (a) “*the asset*” means the asset the disposal of which causes the income to be treated as arising, and
- (b) “*the disposal*” means the disposal mentioned in paragraph (a).
##### 762A
- (1) This section applies where—
- (a) classes of interest in an offshore fund (the “*main fund*”) are treated as separate offshore funds under section 756C; and
- (b) as the result of—
- (i) a reorganisation within the meaning of section 126 of the 1992 Act, or
- (ii) a conversion of securities within the meaning of section 132 of that Act,
a person exchanges an interest of one class (A) in the main fund for an interest of another class (B) in that fund.
- (2) Where—
- (a) the interest of class A—
- (i) is at the time of the exchange an interest in a non-qualifying offshore fund, or
- (ii) has been an interest in such a fund at any material time, and
- (b) the interest of class B is at the time of the exchange an interest in a fund which is certified by the Board as a distributing offshore fund,
section 127 of the 1992 Act (equation of original shares and new holding) shall not prevent the exchange constituting a disposal for the purposes of this Chapter.
- (3) Any such disposal shall be treated as a disposal for a consideration equal to the market value of the rights at the time of the exchange.
- (4) In this section—
- “*class of interest*” has the same meaning as in section 756C(1);
- “*material time*” has the same meaning as in section 757.
##### 765A
- (1) Section 765(1) shall not apply to a transaction which is a movement of capital to which Article 1 of the Directive of the Council of the European Communities dated 24th June 1988 No. [88/361/EEC](https://www.legislation.gov.uk/european/directive/1988/0361) applies.
- (2) Where if that Article did not apply to it a transaction would be unlawful under section 765(1), the body corporate in question (that is to say, the body corporate resident in the United Kingdom) shall—
- (a) give to the Board within six months of the carrying out of the transaction such information relating to the transaction, or to persons connected with the transaction, as regulations made by the Board may require, and
- (b) where notice is given to the body corporate by the Board, give to the Board within such period as is prescribed by regulations made by the Board (or such longer period as the Board may in the case allow) such further particulars relating to the transaction, to related transactions, or to persons connected with the transaction or related transactions, as the Board may require.
#### Write-off of government investment.
##### 767A
- (1) Where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“*the tax-payer company*”),
- (b) any corporation tax assessed on the tax-payer company for an accounting period beginning before the change remains unpaid at any time after the relevant date, and
- (c) any of the three conditions mentioned below is fulfilled,
any person mentioned in subsection (2) below may be assessed by the Board and charged (in the name of the tax-payer company) to an amount of corporation tax in accordance with this section.
- (2) The persons are—
- (a) any person who at any time during the relevant period before the change in the ownership of the tax-payer company had control of it;
- (b) any company of which the person mentioned in paragraph (a) above has at any time had control within the period of three years before that change.
- (3) In subsection (2) above, “*the relevant period*” means—
- (a) the period of three years before the change in the ownership of the tax-payer company; or
- (b) if during the period of three years before that change (“*the later change*”) there was a change in the ownership of the tax-payer company (“*the earlier change*”), the period elapsing between the earlier change and the later change.
- (4) The first condition is that—
- (a) at any time during the period of three years before the change in the ownership of the tax-payer company the activities of a trade or business of that company cease or the scale of those activities become small or negligible; and
- (b) there is no significant revival of those activities before that change occurs.
- (5) The second condition is that at any time after the change in the ownership of the tax-payer company, but under arrangements made before that change, the activities of a trade or business of that company cease or the scale of those activities become small or negligible.
- (6) The third condition is that—
- (a) at any time during the period of six years beginning three years before the change in the ownership of the tax-payer company there is a major change in the nature or conduct of a trade or business of that company;
- (b) there is a transfer or there are transfers of assets of the tax-payer company to a person mentioned in subsection (7) below or to any person under arrangements which enable any of those assets or any assets representing those assets to be transferred to a person mentioned in subsection (7) below;
- (c) that transfer occurs or those transfers occur during the period of three years before the change in the ownership of the tax-payer company or after that change but under arrangements made before that change; and
- (d) the major change mentioned in paragraph (a) above is attributable to that transfer or those transfers.
- (7) The persons are—
- (a) any person mentioned in subsection (2)(a) above; and
- (b) any person connected with him.
- (8) The amount of tax charged in an assessment made under this section must not exceed the amount of the tax which, at the time of that assessment, remains unpaid by the tax-payer company.
- (9) For the purposes of this section the relevant date is the date six months from the date on which the corporation tax is assessed as mentioned in subsection (1)(b) above.
- (10) Any assessment made under this section shall not be out of time if made within three years from the date on which the liability of the tax-payer company to corporation tax for the accounting period mentioned in subsection (1)(b) above is finally determined.
##### 767AA
- (1) Where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“the transferred company"),
- (b) any corporation tax relating to an accounting period ending on or after the change has been assessed on the transferred company or an associated company,
- (c) that tax remains unpaid at any time more than six months after it was assessed, and
- (d) the condition set out in subsection (2) below is fulfilled,
any person mentioned in subsection (4) below may be assessed by the Board and charged to an amount of corporation tax not exceeding the amount remaining unpaid.
- (2) The condition is that it would be reasonable (apart from this section) to infer, from either or both of—
- (a) the terms of any transactions entered into in connection with the change, and
- (b) the other circumstances of the change and of any such transactions,
that at least one of those transactions was entered into by one or more of its parties on the assumption, as regards a potential tax liability, that that liability would be unlikely to be met, or met in full, if it were to arise.
- (3) In subsection (2) above the reference to a potential tax liability is a reference to a liability to pay corporation tax which—
- (a) in circumstances which were reasonably foreseeable at the time of the change in ownership, or
- (b) in circumstances the occurrence of which is something of which there was at that time a reasonably foreseeable risk,
would or might arise from an assessment made, after the change in ownership, on the transferred company or an associated company (whether or not a particular associated company).
- (4) The persons mentioned in subsection (1) above are—
- (a) any person who at any time during the relevant period had control of the transferred company;
- (b) any company of which the person mentioned in paragraph (a) above has at any time had control within the period of three years before the change in the ownership of the transferred company.
- (5) In subsection (4) above, “*the relevant period*” means—
- (a) the period of three years before the change in the ownership of the transferred company; or
- (b) if during the period of three years before that change (“the later change") there was a change in the ownership of the transferred company (“the earlier change"), the period elapsing between the earlier change and the later change.
- (6) For the purposes of this section a transaction is entered into in connection with a change in the ownership of a company if—
- (a) it is the transaction, or one of the transactions, by which that change is effected; or
- (b) it is entered into as part of a series of transactions, or scheme, of which transactions effecting the change in ownership have formed or will form a part.
- (7) For the purposes of this section—
- (a) references to a scheme are references to any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving a single transaction or two or more transactions;
- (b) it shall be immaterial in determining whether any transactions have formed or will form part of a series of transactions or scheme that the parties to any of the transactions are different from the parties to another of the transactions; and
- (c) the cases in which any two or more transactions are to be taken as forming part of a series of transactions or scheme shall include any case in which it would be reasonable to assume that one or more of them—
- (i) would not have been entered into independently of the other or others; or
- (ii) if entered into independently of the other or others, would not have taken the same form or been on the same terms.
- (8) In this section references, in relation to the transferred company and an assessment to tax, to an associated company are references to any compnay (whenever formed) which, at the time of the assessment or at an earlier time after the change in ownership—
- (a) has control of the transferred company;
- (b) is a company of which the transferred company has control; or
- (c) is a company under the control of the same person or persons as the transferred company.
- (9) A person assessed and charged to tax under this section shall be assessed and charged in the name of the company by whom the tax to which the assessment relates remains unpaid.
- (10) Any assessment made under this section shall not be out of time if made within three years from the date of the final determination of the liability of the company by whom the tax remains unpaid to corporation tax for the accounting period for which that tax was assessed.
##### 767B
- (1) In relation to corporation tax assessed under section 767A—
- (a) section 86 of the Management Act (interest on overdue tax), in so far as it has effect in relation to accounting periods ending on or before 30th September 1993, and
- (b) section 87A of that Act (corresponding provision for corporation tax due for accounting periods ending after that date),
shall have effect as if the references in section 86 to the reckonable date and in section 87A to the date when the tax becomes due and payable were, respectively, references to the date which is the reckonable date in relation to the tax-payer company and the date when the tax became due and payable by the tax-payer company.
- (1A) In relation to corporation tax assessed under section 767AA, section 87A of the Management Act shall have effect as if the references to the date when the tax becomes due and payable were references to the date when the tax became due and payable by the transferred company or the associated company (as the case may be).
- (2) A payment in pursuance of an assessment under section 767A or 767AA shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes; but any person making such a payment shall be entitled to recover an amount equal to the payment from the tax-payer company or the transferred company or associated company (as the case may be).
- (3) In subsection (2) above the reference to a payment in pursuance of an assessment includes a reference to a payment of interest under section 86 or 87A of the Management Act (as they have effect by virtue of subsection (1) above).
- (4) For the purposes of sections 767A, 767AA and 767C, “*control*”, in relation to a company, shall be construed in accordance with section 416 as modified by subsections (5) and (6) below.
- (5) In subsection (2)(a) for “the greater part of” there shall be substituted “50 per cent. of”.
- (6) For subsection (3) there shall be substituted—
- (”) Where two or more persons together satisfy any of the conditions in subsection (2) above and do so by reason of having acted together to put themselves in a position where they will in fact satisfy the condition in question, each of those persons shall be treated as having control of the company.”
- (7) In section 767A(6) “*a major change in the nature or conduct of a trade or business*” includes any change mentioned in any of paragraphs (a) to (d) of section 245(4); and also includes a change falling within any of those paragraphs which is achieved gradually as the result of a series of transfers.
- (8) In section 767A(6) “*transfer*”, in relation to an asset, includes any disposal, letting or hiring of it, and any grant or transfer of any right, interest or licence in or over it, or the giving of any business facilities with respect to it.
- (9) Section 839 shall apply for the purposes of section 767A(7).
- (10) Subsection (9) of section 768 shall apply for the purposes of sections 767A and 767AA as it applies for the purposes of section 768.
##### 767C
- (1) This section applies where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“the subject company"); and
- (b) in connection with that change a person (“the seller") may be or become liable to be assessed and charged to corporation tax under section 767A or 767AA.
- (2) The Board may by notice require any person to supply to them—
- (a) any document in the person’s possession or power which appears to the Board to be relevant for determining any one or more of the matters referred to in subsection (3) below; or
- (b) any particulars which appear to them to be so relevant.
- (3) Those matters are—
- (a) whether the seller is or may become liable as mentioned in subsection (1) above and the extent of the liability or potential liability; and
- (b) whether the subject company or an associated company is or may become liable to be assessed to any tax in respect of which the seller is or could become liable as mentioned in subsection (1) above, and the extent of the liability or potential liability of the subject company or associated company.
- (4) Without prejudice to the following provisions of this section, the references in subsection (2) above to documents and particulars are references to the documents and particulars specified or described in the notice.
- (5) A notice under subsection (2) above must specify the period, which must not be less than 30 days, within which the notice must be complied with.
- (6) Any person to whom any documents are supplied under this section may take copies of them or of any extracts from them.
- (7) A notice under subsection (2) above shall not oblige a person to supply any documents or particulars relating to the conduct of any pending appeal relating to tax.
- (8) In relation to any notice under subsection (2) above—
- (a) subsection (4) of section 20B of the Taxes Management Act 1970 (rules relating to copies of documents) shall apply as it applies in relation to a notice under section 20(1) of that Act; and
- (b) subsections (8) to (14) of section 20B of that Act (rules about obtaining documents etc. from professional advisers) shall apply as they apply in relation to a notice under section 20(3) of that Act but as if any reference to an inspector were a reference to the Board;
and subsection (8C) of section 20 of that Act (exclusion of personal records and journalistic material) shall apply for the purposes of this section as it applies for the purposes of that section.
- (9) In this section references, in relation to the subject company and an assessment to tax, to an associated company are references to any company which, at the time of the assessment or at an earlier time after the change in ownership—
- (a) has control of the subject company;
- (b) is a company of which the subject company has control; or
- (c) is a company under the control of the same person or persons as the subject company.
- (10) In this section “*document*” means anything in which information of any description is recorded.
##### 768A
- (1) In any case where—
- (a) within any period of three years there is both a change in the ownership of a company and (either earlier or later in that period, or at the same time) a major change in the nature or conduct of a trade carried on by the company, or
- (b) at any time after the scale of the activities in a trade carried on by a company has become small or negligible, and before any considerable revival of the trade, there is a change in the ownership of the company,
no relief shall be given under section 393A(1) by setting a loss incurred by the company in an accounting period ending after the change in ownership against any profits of an accounting period beginning before the change in ownership.
- (2) Subsections (2) to (4), (8) and (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (3) This section applies in relation to changes in ownership occurring on or after 14th June 1991.
##### 768B
- (1) This section applies where there is a change in the ownership of a company with investment business and—
- (a) after the change there is a significant increase in the amount of the company’s capital; or
- (b) within the period of six years beginning three years before the change there is a major change in the nature or conduct of the business carried on by the company; or
- (c) the change in the ownership occurs at any time after the scale of the activities in the business carried on by the company has become small or negligible and before any considerable revival of the business.
- (2) For the purposes of subsection (1)(a) above, whether there is a significant increase in the amount of a company’s capital after a change in the ownership of the company shall be determined in accordance with the provisions of Part I of Schedule 28A.
- (3) In paragraph (b) of subsection (1) above “*major change in the nature or conduct of a business*” includes a major change in the nature of the investments held by the company, even if the change is the result of a gradual process which began before the period of six years mentioned in that paragraph.
- (4) For the purposes of this section—
- (a) “*legatee*” includes any person taking under a testamentary disposition or on an intestacy or partial intestacy, whether he takes beneficially or as trustee,
- (b) property taken under a testamentary disposition or on an intestacy or partial intestacy includes any property appropriated by the personal representatives in or towards satisfaction of a pecuniary legacy or any other interest or share in the property devolving under the disposition or intestacy, and
- (c) a person taking under a donatio mortis causa shall be treated as a legatee and his acquisition as made at the time of the donor's death.
- (a) the accounting period of the company in which the change in the ownership occurs shall be divided into two parts, the first the part ending with the change, the second the part after;
- (b) those parts shall be treated as two separate accounting periods; and
- (c) the amounts in issue for the accounting period being divided shall be apportioned to those parts.
- (5) In Schedule 28A—
- (a) Part II shall have effect for identifying the amounts in issue for the accounting period being divided; and
- (b) Part III shall have effect for the purpose of apportioning those amounts to the parts of that accounting period.
- (6) Any sums which—
- (a) are, or are treated as, expenses of management referable to the accounting period being divided, and
- (b) under Part III of Schedule 28A are apportioned to either part of that period,
shall be treated for the purposes of section 75 expenses of management referable to that part.
- (7) Any charges which under Part III of Schedule 28A are apportioned to either part of the accounting period being divided shall be treated for the purposes of sections 338 and 75 as paid in that part.
- (8) Any allowances which under Part III of Schedule 28A are apportioned to either part of the accounting period being divided shall be treated for the purposes of section 253 of the Capital Allowances Act and section 75(7) as falling to be made in that part.
- (9) In computing the total profits of the company for an accounting period ending after the change in the ownership, no deduction shall be made under section 75 by reference to—
- (a) expenses of management deductible or allowances falling to be made for an accounting period beginning before the change; or
- (b) charges paid in such an accounting period.
- (10) Part IV of Schedule 28A shall have effect for the purpose of restricting, in a case where this section applies, the debits and non-trading deficits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of the company’s loan relationships (including debits so brought into account by virtue of paragraph 14(3)of Schedule 26 to the Finance Act 2002).
- (12) Subject to the modification in subsection (13) below, subsections (6) to (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (13) The modification is that in subsection (6) of section 768 for the words “relief in respect of a company’s losses has been restricted” there shall be substituted “deductions from a company’s total profits , or the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in the case of a company in respect of its loan relationships (or its derivative contracts by virtue of paragraph 14(3) of Schedule 26 to the Finance Act 2002), have been restricted.”
- (14) In this section “*company with investment business*” has the same meaning as in Part IV.
##### 768C
- (1) This section applies where—
- (a) there is a change in the ownership of a company with investment business (“the relevant company”);
- (b) none of paragraphs (a) to (c) of section 768B(1) applies;
- (c) after the change in the ownership the relevant company acquires an asset from another company in circumstances such that section 171(1) of the 1992 Act applies to the acquisition; and
- (d) a chargeable gain (“a relevant gain”) accrues to the relevant company on a disposal of the asset within the period of three years beginning with the change in the ownership.
- (2) For the purposes of subsection (1)(d) above an asset acquired by the relevant company as mentioned in subsection (1)(c) above shall be treated as the same as an asset owned at a later time by that company if the value of the second asset is derived in whole or in part from the first asset, and in particular where the second asset is a freehold and the first asset was a leasehold and the lessee has acquired the reversion.
- (3) For the purposes of this section—
- (a) the accounting period of the relevant company in which the change in the ownership occurs shall be divided into two parts, the first the part ending with the change, the second the part after;
- (b) those parts shall be treated as two separate accounting periods; and
- (c) the amounts in issue for the accounting period being divided shall be apportioned to those parts.
- (4) In Schedule 28A—
- (a) Part V shall have effect for identifying the amounts in issue for the accounting period being divided; and
- (b) Part VI shall have effect for the purpose of apportioning those amounts to the parts of that accounting period.
- (5) Subsections (6) to (8) of section 768B shall apply in relation to the relevant company as they apply in relation to the company mentioned in subsection (1) of that section except that any reference in those subsections to Part III of Schedule 28A shall be read as a reference to Part VI of that Schedule.
- (6) Subsections (7) and (9) below apply only where, in accordance with the relevant provisions of the 1992 Act and Part VI of Schedule 28A, an amount is included in respect of chargeable gains in the total profits for the accounting period of the relevant company in which the relevant gain accrues.
- (7) In computing the total profits of the relevant company for the accounting period in which the relevant gain accrues, no deduction shall be made under section 75 by reference to—
- (a) expenses of management deductible or allowances falling to be made for an accounting period of the relevant company beginning before the change in ownership, or
- (b) charges paid in such an accounting period,
from an amount of the total profits equal to the amount which represents the relevant gain.
- (8) For the purposes of this section, the amount of the total profits for an accounting period which represents the relevant gain is—
- (a) where the amount of the relevant gain does not exceed the amount which is included in respect of chargeable gains for that period, an amount equal to the amount of the relevant gain;
- (b) where the amount of the relevant gain exceeds the amount which is included in respect of chargeable gains for that period, the amount so included.
- (9) Part IV of Schedule 28A shall have effect for the purpose of restricting, in a case where this section applies, the debits and non-trading deficits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of the relevant company’s loan relationships (including debits so brought into account by virtue of paragraph 14(3) of Schedule 26 to the Finance Act 2002).
- (11) Subsections (8) and (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (12) In this section—
- “*the relevant provisions of the 1992 Act*” means section 8(1) of and Schedule 7A to that Act; and
- “*company with investment business*” has the same meaning as in Part 4.
- (13) This section applies in relation to an asset to which Schedule 29 to the Finance Act 2002 applies (intangible fixed assets), with the following adaptations—
- (a) for the reference to section 171(1) of the 1992 Act substitute a reference to paragraph 55 of that Schedule;
- (b) for any reference to a chargeable gain under that Act substitute a reference to a chargeable realisation gain within the meaning of that Schedule that is a credit within paragraph 34(1)(a) of that Schedule (non-trading credits);
- (c) for any reference to a disposal of the asset substitute a reference to its realisation within the meaning of that Schedule;
- (d) for the reference to the relevant provisions of the 1992 Act substitute a reference to Part 6 of that Schedule.
##### 768D
- (1) This section applies where there is a change in the ownership of a company carrying on a Schedule A business and—
- (a) in the case of a company with investment business, either—
- (i) paragraph (a), (b) or (c) of section 768B(1) applies, or
- (ii) section 768C applies;
- (b) in the case of a company which is not a company with investment business, paragraph (a) or (b) of section 768(1) applies.
- (2) Where this section applies the following provisions have effect to prevent relief being given under section 392A by setting a Schedule A loss incurred by the company before the change of ownership against profits arising after the change.
- (3) The accounting period in which the change of ownership occurs is treated for that purpose as two separate accounting periods, the first ending with the change and the second consisting of the remainder of the period.
- (4) The profits or losses of the period in which the change occurs are apportioned to those two periods—
- (a) in the case of a company with investment business—
- (i) where paragraph (a), (b) or (c) of section 768B(1) applies, in accordance with Parts II and III of Schedule 28A, or
- (ii) where section 768C applies, in accordance with Parts V and VI of that Schedule, and
- (b) in the case of a company which is not a company with investment business, according to the length of the periods,
unless in any case the specified method of apportionment would work unjustly or unreasonably in which case such other method shall be used as appears just and reasonable.
- (5) Relief under section 392A(1) against total profits of the same accounting period is available only in relation to each of those periods considered separately.
- (6) A loss made in any accounting period beginning before the change of ownership may not be set off under section 392A(2) against, or deducted by virtue of section 392A(3) from—
- (a) in the case of—
- (i) a company with investment business where paragraph (a), (b) or (c) of section 768B(1) applies, or
- (ii) a company which is not a company with investment business,
profits of an accounting period ending after the change of ownership;
- (b) in the case of a company with investment business where section 768C applies, from so much of those profits as represents the relevant gain within the meaning of that section.
- (7) Subsections (8) and (9) of section 768 (time limits for assessment; information powers) apply for the purposes of this section as they apply for the purposes of that section.
- (8) In this section—
- (a) any reference to a case where paragraph (a) or (b) of section 768(1) applies includes the case where that paragraph would apply if the reference there to a trade carried on by the company were to a Schedule A business carried on by it;
- (b) “*company with investment business*” has the same meaning as in Part 4.
- (9) The provisions of this section apply in relation to an overseas property business as they apply in relation to a Schedule A business.
##### 768E
- (1) Where there is a change in the ownership of a company with investment business and either—
- (a) paragraph (a), (b) or (c) of section 768B(1) applies, or
- (b) section 768C applies,
the following provisions have effect to prevent relief being given under paragraph 35 of Schedule 29 to the Finance Act 2002 by setting a non-trading loss on intangible fixed assets incurred by the company before the change of ownership against profits arising after the change.
- (2) The accounting period in which the change of ownership occurs is treated for that purpose as two separate accounting periods, the first ending with the change and the second consisting of the remainder of the period.
- (3) The profits or losses of the period in which the change occurs are apportioned to those two periods—
- (a) where paragraph (a), (b) or (c) of section 768B(1) applies, in accordance with Parts 2 and 3 of Schedule 28A, or
- (b) where section 768C applies, in accordance with Parts 5 and 6 of that Schedule,
unless in any case the specified method of apportionment would work unjustly or unreasonably in which case such other method shall be used as appears just and reasonable.
- (4) Relief under paragraph 35 of Schedule 29 to the Finance Act 2002 against total profits of the same accounting period is available only in relation to each of those periods considered separately.
- (5) A loss made in any accounting period beginning before the change of ownership may not be set off under paragraph 35(3) of Schedule 29 to the Finance Act 2002 against—
- (a) in a case where paragraph (a), (b) or (c) of section 768B(1) applies, profits of an accounting period ending after the change of ownership;
- (b) in a case where section 768C applies, so much of those profits as represents the relevant gain within the meaning of that section.
- (6) Subsections (8) and (9) of section 768 (time limits for assessment; information powers) apply for the purposes of this section as they apply for the purposes of that section.
- (7) In this section “company with investment business” has the same meaning as in Part 4.
##### 770A
Schedule 28AA (which deals with provision made or imposed otherwise than at arm’s length) shall have effect.
#### Old societies.
### Factoring of income receipts etc
##### 774A
- (1) For the purposes of section 774B an arrangement is a structured finance arrangement in relation to a person (“*the borrower*”) if the following condition is met in relation to the borrower.
- (2) The condition is that—
- (a) under the arrangement the borrower receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (b) in accordance with generally accepted accounting practice the accounts of the borrower for that period record a financial liability in respect of the advance,
- (c) the borrower, or a person connected with the borrower, makes a disposal of an asset (“the security”) under the arrangement to or for the benefit of the lender or a person connected with the lender,
- (d) the lender, or a person connected with the lender, is entitled under the arrangement to payments in respect of the security, and
- (e) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower.
- (3) For the purposes of this section, in any case where the borrower is a partnership, references to the accounts of the borrower include the accounts of any member of the partnership.
- (4) For the purposes of this section and section 774B—
- (a) references to a person connected with the borrower do not include the lender, and
- (b) references to a person connected with the lender do not include the borrower.
##### 774B
- (1) If—
- (a) an arrangement is a structured finance arrangement in relation to a person (“*the borrower*”), and
- (b) the arrangement would (disregarding this section) have had the relevant effect (see subsections (2) and (3)),
the arrangement is not to have that effect.
- (2) If the borrower is a person other than a partnership, the relevant effect is that—
- (a) an amount of income on which the borrower, or a person connected with the borrower, would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of the borrower, or of a person connected with the borrower, is not so brought into account, or
- (c) the borrower, or a person connected with the borrower, becomes entitled to an income deduction.
- (3) If the borrower is a partnership, the relevant effect is that—
- (a) an amount of income on which a member of the partnership would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a member of the partnership is not so brought into account, or
- (c) a member of the partnership becomes entitled to an income deduction.
- (4) If—
- (a) a person in relation to whom the structured finance arrangement would otherwise have had the relevant effect is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the person record an amount as a finance charge in respect of the advance,
that person may treat the amount for income tax purposes as interest payable on a loan.
- (5) If a person in relation to whom the structured finance arrangement would otherwise have had the relevant effect is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 as a money debt owed by the company,
- (b) the arrangement is to be treated, in relation to the company, for the purposes of that Chapter as a loan relationship of the company (as a debtor relationship), and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the company as a finance charge in respect of the advance is to be treated as interest payable under that relationship.
- (6) For the purposes of this section, in any case where the borrower is a partnership,—
- (a) references to accounts include the accounts of the partnership, and
- (b) any deemed interest is treated as payable by the partnership (whether or not the finance charge is recorded in the accounts of the partnership).
- (7) For the purpose of determining when any deemed interest in respect of the advance is paid—
- (a) the payments mentioned in section 774A(2)(d) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and
- (b) the interest elements of those payments are treated as paid when those payments are paid,
and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid.
- (8) In this section “*deemed interest*” means any amount which is treated as interest as a result of subsection (4) or (5).
- (9) This section is subject to the exceptions contained in section 774E.
##### 774C
- (1) For the purposes of section 774D an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”) if condition A or B is met in relation to the borrower partnership.
- (2) Condition A is that—
- (a) a person (“the transferor partner”) disposes of an asset (“the security”) under the arrangement to the borrower partnership,
- (b) the transferor partner is a member of the borrower partnership immediately after the disposal (whether or not a member immediately before the disposal),
- (c) under the arrangement the borrower partnership receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (d) in accordance with generally accepted accounting practice the accounts of the borrower partnership for that period record a financial liability in respect of the advance,
- (e) there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender (see subsection (6)),
- (f) under the arrangement the share of the lender or person connected with the lender in the profits of the borrower partnership is determined by reference (wholly or partly) to payments in respect of the security, and
- (g) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership.
- (3) For the purposes of condition A, references to the accounts of the borrower partnership include the accounts of the transferor partner.
- (4) Condition B is that—
- (a) the borrower partnership holds an asset (“the security”) as a partnership asset at any time before the arrangement is made,
- (b) under the arrangement the borrower partnership receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (c) in accordance with generally accepted accounting practice the accounts of the borrower partnership for that period record a financial liability in respect of the advance,
- (d) there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender,
- (e) under the arrangement the share of the lender or person connected with the lender in the profits of the borrower partnership is determined by reference (wholly or partly) to payments in respect of the security, and
- (f) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership.
- (5) For the purposes of condition B, references to the accounts of the borrower partnership include the accounts of any person who is a member of the partnership immediately before the arrangement is made.
- (6) For the purposes of this section and section 774D there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender if directly or indirectly in consequence of, or otherwise in connection with, the arrangement—
- (a) the lender, or a person connected with the lender, becomes a member of the borrower partnership at any time, or
- (b) there is at any time a change in the share of a member of the borrower partnership in the profits of the borrower partnership in a case where that member is the lender or a person connected with the lender.
- (7) For the purposes of subsection (6)(b) the reference to a person connected with the lender includes a person who at any time becomes connected with the lender directly or indirectly in consequence of, or otherwise in connection with, the arrangement.
##### 774D
- (1) This section applies if—
- (a) an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”), and
- (b) any relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender would (disregarding this section) have had the following effect.
- (2) The effect is that—
- (a) an amount of income on which a relevant member of the borrower partnership would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a relevant member of the borrower partnership is not so brought into account, or
- (c) a relevant member of the borrower partnership becomes entitled to an income deduction.
- (3) In this section “*relevant member of the borrower partnership*” means—
- (a) in any case where condition A in section 774C is met in relation to the arrangement, the transferor partner, and
- (b) in any case where condition B in that section is met in relation to the arrangement, any person other than the lender who is a member of the borrower partnership immediately before the time at which the relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender occurs.
- (4) Part 9 of ITTOIA 2005 and section 114 above are to have effect in relation to any relevant member of the borrower partnership as if the relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender had not occurred.
Accordingly, the structured finance arrangement is not to have the effect mentioned in subsection (2).
- (5) The following provisions of this section confer relief from tax the availability of which depends on which of the conditions in section 774C is met in relation to the arrangement.
- (6) In any case where condition A in section 774C is met, if—
- (a) the transferor partner is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance,
the transferor partner may treat the amount for income tax purposes as interest payable by the transferor partner on a loan.
- (7) In any case where condition A in that section is met, if the transferor partner is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by the borrower partnership,
- (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the borrower partnership as a finance charge in respect of the advance is to be treated as interest payable by the company under that transaction.
- (8) For the purposes of subsections (6) and (7), references to the accounts of the borrower partnership include the accounts of the transferor partner.
- (9) In any case where condition B in section 774C is met, if—
- (a) a relevant member of the borrower partnership is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance,
the relevant partner may treat the amount for income tax purposes as interest payable by the borrower partnership on a loan.
- (10) In any case where condition B in that section is met, if a relevant member of the borrower partnership is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by that partnership,
- (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the borrower partnership as a finance charge in respect of the advance is to be treated as interest payable by the borrower partnership under that transaction.
- (11) For the purposes of subsections (9) and (10), references to the accounts of the borrower partnership include the accounts of any relevant member of the borrower partnership.
- (12) For the purpose of determining when any deemed interest in respect of the advance is paid—
- (a) the payments mentioned in section 774C(2)(f) or (4)(e) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and
- (b) the interest elements of those payments are treated as paid when those payments are paid,
and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid.
- (13) In this section “*deemed interest*” means any amount which is treated as interest as a result of any of subsections (6) to (10).
- (14) This section is subject to the exceptions contained in section 774E.
##### 774E
- (1) Section 774B or 774D does not apply if the whole of the advance under the structured finance arrangement—
- (a) is charged to tax on a relevant person (see subsection (7)) as an amount of income,
- (b) is brought into account in calculating for tax purposes any income of a relevant person, or
- (c) is brought into account for the purposes of any provision of the Capital Allowances Act as a disposal receipt, or proceeds from a balancing event or disposal event, of a relevant person.
For the purposes of this subsection the effect of section 785A (rent factoring of leases of plant or machinery) is to be disregarded.
- (2) Subsection (1)(c) is not to be taken as met in any case where—
- (a) the receipt or proceeds gives rise to a balancing charge, and
- (b) the amount of the balancing charge is limited by any provision of the Capital Allowances Act.
- (3) Section 774B or 774D does not apply if, at all times, the whole of the advance under the structured finance arrangement—
- (a) is a debtor relationship of a relevant person for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships), or
- (b) would be a debtor relationship of a relevant person for those purposes if that person were a company within the charge to corporation tax.
For the purposes of this subsection references to a debtor relationship do not include a relationship to which section 100 of the Finance Act 1996 (money debts etc not arising from the lending of money) applies.
- (4) Section 774B or 774D does not apply in so far as the structured finance arrangement is an arrangement in relation to which—
- (a) section 263A of the 1992 Act (agreements for sale and repurchase of securities) applies,
- (b) paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending) applies, or
- (c) Chapter 5 of Part 2 of the Finance Act 2005 (alternative finance arrangements) has effect.
- (5) Section 774B or 774D does not apply in so far as—
- (a) the security under the structured finance arrangement is plant or machinery which is the subject of a sale and finance leaseback, or
- (b) the structured finance arrangement is an arrangement in relation to which sections 228B to 228D of the Capital Allowances Act apply with the modifications contained in section 228F of that Act (lease and finance leaseback).
- (6) For the purposes of subsection (5)(a), whether plant or machinery is the subject of a sale and finance leaseback is determined in accordance with section 221 of the Capital Allowances Act.
But, in applying that section, it is to be assumed that the words “and which are not a long funding lease in the case of the lessor” were omitted from section 219(1)(b) of that Act (meaning of “finance lease”).
- (7) For the purposes of this section a “*relevant person*” means—
- (a) if section 774B applies, a person in relation to whom the structured finance arrangement would (but for that section) otherwise have had the relevant effect (within the meaning of that section), and
- (b) if section 774D applies, a relevant member of the borrower partnership (within the meaning of that section).
##### 774F
- (1) The Treasury may make regulations prescribing other circumstances in which section 774B or 774D is not to apply in relation to a structured finance arrangement.
- (2) Any regulations under subsection (1) may make provision amending section 774E.
- (3) The power to make regulations under subsection (1) includes—
- (a) power to make provision having effect in relation to times before the making of the regulations (but not times earlier than 6th June 2006),
- (b) power to make different provision for different cases or different purposes, and
- (c) power to make incidental, supplemental, consequential or transitional provision and savings.
##### 774G
- (1) For the purposes of sections 774A to 774D “*arrangement*” includes any agreement or understanding (whether or not legally enforceable).
- (2) For the purposes of sections 774A to 774D “*income deduction*” means—
- (a) a deduction in calculating any income for tax purposes, or
- (b) a deduction against total income or total profits.
- (3) For the purposes of sections 774A to 774D—
- (a) references to a person's receiving any asset include the person's obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it,
- (b) references to a disposal of an asset include anything which constitutes a disposal of the asset for the purposes of the 1992 Act,
- (c) references to payments in respect of any asset include obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it.
- (4) For the purposes of sections 774A to 774D, section 839 (connected persons) applies.
- (5) For the purposes of sections 774A to 774D references to the accounts of any person who is a company include the consolidated group accounts of a group of companies of which it is a member.
- (6) If any person does not draw up accounts in accordance with generally accepted accounting practice, sections 774A to 774D apply as if the accounts had been drawn up by the person in accordance with that practice.
- (7) Sections 277 to 281 of ITTOIA 2005 and section 34 above (lease premiums) are not to apply in relation to a premium paid in respect of a grant of a lease where the grant constitutes a disposal of an asset for the purposes of section 774A(2)(c) or 774C(2)(a).
##### 775A
- (1) This section applies in any case where—
- (a) a person sells or transfers the right to receive an annual payment to which this section applies (see subsection (4)), and
- (b) the consideration (if any) for the sale or transfer would not, apart from this section, be chargeable to tax.
- (2) In any such case, tax is charged—
- (a) in the case of income tax, under this section; or
- (b) in the case of corporation tax, under Case III of Schedule D.
- (3) Where this section applies—
- (a) the tax is charged on an amount equal to the market value of the right to receive the annual payment;
- (b) the tax is charged for the chargeable period in which the sale or transfer takes place;
- (c) the person liable for the tax is the person who sells or transfers the right to the annual payment.
- (4) This section applies to any annual payment other than—
- (a) an annual payment under a life annuity;
- (b) an annual payment under a pension annuity;
- (c) an annual payment to which section 347A applies (certain annual payments not to form part of the income of a company for corporation tax purposes);
- (d) an annual payment in respect of which, by virtue of section 727 of ITTOIA 2005 (payments by individuals arising in UK), no liability to income tax arises under Part 5 of that Act.
- (5) This section applies in relation to part of an annual payment as it applies in relation to the whole of an annual payment.
- (6) For the purposes of this section, a sale or transfer of all rights under an agreement for annual payments, or under an annuity, is a sale or transfer of the rights to each individual payment under the agreement or annuity.
- (7) In this section—
- “*life annuity*” means—a life annuity, as defined in section 657(1); ora life annuity, as defined in section 473(2) of ITTOIA 2005;
- “*pension annuity*” means an annuity which is pension income within the meaning of Part 9 of ITEPA 2003 (see section 566(2) of that Act).
#### Exemption for trade unions and employers’ associations.
##### 785ZA
- (1) This section applies for corporation tax purposes if—
- (a) a company carries on a business in respect of which the company is within the charge to corporation tax,
- (b) the company carries on the business in partnership with other persons in an accounting period of the partnership,
- (c) the business (“the leasing business”) is, on any day in that period, a business of leasing plant or machinery,
- (d) the company incurs a loss in its notional business in any accounting period comprised (wholly or partly) in the accounting period of the partnership, and
- (e) the interest of the company in the leasing business during the accounting period of the partnership is not determined on an allowable basis (see subsections (2) to (4)).
- (2) The interest of the company in the leasing business during the accounting period of the partnership is determined on an allowable basis if (and only if) the following condition is met.
- (3) The condition is met if, for the purposes of section 114(2),—
- (a) the company's share in the profits or loss of the leasing business for that period is determined wholly by reference to a single percentage, and
- (b) the company's share in any relevant capital allowances for that period is determined wholly by reference to the same percentage.
- (4) For the purposes of this condition “*profits*” does not include chargeable gains.
- (5) The following restrictions apply in respect of so much of the loss incurred by the company in its notional business as derives from any relevant capital allowances (“the restricted part of the loss”).
- (6) Apart from by way of set off against any relevant leasing income, relief is not to be given to the company under any relevant loss relief provision in respect of the restricted part of the loss.
- (7) If the leasing business is a trade, relief is not to be given to the company under section 393A(1) in respect of the restricted part of the loss.
- (8) The restricted part of the loss is not available for set off by way of group relief in accordance with section 403.
- (9) For the purpose of determining how much of a loss derives from any relevant capital allowances, the loss is to be calculated on the basis that any relevant capital allowances are the final amounts to be deducted.
##### 785ZB
- (1) This section applies for the purposes of section 785ZA.
- (2) “*Business of leasing plant or machinery*” has the same meaning as in Part 3 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc).
- (3) “*Lease*” has the same meaning as in section 785A.
- (4) “*Notional business*”, in relation to a company, means the business—
- (a) from which the company's share in the profits or loss of the leasing business is treated under section 114(2) as deriving for the purposes of the charge to corporation tax, and
- (b) which is treated under that provision as carried on alone by the company for those purposes.
- (5) “*Plant or machinery*” has the same meaning as in Part 2 of the Capital Allowances Act.
- (6) “*Relevant capital allowance*” means an allowance under Part 2 of the Capital Allowances Act in respect of expenditure incurred on the provision of plant or machinery wholly or partly for the purposes of the leasing business.
- (7) “*Relevant leasing income*” means any income of the company's notional business deriving from any lease—
- (a) which is a lease of plant or machinery, and
- (b) which was entered into before the end of the accounting period of the company in which the loss in its notional business was incurred.
- (8) “*Relevant loss relief provision*” means any of the following provisions—
- (a) section 392A (Schedule A losses),
- (b) section 392B (losses from overseas property businesses),
- (c) section 393 (trade losses),
- (d) section 396 (Case VI losses).
##### 785A
- (1) This section applies in any case where the following conditions are satisfied—
- (a) a person (call him “P”) is entitled to receive rentals under a lease of plant or machinery,
- (b) the rentals, so far as receivable by him, fall to be brought into account as income for the purpose of calculating his tax liability,
- (c) P enters into arrangements for the transfer of his right to receive some or all of the rentals to another person,
- (d) apart from this section, some or all of the amount or value of the consideration for the transfer (“the relevant portion of the consideration”) would fall to be brought into account neither—
- (i) as income, nor
- (ii) as a capital allowances disposal receipt,
for the purpose of calculating P’s tax liability.
- (2) In any such case, the relevant portion of the consideration—
- (a) shall be treated for tax purposes as income of P,
- (b) shall be taxable as rentals receivable by P under the lease (apart from any transfer of his right to receive some or all of the rentals), and
- (c) shall be brought into account in a period of account to the extent that it is receivable in that period of account.
- (3) Any reference to the transfer from P to another person of a right to receive rentals includes a reference to any arrangement under which rental ceases to form part of the receipts taken into account as income for the purposes of calculating P’s tax liability.
- (4) Where P is a partnership, any reference in this section to calculating P’s tax liability includes a reference to calculating the tax liability of the partners, notwithstanding that the partnership has legal personality.
- (5) A partnership has legal personality for the purposes of subsection (4) above if it is regarded as a legal person, or as a body corporate, under the law of the country or territory under which it is formed.
- (5A) This section does not apply in so far as section 774B or 774D (structured finance arrangements) applies in relation to the arrangements mentioned in paragraph (c) of subsection (1) above as a result of the transfer mentioned in that paragraph.
- (6) In this section—
- “*capital allowances disposal receipt*” means a disposal receipt within the meaning of Part 2 of the Capital Allowances Act 2001 (see section 60 of that Act);
- “*lease*” includes an underlease, sublease, tenancy or licence and an agreement for any of those things;
- “*tax liability*” means liability to income tax or corporation tax.
##### 785B
- (1) This section applies if—
- (a) there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or
- (b) a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.
- (2) The lessor is treated for corporation tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.
- (3) The income is treated—
- (a) if subsection (1)(a) applies, as income for the period of account in which there is first an obligation of the kind mentioned there, and
- (b) if subsection (1)(b) applies, as income for the period of account in which the payment is made.
##### 785C
- (1) The expressions used in section 785B and this section are to be interpreted as follows.
- (2) “*Capital payment*” means any payment except one which, if made to the lessor—
- (a) would fall to be included in a calculation of the lessor's income for corporation tax purposes, or
- (b) would fall to be included in such a calculation but for section 502B (rental earnings under long funding finance lease).
- (3) “*Lease*” includes—
- (a) a licence, and
- (b) the letting of a ship or aircraft on charter or the letting of any other asset on hire,
and “*lessor*” and “*lessee*” are to be read accordingly.
- (4) “*Lease of plant or machinery*” includes a lease of plant or machinery and other property but does not include—
- (a) a lease where the income attributable to the lease received by the lessor (if any) would be chargeable to tax under Schedule A, or
- (b) a lease of plant or machinery where the lessor has incurred what would (but for section 34A of the Capital Allowances Act) be qualifying expenditure (within the meaning of Part 2 of that Act) on the plant or machinery.
- (5) “*Relevant arrangement*” means any agreement or arrangement relating to a lease of plant or machinery, including one made before the lease is entered into or after it has ended (and, accordingly, “lessor” and lessee” include prospective and former lessors and lessees).
- (6) A capital payment, in relation to a lease or relevant arrangement, is “relevant” if condition A or B is met (but this is subject to subsection (9)).
- (7) Condition A is that the capital payment is payable (or paid), directly or indirectly, by (or on behalf of) the lessee to (or on behalf of) the lessor in connection with—
- (a) the grant, assignment, novation or termination of the lease, or
- (b) any provision of the lease or relevant arrangement (including the variation or waiver of any such provision).
- (8) Condition B is that rentals payable under the lease are less than (or payable later than) they might reasonably be expected to be if there were no obligation to make the capital payment (and the capital payment were not made).
- (9) A capital payment is not “relevant” if or to the extent that—
- (a) the capital payment reduces (or would but for section 536 of the Capital Allowances Act reduce) the amount of expenditure incurred by the lessor for the purposes of the Capital Allowances Act in respect of the plant or machinery in question,
- (b) the capital payment is compensation for loss resulting from damage to, or damage caused by, the plant or machinery in question, or
- (c) the capital payment would fall (or falls) to be brought into account by the lessor as a disposal receipt within the meaning of Part 2 of the Capital Allowances Act (see section 60(1) of that Act).
- (10) References to payment include the provision of value by any means other than the making of a payment, and accordingly—
- (a) references to the making of a payment include the passing of value (by any other means), and
- (b) references to the amount of the payment include the value passed.
##### 785D
- (1) This section applies if section 785B applies in relation to a lease of plant or machinery and other property (see section 785C(4)).
- (2) The relevant capital payment is to be apportioned, on a just and reasonable basis, between—
- (a) the plant and machinery, and
- (b) the other property.
- (3) If the income (if any) received by the lessor that is attributable to any of the plant or machinery is chargeable to tax under Schedule A, treat that plant or machinery as falling within subsection (2)(b) (and not subsection (2)(a)).
- (4) Section 785B(2) has effect as if the reference to the amount of the capital payment were to such amount as is apportioned under subsection (2) in respect of the plant or machinery within subsection (2)(a).
#### Certified unit trusts: corporation tax.
##### 785E
- (1) This section applies for corporation tax purposes if—
- (a) section 785B applies by virtue of subsection (1)(a) of that section, and
- (b) at any time, the lessor reasonably expects that the relevant capital payment will not be paid (or will not be paid in full).
- (2) For the purposes of calculating the profits of the lessor, a deduction is allowed for the period of account which includes that time.
- (3) The amount of the deduction is equal to the amount reasonably expected not to be paid.
- (4) No other deduction is allowed in respect of the matters mentioned in subsection (1).
#### Section 432B: apportionment of business transfer-in
#### Section 432B: apportionment of business transfer-in
##### 793A
- (1) Where relief in respect of an amount of tax that would otherwise be payable under the law of a territory outside the United Kingdom may be allowed—
- (a) under arrangements made in relation to that territory, or
- (b) under the law of that territory in consequence of any such arrangements,
credit may not be allowed in respect of that tax, whether the relief has been used or not.
- (2) Where, under arrangements having effect by virtue of section 788, credit may be allowed in respect of an amount of tax, credit by way of unilateral relief may not be allowed in respect of that tax.
- (3) Where arrangements made in relation to a territory outside the United Kingdom contain express provision to the effect that relief by way of credit shall not be given under the arrangements in cases or circumstances specified or described in the arrangements, then neither shall credit by way of unilateral relief be allowed in those cases or circumstances.
##### 795A
- (1) The amount of credit for foreign tax which, under any arrangements, is to be allowed against tax in respect of any income or chargeable gain shall not exceed the credit which would be allowed had all reasonable steps been taken—
- (a) under the law of the territory concerned, and
- (b) under any arrangements made in relation to that territory,
to minimise the amount of tax payable in that territory.
- (2) The steps mentioned in subsection (1) above include—
- (a) claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances; and
- (b) making elections for tax purposes.
- (3) For the purposes of subsection (1) above, any question as to the steps which it would have been reasonable for a person to take shall be determined on the basis of what the person might reasonably be expected to have done in the absence of relief under this Part against tax in the United Kingdom.
##### 797A
- (1) This section applies for the purposes of any arrangements where, in the case of any company—
- (a) any non-trading credit relating to an item is brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for any accounting period (“the applicable accounting period”); and
- (b) there is in respect of that item an amount of foreign tax for which, under the arrangements, credit is allowable against United Kingdom tax computed by reference to that interest.
- (2) It shall be assumed that tax chargeable under paragraph (a) of Case III of Schedule D on the profits and gains arising for the applicable accounting period from the company’s loan relationships falls to be computed on the actual amount of its non-trading credits for that period, and without any deduction in respect of non-trading debits.
- (3) Section 797(3) shall have effect (subject to subsection (7) below) as if—
- (a) there were for the applicable accounting period an amount equal to the adjusted amount of the non-trading debits falling to be brought into account by being set against profits of the company for that period of any description; and
- (b) different parts of that amount might be set against different profits.
- (4) For the purposes of this section, the adjusted amount of a company’s non-trading debits for any accounting period is the amount equal, in the case of that company, to the aggregate of the non-trading debits given for that period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) less the aggregate of the amounts specified in subsection (5) below.
- (5) Those amounts are—
- (a) so much of any non-trading deficit for the applicable accounting period as is an amount to which a claim under subsection (2)(c) of section 83 of the Finance Act 1996 or paragraph 4(3) of Schedule 11 to that Act (deficit carried back and set against profits) relates; and
- (aa) so much of any non-trading deficit for that period as is surrendered as group relief by virtue of section 403 of the Taxes Act 1988; and
- (b) so much of any non-trading deficit for that period as falls to be carried forward to a subsequent period in accordance with subsection (3A) of that section or paragraph 4(4) of that Schedule; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Section 797(3) shall have effect as if any amount carried forward to the applicable accounting period under section 83(3A) of that Act were an amount capable of being allocated only to any non-trading profits of the company.
- (7) Where—
- (a) the company has a non-trading deficit for the applicable accounting period,
- (b) the amount of that deficit exceeds the aggregate of the amounts specified in subsection (5) above, and
- (c) in pursuance of a claim under—
- (i) subsection (2)(a) of section 83 of the Finance Act 1996 (deficit set against current year profits), or
- (ii) paragraph 4(2) of Schedule 11 to that Act (set-off of deficits in the case of insurance companies),
the excess falls to be set off against profits of any description,
section 797(3) shall have effect as if non-trading debits of the company which in aggregate are equal to the amount of the excess were required to be allocated to the profits against which they are set off in pursuance of the claim.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) In this section “*non-trading profits*” has the same meaning as in paragraph 4 of Schedule 8 to the Finance Act 1996.
##### 797B
- (1) This section applies for the purposes of any arrangements where, in the case of a company—
- (a) a non-trading credit relating to an item is brought into account for the purposes of Schedule 29 to the Finance Act 2002 (intangible fixed assets) for an accounting period (“*the applicable accounting period*”), and
- (b) there is in respect of that item an amount of foreign tax for which, under the arrangements, credit is allowable against United Kingdom tax computed by reference to that item.
- (2) It shall be assumed that tax chargeable under Case VI of Schedule D on the profits and gains arising for the applicable accounting period from the company’s intangible fixed assets falls to be computed on the actual amount of its non-trading credits for that period, and without any deduction in respect of non-trading debits.
- (3) Section 797(3) shall have effect as if—
- (a) there were for the applicable accounting period an amount equal to the adjusted amount of the non-trading debits falling to be brought into account by being set against profits of the company for that period of any description, and
- (b) different parts of that amount might be set against different profits.
- (4) For this purpose the adjusted amount of a company’s non-trading debits for an accounting period is given by:
$$TotalDebits-AmountCarriedForward$where—Total Debits is the aggregate amount of the company’s non-trading debits for that accounting period under Schedule 29 to the Finance Act 2002 (intangible fixed assets), andAmount Carried Forward is the amount (if any) carried forward to the next accounting period of the company under paragraph 35(3) of that Schedule (carry-forward of non-trading loss in respect of which no claim is made for it to be set against total profits of current period).$
#### Letting of furnished holiday accommodation treated as trade for certain income tax purposes
##### 798A
- (1) This section has effect in relation to the application of section 797(1) to the allowance of credit for foreign tax against corporation tax in respect of trade income.
- (2) The reference in section 797(1) to the relevant income or gain shall be treated as referring only to income arising or gains accruing out of the transaction, arrangement or asset in connection with which the credit for foreign tax arises.
- (3) In determining for the purposes of section 797(1) the amount of corporation tax attributable to any income or gain, there shall be taken into account—
- (a) deductions or expenses which would be allowable in the computation of the taxpayer's liability,
- (b) a reasonable apportionment of allowable deductions or expenses which relate partly to the transaction, arrangement or asset from which the income or gain arises and partly to other matters, and
- (c) expenses of a company connected (within the meaning given by section 839) with the taxpayer, in so far as reasonably attributable to the income or gain.
- (4) In this section and section 798B “*trade income*” means—
- (a) income or profits chargeable to tax under Case I, II or V of Schedule D,
- (b) profits of a Schedule A business computed in same way as the profits of a trade in accordance with section 21A of ICTA,
- (c) sums charged to tax under Case VI of Schedule D in accordance with section 104 of ICTA, and
- (d) any other income or profits which by a provision of ICTA is chargeable to tax under, or computed in accordance with, Case I of Schedule D;
but this section shall not apply in relation to income to which section 804C below applies.
##### 798B
- (1) Where—
- (a) a credit for foreign tax arises in connection with an asset, and
- (b) the asset is in a hedging relationship with a derivative contract,
in the application of section 798A(2) the reference to the income arising out of the asset shall be taken as a reference to the income arising out of the asset and the derivative contract taken together (but taking account of the income or loss from the derivative contract only in so far as reasonably attributable to the hedging relationship).
- (2) For the purposes of subsection (1)(b) an asset is in a hedging relationship with a derivative contract if—
- (a) the asset is acquired as a hedge of risk in connection with the contract, or
- (b) the contract is entered into as a hedge of risk in connection with the asset;
and if an asset or a contract is wholly or partly designated as a hedge for the purposes of a person's accounts, that shall be conclusive for the purpose of this subsection.
- (3) Where royalties (as defined in arrangements having effect by virtue of section 788) are paid in respect of an asset in more than one jurisdiction outside the United Kingdom, for the purposes of section 798A(2)—
- (a) royalty income arising in more than one jurisdiction (other than the United Kingdom) in a year of assessment in respect of that asset shall be treated as income arising from a single transaction, arrangement or asset, and
- (b) credits available for foreign tax in respect of the royalty income shall be aggregated accordingly.
- (4) If a person (“A”) carrying on a trade giving rise to trade income enters into a scheme or arrangement with another person (“B”) a main purpose of which is to alter the effect of section 798A in relation to A, income received in pursuance of the scheme or arrangement shall be treated for the purposes of section 798A as trade income of B (and not as income of A).
- (5) Where—
- (a) property would have become comprised in a settlement—
- (i) which arose on the deceased person's death (whether in accordance with his will, on his intestacy or otherwise, or
- (ii) which was already in existence on the deceased person's death (whether or not the deceased person was a settlor in relation to that settlement), but
- (b) in consequence of the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of the Tax Acts, except where the context otherwise requires, as having made the other settlement.
- (a) transactions, arrangements or assets are treated by a taxpayer as a series or group (the “portfolio”),
- (b) a number of credits for foreign tax arise in respect of the portfolio, and
- (c) either—
- (i) it is not reasonably practicable to prepare a separate computation of income or gain for the purposes of section 798A(2) in respect of each transaction, arrangement or asset, or
- (ii) a separate computation of income or gain in respect of each transaction, arrangement or asset for the purposes of section 798A(2) would not, compared with an aggregated computation, make a material difference to the amount of credit for foreign tax which is allowable,
the income or gains arising from the portfolio, or part of the portfolio, may be aggregated and apportioned for the purposes of section 798A(2) in a fair and reasonable manner.
##### 798C
- (1) This section applies where the application of section 796(1) or 797(1) prevents an amount of credit for foreign tax from being allowable against income tax or corporation tax.
- (2) The taxpayer's income shall be treated as reduced by the amount of disallowed credit.
- (3) Subsection (2) applies only in so far as the amount of disallowed credit does not exceed the amount of any loss attributable to the income or gain in respect of which the foreign tax was paid.
- (4) For the purpose of subsection (3), payment of the foreign tax is to be taken into account despite section 795(2).
##### 801A
- (1) This section applies where—
- (a) a company (“*the claimant company*”) makes a claim for an allowance by way of credit in accordance with this Part;
- (b) the claim relates to underlying tax on a dividend paid to that company by a company resident outside the United Kingdom (“*the overseas company*”);
- (c) that underlying tax is or includes an amount in respect of tax (“*the high rate tax*”) payable by—
- (i) the overseas company, or
- (ii) such a third, fourth or successive company as is mentioned in section 801,
at a rate in excess of the relievable rate; and
- (d) the whole or any part of the amount in respect of the high rate tax which is or is included in the underlying tax would not be, or be included in, that underlying tax but for the existence of, or for there having been, an avoidance scheme.
- (2) Where this section applies, the amount of the credit to which the claimant company is entitled on the claim shall be determined as if the high rate tax had been tax at the relievable rate, instead of at a rate in excess of that rate.
- (3) For the purposes of this section tax shall be taken to be payable at a rate in excess of the relievable rate if, and to the extent that, the amount of that tax exceeds the amount that would represent tax on the relevant profits at the relievable rate.
- (4) In subsection (3) above “*the relevant profits*”, in relation to any tax, means the profits of the overseas company or, as the case may be, of the third, fourth or successive company which, for the purposes of this Part, are taken to bear that tax.
- (5) In this section “*the relievable rate*” means the rate of corporation tax in force when the dividend mentioned in subsection (1)(b) above was paid.
- (6) In this section “*an avoidance scheme*” means any scheme or arrangement which—
- (a) falls within subsection (7) below; and
- (b) is a scheme or arrangement the purpose, or one of the main purposes, of which is to have an amount of underlying tax taken into account on a claim for an allowance by way of credit in accordance with this Part.
- (7) A scheme or arrangement falls within this subsection if the parties to it include both—
- (a) the claimant company, a company related to that company or a person connected with the claimant company; and
- (b) a person who was not under the control of the claimant company at any time before the doing of anything as part of, or in pursuance of, the scheme or arrangement.
- (8) In this section “*arrangement*” means an arrangement of any kind, whether in writing or not.
- (9) For the purposes of this section, whether a person is connected with another is determined in accordance with section 839.
- (10) Subsection (5) of section 801 (meaning of “*related company*”) shall apply for the purposes of this section as it applies for the purposes of that section.
- (11) For the purposes of this section a person who is a party to a scheme or arrangement shall be taken to have been under the control of the claimant company at all the following times, namely—
- (a) any time when that company would have been taken (in accordance with section 416) to have had control of that person for the purposes of Part XI;
- (b) any time when that company would have been so taken if that section applied (with the necessary modifications) in the case of partnerships and unincorporated associations as it applies in the case of companies; and
- (c) any time when that person acted in relation to that scheme or arrangement, or any proposal for it, either directly or indirectly under the direction of that company.
##### 801B
- (1) This section applies where—
- (a) a company (“*company A*”) resident outside the United Kingdom has paid tax under the law of a territory outside the United Kingdom in respect of any of its profits;
- (b) some or all of those profits become profits of another company resident outside the United Kingdom (“*company B*”) otherwise than by virtue of the payment of a dividend to company B; and
- (c) company B pays a dividend out of those profits to another company (“*company C*”), wherever resident.
- (2) Where this section applies, this Part shall have effect, so far as relating to the determination of underlying tax in relation to any dividend paid—
- (a) by any company resident outside the United Kingdom (whether or not company B),
- (b) to a company resident in the United Kingdom,
as if company B had paid the tax paid by company A in respect of those profits of company A which have become profits of company B as mentioned in subsection (1)(b) above.
- (3) But the amount of relief under this Part which is allowable to a company resident in the United Kingdom shall not exceed the amount which would have been allowable to that company had those profits become profits of company B by virtue of the payment of a dividend by company A to company B.
##### 801C
- (1) This section applies in any case where—
- (a) by virtue only of section 748(1)(a), no apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company; and
- (b) one or more of the dividends paid by the controlled foreign company by virtue of which the condition in paragraph (a) above is satisfied are dividends falling within subsection (2) below.
- (2) A dividend falls within this subsection if, for the purposes of Part I of Schedule 25, the whole or any part of it falls to be treated by virtue of paragraph 4 of that Schedule as paid by the controlled foreign company to a United Kingdom resident.
- (3) If, in a case where this section applies,—
- (a) an initial dividend is paid to a company resident outside the United Kingdom, and
- (b) that company, or any other company which is related to it, pays an intermediate dividend which for the purposes of paragraph 4 of Schedule 25 to any extent represents that initial dividend,
subsection (4) below shall have effect in relation to the UK recipient concerned.
- (4) Where this subsection has effect, it shall be assumed for the purposes of allowing credit relief under this Part to that UK recipient—
- (a) that, instead of the intermediate dividend, the dividends described in subsection (5) below had been paid and the circumstances had been as described in subsection (6) or (7) below, as the case may be; and
- (b) that any tax paid under the law of any territory in respect of the intermediate dividend, or which is underlying tax in relation to that dividend, had instead fallen to be borne accordingly (taking account of any reduction falling to be made under section 799(2)).
- (5) The dividends mentioned in subsection (4)(a) above are—
- (a) as respects each of the initial dividends which are, for the purposes of paragraph 4 of Schedule 25, to any extent represented by the intermediate dividend, a separate dividend (an “*ADP dividend*”) representing, and of an amount equal to, so much of that initial dividend as is for those purposes represented by the intermediate dividend; and
- (b) a further separate dividend (a “*residual dividend*”) representing, and of an amount equal to, the remainder (if any) of the intermediate dividend.
- (6) As respects each of the ADP dividends, the intermediate company is to be treated as if it were a separate company whose distributable profits are of a constitution corresponding to, and an amount equal to, that of the ADP dividend.
- (7) As respects the residual dividend (if any), the relevant profits out of which it is to be regarded for the purposes of section 799(1) as paid by the intermediate company are, in consequence of subsection (6) above, to be treated as being of such constitution and amount as remains after excluding accordingly so much of those relevant profits as constitute the whole or any part of the distributable profits out of which the ADP dividends are paid.
- (8) If, in a case where this section applies, an intermediate company also pays a dividend which is not an intermediate dividend (an “*independent dividend*”) and either—
- (a) that dividend is paid to a United Kingdom resident, or
- (b) if it is not so paid, a dividend which to any extent represents it is paid by a company which is related to that company and resident outside the United Kingdom to a United Kingdom resident,
subsection (9) below shall have effect in relation to the United Kingdom resident.
- (9) Where this subsection has effect, it shall be assumed for the purposes of allowing credit relief under this Part to the United Kingdom resident—
- (a) that the relevant profits out of which the independent dividend is to be regarded for the purposes of section 799(1) as paid by the intermediate company are, in consequence of subsection (6) above, to be treated as being of such constitution and amount as remains after excluding so much of those relevant profits as constitute the whole or any part of the distributable profits out of which the ADP dividends are paid; and
- (b) that any tax paid under the law of any territory in respect of the independent dividend, or which is underlying tax in relation to that dividend, had instead fallen to be borne accordingly (taking account of any reduction falling to be made under section 799(2)).
- (10) For the purposes of this section—
- (a) a controlled foreign company is an “ADP controlled foreign company" as respects any of its accounting periods if the condition in paragraph (a) of subsection (1) above is satisfied as respects that accounting period;
- (b) an “initial dividend" (subject to subsection (14) below) is any of the dividends mentioned in paragraph (b) of subsection (1) above paid by an ADP controlled foreign company; and
- (c) a “*subsequent dividend*” is any dividend which, in relation to one or more initial dividends, is the subsequent dividend for the purposes of paragraph 4 of Schedule 25.
- (11) In this section—
- “*distributable profits*” means a company’s profits available for distribution, determined in accordance with section 799(6);
- “*intermediate company*” means any company resident outside the United Kingdom which pays an intermediate dividend;
- “*intermediate dividend*” means any dividend which is paid by a company resident outside the United Kingdom and which—for the purposes of paragraph 4 of Schedule 25, to any extent represents one or more initial dividends paid by other companies; andeither is the subsequent dividend in the case of those initial dividends or is itself to any extent represented for those purposes by a subsequent dividend;
- “*the UK recipient*” means the United Kingdom resident to whom a subsequent dividend is paid.
- (12) Where—
- (a) one company pays a dividend (“*dividend A*”) to another company, and
- (b) that other company, or a company which is related to it, pays a dividend (“*dividend B*”) to another company,
then, for the purposes of this section, dividend B represents dividend A, and dividend A is represented by dividend B, to the extent that dividend B is paid out of profits which are derived, directly or indirectly, from the whole or part of dividend A.
- (13) Sub-paragraph (2) of paragraph 4 of Schedule 25 (related companies) shall apply for the purposes of this section as it applies for the purposes of that paragraph.
- (14) Where an intermediate company which is an ADP controlled foreign company pays a dividend—
- (a) by virtue of which (whether taken alone or with other dividends) the condition in subsection (1)(a) above is satisfied as regards an accounting period of the company, but
- (b) which also for the purposes of paragraph 4 of Schedule 25 to any extent represents one or more initial dividends paid by other ADP controlled foreign companies,
the dividend shall not be regarded for the purposes of this section as an initial dividend paid by the company, to the extent that it so represents initial dividends paid by other ADP controlled foreign companies.
##### 803A
- (1) This section applies in any case where, under the law of a territory outside the United Kingdom, tax is payable by any one company resident in that territory (“*the responsible company*”) in respect of the aggregate profits, or aggregate profits and aggregate gains, of that company and one or more other companies so resident, taken together as a single taxable entity.
- (1A) Where—
- (a) a company is (within the meaning of section 801) an ADP controlled foreign company as respects any of its accounting periods, and
- (b) the whole or any part of the profits or gains of that accounting period are included in the aggregate profits, or aggregate profits or gains, mentioned in subsection (1) above,
subsection (2) below shall have effect as if the companies mentioned in subsection (1) above did not include that company.
- (2) Where this section applies, this Part shall have effect, so far as relating to the determination of underlying tax in relation to any dividend paid by any of the companies mentioned in subsection (1) above (the “*non-resident companies*”) to another company (“*the recipient company*”), as if—
- (a) the non-resident companies, taken together, were a single company,
- (b) anything done by or in relation to any of the non-resident companies (including the payment of the dividend) were done by or in relation to that single company, and
- (c) that single company were related to the recipient company, if that one of the non-resident companies which actually pays the dividend is related to the recipient company,
(so that, in particular, the relevant profits for the purposes of section 799(1) is a single aggregate figure in respect of that single company and the foreign tax paid by the responsible company is foreign tax paid by that single company).
- (3) For the purposes of this section a company is related to another company if that other company—
- (a) controls directly or indirectly, or
- (b) is a subsidiary of a company which controls directly or indirectly,
not less than 10 per cent. of the voting power in the first-mentioned company.
##### 804ZA
- (1) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied in relation to any income or chargeable gain taken or to be taken into account for the purposes of determining a person's liability to tax in a chargeable period, they may give the person a notice under this section.
- (2) Condition A is that, in the case of the person, there is in respect of the income or gain an amount of foreign tax for which, under any arrangements, credit is allowable against United Kingdom tax for that chargeable period.
- (3) Condition B is that there is a scheme or arrangement the main purpose, or one of the main purposes, of which is to cause an amount of foreign tax to be taken into account in the case of the person for that chargeable period.
- (4) Condition C is that the scheme or arrangement is a prescribed scheme or arrangement.
- (5) Condition D is that the amount referred to in subsection (6) is more than a minimal amount.
- (6) The amount is the aggregate of—
- (a) the aggregate amount of the claims for credit that the person has made, or is in a position to make, for the chargeable period; and
- (b) for all the persons connected to that person, the aggregate amount of the claims for credit that the connected person has made, or is in a position to make, for a corresponding chargeable period.
- (7) A chargeable period of a person (“A”) corresponds to a chargeable period of another person (“B”) if at least one day of A's chargeable period falls within B's chargeable period.
- (8) A notice under this section is a notice—
- (a) informing the person of the Board's view under subsection (1),
- (b) specifying the chargeable period in relation to which the Board formed that view,
- (c) if the amount of foreign tax considered by the Board to satisfy condition B is an amount of underlying tax, specifying the body corporate resident in a territory outside the United Kingdom whose payment of foreign tax is relevant to that underlying tax, and
- (d) informing the person that as a consequence section 804ZB has effect in relation to him.
- (9) A notice under this section may specify the adjustments of a person's tax return that, in the view of the Board, fall to be made by him under section 804ZB(2).
- (10) The adjustments specified may, in a case where the notice given to a person specifies a body corporate resident outside the United Kingdom, include treating the body corporate as having paid or being liable to pay only so much foreign tax as would have been allowed to it as a credit if it were resident in the United Kingdom and a notice under this section had been given to it as regards an amount of foreign tax.
- (11) Schedule 28AB makes provision about what constitutes a prescribed scheme or arrangement.
- (12) In this section and sections 804ZB and 804ZC “*tax return*” means—
- (a) a return under section 8, 8A or 12AA of the Management Act, or
- (b) a company tax return;
and “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule.
##### 804ZB
- (1) This section applies in relation to a person if—
- (a) a notice under section 804ZA has been given to the person in respect of a chargeable period specified in the notice, and
- (b) the chargeable period specified is a chargeable period in relation to which conditions A to D of section 804ZA are satisfied.
- (2) The person must in his tax return for the period make (or must amend his return for the period so as to make) such adjustments as are necessary for counteracting the effects of the scheme or arrangement in that period that are referable to the purpose referred to in condition B of section 804ZA.
##### 804ZC
- (1) Subsection (2) applies if the Board give a notice to a person under section 804ZA before the person has made his tax return for the chargeable period specified in the notice.
- (2) If the person makes a tax return for that period before the end of the period of 90 days beginning with the day on which the notice is given, he may—
- (a) make a tax return that disregards the notice, and
- (b) at any time after making the return and before the end of the period of 90 days, amend the return for the purpose of complying with the notice.
- (3) If a person has made a tax return for a chargeable period, the Board may only give him a notice under section 804ZA in relation to that period if a notice of enquiry has been given to him in respect of his tax return for that period.
- (4) After any enquiries into the person's tax return for that period have been completed, the Board may only give him a notice under section 804ZA in relation to that period if the requirements in subsections (5) and (7) are satisfied.
- (5) The first requirement is that at the time the enquiries were completed, the Board could not have been reasonably expected, on the basis of the information made available to them or to an officer of theirs before that time, to have been aware that the circumstances were such that a notice under section 804ZA could have been given to the person in relation to that period.
- (6) For the purposes of subsection (5)—
- (a) section 29(6) and (7) of the Management Act (information made available) applies as it applies for the purposes of section 29(5), and
- (b) paragraph 44(2) and (3) of Schedule 18 to the Finance Act 1998 applies as it applies for the purposes of paragraph 44(1).
- (7) The second requirement is that—
- (a) the person was requested to produce, provide or furnish information during an enquiry into the return for that period, and
- (b) if the person had duly complied with the request, the Board could have been reasonably expected to give the person a notice under section 804ZA in relation to that period.
- (8) If a person is given a notice under section 804ZA in relation to a chargeable period after having made a tax return for that period, the person may amend the return for the purpose of complying with the notice at any time before the end of the period of 90 days beginning with the day on which the notice is given.
- (9) If the notice under section 804ZA is given to the person after he has been given a notice of enquiry in respect of his tax return for the period, no closure notice may be given in relation to his tax return until—
- (a) the end of the period of 90 days beginning with the day on which the notice under section 804ZA is given, or
- (b) the earlier amendment of the return for the purpose of complying with the notice.
- (10) If the notice under section 804ZA is given to the person after any enquiries into the return for the period are completed, no discovery assessment may be made as regards the income or chargeable gain to which the notice relates until—
- (a) the end of the period of 90 days beginning with the day on which the notice under section 804ZA is given, or
- (b) the earlier amendment of the return for the purpose of complying with the notice.
- (11) Subsections (2)(b) and (8) do not prevent a person's tax return for a chargeable period becoming incorrect if—
- (a) a notice under section 804ZA is given to the person in relation to that period,
- (b) the return is not amended in accordance with subsection (2)(b) or (8) for the purpose of complying with the notice, and
- (c) the return ought to have been so amended.
- (12) In this section—
- “*closure notice*” means a notice under—section 28A or 28B of the Management Act, orparagraph 32 of Schedule 18 to the Finance Act 1998;
- “*discovery assessment*” means an assessment under—section 29 of the Management Act, orparagraph 41 of Schedule 18 to the Finance Act 1998;
- “*notice of enquiry*” means a notice under—section 9A or 12AC of the Management Act, orparagraph 24 of Schedule 18 to the Finance Act 1998.
##### 804A
- (1) Subsection (2) below applies where credit for tax—
- (a) which is payable under the laws of a territory outside the United Kingdom in respect of insurance business carried on by a company through a permanent establishment in that territory, and
- (b) which is computed otherwise than wholly by reference to profits arising in that territory,
is to be allowed (in accordance with this Part) against corporation tax charged under Case I or Case VI of Schedule D in respect of the profits, computed in accordance with the provisions applicable to Case I of Schedule D, of life assurance business or any category of life assurance business carried on by the company in an accounting period (in this section referred to as “*the relevant profits*”).
- (1A) For the purposes of paragraph (b) of subsection (1) above, the cases where tax payable under the laws of a territory outside the United Kingdom is “*computed otherwise than wholly by reference to profits arising in that territory*” are those cases where the charge to tax in that territory falls within subsection (1B) below.
- (1B) A charge to tax falls within this subsection if it is such a charge made otherwise than by reference to profits as (by disallowing their deduction in computing the amount chargeable) to require sums payable and other liabilities arising under policies to be treated as sums or liabilities falling to be met out of amounts subject to tax in the hands of the company.
- (2) Where this subsection applies, the amount of the credit shall not exceed the greater of—
- (a) any such part of the tax payable under the laws of the territory outside the United Kingdom as is charged by reference to profits arising in that territory, and
- (b) the shareholders’ share of the tax so payable.
- (3) For the purposes of subsection (2) above the shareholders’ share of tax payable under the laws of a territory outside the United Kingdom is so much of that tax as is represented by the fraction
$$AB$where— A is an amount equal to the amount of the relevant profits before making any deduction authorised by subsection (5) below; andB is an amount equal to the excess of—$
- (a) the amount taken into account as receipts of the company in computing those profits, apart from premiums and sums received by virtue of a claim under a reinsurance contract, over
- (b) the amounts taken into account as expenses . . . in computing those profits.
- (4) Where there is no such excess as is mentioned in subsection (3) above, or where the profits are greater than any excess, the whole of the tax payable under the laws of the territory outside the United Kingdom shall be the shareholders’ share; and (subject to that) where there are no profits, none of it shall be the shareholders’ share.
- (5) Where, by virtue of this section, the credit for any tax payable under the laws of a territory outside the United Kingdom is less than it otherwise would be, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the relevant profits.
##### 804B
- (1) Where—
- (a) an insurance company carries on more than one category of business in an accounting period, and
- (b) there arises to the company in that period any income or gain (“*the relevant income*”) in respect of which credit for foreign tax falls to be allowed under any arrangements,
subsection (2) below shall have effect.
- (2) In any such case, the amount of the credit for foreign tax which, under the arrangements, is allowable against corporation tax in respect of so much of the relevant income as is referable (in accordance with the provisions of sections 432ZA to 432E or section 438B) to a particular category of business must not exceed the fraction of the foreign tax which, in accordance with the following provisions of this section, is attributable to that category of business.
- (3) Where the relevant income arises from an asset—
- (a) which is linked solely to a category of business (other than overseas life assurance business), or
- (b) which is an asset of the company’s overseas life assurance fund,
the whole of the foreign tax is attributable to the category mentioned in paragraph (a) above or, as the case may be, to the company’s overseas life assurance business, unless the case is one where subsection (7) below applies in relation to the category of business in question.
- (4) Where subsection (3) above does not apply and the category of business in question is—
- (a) basic life assurance and general annuity business, or
- (b) long-term business which is not life assurance business,
the fraction of the foreign tax that is attributable to that category of business is the fraction whose numerator is the part of the relevant income which is referable to that category by virtue of any provision of section 432A or 438B and whose denominator is the whole of the relevant income.
- (5) Subsections (6) and (7) below apply where the category of business in question is neither—
- (a) basic life assurance and general annuity business; nor
- (b) long-term business which is not life assurance business.
- (6) Where—
- (a) immediately before the variation property is comprised in a settlement and is property of which the deceased person is a settlor, and
- (b) immediately after the variation the property, or property derived from it, becomes comprised in another settlement,
the deceased person shall be treated for the purposes of the Tax Acts, except where the context otherwise requires, as having made the other settlement.
- (7) If a person is treated as having made a settlement under subsection (5) or (6), for the purposes of the Tax Acts he shall be treated as having made the settlement immediately before his death.
- (8) But subsection (7) does not apply in relation to a settlement which arose on the person's death.
##### 685E
- (1) For the purposes of the Tax Acts the trustees of a settlement shall, unless the context otherwise requires, together be treated as if they were a single person (distinct from the persons who are the trustees of the settlement from time to time).
- (2) The deemed person referred to in subsection (1) shall be treated for the purposes of the Tax Acts as resident and ordinarily resident in the United Kingdom at any time when a condition in subsection (3) or (4) is satisfied.
- (3) Condition 1 is that all the trustees are resident in the United Kingdom.
- (4) Condition 2 is that—
- (a) at least one trustee is resident in the United Kingdom,
- (b) at least one is not resident in the United Kingdom, and
- (c) a settlor in relation to the settlement was resident, ordinarily resident or domiciled in the United Kingdom at a time which is a relevant time in relation to him.
- (5) In subsection (4)(c) “*relevant time*” in relation to a settlor means—
- (a) where the settlement arose on the settlor's death (whether by will, intestacy or otherwise), the time immediately before his death, and
- (b) in any other case, a time when the settlor made the settlement (or was treated for the purposes of the Tax Acts as making the settlement);
and, in the case of a transfer of property from Settlement 1 to Settlement 2 in relation to which section 685C applies, “*relevant time*” in relation to a settlor of the transferred property in respect of Settlement 2 includes any time which, immediately before the time of the disposal by the trustees of Settlement 1, was a relevant time in relation to that settlor in respect of Settlement 1.
- (6) A trustee who is not resident in the United Kingdom shall be treated for the purposes of subsections (3) and (4) as if he were resident in the United Kingdom at any time when he acts as trustee in the course of a business which he carries on in the United Kingdom through a branch, agency or permanent establishment there.
- (7) If the deemed person referred to in subsection (1) is not treated for the purposes of the Tax Acts as resident and ordinarily resident in the United Kingdom, then for the purposes of the Tax Acts it shall be treated as neither resident nor ordinarily resident in the United Kingdom.
- (8) If part of the settled property in relation to a settlement is vested in one trustee or body of trustees and another part of the settled property in relation to that settlement is vested in another trustee or body of trustees (and in particular where settled land within the meaning of the Settled Land Act 1925 (c. 18) is vested in the tenant for life and investments representing capital money are vested in the trustees of the settlement) they shall together be treated for the purposes of this section as constituting and, in so far as they act separately, as acting on behalf of a single body of trustees.
- (9) If the trustees of a settlement are carrying on a trade, profession or vocation, a change in the trustees of the settlement by reason of the coming into force of this section and section 685A shall not result in—
- (a) any of the trustees before the change permanently ceasing to carry on the trade, profession or vocation, or
- (b) any of the trustees after the change starting to carry on the trade, profession or vocation.
#### Directions disapplying section 349A(1)
##### 685F
- (1) Section 685E(2) and (7) shall not apply for any of the purposes of section 739 in relation to income payable before 15th June 1989, or for the purposes of subsection (3) of that section in relation to income payable on or after that date if—
- (a) the capital sum mentioned in that subsection was received, or the right to receive it was acquired, before that date, and
- (b) the sum was wholly repaid, or the right to it waived, before 1st October 1989.
- (2) Section 685E shall not apply for any of the purposes of section 740 in relation to benefits received before 15th June 1989; and, in relation to benefits received on or after that date, “*relevant income*” includes income arising to the trustees of a settlement before 6 April 1989, notwithstanding that one or more trustees was not resident outside the United Kingdom, unless the trustees have been charged to tax in relation to that income.
##### 685G
- (1) If the trustees of a settlement have made a sub-fund election under paragraph 1 of Schedule 4ZA to the 1992 Act, then for the purposes of the Tax Acts, unless the context otherwise requires—
- (a) the sub-fund settlement shall be treated as a settlement,
- (b) the sub-fund settlement shall be treated as having been created at the time when the sub-fund election is treated as having taken effect,
- (c) each trustee of the trusts on which the property comprised in the sub-fund settlement is held shall be treated as a trustee of the sub-fund settlement,
- (d) a person who is a trustee of the sub-fund settlement shall be treated, from the time when the election is to be treated as having taken effect, as having ceased to be a trustee of the principal settlement unless he is also a trustee of trusts on which property comprised in the principal settlement is held,
- (e) a person who is a trustee of the principal settlement shall not be treated as a trustee of the sub-fund settlement unless he is also a trustee of trusts on which property comprised in the sub-fund settlement is held, and
- (f) the trustees of the sub-fund settlement shall be treated as having become absolutely entitled, at the time when the sub-fund election is treated as having taken effect, to the property comprised in that settlement as against the trustees of the principal settlement.
- (2) References in subsection (1) to the time when the sub-fund election is treated as having taken effect are references to the time when the sub-fund election is treated as having taken effect under paragraph 2 of Schedule 4ZA to the 1992 Act.
- (3) In this section—
- “*principal settlement*” has the meaning given by paragraph 1 of Schedule 4ZA to the 1992 Act,
- “*sub-fund election*” has the meaning given by paragraph 2 of that Schedule, and
- “*sub-fund settlement*” has the meaning given by paragraph 1 of that Schedule.
#### The conditions mentioned in section 349A(1)
##### 686A
- (1) Where the trustees of a settlement (other than the trustees of a unit trust scheme)—
- (a) receive or are entitled to a payment of a kind specified in subsection (2), or
- (b) are liable for tax in respect of a gain on a chargeable event of a kind specified in subsection (2),
the payment or gain shall be treated as if it were income to which section 686 applies.
- (2) Those payments and gains are—
- (a) a payment made by a company—
- (i) on the redemption, repayment or purchase of its own shares, or
- (ii) on the purchase of rights to acquire its own shares,
- (b) a gain arising on a chargeable event in respect of which the trustees are liable for tax under section 467 of ITTOIA 2005 (gains on contracts for life insurance, etc), other than a gain to which subsection (7)(a) of that section applies,
- (c) if the trustees are resident in the United Kingdom, a profit on the disposal of a deeply discounted security in respect of which the trustees are liable for tax under section 429 of ITTOIA 2005,
- (d) a sum to which Chapter 4 of Part 3 of ITTOIA 2005 applies,
- (e) a profit on the disposal of a future or option in respect of which the trustees are liable for tax under section 557 of ITTOIA 2005, if none of conditions A to C in section 568 of that Act are met,
- (f) a profit on the disposal of a deposit in respect of which the trustees are liable for tax under section 554 of ITTOIA 2005,
- (g) the proceeds of sale of a foreign dividend coupon in respect of which the trustees are liable for tax under section 573 of ITTOIA 2005,
- (h) a sum which is chargeable to tax under section 68(2) or 71(4) of the Finance Act 1989 (c. 26) (employee share ownership trusts: chargeable events),
- (i) an offshore income gain (within the meaning of section 761 of this Act), and
- (j) a gain on a disposal of land to which section 776 of this Act applies.
##### 686B
- (1) This section applies to income of the trustees of an approved share incentive plan consisting of dividends or other distributions in respect of shares held by them in relation to which the requirements of Part 4 of Schedule 2 to ITEPA 2003 (approved share incentive plans: types of shares that may be awarded) are met.
- (2) Income to which this section applies is income to which section 686 applies only if and when—
- (a) the period applicable to the shares under the following provisions of this section comes to an end without the shares being awarded to a participant in accordance with the plan, or
- (b) if earlier, the shares are disposed of by the trustees.
- (3) If any of the shares in the company in question are readily convertible assets at the time the shares are acquired by the trustees, the period applicable to the shares is the period of two years beginning with the date on which the shares were acquired by the trustees.
This is subject to subsection (5).
- (4) If at the time of the acquisition of the shares by the trustees none of the shares in the company in question are readily convertible assets, the period applicable to the shares is—
- (a) the period of five years beginning with the date on which the shares were acquired by the trustees, or
- (b) if within that period any of the shares in that company become readily convertible assets, the period of two years beginning with the date on which they did so,
whichever ends first.
This is subject to subsection (5).
- (5) If the shares are acquired by the trustees by virtue of a payment in respect of which a deduction is allowed under paragraph 9 of Schedule 4AA (deduction for contribution to plan trust), the period applicable to the shares is the period of ten years beginning with the date of acquisition.
- (6) For the purposes of determining whether shares are awarded to a participant within the period applicable under the above provisions, shares acquired by the trustees at an earlier time are taken to be awarded to a participant before shares of the same class acquired by the trustees at a later time.
- (7) For the purposes of this section shares which are subject to provision for forfeiture are treated as acquired by the trustees if and when the forfeiture occurs.
- (8) In relation to shares acquired by the trustees before 11th May 2001 this section has effect with the substitution—
- (a) in subsection (3), of “Subject to subsection (4)” for the words before “the period applicable”, and
- (b) in subsection (4)(b), of “the shares in question” for “any of the shares in that company”.
##### 686C
- (1) Section 686B and this section form part of the SIP code (see section 488 of ITEPA 2003 (approved share incentive plans)).
- (2) Accordingly, expressions used in section 686B or this section and contained in the index at the end of Schedule 2 to that Act (approved share incentive plans) have the meaning indicated by that index.
- (3) References in section 686B to shares being awarded to a participant include references to the shares being acquired on behalf of the participant as dividend shares.
- (4) In section 686B, “*readily convertible assets*” has the meaning given by sections 701 and 702 of ITEPA 2003, but this is subject to subsection (5).
- (5) In determining for the purposes of section 686B whether shares are readily convertible assets, any market for the shares that—
- (a) is created by virtue of the trustees acquiring shares for the purposes of the plan, and
- (b) exists solely for the purposes of the plan,
shall be disregarded.
##### 686D
- (1) This section applies where income arising (or treated as arising) to the trustees of a settlement in a year of assessment consists of or includes income subject to a special trust tax rate (“the special trust tax rate income”).
- (2) “*Income subject to a special trust tax rate*” means any income which is (or apart from this section would be) chargeable to income tax at—
- (a) the dividend trust rate, or
- (b) the rate applicable to trusts.
- (3) So much of the special trust tax rate income as does not exceed £1,000 is not chargeable to income tax at the dividend trust rate or the rate applicable to trusts (but is instead chargeable to income tax at the basic rate, the lower rate or the dividend ordinary rate, depending on the nature of the income).
- (4) In the following provisions “*the relevant purposes*” means the purposes of—
- (a) determining (in accordance with section 1A(5)) which of the special trust tax rate income is not chargeable to income tax at the dividend trust rate, or the rate applicable to trusts, by virtue of subsection (3), and
- (b) determining at which of the basic rate, the lower rate and the dividend ordinary rate that special trust tax rate income is chargeable to income tax.
- (5) For the relevant purposes the fact that any amount forming part of the special trust tax rate income is subject to a special trust tax rate is to be disregarded if, in any circumstances, an amount of that description is chargeable on trustees at the basic rate, the lower rate or the dividend ordinary rate.
- (6) For the relevant purposes any of the special trust tax rate income that consists of—
- (a) an amount which, by virtue of section 686A, is treated for the purposes of the Tax Acts as if it were income to which section 686 applies, or
- (b) income treated as arising under Chapter 5 of Part 4 of ITTOIA 2005 (stock dividends from UK resident companies),
is to be regarded as income to which section 1A applies and which is chargeable at the dividend ordinary rate.
- (7) For the relevant purposes any of the special trust tax rate income that consists of—
- (a) income treated as arising under section 761(1) (offshore income gains),
- (b) income treated as received under section 68 of the Finance Act 1989 (c. 26) (employee share ownership trusts), or
- (c) profits or gains which are treated as income under Chapter 12 of Part 4 of ITTOIA 2005 (guaranteed returns on disposals of futures and options) and in relation to which section 568 of that Act applies (profits or gains not meeting conditions of that section),
is or are to be regarded as chargeable at the basic rate.
- (8) For the relevant purposes any of the special trust tax rate income that consists of—
- (a) income treated as received under section 714(2) or 716(3) (transfers of securities),
- (b) profits taken to be income arising under Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities), or
- (c) gains which are treated as arising under Chapter 9 of that Part and on which tax is charged at the rate applicable to trusts under section 467(7)(b) of that Act (gains from contracts for life assurance),
is or are chargeable at the lower rate.
#### The conditions mentioned in section 349A(1)
##### 686E
- (1) If a settlor in relation to a settlement has made more than one settlement, section 686D shall have effect in relation to each settlement made by him with the following modification.
- (2) The reference in subsection (3) to £1000 shall be treated as a reference to—
- (a) £200, or
- (b) such amount as may be obtained by dividing £1000 by the total number of settlements in the class, provided that the amount is not less than £200.
- (3) If there is more than one settlor in relation to a settlement, the amount shall be the amount obtained under subsection (2)(b) in relation to the largest class of settlements.
- (4) In this section a reference to a class of settlements is a reference to the class of settlements which were made by a settlor and which are in existence during any part of the year of assessment.
##### 687A
- (1) This section applies where—
- (a) the trustees of a settlement make a payment to a company;
- (b) section 687 applies to the payment; and
- (c) the company is chargeable to corporation tax and does not fall within subsection (2) below.
- (2) A company falls within this subsection if it is—
- (a) a charity, as defined in section 506(1);
- (b) a body mentioned in section 507 (heritage bodies); or
- (c) an Association of a description specified in section 508 (scientific research organisations).
- (3) Where this section applies—
- (a) none of the following provisions, namely—
- (i) section 7(2),
- (ii) section 11(3),
- (iii) paragraph 5(1) of Schedule 16,
shall apply in the case of the payment;
- (b) the payment shall be left out of account in calculating the profits of the company for the purposes of corporation tax; and
- (c) no repayment shall be made of the amount treated under section 687(2) as income tax paid by the company in the case of the payment.
- (4) If the company is not resident in the United Kingdom, this section applies only in relation to so much (if any) of the payment as is comprised in the company’s chargeable profits for the purposes of corporation tax.
### Chapter ID — Trust management expenses
##### 689A
- (1) This section applies where—
- (a) there is income (“the distributed income”) arising to the trustees of a settlement in any year of assessment which (before being distributed) is income of a person (“the beneficiary”) other than the trustees;
- (b) the trustees have any expenses in that year (“the management expenses”) which are properly chargeable to that income or would be so chargeable but for any express provisions of the trust; and
- (c) the beneficiary is not liable to income tax on an amount of the distributed income (“the untaxed income”) by reason wholly or partly of—
- (i) his not having been resident in the United Kingdom, or
- (ii) his being deemed under any arrangements under section 788, or any arrangements having effect by virtue of that section, to have been resident in a territory outside the United Kingdom.
- (2) Where this section applies, there shall be disregarded in computing the income of the beneficiary for the purposes of the Income Tax Acts such part of the management expenses as bears the same proportion to all those expenses as the untaxed income bears to the distributed income.
- (3) For the purpose of computing the proportion mentioned in subsection (2) above, the amounts of the distributed income and of the untaxed income shall not, in either case, include so much (if any) of the income as is equal to the amount of income tax, or of any foreign tax, chargeable on the trustees (by way of deduction or otherwise) in respect of that income.
- (4) In subsection (3) above, “foreign tax” means any tax which is—
- (a) of a similar character to income tax; and
- (b) imposed by the laws of a territory outside the United Kingdom.
- (5) For the purposes of this section, where the income tax chargeable on any person is limited in accordance with section 128 of the Finance Act 1995 (limit on income chargeable on non-residents), the income of that person on which he is not liable to tax by reason of not having been resident in the United Kingdom shall be taken to include so much of any income of his as—
- (a) is excluded income within the meaning of that section; and
- (b) is not income which is treated for the purposes of subsection (1)(b) of that section as income the tax on which is deducted at source.
##### 689B
- (1) The expenses of the trustees of a settlement in any year of assessment, so far as they are properly chargeable to income (or would be so chargeable but for any express provisions of the trust), shall be treated—
- (a) as set against so much (if any) of any income as is income falling within subsection (2) , (2A) or (3) below before being set against other income; and
- (b) as set against so much (if any) of any income as is income falling within subsection (2) or (2A) below before being set against income falling within subsection (3) below; and
- (c) as set against so much (if any) of any income as is income falling within subsection (2) below before being set against income falling within subsection (2A) below.
- (2) Income falls within this subsection if it is—
- (a) so much of the income of the trustees as is income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
- (b) income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies); or
- (c) income chargeable under Chapter 6 of that Part (release of loan to participator in close company).
- (2A) Income falls within this subsection if it is —
- (a) income chargeable under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies); or
- (b) a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).
- (2B) In subsection (2A) “*relevant foreign distribution*” means any distribution of a company not resident in the United Kingdom which—
- (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
- (b) would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.
- (3) Income falls within this subsection if it is income to which section 1A applies but which does not fall within subsection (2) or (2A) above.
- (4) This section has effect—
- (a) subject to sections 686(2A) and 689A, but
- (b) notwithstanding anything in section 1A(5) and (6).
##### 698A
- (1) Subject to subsection (3) below, in so far as any income of any person is treated under this Part as having borne income tax at the lower rate, section 1A shall have effect as if that income were income to which that section applies otherwise than by virtue of the income being income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.).
- (2) Subject to subsection (3) below, in so far as any income of any person is treated under this Part as having borne income tax at the dividend ordinary rate, that income shall be treated as if it were income chargeable under Chapter 3 of Part 4 of ITTOIA 2005.
- (3) Subsections (1) and (2) above shall not apply to income paid indirectly through a trustee and treated by virtue of section 698(3) above or of section 662 of ITTOIA 2005 read with section 656(3) or 657(4) of that Act as having borne income tax at the lower rate or the dividend ordinary rate; but, subject to section 686(1), section 1A shall have effect as if the payment made to the trustee were income of the trustee—
- (a) to which section 1A applies by virtue of the income being chargeable under Chapter 3 of Part 4 of ITTOIA 2005, in the case of income treated as having borne tax at the dividend ordinary rate; and
- (b) to which section 1A applies otherwise than by virtue of the income being chargeable under Chapter 3 of Part 4 of ITTOIA 2005, in any other case.
##### 699A
- (1) In this section “*a relevant amount*” means so much of any amount which a person is deemed by virtue of this Part to receive or to have a right to receive as is or would be paid out of sums which—
- (a) are included in the aggregate income of the estate of the deceased by virtue of any of paragraphs (c) to (e) of section 701(8) below; and
- (b) are sums in respect of which the personal representatives are not directly assessable to United Kingdom income tax;
or out of any sums included in the aggregate income of the estate of the deceased which fall within subsection (1A) below.
- (1A) A sum falls within this subsection if it is a sum in respect of—
- (a) a distribution chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.); . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) Any reference in this Part to a sum to which subsection (1)(a) and (b) above applies includes a reference to a sum falling within subsection (1A) above which is included in the aggregate income of the estate of the deceased.
- (2) In determining for the purposes of this Part whether any amount is a relevant amount—
- (a) such apportionments of any sums to which subsection (1)(a) and (b) above applies shall be made between different persons with interests in the residue of the estate as are just and reasonable in relation to their different interests; and
- (b) subject to paragraph (a) above, the assumptions in section 701(3A)(b) shall apply, but (subject to that) it shall be assumed that payments are to be made out of other sums comprised in the aggregate income of the estate before they are made out of any sums to which subsection (1)(a) and (b) above applies.
- (3) In the case of a foreign estate, and notwithstanding anything in section 695(4)(b) or 696(6), a relevant amount shall be deemed—
- (a) to be income of such amount as would, after deduction of income tax for the year in which it is deemed to be paid, be equal to the relevant amount; and
- (b) to be income that has borne tax at the applicable rate.
- (4) Sums to which subsection (1)(a) and (b) above applies shall be assumed, for the purpose of determining the applicable rate in relation to any relevant amount, to bear tax—
- (a) in the case of sums included by virtue of section 701(8)(c) or (d), at the dividendordinary rate, and
- (b) in the case of sums included by virtue of section 701(8)(e), at the lower rate; and
- (c) in the case of sums falling within subsection (1A) above, at the dividend ordinary rate.
- (5) No repayment shall be made of any income tax which by virtue of this Part is treated as having been borne by the income that is represented by a relevant amount.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substitution of security: supplemental.
#### Relief where borrower deceased.
##### 705A
- (1) Immediately after the determination by the tribunal of an appeal re-heard by them under section 705 of this Act, the appellant or the Board, if dissatisfied with the determination as being erroneous in point of law, may declare his or their dissatisfaction to the tribunal.
- (2) The appellant or the Board, as the case may be, having declared his or their dissatisfaction, may, within thirty days after the determination, by notice in writing require the tribunal to state and sign a case for the opinion of the High Court.
- (3) The party requiring the case shall pay to the tribunal a fee of £25 for and in respect of the same, before he is entitled to have the case stated.
- (4) The case shall set forth the facts and the determination of the tribunal, and the party requiring it shall transmit the case, when stated and signed, to the High Court, within thirty days after receiving the same.
- (5) At or before the time when he transmits the case to the High Court, the party requiring it shall send notice in writing of the fact that the case has been stated on his application, together with a copy of the case, to the other party.
- (6) The High Court shall hear and determine any question of law arising on the case, and may reverse, affirm or amend the determination in respect of which the case has been stated, or remit the matter to the tribunal with the Court’s opinion on it, or make such other order in relation to the matter as the Court thinks fit.
- (7) The High Court may cause the case to be sent back for amendment, and thereupon the case shall be amended accordingly, and judgment shall be delivered after it has been amended.
- (8) Subject to subsection (9) below and to Part II of the Administration of Justice Act 1969 (appeal from High Court to House of Lords), an appeal shall, in England and Wales, lie from the decision of the High Court to the Court of Appeal and thence to the House of Lords.
- (9) No appeal shall lie to the House of Lords from the Court of Appeal unless leave has been given under and in accordance with section 1 of the Administration of Justice (Appeals) Act 1934.
- (10) Subject to subsection (11) below, where the determination of the tribunal is in respect of an assessment made in accordance with a notice under subsection (3) of section 703, then notwithstanding that a case has been required to be stated or is pending before the High Court in respect of the determination, tax shall be paid in accordance with the determination.
- (11) If the amount charged by the assessment is altered by the order or judgment of the High Court, then—
- (a) if too much tax has been paid the amount overpaid shall be refunded with such interest, if any, as the High Court may allow; or
- (b) if too little tax has been charged, the amount undercharged shall be due and payable at the expiration of a period of thirty days beginning with the date on which the Board issue to the other party a notice of the total amount payable in accordance with the order or judgment of that Court.
- (12) All matters within the jurisdiction of the High Court under this section shall be assigned in Scotland to the Court of Session sitting as the Court of Exchequer (references in this section to the High Court being construed accordingly); and an appeal shall lie from the decision under this section of the Court of Session, as the Court of Exchequer in Scotland, to the House of Lords.
##### 705B
- (1) A case which is stated by the tribunal under section 705A in proceedings in Northern Ireland shall be a case for the opinion of the Court of Appeal in Northern Ireland, and the Taxes Acts (as defined in section 118(1) of the Management Act shall have effect as if that section applied in relation to such proceedings—
- (a) with the substitution for references to the High Court of references to the Court of Appeal in Northern Ireland;
- (b) with the omission of subsections (4), (5), (8) and (9) of that section.
- (2) The procedure relating to the transmission of the case to, and the hearing and determination of the case by, the Court of Appeal in Northern Ireland shall be that for the time being in force in Northern Ireland as respects cases stated by a county court in exercise of its general jurisdiction, and an appeal shall lie from the Court of Appeal to the House of Lords in accordance with section 42 of the Judicature (Northern Ireland) Act 1978.
- (3) Where in proceedings in Northern Ireland an application is made for a case to be stated by the tribunal under this section, the case must be settled and sent to the applicant as soon after the application as is reasonably practicable.
- (4) For the purposes of this section “proceedings in Northern Ireland” means proceedings as respects which the place given by the rules in Schedule 3 to the Management Act is in Northern Ireland.
#### Section 349A(1): consequences of reasonable but incorrect belief
#### Loan to buy machinery or plant.
#### Loan to buy life annuity.
##### 722A
- (1) For the purposes of sections 710 to 728, where a gilt-edged security is exchanged by any person for strips of that security the security shall be deemed to have been transferred by that person.
- (2) Nothing in subsection (1) above shall have effect to cause any person to be treated as the transferee of any securities for the purposes of section 713(2)(b).
- (3) For the purposes of sections 710 to 728, where strips of gilt-edged securities are exchanged by any person for a single gilt-edged security consolidating those strips, that security shall be deemed to have been transferred to that person.
- (4) Nothing in subsection (3) above shall have effect to cause any person to be treated as the transferor of any securities for the purposes of section 713(2)(a).
- (5) In this section—
#### Relevant loan interest.
##### 726A
- (1) This section applies where—
- (a) securities (old securities) of a particular kind are issued by way of the original issue of securities of that kind,
- (b) on a later occasion securities (new securities) of the same kind are issued,
- (c) a sum (the extra return) is payable in respect of the new securities, by the person issuing them, to reflect the fact that interest is accruing on the old securities,
- (d) the issue price of the new securities includes an element (whether or not separately identified) representing payment for the extra return, and
- (e) the extra return is equal to the amount of interest payable for the relevant period on so many old securities as there are new (or, if there are more new securities than old, the amount of interest which would be so payable if there were as many old securities as new).
- (2) For the purposes of sections 710 to 728—
- (a) the new securities shall be treated as having been issued on the relevant day;
- (b) they shall be treated as transferred to the person to whom they are in fact issued (though not treated as transferred by any person);
- (c) the transfer shall be treated as a transfer with accrued interest and as made on the day on which the new securities are in fact issued;
- (d) that day shall be treated as the settlement day (notwithstanding section 712);
but this subsection is subject to subsection (7) below.
- (3) If the new securities are in fact issued under an arrangement by virtue of which the acquirer accounts to the issuer separately for the extra return mentioned in subsection (1) above and the rest of the issue price, in relation to the transfer mentioned in subsection (2)(b) above—
- (a) section 713(4) shall not apply, and
- (b) for the purposes of section 713(2) the accrued amount shall be the amount found under subsection (4) or (5) below (as the case may be);
and here “*the acquirer*” means the person to whom the new securities are in fact issued and “*the issuer*” means the person by whom they are in fact issued.
- (4) Subject to subsection (5) below, the amount is one equal to the amount (if any) of the extra return separately accounted for.
- (5) If the interest on the new securities is payable in a currency other than sterling, the amount is the sterling equivalent on the settlement day of the amount found under subsection (4) above; and for this purpose the sterling equivalent of an amount on the settlement day is the sterling equivalent calculated by reference to the London closing rate of exchange for that day.
- (6) If the new securities are in fact issued otherwise than as mentioned in subsection (3) above, section 713(4)(b) shall apply in relation to the transfer mentioned in subsection (2)(b) above.
- (7) If the new securities are securities to which section 717 applies (after applying subsection (2)(a) above) subsection (2)(b) to (d) above shall not apply.
- (8) For the purposes of this section the relevant period is the period beginning with the day following the relevant day and ending with the day on which the new securities are in fact issued.
- (9) For the purposes of this section the relevant day is—
- (a) the last (or only) interest payment day to fall in respect of the old securities before the day on which the new securities are in fact issued, or
- (b) the day on which the old securities were issued, in a case where no interest payment day fell in respect of them before the day on which the new securities are in fact issued.
##### 727A
- (1) Where securities are transferred under an agreement to sell them, and the transferor or a person connected with him—
- (a) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (b) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises,
section 713(2) and (3) and section 716 do not apply to the transfer by the transferor or the transfer back except in a case where section 730A of the Taxes Act 1988 is prevented from applying by subsection (8) of that section.
- (2) For the purposes of this section agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (3) Section 839 (connected persons) applies for the purposes of this section.
- (4) References in this section to buying back securities include buying similar securities.
- (5) For the purposes of this section—
- (a) a person connected with the transferor who is required to buy securities sold by the transferor shall be treated as being required to buy the securities back, and
- (b) a person connected with the transferor who acquires an option to buy securities sold by the transferor shall be treated as acquiring an option to buy the securities back,
notwithstanding that it was not he who sold them.
#### Interest ceasing to be relevant loan interest, etc.
##### 730A
- (1) Subject to subsection (8) below, this section applies where—
- (a) a person (“the original owner”) has transferred any securities to another person (“the interim holder”) under an agreement to sell them;
- (b) the original owner or a person connected with him—
- (i) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (ii) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises; and
- (c) the sale price and the repurchase price are different.
- (2) The difference between the sale price and the repurchase price shall be treated for the purposes of the Tax Acts—
- (a) where the repurchase price is more than the sale price, as a payment of interest made by the repurchaser on a deemed loan from the interim holder of an amount equal to the sale price; and
- (b) where the sale price is more than the repurchase price, as a payment of interest made by the interim holder on a deemed loan from the repurchaser of an amount equal to the repurchase price.
- (3) Where any amount is deemed under subsection (2) above to be a payment of interest, that payment shall be deemed for the purposes of the Tax Acts to be one that becomes due at the time when the repurchase price becomes due and, accordingly, is treated as paid when that price is paid.
- (4) Where any amount is deemed under subsection (2) above to be a payment of interest, the repurchase price shall be treated for the purposes of the Tax Acts (other than the excepted provisions specified in subsection (4A) below) and (in cases where section 263A of the 1992 Act does not apply) for the purposes of the 1992 Act—
- (a) in a case falling within paragraph (a) of that subsection, as reduced by the amount of the deemed payment; and
- (b) in a case falling within paragraph (b) of that subsection, as increased by the amount of the deemed payment.
This subsection is subject to subsection (4B) below.
- (4A) The excepted provisions are—
- (a) this section,
- (b) section 730BB, apart from subsection (7),
- (c) section 737A, and
- (d) section 737C.
- (4B) Where section 730BB(7) has effect (repurchase price to be treated as increased or reduced for certain purposes), subsection (4) above does not have effect for any purpose other than that of determining the amount that falls to be increased or reduced under section 730BB(7).
- (5) For the purposes of section 209(2)(d) . . . any amount which is deemed under subsection (2)(a) above to be a payment of interest shall be deemed to be interest in respect of securities issued by the repurchaser and held by the interim holder.
- (5A) For the purposes of the Corporation Tax Acts, a company has a relationship to which this section applies in any case where—
- (a) the circumstances are as set out in subsection (1) above; and
- (b) interest on a deemed loan is deemed by virtue of subsection (2) above to be paid by or to the company;
and references to a relationship to which this section applies, and to a company’s being party to such a relationship, shall be construed accordingly.
- (6) Where a company has a relationship to which this section applies—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) shall, as respects that company, have effect in relation to the interest deemed by virtue of subsection (2) above to be paid or received by the company under that relationship as it would have effect if it were interest under a loan relationship to which the company is a party,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and
- (c) the only debits or credits to be brought into account for the purposes of that Chapter by virtue of this subsection in respect of a relationship are those relating to that deemed interest,
and, subject to paragraph (c) above, references in the Corporation Tax Acts to a loan relationship accordingly include a reference to a relationship to which this section applies.
- (6A) Any question whether debits or credits brought into account in accordance with subsection (6) above in relation to any company—
- (a) are to be brought into account under section 82(2) of the Finance Act 1996 (trading loan relationships), or
- (b) are to be treated as non-trading debits or credits,
shall be determined (subject to Schedule 11 to that Act (insurance companies)) according to the extent (if any) to which the company is a party to the repurchase in the course of activities forming an integral part of a trade carried on by the company.
- (6B) To the extent that debits or credits fall to be brought into account by a company under section 82(2) of the Finance Act 1996 in the case of a relationship to which this section applies, the company shall be regarded for the purposes of Chapter 2 of Part 4 of that Act as being party to the relationship for the purposes of a trade carried on by the company.
- (7) The Treasury may by regulations provide for any amount which is deemed under subsection (2) above to be received as a payment of interest to be treated, in such circumstances and to such extent as may be described in the regulations, as comprised in income that is eligible for relief from tax by virtue of section 438, 613(4) or 614(2), (3) or (4) or section 186 of the Finance Act 2004.
- (8) Except where regulations under section 737E otherwise provide, this section does not apply if—
- (a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) all of the benefits and risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrue to, or fall on, the interim holder.
- (8A) In this section references to the sale price are to be construed—
- (a) in a case where the securities are bought back by the transferor or a person connected with him in compliance with a requirement imposed in consequence of the exercise of an option acquired under the agreement to sell the securities or any related agreement, as references to what would otherwise be the sale price plus the amount of any consideration given for the option, and
- (b) in a case where the securities are so bought back in the exercise of an option so acquired, as references to what would otherwise be the sale price less the amount of any consideration so given,
unless the consideration is brought into account under Schedule 26 to the Finance Act 2002 (derivative contracts).
- (9) In this section references to the repurchase price are to be construed—
- (a) in cases where section 737A applies, and
- (b) in cases where section 737A would apply if it were in force in relation to the securities in question,
as references to the repurchase price which is or, as the case may be, would be applicable by virtue of section 737C(3)(b), (9) or (11)(c).
##### 730B
- (1) For the purposes of section 730A agreements are related if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (2) References in section 730A to buying back securities—
- (a) shall include references to buying similar securities; and
- (b) in relation to a person connected with the original owner, shall include references to buying securities sold by the original owner or similar securities,
notwithstanding (in each case) that the securities bought have not previously been held by the purchaser; and references in that section to repurchase or to a repurchaser shall be construed accordingly.
- (3) In section 730A and this section “*securities*” has the same meaning as in section 737A.
- (4) For the purposes of this section securities are similar if they entitle their holders—
- (a) to the same rights against the same persons as to capital, interest and dividends, and
- (b) to the same remedies for the enforcement of those rights,
notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.
- (5) Section 839 (connected persons) applies for the purposes of section 730A.
##### 730BB
- (1) For the purposes of the Corporation Tax Acts, a company has a relationship to which this section applies in any case where—
- (a) the circumstances are as set out in section 730A(1)(a) and (b);
- (b) the company is the repurchaser of the securities or (subject to subsection (11) below) the interim holder;
- (c) the conditions in subsection (2) or (3) below are satisfied; and
- (d) subsection (10) below does not prevent this section from applying,
and references to a relationship to which this section applies, and to a company’s being a party to such a relationship, shall be construed accordingly.
- (2) The conditions in this subsection are that—
- (a) the sale price and the repurchase price are expressed in a currency other than sterling;
- (b) there is a difference between—
- (i) the sterling equivalent of the sale price as at the date of the transfer of the securities to the interim holder (“*the first sum*”); and
- (ii) the sterling equivalent of the sale price as at the date they are bought back by the repurchaser (“*the second sum*”); and
- (c) the case is not one where section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling) applies in relation to the company.
- (3) The conditions in this subsection are that—
- (a) the case is one where section 92B or 92C of the Finance Act 1993 (company preparing accounts or operating in currency other than sterling) applies in relation to the company;
- (b) the sale price and the repurchase price are expressed in a currency other than the relevant currency; and
- (c) there is a difference between—
- (i) the relevant currency equivalent of the sale price as at the date of the transfer of the securities to the interim holder (“*the first sum*”); and
- (ii) the relevant currency equivalent of the sale price as at the date they are bought back by the repurchaser (“*the second sum*”).
- (3A) In subsection (3), references to the relevant currency are—
- (a) in cases in which section 92B of the Finance Act 1993 applies, to the functional currency (within the meaning of that section), and
- (b) in cases in which section 92C of the Finance Act 1993 applies, to the accounts currency (within the meaning of that section).
- (4) Where a company has a relationship to which this section applies and—
- (a) the company is the repurchaser and the first sum exceeds the second sum; or
- (b) the company is the interim holder and the second sum exceeds the first sum,
the amount of the excess shall be treated for the purposes of the Corporation Tax Acts as an exchange gain (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships)) arising to the company from the relationship.
- (5) Where a company has a relationship to which this section applies and—
- (a) the company is the repurchaser and the second sum exceeds the first sum; or
- (b) the company is the interim holder and the first sum exceeds the second sum,
the amount of the excess shall be treated for the purposes of the Corporation Tax Acts as an exchange loss (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships)) arising to the company from the relationship.
- (6) Where an exchange gain or loss is treated by virtue of subsection (4) or (5) above as arising to a company from a relationship to which this section applies—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 shall have effect in relation to the exchange gain or loss as it would have effect if it were an exchange gain or loss (as the case may be) arising to the company from a loan relationship to which it is a party; but
- (b) the only debits and credits to be brought into account for the purposes of that Chapter by virtue of this section in respect of the relationship to which this section applies are those relating to the exchange gains and losses,
and, subject to paragraph (b) above, references in the Corporation Tax Acts to a loan relationship accordingly include a reference to a relationship to which this section applies.
- (7) Where a company has a relationship to which this section applies, the repurchase price shall be treated for the purposes of the Tax Acts (other than this section and sections 730A, 737A and 737C) and (in cases where section 263A of the 1992 Act does not apply) for the purposes of the 1992 Act—
- (a) in a case where an exchange gain arises to the company by virtue of subsection (4)(a) above or an exchange loss arises to the company by virtue of subsection (5)(b) above, as increased by the amount by which the first sum exceeds the second sum, and
- (b) in a case where an exchange gain arises to the company by virtue of subsection (4)(b) above or an exchange loss arises to the company by virtue of subsection (5)(a) above, as reduced by the amount by which the second sum exceeds the first sum.
- (8) Any question whether debits or credits brought into account in accordance with subsection (6) above in relation to any company—
- (a) are to be brought into account under section 82(2) of the Finance Act 1996 (trading loan relationships); or
- (b) are to be treated as non-trading debits or credits,
shall be determined (subject to Schedule 11 to that Act (insurance companies)) according to the extent (if any) to which the company is a party to the repurchase in the course of activities forming an integral part of a trade carried on by that company.
- (9) To the extent that debits or credits fall to be brought into account by a company under section 82(2) of that Act in the case of a relationship to which this section applies, the company shall be regarded for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 as being a party to the relationship for the purposes of a trade carried on by the company.
- (10) Except where regulations under section 737E otherwise provide, this section does not apply if—
- (a) the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or
- (b) all of the benefits and risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrue to, or fall on, the interim holder.
- (11) Where—
- (a) the repurchase price is more than the sale price, so that by virtue of section 730A(2)(a) a payment of interest is treated as made by the repurchaser on a deemed loan from the interim holder; but
- (b) the payment of interest is treated as made to a person other than the interim holder,
references to the “*interim holder*” in subsections (1), (4) and (5) above shall be read as references to the person to whom the payment of interest is treated as made.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) Expressions used in this section and in section 730A have the same meaning in this section as in that section.
##### 730C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schedule A losses.
##### 736A
Schedule 23A to this Act shall have effect in relation to certain cases where under a contract or other arrangements for the transfer of shares or other securities a person is required to pay to the other party an amount representative of a dividend or payment of interest on the securities.
#### Losses from UK property business.
##### 736B
- (1) This section applies where—
- (a) any interest on securities transferred by the lender under a stock lending arrangement is paid, as a consequence of the arrangement, to a person other than the lender; and
- (b) no provision is made for securing that the lender receives payments representative of that interest.
- (2) Where this section applies, Schedule 23A and the provisions for the time being contained in any regulations under that Schedule shall apply , subject to subsection (2A) below, as if—
- (a) the borrower were required under the stock lending arrangement to pay the lender an amount representative of the interest mentioned in subsection (1)(a) above;
- (b) a payment were made by the borrower in discharge of that requirement; and
- (c) that payment were made on the same date as the payment of the interest of which it is representative.
- (2A) The borrower is not entitled, by virtue of anything in Schedule 23A or any provision of regulations under that Schedule, or otherwise—
- (a) to any deduction in computing profits or gains for the purposes of income tax or corporation tax, or
- (b) to any deduction against total income or, as the case may be, total profits,
in respect of any such deemed requirement or payment as is provided for by subsection (2) above.
Where the borrower is a company, an amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection.
- (3) In this section—
- “*interest*” includes dividends; and
- “*stock lending arrangement*” and “*securities*” have the same meanings as in section 263B of the 1992 Act.
- (4) See section 736D for provision treating certain arrangements as stock lending arrangements for the purposes of this section.
##### 736C
- (1) This section applies where—
- (a) the borrower under a stock lending arrangement is treated under section 736B(2) as paying under that arrangement an amount representative of interest on any securities (“the relevant securities”),
- (b) an amount of money (“cash collateral”) is payable to or for the benefit of the lender for the purpose of securing the discharge of the requirement to transfer the relevant securities back to the lender,
- (c) the stock lending arrangement is designed to produce a return to the borrower which equates, in substance, to the return on an investment of money at interest, and
- (d) the main purpose, or one of the main purposes, of the stock lending arrangement is the obtaining of a tax advantage.
- (2) Where this section applies—
- (a) the Tax Acts are to apply as if the borrower receives an amount of interest payable in respect of the cash collateral, and
- (b) the amount of the interest is calculated in accordance with the following provisions of this section (see, in particular, subsections (3) to (7)).
- (3) The interest is treated for the purposes of the Tax Acts as if it were received on the date (“the return date”) on which the borrower transfers the relevant securities back to the lender.
- (4) The interest is treated for the purposes of the Tax Acts as if it were payable in respect of the period (“*the interest period*”)—
- (a) beginning with the date on which the lender transfers the relevant securities to the borrower, and
- (b) ending with the return date.
- (5) The rate of interest payable in respect of the cash collateral is a rate that is reasonably comparable to the rate that the borrower could obtain by placing the cash collateral on deposit for the interest period.
- (6) For the purposes of this section, the amount of the cash collateral on which the interest is payable is taken to be—
- (a) in any case where the amount of the cash collateral varies at any time on or before the return date, the highest amount of the cash collateral at any time on or before the return date, and
- (b) in any other case, the amount of the cash collateral as at the return date.
- (7) The amount of the interest which the borrower is treated as receiving in respect of the cash collateral for the interest period is reduced (but not below nil) by any interest which the borrower actually receives in respect of that collateral for that period.
- (8) If the borrower is a person within the charge to income tax, the interest which the borrower is treated as receiving is charged to income tax under Chapter 2 of Part 4 of ITTOIA 2005 (interest).
- (9) If the borrower is a company within the charge to corporation tax—
- (a) the interest which the borrower is treated as receiving is treated for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) as payable to it on a money debt,
- (b) that money debt is treated for those purposes as a relationship to which section 100 of the Finance Act 1996 applies (money debts etc not arising from the lending of money), and
- (c) the credits to be brought into account for those purposes in respect of the interest must be determined using an amortised cost basis of accounting.
- (10) The fact that the borrower is treated as receiving an amount of interest is not to be taken as implying that the interest is payable by the lender or any other person.
- (11) For the purposes of this section—
- “*money*” includes money expressed in a currency other than sterling,
- “*stock lending arrangement*” and “*securities*” have the same meanings as in section 263B of the 1992 Act,
- “*tax advantage*” has the meaning given by section 709(1).
- (12) For the purposes of this section—
- (a) any reference to the transfer of securities back has the same meaning as in section 263B of the 1992 Act (see, in particular, sections 263B(5) and 263C(1) of that Act), but
- (b) if it becomes apparent that the borrower will not comply with the requirement to transfer any securities back, the borrower is treated as if he transfers them back on the date on which it becomes so apparent.
- (13) For the purposes of this section it does not matter—
- (a) whether the cash collateral is payable by the borrower or by any other person,
- (b) whether the cash collateral is payable under the stock lending arrangement or under any other arrangement,
- (c) whether collateral in another form is also provided in connection with the stock lending arrangement.
- (14) See section 736D—
- (a) for provision treating certain arrangements as stock lending arrangements for the purposes of this section, and
- (b) for provision treating certain amounts as cash collateral for those purposes.
##### 736D
- (1) In this section “*quasi-stock lending arrangement*” means so much of any arrangements between two or more persons as are not stock lending arrangements, but are arrangements under which—
- (a) a person (“*the lender*”) transfers securities to another person (“*the borrower*”), and
- (b) a requirement is imposed on a person to transfer any or all of the securities, or any other property, back to the lender or any other person,
and it does not matter whether the person on whom that requirement is imposed is the borrower or any other person.
- (2) In this section “*quasi-cash collateral*”, in relation to any stock lending arrangement or quasi-stock lending arrangement, means—
- (a) any money which is payable for a relevant purpose, plus
- (b) any other property which is transferable for a relevant purpose.
- (3) Money or other property is payable or transferable for a relevant purpose if it is payable or transferable to or for the benefit of—
- (a) the lender under the stock lending arrangement or quasi-stock lending arrangement, or
- (b) a person connected with that lender,
for the purpose of securing the discharge of the requirement to transfer any or all of the securities, or any other property, back to that lender or any other person.
- (4) For the purposes of sections 736B and 736C, a quasi-stock lending arrangement is treated as if it were a stock lending arrangement.
- (5) For the purposes of section 736C, in relation to any stock lending arrangement or quasi-stock lending arrangement,—
- (a) quasi-cash collateral is treated as if it were cash collateral, and
- (b) the amount of the quasi-cash collateral in relation to the stock lending arrangement or quasi-stock lending arrangement is taken to be the amount of the cash collateral.
- (6) If any property other than money is transferable for a relevant purpose, the amount of the quasi-cash collateral so far as relating to that property is determined by reference to its market value.
- (7) In any case where—
- (a) section 736C applies in relation to a quasi-stock lending arrangement, and
- (b) the person for whom the tax advantage was designed to be obtained is a person (“*the other person*”) other than the borrower under that arrangement,
that section has effect as if the other person were the person who receives the amount of interest mentioned in that section.
- (8) In any case where section 736C applies in relation to a quasi-stock lending arrangement—
- (a) any reference in that section to cash collateral being payable to or for the benefit of the lender includes its being payable to or for the benefit of a person connected with the lender,
- (b) the reference in subsection (1)(c) of that section to a return to the borrower includes a return to any other person, and
- (c) any reference in that section to the transfer back of the relevant securities by the borrower to the lender includes the transfer back of any or all of the securities, or any other property, by any person to the lender or any other person.
- (9) Section 839 (connected persons) applies for the purposes of this section.
- (a) subsection (3) above does not apply, and
- (b) some or all of the relevant income is taken into account in accordance with section 83 of the Finance Act 1989 in an account in relation to which the provisions of section 432C or 432D apply,
the fraction of the foreign tax that is attributable to the category of business in question is the fraction whose numerator is the part of the relevant income which is referable to that category by virtue of any provision of section 432C or 432D and whose denominator is the whole of the relevant income.
- (7) Where some or all of the relevant income falls to be taken into account in determining in accordance with section 83(2) of the Finance Act 1989 the amount referred to in section 432E(1) as the net amount, the fraction of the foreign tax that is attributable to the category of business in question is the fraction—
- (a) whose numerator is the part of the investment income taken into account in that determination which would be referable to that category by virtue of section 432E if the investment income were the only amount included in the net amount; and
- (b) whose denominator is the whole of that investment income.
- (7A) The Treasury may by regulations amend subsection (7) above; and the regulations may include amendments having effect in relation to accounting periods during which they are made.
- (8) No part of the foreign tax is attributable to any category of business except as provided by subsections (3) to (7) above.
- (9) Where for the purposes of this section an amount of foreign tax is attributable to a category of life assurance business other than basic life assurance and general annuity business, credit in respect of the foreign tax so attributable shall be allowed only against corporation tax in respect of profits chargeable under Case VI of Schedule D arising from carrying on that category of business.
##### 804C
- (1) Where—
- (a) an insurance company carries on any category of insurance business in a period of account,
- (b) a computation in accordance with the provisions applicable to Case I of Schedule D falls to be made in relation to that category of business for that period, and
- (c) there arises to the company in that period any income or gain in respect of which credit for foreign tax falls to be allowed under any arrangements,
subsection (2) below shall have effect.
- (2) In any such case, the amount of the credit for foreign tax which, under the arrangements, is to be allowed against corporation tax in respect of so much of that income or gain as is referable to the category of business concerned (“*the relevant income*”) shall be limited by treating the amount of the relevant income as reduced in accordance with subsections (3) and (4) below.
- (3) The first limitation is to treat the amount of the relevant income as reduced (but not below nil) for the purposes of this Chapter by the amount of expenses (if any) attributable to the relevant income.
- (4) If—
- (a) the amount of the relevant income after any reduction under subsection (3) above,
exceeds
- (b) the relevant fraction of the profits of the category of business concerned for the period of account in question which are chargeable to corporation tax,
the second limitation is to treat the relevant income as further reduced (but not below nil) for the purposes of this Chapter to an amount equal to that fraction of those profits.
In this subsection any reference to the profits of a category of business is a reference to those profits after the set off of any losses of that category of business which have arisen in any previous accounting period.
- (5) In determining the amount of the credit for foreign tax which is to be allowed as mentioned in subsection (2) above, the relevant income shall not be reduced except in accordance with that subsection.
- (6) For the purposes of subsection (3) above, the amount of expenses attributable to the relevant income is the appropriate fraction of the total relevant expenses of the category of business concerned for the period of account in question.
- (7) In subsection (6) above, the “*appropriate fraction*” means the fraction—
- (a) whose numerator is the amount of the relevant income before any reduction in accordance with subsection (2) above, and
- (b) whose denominator is the total income of the category of business concerned for the period of account in question,
unless the denominator so determined is nil, in which case the denominator shall instead be the amount described in subsection (8) below.
- (8) That amount is so much in total of the income and gains—
- (a) which arise to the company in the period of account in question, and
- (b) in respect of which credit for foreign tax falls to be allowed under any arrangements,
as are referable to the category of business concerned (before any reduction in accordance with subsection (2) above).
- (9) In subsection (4) above, the “*relevant fraction*” means the fraction—
- (a) whose numerator is the amount of the relevant income before any reduction in accordance with subsection (2) above; and
- (b) whose denominator is the amount described in subsection (8) above.
- (10) Where a 75 per cent subsidiary of an insurance company is acting in accordance with a scheme or arrangement and—
- (a) the purpose, or one of the main purposes, of that scheme or arrangement is to prevent or restrict the application of subsection (2) above to the insurance company, and
- (b) the subsidiary does not carry on insurance business of any description,
the amount of corporation tax attributable (apart from this subsection) to any item of income or gain arising to the subsidiary shall be found by setting off against that item the amount of expenses that would be attributable to it under subsection (3) above if that item had arisen directly to the insurance company.
- (11) Where the credit allowed for any tax payable under the laws of a territory outside the United Kingdom is, by virtue of subsection (2) above, less than it would be if the relevant income were not treated as reduced in accordance with that subsection, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the profits of the category of business concerned.
- (12) Where, by virtue of subsection (10) above, the credit allowed for any tax payable under the laws of a territory outside the United Kingdom is less than it would be apart from that subsection, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the income of the 75 per cent subsidiary.
- (13) For the purposes of the operation of this section in relation to any income or gain in respect of which credit falls to be allowed under any arrangements, the amount of the income or gain that is referable to a category of insurance business is the same fraction of the income and gain as the fraction of the foreign tax that is attributable to that category of business in accordance with section 804B.
- (14) This section shall be construed—
- (a) in accordance with section 804D, where the category of business concerned is life assurance business or a category of life assurance business; and
- (b) in accordance with section 804E, where the category of business concerned is not life assurance business or any category of life assurance business.
##### 804D
- (1) This section has effect for the interpretation of section 804C where the category of business concerned is life assurance business or a category of life assurance business.
- (2) The “total income" of the category of business concerned for the period of account in question is the amount (if any) by which—
- (a) so much of the total income shown in the revenue account in the periodical return of the company concerned for that period as is referable to that category of business,
exceeds
- (b) so much of any commissions payable and any expenses of management incurred in connection with the acquisition of the business, as shown in that return, so far as referable to that category of business.
- (3) Where any amounts fall to be brought into account in accordance with section 83 of the Finance Act 1989, the amounts that are referable to the category of business concerned shall be determined for the purposes of subsection (2) above in accordance with sections 432B to 432F.
- (4) The “total relevant expenses" of the category of business concerned for any period of account is the amount of the claims incurred—
- (a) increased by any increase in the liabilities of the company, or
- (b) reduced (but not below nil) by any decrease in the liabilities of the company.
- (5) For the purposes of subsection (4) above, the amounts to be taken into account in the case of any period of account are the amounts as shown in the company’s periodical return for the period so far as referable to the category of business concerned.
##### 804E
- (1) This section has effect for the interpretation of section 804C where the category of business concerned is not life assurance business or any category of life assurance business.
- (2) The “total income" of the category of business concerned for any period of account is the amount (if any) by which—
- (a) the sum of the amounts specified in subsection (3) below,
exceeds
- (b) the sum of the amounts specified in subsection (4) below.
- (3) The amounts mentioned in subsection (2)(a) above are—
- (a) earned premiums, net of reinsurance;
- (b) investment income and gains;
- (c) other technical income, net of reinsurance;
- (d) any amount treated under section 107(2) of the Finance Act 2000 as a receipt of the company’s trade.
- (4) The amounts mentioned in subsection (2)(b) above are—
- (a) acquisition costs;
- (b) the change in deferred acquisition costs;
- (c) losses on investments.
- (5) The “total relevant expenses" of the category of business concerned for any period of account is the sum of—
- (a) the claims incurred, net of reinsurance,
- (b) the changes in other technical provisions, net of reinsurance,
- (c) the change in the equalisation provision, and
- (d) investment management expenses,
unless that sum is a negative amount, in which case the total relevant expenses shall be taken to be nil.
- (6) The amounts to be taken into account for the purposes of the paragraphs of subsections (3) to (5) above are the amounts taken into account for the purposes of corporation tax.
- (7) Expressions used—
- (a) in the paragraphs of subsections (3) to (5) above, and
- (b) in the provisions of section B of Schedule 9A to the Companies Act 1985 (form and content of accounts of insurance companies and groups) which relate to the profit and loss account format (within the meaning of paragraph 7(1) of that section),
have the same meaning in those paragraphs as they have in those provisions.
##### 804F
Expressions used in sections 804A to 804E and in Chapter I of Part XII have the same meaning in those sections as in that Chapter.
##### 804G
- (1) This section applies if—
- (a) credit for foreign tax falls to be allowed to a person (“P”) under any arrangements, and
- (b) a payment is made by a tax authority to P, or any person connected with P, by reference to the foreign tax.
- (2) The amount of that credit is to be reduced by an amount equal to that payment.
- (3) Section 839 applies for the purposes of determining whether or not a person is connected with P.
### Foreign dividends: onshore pooling and utilisation of eligible unrelieved foreign tax
##### 806A
- (1) This section applies where, in any accounting period of a company resident in the United Kingdom, an amount of eligible unrelieved foreign tax arises in respect of a dividend falling within subsection (2) below paid to the company.
- (2) The dividends that fall within this subsection are any dividends chargeable under Case V of Schedule D, other than—
- (a) any dividend which is trading income for the purposes of section 393;
- (b) any dividend which, in the circumstances described in paragraphs (a) and (b) of subsection (8) of section 393, would by virtue of that subsection fall to be treated as trading income for the purposes of subsection (1) of that section;
- (c) in a case where section 801A applies, the dividend mentioned in subsection (1)(b) of that section;
- (d) in a case where section 803 applies, the dividend mentioned in subsection (1)(b) of that section;
- (e) any dividend the amount of which is, under section 811, treated as reduced.
- (3) For the purposes of this section—
- (a) the cases where an amount of eligible unrelieved foreign tax arises in respect of a dividend falling within subsection (2) above are the cases set out in subsections (4) and (5) below; and
- (b) the amounts of eligible unrelieved foreign tax which arise in any such case are those determined in accordance with section 806B.
- (4) Case A is where—
- (a) the amount of the credit for foreign tax which under any arrangements would, apart from section 797, be allowable against corporation tax in respect of the dividend,
exceeds
- (b) the amount of the credit for foreign tax which under the arrangements is allowed against corporation tax in respect of the dividend.
- (5) Case B is where the amount of tax which, by virtue of any provision of any arrangements, falls to be taken into account as mentioned in section 799(1) in the case of the dividend (whether or not by virtue of section 801(2) or (3)) is less than it would be apart from the mixer cap.
But if that is so in any case by reason only of the mixer cap restricting the amount of underlying tax that is treated as mentioned in subsection (2) or (3) of section 801 in the case of a dividend paid by a company resident in the United Kingdom, the case does not fall within Case B.
- (6) In determining whether the circumstances are as set out in subsection (4) or (5) above, sections 806C and 806D shall be disregarded.
##### 806B
- (1) This section has effect for determining the amounts of eligible unrelieved foreign tax which arise in the cases set out in section 806A(4) and (5).
- (2) In Case A, the difference between—
- (a) the amount of the credit allowed as mentioned in section 806A(4)(b), and
- (b) the greater amount of the credit that would have been so allowed if, for the purposes of subsection (2) of section 797, the rate of corporation tax payable as mentioned in that subsection were the upper percentage,
shall be an amount of eligible unrelieved foreign tax.
- (3) In Case B, the amount (if any) by which—
- (a) the aggregate of the upper rate amounts falling to be brought into account for the purposes of this paragraph by virtue of subsection (4) or (5) below, exceeds
- (b) the amount of tax to be taken into account as mentioned in section 799(1) in the case of the Case V dividend, before any increase under section 801(4B),
shall be an amount of eligible unrelieved foreign tax.
- (4) In the case of the Case V dividend (but not any lower level dividend), the upper rate amount to be brought into account for the purposes of subsection (3)(a) above—
- (a) in a case where the mixer cap does not restrict the amount of tax to be taken into account as mentioned in section 799(1) (before any increase under section 801(4B)) in the case of that dividend, is that amount of tax; or
- (b) in a case where the mixer cap restricts the amount of tax to be so taken into account in the case of that dividend, is the greater amount that would have been so taken into account if, in the application of the formula in section 799(1A) in the case of that dividend (but not any lower level dividend) M% had, in relation to—
- (i) so much of D as does not represent any lower level dividend, and
- (ii) so much of U as is not underlying tax attributable to any lower level dividend,
been the upper percentage.
- (5) In the case of any dividend (the “*relevant dividend*”) received as mentioned in subsection (2) or (3) of section 801 which is a lower level dividend in relation to the Case V dividend, the upper rate amount to be brought into account for the purposes of subsection (3)(a) above—
- (a) in a case where the mixer cap does not restrict the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of the relevant dividend, is the appropriate portion of that amount of underlying tax;
- (b) in a case where—
- (i) the relevant dividend was paid by a company resident in the United Kingdom, and
- (ii) the mixer cap restricts the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of that dividend,
is the appropriate portion of that restricted amount of underlying tax; or
- (c) in a case where—
- (i) the relevant dividend was paid by a company resident outside the United Kingdom, and
- (ii) the mixer cap restricts the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of that dividend,
is the appropriate portion of the greater amount of tax that would have been so treated if, in the application of the formula in section 799(1A) in the case of that dividend (but not any other dividend) M% had, in relation to so much of D as does not represent any lower level dividend, and so much of U as is not underlying tax attributable to any lower level dividend, been the upper percentage.
- (6) For the purposes of subsection (5) above, the “*appropriate portion*” of any amount there mentioned in the case of a dividend is found by multiplying that amount by the product of the reducing fractions for each of the higher level dividends.
- (7) For the purposes of subsection (6) above, the “*reducing fraction*” for any dividend is the fraction—
- (a) whose numerator is the amount of the dividend; and
- (b) whose denominator is the amount of the relevant profits (within the meaning of section 799(1)) out of which the dividend is paid.
- (8) Any reference in this section to any tax being restricted by the mixer cap in the case of any dividend is a reference to that tax being so restricted otherwise than by virtue only of the application of the mixer cap in the case of one or more lower level dividends.
- (9) For the purpose of determining the amount described in subsection (2)(b), (4)(b) or (5)(c) above, sections 806C and 806D shall be disregarded.
- (10) In this section—
- “*money*” includes money expressed in a currency other than sterling,
- “*property*” means property in any form,
- “*stock lending arrangement*” and “*securities*” have the same meaning as in section 263B of the 1992 Act,
- “*transfer*” means a transfer otherwise than by way of sale.
#### Losses from UK property business.
##### 737A
- (1) This section applies where on or after the appointed day a person (the transferor) agrees to sell any securities, and the transferor or a person connected with him—
- (a) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (b) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises;
but this section does not apply unless either the conditions set out in subsection (2) below or the conditions set out in subsection (2A) below are fulfilled.
- (2) The first set of conditions referred to in subsection (1) above are that—
- (a) as a result of the transaction, a dividend which becomes payable in respect of the securities is receivable otherwise than by the transferor,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) there is no requirement under any agreement mentioned in subsection (1) above for a person to pay to the transferor on or before the relevant date an amount representative of the dividend, and
- (d) it is reasonable to assume that, in arriving at the repurchase price of the securities, account was taken of the fact that the dividend is receivable otherwise than by the transferor.
- (2A) The second set of conditions referred to in subsection (1) above are that—
- (a) a dividend which becomes payable in respect of the securities is receivable otherwise than by the transferor,
- (b) the transferor or a person connected with him is required under any agreement mentioned in subsection (1) above to make a payment representative of the dividend,
- (c) there is no requirement under any such agreement for a person to pay to the transferor on or before the relevant date an amount representative of the dividend, and
- (d) it is reasonable to assume that, in arriving at the repurchase price of the securities, account is taken of the circumstances referred to in paragraphs (a) to (c).
- (3) For the purposes of subsections (2) and (2A) above the relevant date is the date when the repurchase price of the securities becomes due.
- (4) Where it is a person connected with the transferor who is required to buy back the securities, or who acquires the option to buy them back, references in the following provisions of this section to the transferor shall be construed as references to the connected person.
- (5) Where this section applies, . . . Schedule 23A and dividend manufacturing regulations shall apply , subject to subsection (5A) below, as if—
- (a) the relevant person were required, under the arrangements for the transfer of the securities, to pay to the transferor an amount representative of the dividend mentioned in subsection (2)(a) or (2A)(a) above,
- (b) a payment were made by that person to the transferor in discharge of that requirement, and
- (c) the payment were made on the date when the repurchase price of the securities becomes due.
- (5A) If the relevant person is not the person to whom the transferor agreed to sell the securities, the relevant person is not entitled, by virtue of anything in Schedule 23A or any provision of dividend manufacturing regulations, or otherwise—
- (a) to any deduction in computing profits or gains for the purposes of income tax or corporation tax, or
- (b) to any deduction against total income or total profits,
by virtue of subsection (5) above.
Where the relevant person is a company, an amount may not be surrendered by way of group relief if a deduction in respect of it is prohibited by this subsection.
- (6) In this section“*the relevant person*” means—
- (a) where subsection (1)(a) above applies, the person from whom the transferor is required to buy back the securities;
- (b) where subsection (1)(b) above applies, the person from whom the transferor has the right to buy back the securities;
and in this section“*dividend manufacturing regulations*” means regulations under Schedule 23A (whenever made).
##### 737B
- (1) In section 737A and this section “*securities*” means United Kingdom equities, United Kingdom securities or overseas securities; and—
- (a) where the securities mentioned in section 737A(1) are United Kingdom securities, references in section 737A to a dividend shall be construed as references to a periodical payment of interest;
- (b) where the securities mentioned in section 737A(1) are overseas securities, references in section 737A to a dividend shall be construed as references to an overseas dividend.
- (2) In this section “*United Kingdom equities*”, “*United Kingdom securities*”, “*overseas securities*” and “*overseas dividend*” have the meanings given by paragraph 1(1) of Schedule 23A.
- (3) For the purposes of section 737A agreements are related if each is entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into).
- (4) In section 737A “*the repurchase price of the securities*” means—
- (a) where subsection (1)(a) of that section applies, the amount which, under any agreement mentioned in section 737A(1), the transferor or connected person is required to pay for the securities bought back, or
- (b) where subsection (1)(b) of that section applies, the amount which under any such agreement the transferor or connected person is required, if he exercises the option, to pay for the securities bought back.
- (5) In section 737A and subsection (4) above references to buying back securities include references to buying similar securities.
- (6) For the purposes of subsection (5) above securities are similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred; and “interest” here includes dividends.
- (7) For the purposes of section 737A and subsection (4) above—
- (a) a person who is connected with the transferor and is required to buy securities sold by the transferor shall be treated as being required to buy the securities back notwithstanding that it was not he who sold them, and
- (b) a person who is connected with the transferor and acquires an option to buy securities sold by the transferor shall be treated as acquiring an option to buy the securities back notwithstanding that it was not he who sold them.
- (8) Section 839 shall apply for the purposes of section 737A and this section.
- (9) In section 737A “*the appointed day*” means such day as the Treasury may by order appoint, and different days may be appointed in relation to—
- (a) United Kingdom equities,
- (b) United Kingdom securities, and
- (c) overseas securities.
##### 737C
- (1) This section applies where section 737A applies.
- (2) Subsection (3) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is a dividend on United Kingdom equities, and
- (b) by virtue of section 737A(5), . . . paragraph 2 of Schedule 23A applies, in relation to the payment which is treated under section 737A(5) as having been made;
and in subsection (3) below “*the deemed manufactured dividend*” means that payment.
- (3) Where this subsection applies—
- (a) the amount of the deemed manufactured dividend shall be taken to be an amount equal to the amount of the dividend mentioned in section 737A(2)(a) or (2A)(a);
- (b) the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by an amount equal to the . . . amount of the deemed manufactured dividend.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) Subsection (8) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is a periodical payment of interest on United Kingdom securities, and
- (b) by virtue of section 737A(5), paragraph 3 of Schedule 23A applies in relation to the payment which is treated under section 737A(5) as having been made . . . ;
and in subsection (8) below “*the deemed manufactured interest*” means the payment referred to in paragraph (b) above.
- (8) Where this subsection applies—
- (a) the amount which by virtue of section 737A(5) is taken to be the gross amount of the deemed manufactured payment for the purposes of paragraph 3 of Schedule 23A shall be taken to be the gross amount of the deemed manufactured interest for the purposes of this section;
- (b) any deduction which, by virtue of that paragraph, is required to be made out of the gross amount of the deemed manufactured interest shall be deemed to have been made.
- (9) Where . . . subsection (8) above applies, the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by the gross amount of the deemed manufactured interest.
- (10) Subsection (11) below applies where—
- (a) the dividend mentioned in section 737A(2)(a) or (2A)(a) is an overseas dividend, and
- (b) by virtue of section 737A(5), paragraph 4 of Schedule 23A applies in relation to the payment which is treated under section 737A(5) as having been made;
and in subsection (11) below “*the deemed manufactured overseas dividend*” means that payment.
- (11) Where this subsection applies—
- (a) the gross amount of the deemed manufactured overseas dividend shall be taken to be the amount found under paragraph 4(5)(b) and (c) of Schedule 23A;
- (b) any deduction which, by virtue of paragraph 4 of Schedule 23A, is required to be made out of the gross amount of the deemed manufactured overseas dividend shall be deemed to have been made;
- (c) the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by the gross amount of the deemed manufactured overseas dividend.
- (11A) The deemed increase of the repurchase price which is made for the purposes of section 730A by subsection (3)(b), (9) or (11)(c) above shall also have effect—
- (a) for all the purposes of the Tax Acts, other than section 737A, and
- (b) in cases where section 263A of the 1992 Act does not apply, for the purposes of the 1992 Act,
wherever in consequence of that increase there is for the purposes of section 730A no difference between the sale price and the repurchase price or where that section is prevented from applying by subsection (8) of that section.
- (11B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) In this section—
- (a) “*United Kingdom equities*”, “*United Kingdom securities*” and “*overseas dividend*” have the meanings given by paragraph 1(1) of Schedule 23A;
- (b) “*the repurchase price of the securities*” shall be construed in accordance with section 737B(4).
##### 737D
- (1) The Treasury may by regulations provide for any manufactured payment made to any person to be treated, in such circumstances and to such extent as may be described in the regulations, as comprised in income of that person that is eligible for relief from tax by virtue of section 438, 613(4) or 614(2), (3) or (4) or section 186 of the Finance Act 2004.
- (2) In this section “*manufactured payment*” means any . . . manufactured interest or manufactured overseas dividend, within the meaning of Schedule 23A.
##### 737E
- (1) The Treasury may by regulations make provision for all or any of sections 727A, 730A , 730BB and 737A to 737C to have effect with modifications in relation to cases involving any arrangement for the sale and repurchase of securities where—
- (a) the obligation to make the repurchase is not performed or the option to repurchase is not exercised;
- (b) provision is made by or under any agreement for different or additional securities to be treated as, or as included with, securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale;
- (c) provision is made by or under any agreement for any securities to be treated as not included with securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale;
- (d) provision is made by or under any agreement for the sale price or repurchase price to be determined or varied wholly or partly by reference to fluctuations, occurring in the period after the making of the agreement for the original sale, in the value of securities transferred in pursuance of that sale, or in the value of securities treated as representing those securities; or
- (e) provision is made by or under any agreement for any person to be required, in a case where there are any such fluctuations, to make any payment in the course of that period and before the repurchase price becomes due.
- (2) The Treasury may by regulations make provision for all or any of sections 727A, 730A , 730BB and 737A to 737C to have effect with modifications in relation to cases where—
- (a) arrangements, corresponding to those made in cases involving an arrangement for the sale and repurchase of securities, are made by any agreement, or by one or more related agreements, in relation to securities that are to be redeemed in the period after their sale; and
- (b) those arrangements are such that the person making the sale or a person connected with him (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will accrue from their redemption.
- (3) The Treasury may by regulations provide that section 730A or 730BB is to have effect with modifications in relation to cases involving any arrangement for the sale and repurchase of securities where there is an agreement relating to the sale or repurchase which is not such as would be entered into by persons dealing with each other at arm’s length.
- (4) The powers conferred by subsections (1) and (2) above shall be exercisable in relation to section 263A or 263D of the 1992 Act as they are exercisable in relation to section 730A of this Act.
- (5) Regulations made for the purposes of this section may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential and transitional provision as appears to the Treasury to be appropriate.
- (6) The supplementary, incidental and consequential provision that may be made by regulations under this section shall include—
- (a) in the case of regulations relating to section 730A, provision modifying subsections (3)(b), (9), (11)(c) and (11A) of section 737C; and
- (b) in the case of regulations relating to section 263A or 263D of the 1992 Act, provision modifying the operation of that Act in relation to cases where by virtue of the regulations any acquisition or disposal is excluded from those which are to be disregarded for the purposes of capital gains tax.
- (7) In this section “*modifications*” includes exceptions and omissions; and any power under this section to provide for an enactment to have effect with modifications in any case shall include power to provide for it not to apply (if it otherwise would do) in that case.
- (8) References in this section to a case involving an arrangement for the sale and repurchase of securities are references to any case where—
- (a) a person makes a sale of any securities under any agreement (“the original sale”); and
- (b) that person or a person connected with him—
- (i) is required to buy them back in pursuance of an obligation imposed by, or in consequence of the exercise of an option acquired under, that agreement or any related agreement, or
- (ii) acquires an option to buy them back under that agreement or any related agreement which he subsequently exercises.
- (9) Section 730B shall apply for the purposes of this section as it applies for the purposes of section 730A.
##### 741A
- (1) The individual is not liable to income tax by virtue of section 739 or 740 for the year of assessment by reference to the relevant transactions if he satisfies an officer of the Board—
- (a) that Condition A is met, or
- (b) in a case where Condition A is not met, that Condition B is met.
- (2) Condition A is that it would not be reasonable to draw the conclusion, from all the circumstances of the case, that the purpose of avoiding liability to taxation was the purpose, or one of the purposes, for which the relevant transactions or any of them were effected.
- (3) Condition B is that—
- (a) all the relevant transactions were genuine commercial transactions, and
- (b) it would not be reasonable to draw the conclusion, from all the circumstances of the case, that any one or more of those transactions was more than incidentally designed for the purpose of avoiding liability to taxation.
- (4) The intentions and purposes of any person who, whether or not for consideration,—
- (a) designs or effects the relevant transactions or any of them, or
- (b) provides advice in relation to the relevant transactions or any of them,
are to be taken into account in determining the purposes for which those transactions or any of them were effected.
- (5) A relevant transaction is a commercial transaction only if it is effected—
- (a) in the course of a trade or business, or
- (b) with a view to setting up and commencing a trade or business,
and, in either case, for the purposes of that trade or business.
- (6) For that purpose, the making and managing of investments, or the making or managing of investments, is not a trade or business except to the extent that—
- (a) the person by whom it is done, and
- (b) the person for whom it is done,
are independent persons dealing at arm's length.
- “*the Case V dividend*” means the dividend mentioned in section 806A(1);
- “*higher level dividend*”, in relation to another dividend, means any dividend—by which that other dividend is to any extent represented; andwhich either is the Case V dividend or is to any extent represented by the Case V dividend;
- “*lower level dividend*”, in relation to another dividend, means any dividend which—is received as mentioned in section 801(2) or (3); andis to any extent represented by that other dividend;
- “*the relevant tax*” means—in the case of the Case V dividend, the foreign tax to be taken into account as mentioned in section 799(1); andin the case of any other dividend, the amount of underlying tax to be treated as mentioned in section 801(2) or (3) in the case of the dividend.
##### 806C
- (1) In this section “qualifying foreign dividend" means any dividend which falls within section 806A(2), other than—
- (a) an ADP dividend paid by a controlled foreign company;
- (b) so much of any dividend paid by any company as represents an ADP dividend paid by another company which is a controlled foreign company;
- (c) a dividend in respect of which an amount of eligible unrelieved foreign tax arises.
- (2) For the purposes of this section—
- (a) a “related qualifying foreign dividend" is any qualifying foreign dividend paid to a company resident in the United Kingdom by a company which, at the time of payment of the dividend, is related to that company;
- (b) an “unrelated qualifying foreign dividend" is any qualifying foreign dividend which is not a related qualifying foreign dividend.
- (3) For the purposes of giving credit relief under this Part to a company resident in the United Kingdom—
- (a) the related qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (b) the unrelated qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (c) the underlying tax in relation to the related qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (d) so much of the foreign tax paid in respect of the qualifying foreign dividends that arise to the company in an accounting period as is not underlying tax shall be aggregated.
- (4) Credit relief under this Part shall be given as if—
- (a) the related qualifying foreign dividends aggregated under paragraph (a) of subsection (3) above in the case of any accounting period instead together constituted a single related qualifying foreign dividend arising in that accounting period (“*the single related dividend*” arising in that accounting period);
- (b) the unrelated qualifying foreign dividends aggregated under paragraph (b) of that subsection in the case of any accounting period instead together constituted a single unrelated qualifying foreign dividend arising in that accounting period (“*the single unrelated dividend*” arising in that accounting period);
- (c) the underlying tax aggregated under paragraph (c) of that subsection for any accounting period were instead underlying tax in relation to the single related dividend arising in that accounting period (the “aggregated underlying tax" in respect of the single related dividend);
- (d) the tax aggregated under paragraph (d) of that subsection for any accounting period were instead foreign tax (other than underlying tax) paid in respect of, and computed by reference to,—
- (i) the single related dividend arising in that accounting period,
- (ii) the single unrelated dividend so arising, or
- (iii) partly the one dividend and partly the other,
(that aggregated tax being referred to as the “*aggregated withholding tax*”).
- (5) For the purposes of this section, a dividend paid by a controlled foreign company is an “*ADP dividend*” if it is a dividend by virtue of which (whether in whole or in part and whether taken alone or with one or more other dividends) no apportionment under section 747(3) falls to be made as regards an accounting period of the controlled foreign company in a case where such an apportionment would fall to be made apart from section 748(1)(a).
##### 806D
- (1) For the purposes of this section, where—
- (a) any eligible unrelieved foreign tax arises in an accounting period of a company, and
- (b) the dividend in relation to which it arises is paid by a company which, at the time of payment of the dividend, is related to that company,
that tax is “eligible underlying tax" to the extent that it consists of or represents underlying tax.
- (2) To the extent that any eligible unrelieved foreign tax is not eligible underlying tax it is for the purposes of this section “*eligible withholding tax*”.
- (3) For the purposes of giving credit relief under this Part to a company resident in the United Kingdom—
- (a) the amounts of eligible underlying tax that arise in an accounting period of the company shall be aggregated (that aggregate being referred to as the “relievable underlying tax" arising in that accounting period); and
- (b) the amounts of eligible withholding tax that arise in an accounting period of the company shall be aggregated (that aggregate being referred to as the “relievable withholding tax" arising in that accounting period).
- (4) The relievable underlying tax arising in an accounting period of the company shall be treated for the purposes of allowing credit relief under this Part as if it were—
- (a) underlying tax in relation to the single related dividend that arises in the same accounting period,
- (b) relievable underlying tax arising in the next accounting period (whether or not any related qualifying foreign dividend in fact arises to the company in that accounting period), or
- (c) underlying tax in relation to the single related dividend that arises in such one or more preceding accounting periods as result from applying the rules in section 806E,
or partly in one of those ways and partly in each or either of the others.
- (5) The relievable withholding tax arising in an accounting period of the company shall be treated for the purposes of allowing credit relief under this Part as if it were—
- (a) foreign tax (other than underlying tax) paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend that arises in the same accounting period,
- (b) relievable withholding tax arising in the next accounting period (whether or not any qualifying foreign dividend in fact arises to the company in that accounting period), or
- (c) foreign tax (other than underlying tax) paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend that arises in such one or more preceding accounting periods as result from applying the rules in section 806E,
or partly in one of those ways and partly in any one or more of the others.
- (6) The amount of relievable underlying tax or relievable withholding tax arising in an accounting period that is treated—
- (a) under subsection (4)(a) or (c) above as underlying tax in relation to the single related dividend arising in the same or any earlier accounting period, or
- (b) under subsection (5)(a) or (c) above as foreign tax paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend arising in the same or any earlier accounting period,
must not be such as would cause an amount of eligible unrelieved foreign tax to arise in respect of that dividend.
##### 806E
- (1) Where any relievable tax is to be treated as mentioned in section 806D(4)(c) or (5)(c), the rules for determining the accounting periods in question (and the amount of the relievable tax to be so treated in relation to each of them) are those set out in the following provisions of this section.
- (2) Rule 1 is that the accounting periods in question must be accounting periods beginning not more than three years before the accounting period in which the relievable tax arises.
- (3) Rule 2 is that the relievable tax must be so treated that—
- (a) credit for, or for any remaining balance of, the relievable tax is allowed against corporation tax in respect of the single dividend arising in a later one of the accounting periods beginning as mentioned in rule 1 above,
before
- (b) credit for any of the relievable tax is allowed against corporation tax in respect of the single dividend arising in any earlier such accounting period.
- (4) Rule 3 is that the relievable tax must be so treated that, before allowing credit for any of the relievable tax against corporation tax in respect of the single dividend arising in any accounting period, credit for foreign tax is allowed—
- (a) first for the aggregated foreign tax in respect of the single dividend arising in that accounting period, so far as not consisting of relievable tax arising in another accounting period; and
- (b) then for relievable tax arising in any accounting period before that in which the relievable tax in question arises.
- (5) The above rules are subject to sections 806D(6) and 806F.
- (6) In this section—
- “*aggregated foreign tax*” means aggregated underlying tax or aggregated withholding tax;
- “*relievable tax*” means relievable underlying tax or relievable withholding tax;
- “*the single dividend*” means—in relation to relievable underlying tax, the single related dividend; andin relation to relievable withholding tax, the single related dividend or the single unrelated dividend.
##### 806F
- (1) For the purposes of this Part, credit in accordance with any arrangements shall, in the case of any dividend, be given so far as possible—
- (a) for underlying tax (where allowable) before foreign tax other than underlying tax;
- (b) for foreign tax other than underlying tax before amounts treated as underlying tax; and
- (c) for amounts treated as underlying tax (where allowable) before amounts treated as foreign tax other than underlying tax.
- (2) Accordingly, where the amount of foreign tax to be brought into account for the purposes of allowing credit relief under this Part is subject to any limitation or restriction, the limitation or restriction shall be taken to have the effect of excluding foreign tax other than underlying tax before excluding underlying tax.
##### 806G
- (1) The relievable underlying tax or relievable withholding tax arising in any accounting period shall only be treated as mentioned in subsection (4) or (5) of section 806D on a claim.
- (2) Any such claim must specify the amount (if any) of that tax—
- (a) which is to be treated as mentioned in paragraph (a) of the subsection in question;
- (b) which is to be treated as mentioned in paragraph (b) of that subsection; and
- (c) which is to be treated as mentioned in paragraph (c) of that subsection.
- (3) A claim under subsection (1) above may only be made before the expiration of the period of—
- (a) six years after the end of the accounting period mentioned in that subsection; or
- (b) if later, one year after the end of the accounting period in which the foreign tax in question is paid.
##### 806H
- (1) The Board may by regulations make provision for, or in connection with, allowing a company which is a member of a group to surrender all or any part of the amount of the relievable tax arising to it in an accounting period to another company which is a member of that group at the time, or throughout the period, prescribed by the regulations.
- (2) The provision that may be made under subsection (1) above includes provision—
- (a) prescribing the conditions which must be satisfied if a surrender is to be made;
- (b) determining the amount of relievable tax which may be surrendered in any accounting period;
- (c) prescribing the conditions which must be satisfied if a claim to surrender is to be made;
- (d) prescribing the consequences for tax purposes of a surrender having been made;
- (e) allowing a claim to be withdrawn and prescribing the effect of such a withdrawal.
- (3) Regulations under subsection (1) above—
- (a) may make different provision for different cases; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) For the purposes of subsection (1) above a company is a member of a group if the conditions prescribed for that purpose in the regulations are satisfied.
##### 806J
- (1) This section has effect for the interpretation of the foreign dividend provisions of this Chapter.
- (2) In this section, “*the foreign dividend provisions of this Chapter*” means sections 806A to 806H and this section.
- (3) For the purposes of the foreign dividend provisions of this Chapter, where—
- (a) one company pays a dividend (“*dividend A*”) to another company, and
- (b) that other company, or a company which is related to it, pays a dividend (“*dividend B*”) to another company,
dividend B represents dividend A, and dividend A is represented by dividend B, to the extent that dividend B is paid out of profits which are derived, directly or indirectly, from the whole or part of dividend A.
- (4) Where—
- (a) one company is related to another, and
- (b) that other is related to a third company,
the first company shall be taken for the purposes of paragraph (b) of subsection (3) above to be related to the third, and so on where there is a chain of companies, each of which is related to the next.
- (5) In any case where—
- (a) a company resident outside the United Kingdom pays a dividend to a company resident in the United Kingdom, and
- (b) the circumstances are such that subsection (6)(b) of section 790 has effect in relation to that dividend,
the foreign dividend provisions of this Chapter shall have effect as if the company resident outside the United Kingdom were related to the company resident in the United Kingdom (and subsection (10) of that section shall have effect accordingly).
- (6) Subsection (5) of section 801 (related companies) shall apply for the purposes of the foreign dividend provisions of this Chapter as it applies for the purposes of that section.
- (7) In the foreign dividend provisions of this Chapter—
- “*aggregated underlying tax*” shall be construed in accordance with section 806C(4)(c);
- “*aggregated withholding tax*” shall be construed in accordance with section 806C(4)(d);
- “*controlled foreign company*” has the same meaning as in Chapter IV of Part XVII;
- “*eligible unrelieved foreign tax*” shall be construed in accordance with sections 806A and 806B;
- “*the mixer cap*” means section 799(1)(b);
- “*qualifying foreign dividend*” has the meaning given by section 806C(1);
- “*related qualifying foreign dividend*” has the meaning given by section 806C(2)(a);
- “*relievable tax*” has the meaning given by section 806E(6);
- “*relievable underlying tax*” shall be construed in accordance with 806D(3)(a);
- “*relievable withholding tax*” shall be construed in accordance with 806D(3)(b);
- “*single related dividend*” shall be construed in accordance with section 806C(4)(a);
- “*single unrelated dividend*” shall be construed in accordance with section 806C(4)(b);“the upper percentage" is 45 per cent.
### Application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere
##### 806K
- (1) Sections 806A to 806J shall apply in relation to an amount of eligible unrelieved foreign tax arising in a chargeable period in respect of any of the income of a branch or agency in the United Kingdom of a person resident outside the United Kingdom as they apply in relation to eligible unrelieved foreign tax arising in an accounting period of a company resident in the United Kingdom in respect of any of the company’s income, but with the modifications specified in subsection (2) below.
- (2) Those modifications are—
- (a) take any reference to an accounting period as a reference to a chargeable period;
- (b) take any reference to corporation tax as including a reference to income tax;
- (bb) in relation to income tax, take any reference to a dividend chargeable under Case V of Schedule D as a reference to a dividend chargeable under Chapter 4 of Part 4 of ITTOIA 2005;
- (c) take the reference in section 806A(4)(a) to section 797 as a reference to sections 796 and 797;
- (d) in relation to income tax, for subsection (2) of section 806B substitute the subsection (2) set out in subsection (3) below.
- (3) That subsection is—
- (“) In Case A, the difference between—
- (a) the amount of the credit allowed as mentioned in section 806A(4)(b), and
- (b) the greater amount of credit that would have been so allowed if, for the purposes of section 796, the amount of income tax borne on the dividend as computed under that section were charged at a rate equal to the upper percentage,
shall be an amount of eligible unrelieved foreign tax. ".
### Unrelieved foreign tax: profits of overseas branch or agency
##### 806L
- (1) This section applies where, in any accounting period of a company resident in the United Kingdom, an amount of unrelieved foreign tax arises in respect of any of the company’s qualifying income from an overseas permanent establishment of the company.
- (2) The amount of the unrelieved foreign tax so arising shall be treated for the purposes of allowing credit relief under this Part as if it were foreign tax paid in respect of, and computed by reference to, the company’s qualifying income from the same overseas permanent establishment—
- (a) in the next accounting period (whether or not the company in fact has any such income from that source in that accounting period), or
- (b) in such one or more preceding accounting periods, beginning not more than three years before the accounting period in which the unrelieved foreign tax arises, as result from applying the rules in subsection (3) below,
or partly in the one way and partly in the other.
- (3) Where any unrelieved foreign tax is to be treated as mentioned in paragraph (b) of subsection (2) above, the rules for determining the accounting periods in question (and the amount of the unrelieved foreign tax to be so treated in relation to each of them) are that the unrelieved foreign tax must be so treated under that paragraph—
- (1) that—
- (a) credit for, or for any remaining balance of, the unrelieved foreign tax is allowed against corporation tax in respect of income of a later one of the accounting periods beginning as mentioned in that paragraph,
before
- (b) credit for any of the unrelieved foreign tax is allowed against corporation tax in respect of income of any earlier such period;
- (2) that, before allowing credit for any of the unrelieved foreign tax against corporation tax in respect of income of any accounting period, credit for foreign tax is allowed—
- (a) first for foreign tax in respect of the income of that accounting period, other than unrelieved foreign tax arising in another accounting period; and
- (b) then for unrelieved foreign tax arising in any accounting period before that in which the unrelieved foreign tax in question arises.
- (4) For the purposes of this section, the cases where an amount of unrelieved foreign tax arises in respect of any of a company’s qualifying income from an overseas permanent establishment in an accounting period are those cases where—
- (a) the amount of the credit for foreign tax which under any arrangements would, apart from section 797, be allowable against corporation tax in respect of that income,
exceeds
- (b) the amount of the credit for foreign tax which under the arrangements is allowed against corporation tax in respect of that income;
and in any such case that excess is the amount of the unrelieved foreign tax in respect of that income.
- (5) For the purposes of this section, a company’s qualifying income from an overseas permanent establishment is the profits of the overseas permanent establishment which are—
- (a) chargeable under Case I of Schedule D; or
- (b) included in the profits of life reinsurance business or overseas life assurance business chargeable under Case VI of Schedule D by virtue of section 439B or 441.
- (6) Where (whether by virtue of this subsection or otherwise) an amount of unrelieved foreign tax arising in an accounting period falls to be treated under subsection (2) above for the purposes of allowing credit relief under this Part as foreign tax paid in respect of, and computed by reference to, qualifying income of an earlier accounting period, it shall not be so treated for the purpose of any further application of this section.
- (7) In this section—
- “*commercial transaction*” does not include—a transaction on terms other than those that would have been made between independent persons dealing at arm's length, ora transaction that would not have been entered into between independent persons dealing at arm's length;
- “*independent persons*” means persons who are not connected with each other (within the meaning given by section 839);
- “*relevant transactions*” means—the transfer, andany associated operations;
- “*revenue*” includes taxes, duties and national insurance contributions;
- “*taxation*” includes any revenue for whose collection and management the Commissioners for Her Majesty's Revenue and Customs are responsible.
- (8) Any associated operation that would not (apart from this subsection) fall to be taken into account for the purposes of this section must be taken into account for those purposes if, were it to be so taken into account, the conditions in subsection (1) above would be failed by reference to—
- (a) that associated operation, or
- (b) that associated operation taken together with the transfer or any one or more other associated operations.
- (9) The jurisdiction of the Special Commissioners on any appeal includes jurisdiction to review any decision taken by an officer of the Board in exercise of the officer's functions under this section.
- (10) This section is subject to sections 741B and 741C (application of section 741 and this section etc).
##### 741B
- (1) This section makes provision with respect to the application for the year of assessment of—
- (a) section 741,
- (b) section 741A, or
- (c) section 741C,
in the case of the individual and the relevant transactions.
- (2) In this section—
- “*new transaction*” means a relevant transaction effected on or after the relevant date;
- “*old transaction*” means a relevant transaction effected before the relevant date;
- “*the relevant date*” means 5th December 2005;
- “*relevant transactions*” means—the transfer, andany associated operations.
- (3) If all the relevant transactions are old transactions, section 741 is the provision to be applied.
- (4) If all the relevant transactions are new transactions, section 741A is the provision to be applied.
- (5) If—
- (a) any one or more of the relevant transactions are old transactions, and
- (b) any one or more of the relevant transactions are new transactions,
section 741C is the provision to be applied.
##### 741C
- (1) This section applies by virtue of section 741B if the case falls within subsection (5) of that section.
- (2) Sections 739 and 740 do not apply, unless subsection (3) below applies.
- (3) This subsection applies if—
- (a) the conditions in section 741(1) are failed by reference to the old transactions or any of them, or
- (b) the conditions in section 741A(1) are failed by reference to the new transactions or any of them.
- (4) Where subsection (3) above applies, the general rule is that sections 739 and 740 apply as they would have applied apart from any exemption by virtue of sections 741 to 741C.
- (5) In any case where subsection (3) above applies by virtue only of paragraph (b) of that subsection, the general rule has effect subject to, and in accordance with, the Rules in subsections (6) to (8) below.
- (6) Rule 1 is that, for the purposes of section 739(2) or (3), any income arising before the relevant date must not be brought into account as income of the person resident or domiciled outside the United Kingdom.
- (7) Rule 2 is that for the purposes of section 740, where—
- (a) a benefit is received by the individual in a year of assessment ending after the relevant date, and
- (b) relevant income of years of assessment up to and including that year falls to be determined,
the general rule requires years ending before the relevant date to be brought into account as well as years ending after that date.
- (8) Rule 3 is that, for the purposes of section 740, a benefit received by the individual in the year 2005-06 is to be left out of account to the extent that, on a time apportionment basis, it fell to be enjoyed in any part of the year that falls before the relevant date.
- (9) This section is to be read as one with section 741B.
##### 741D
- (1) This section applies where—
- (a) an individual is liable to tax by virtue of section 739 for a year of assessment (the “taxable year”), but
- (b) the conditions in subsections (2) to (4) below are met.
- (2) Condition 1 is that since the making of the transfer there have been one or more years of assessment when the circumstances were such that, so far as relating to such of the relevant transactions as were effected before the end of the year, the individual—
- (a) was not liable to tax by virtue of section 739, or
- (b) would not have been liable to tax by virtue of section 739 if there had been any deemed income of his under that section,
because an appropriate exemption applied or, in a case falling within paragraph (b) above, would have applied.
- (3) Condition 2 is that the individual is liable to tax under section 739 in the taxable year in consequence of Condition B in section 741A(3) not being met.
- (4) Condition 3 is that the income by reference to which the individual is liable to tax for the taxable year is attributable—
- (a) partly to relevant transactions by reference to which the appropriate exemption applied for the last exempt year of assessment, and
- (b) partly to associated operations not falling within paragraph (a) above (“chargeable operations”).
- (5) For the purposes of this section, a year of assessment is “exempt” if it is one of the years of assessment mentioned in subsection (2) and there is no earlier year of assessment for which—
- (a) the individual was liable to tax by virtue of section 739, or
- (b) the individual would have been liable to tax by virtue of section 739, if there had been any deemed income of his under that section.
- (6) Where this section applies, the liability of the individual is to be reduced as if it fell to be determined by reference to only so much of the income as appears to an officer of the Board to be justly and reasonably attributable to chargeable operations in all the circumstances of the case.
- (7) The facts and matters that may be taken into account in determining for the purposes of subsection (6) above whether income may be regarded as justly and reasonably attributable to chargeable operations include whether, and to what extent, the chargeable operations or any of them directly or indirectly affect any of the following—
- (a) the character, description or amount of any income of any person,
- (b) any person's power to enjoy any income,
- (c) the character, description or amount of any income which a person has power to enjoy.
- (8) The jurisdiction of the Special Commissioners on any appeal includes jurisdiction to review any decision taken by an officer of the Board in exercise of the officer's functions under this section.
- (9) In this section—
- “*appropriate exemption*” means exemption by virtue of—paragraph (b) of section 741(1), orCondition B in section 741A(3);
- “*relevant transactions*” means—the transfer, andany associated operations.
#### Set-off against general income.
##### 747A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 748ZA
- (1) Nothing in section 748(1)(da) prevents an apportionment falling to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company (“X”) if condition A, B or C is met.
- (2) Condition A is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in the absence of this subsection, in consequence of the scheme, section 748(1)(da) would apply to prevent an apportionment falling to be made as regards the relevant accounting period of X, and
- (b) the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to secure that section 748(1)(da) prevents an apportionment falling to be made as regards that period, or that period and one or more other accounting periods of X.
- (3) Condition B is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in consequence of the scheme profits are shifted to X from another company (“Y”),
- (b) the main purpose or one of the main purposes of any party to the scheme in entering into the scheme is to ensure that section 748(1)(da) prevents an apportionment falling to be made as regards the chargeable profits of one or more controlled foreign companies for one or more accounting periods, and
- (c) the relevant accounting period of X falls wholly or partly within that accounting period or those accounting periods.
- (4) For the purposes of subsection (3), profits are shifted to X from Y if it is reasonable to suppose that in the absence of the scheme, and any similar scheme, the whole or a part of the income which is reflected in X's profits would have been reflected in Y's profits.
- (5) Condition C is that, in determining X's chargeable profits for the relevant accounting period—
- (a) section 418(5) of CTA 2009 (loan relationships involving connected debtor and creditor where debits exceed credits) has effect so as to treat X, for the purposes of Part 5 of that Act, as bringing into account for that period credits in respect of a loan relationship, or
- (b) Part 21B of CTA 2010 (group mismatch schemes) has effect so as to exclude an amount from being brought into account as a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).
- (6) For the purposes of this section—
- “*apportionment*” means an apportionment under section 747(3);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions.
##### 748A
- (1) Nothing in section 748 prevents an apportionment under section 747(3) falling to be made as regards an accounting period of a controlled foreign company if the company—
- (a) is a company incorporated in a territory to which this section applies as respects that accounting period; or
- (b) is at any time in that accounting period liable to tax in such a territory by reason of domicile, residence or place of management; or
- (c) at any time in that accounting period carries on business through a permanent establishment in such a territory.
- (2) The condition in subsection (1)(c) above is not satisfied as regards an accounting period of a controlled foreign company if the business carried on by the company in that period through permanent establishments in territories to which this section applies, taken as a whole, is only a minimal part of the whole of the business carried on by the company in that period.
- (3) The territories to which this section applies as respects an accounting period of a controlled foreign company are those specified as such in regulations made by the Treasury.
- (4) Regulations under subsection (3) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such incidental, supplemental, consequential or transitional provision as the Treasury may think fit.
- (5) A statutory instrument containing regulations under subsection (3) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
##### 749A
- (1) An election under paragraph (d) or a designation under paragraph (e) of section 749(3) shall have effect in relation to—
- (a) the accounting period in relation to which it is made (“the original accounting period"), and
- (b) each successive accounting period of the controlled foreign company in question which precedes the next one in which the eligible territories are different,
and shall so have effect notwithstanding any change in the persons who have interests in the company or any change in the interests which those persons have in the company.
- (2) For the purposes of subsection (1)(b) above, an accounting period of the controlled foreign company is one in which the eligible territories are different if in the case of that accounting period—
- (a) at least one of the two or more territories which fell within subsection (1) of section 749 in the original accounting period does not fall within that subsection; or
- (b) some other territory also falls within that subsection.
- (3) Any election under section 749(3)(d)—
- (a) must be made by notice given to an officer of the Board;
- (b) must be made no later than twelve months after the end of the controlled foreign company’s accounting period in relation to which it is made;
- (c) must state, as respects each of the persons making it, the percentage of the chargeable profits and creditable tax (if any) of the controlled foreign company for that accounting period which it is likely would be apportioned to him on an apportionment under section 747(3) if one were made;
- (d) must be signed by the persons making it; and
- (e) is irrevocable.
- (4) Nothing in—
- (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or
- (b) Schedule 1A to the Management Act (claims or elections not included in returns),
shall apply, whether by virtue of section 754 or otherwise, to an election under section 749(3)(d).
- (5) A designation under section 749(3)(e) is irrevocable.
- (6) Where the Board make a designation under section 749(3)(e), notice of the making of the designation shall be given to every company resident in the United Kingdom which appears to the Board to have had an assessable interest in the controlled foreign company at any time during the accounting period of the controlled foreign company in relation to which the designation is made.
- (7) A notice under subsection (6) above shall specify—
- (a) the date on which the designation was made;
- (b) the controlled foreign company to which the designation relates;
- (c) the accounting period of the controlled foreign company in relation to which the designation is made; and
- (d) the territory designated.
- (8) Subsection (9) of section 749 has effect for the purposes of subsection (6) above as it has effect for the purposes of subsection (8) of that section.
##### 749B
- (1) For the purposes of this Chapter, the following persons have an interest in a company—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company;
- (c) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit; and
- (d) any other person who, either alone or together with other persons, has control of the company.
- (2) Rights which a person has as a loan creditor of a company do not constitute an interest in the company for the purposes of this Chapter.
- (3) For the purposes of subsection (1)(b) above, the definition of “distribution" in Part VI shall be construed without any limitation to companies resident in the United Kingdom.
- (4) References in subsection (1) above to being entitled to do anything apply where a person—
- (a) is presently entitled to do it at a future date, or
- (b) will at a future date be entitled to do it;
but a person whose entitlement to secure that any income or assets of the company will be applied as mentioned in paragraph (c) of that subsection is contingent upon a default of the company or any other person under any agreement shall not be treated as falling within that paragraph unless the default has occurred.
- (5) Where a company has an interest in another company and a third person has, or two or more persons together have, an interest in the first company (as in a case where one company has a shareholding in a controlled foreign company and the first company is controlled by a third company or by two or more persons together) subsections (6) and (7) below apply.
- (6) Where this subsection applies, the person who has, or each of the persons who together have, the interest in the first company shall be regarded for the purposes of this Chapter as thereby having an interest in the second company.
- (7) In any case where this subsection applies, in construing references in this Chapter to one person having the same interest as another, the person or, as the case may be, each of the persons who together have, the interest in the first company shall be treated as having, to the extent of that person’s interest in that company, the same interest as the first company has in the second company.
- (8) Where two or more persons jointly have an interest in a company otherwise than in a fiduciary or representative capacity, they shall be treated for the purposes of this Chapter as having the interest in equal shares.
##### 750A
- (1) Where—
- (a) in any accounting period a company is to be regarded by virtue of any of subsections (1) to (4) of section 749 as resident in a particular territory outside the United Kingdom, and
- (b) within the meaning of section 750(1), the local tax in respect of the profits arising to the company in that accounting period is equal to or greater than three-quarters of the corresponding United Kingdom tax on those profits, but
- (c) that local tax is determined under designer rate tax provisions,
the company shall be taken for the purposes of this Chapter to be subject to a lower level of taxation in that territory in that accounting period.
- (2) In subsection (1) above “*designer rate tax provisions*” means provisions—
- (a) which appear to the Board to be designed to enable companies to exercise significant control over the amount of tax which they pay; and
- (b) which are specified in regulations made by the Board.
- (3) Regulations under subsection (2) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) The first regulations under subsection (2) above may make provision having effect in relation to accounting periods beginning not more than fifteen months before the date on which the regulations are made.
##### 751A
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) throughout that period the controlled foreign company has a business establishment in an EEA territory,
- (c) throughout that period there are individuals who work for the controlled foreign company in that territory, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) those chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in those chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the amount (if any) equal to so much of those chargeable profits as can reasonably be regarded as representing the net economic value which—
- (a) arises to the appropriate body of persons (taken as a whole), and
- (b) is created directly by qualifying work.
- (5) For the purposes of subsection (4) “*net economic value*” does not include any value which derives directly or indirectly from the reduction or elimination of any liability of any person to any tax or duty imposed under the law of any territory.
- (6) For the purposes of subsection (4) “*the appropriate body of persons*” means—
- (a) if the controlled foreign company is not a member of a group of companies, the controlled foreign company and the persons who have an interest in it at any time in the relevant accounting period, and
- (b) if the controlled foreign company is a member of a group of companies, all the persons falling within paragraph (a) and any other person who is a member of that group of companies,
and for the purposes of this subsection “*group of companies*” means a company and any other companies of which it has control.
- (7) For the purposes of subsection (4) “*qualifying work*” means work which—
- (a) is done in any EEA territory in which the controlled foreign company has a business establishment throughout the relevant accounting period, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (8) Any reference in this section to a business establishment of a controlled foreign company in an EEA territory is to be construed in accordance with paragraph 7 of Schedule 25 (but as if the reference in that paragraph to the territory in which the company is resident were to the EEA territory).
- (9) For the purposes of this section individuals are not to be regarded as working for a company in any territory unless—
- (a) they are employed by the company in the territory, or
- (b) they are otherwise directed by the company to perform duties on its behalf in the territory.
#### Carry-forward against subsequent profits.
##### 751AA
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) the chargeable profits of the controlled foreign company for the relevant accounting period would, apart from this section, include an amount of income in respect of a payment made by another company (“the payer”),
- (c) the amount that the payer brings into account for the purposes of corporation tax in respect of the payment is reduced (in part or in full) by virtue of Part 3 of Schedule 15 to FA 2009 (tax treatment of financing costs and income), and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in the relevant accounting period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the relevant amount.
- (5) In subsection (4) “*the relevant amount*” means the amount (if any) by which it is just and reasonable that the chargeable profits should be treated as reduced, having regard to the effect of Parts 3 and 4 of Schedule 15 to FA 2009 on amounts brought into account for the purposes of corporation tax by the payer, or any other company.
#### Treatment of interest as a loss for purposes of carry-forward and carry-back.
##### 751AB
- (1) This section applies if—
- (a) an apportionment under section 747(3) would fall to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) but for a relevant failure, section 748(1)(ba) or (bb) would have prevented such an apportionment, and
- (c) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) “*Relevant failure*” means—
- (a) in the case of section 748(1)(ba), one or both of the following—
- (i) a failure to satisfy the requirement of paragraph 12E of Schedule 25 (requirement as to company's UK connection) in circumstances where the requirement would be satisfied if the reference in sub-paragraph (3)(a) of that paragraph to 10% were a reference to 50%, and
- (ii) a failure to satisfy the requirement of paragraph 12F of that Schedule (finance income and relevant IP income) in circumstances where the relevant IP income of the controlled foreign company for the accounting period does not exceed 5% of the company's gross income for that period, and
- (b) in the case of section 748(1)(bb), a failure to satisfy the requirement of paragraph 12M of that Schedule (finance income).
- (3) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced to an amount specified in the application (“*the specified amount*”).
The specified amount may be nil.
- (4) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (5) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AC.
- (6) “*The relevant amount*” means—
- (a) if the relevant failure is within subsection (2)(a), the sum of—
- (i) the excess finance and IP income (if any) for the relevant accounting period, and
- (ii) in a case where there is a failure specified in subsection (2)(a)(i), so much (if any) of the net chargeable profits for that period as are not excluded by subsection (8), and
- (b) if the relevant failure is within subsection (2)(b)—
- (i) the amount (if any) by which the controlled foreign company's finance income for the relevant accounting period exceeds 5% of its gross income for that period, or
- (ii) if that amount is a negligible amount, nil.
- (7) “The excess finance and IP income” for the relevant accounting period means—
- (a) the amount (if any) by which the total of the controlled foreign company's finance income and relevant IP income for that period exceeds 5% of its gross income for that period, or
- (b) if that amount is a negligible amount, nil.
- (8) Net chargeable profits are excluded by this subsection if, and to the extent that, they can reasonably be regarded—
- (a) as representing the net economic value which—
- (i) arises to the appropriate body of persons (taken as a whole), and
- (ii) is created directly by qualifying work, or
- (b) as not being wholly or partly attributable, directly or indirectly, to transactions with persons within the charge to United Kingdom tax.
- (9) In subsection (8)(a) “*qualifying work*” means work which—
- (a) is done in the territory in which the controlled foreign company is resident, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (10) A transaction with a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there is within subsection (8)(b) only if the transaction is attributable to activities carried on through that establishment.
- (11) For the purposes of subsections (8) and (9)—
- (a) section 751A(5), (6) and (9) applies as it applies for the purposes of the equivalent provisions of section 751A, and
- (b) paragraph 5(2) to (5) of Schedule 25 (residence of controlled foreign company) applies as it applies in relation to Part 2 of that Schedule.
- (12) In this section—
- “*finance income*” has the meaning given by paragraph 12F(3) of Schedule 25 (with references to C read as references to the controlled foreign company);
- “*relevant IP income*” has the meaning given by paragraph 12F(4) of that Schedule;
- “*net chargeable profits*” means chargeable profits excluding so much of those profits as is directly attributable to the finance income or relevant IP income of the controlled foreign company;
- “*UK-connected gross income*” has the same meaning as in paragraph 12E of Schedule 25;
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G of that Schedule (gross income) applies for the purposes of this section as it applies for the purposes of Part 2A of that Schedule (with references to C read as references to the controlled foreign company).
#### Schedule A losses.
##### 751AC
- (1) This section applies if—
- (a) an exempt period in relation to a controlled foreign company ends in accordance with paragraph 15F(2) of Schedule 25 (time exempt period ends if there is an early termination event), other than by reason of an early termination event within paragraph 15F(3)(b),
- (b) an accounting period (“*the relevant accounting period*”) of the company ends after that exempt period but before the time the exempt period would have ended had paragraph 15F(2) of that Schedule not applied,
- (c) an apportionment under section 747(3) would fall to be made as regards the relevant accounting period, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for that accounting period (“the chargeable profits”) to be reduced to an amount (“*the specified amount*”) specified in the application (which may be nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AB.
- (5) “*The relevant amount*” means the amount (if any) equal to so much of the chargeable profits as it is just and reasonable to regard as referable to—
- (a) the relevant transaction which triggered the end of the exempt period, or
- (b) any later relevant transaction occurring before the time the exempt period would have ended had paragraph 15F(2) of Schedule 25 not applied.
- (6) “*Relevant transaction*” has the meaning given by paragraph 15E of Schedule 25 (and it does not matter if the transaction occurs pursuant to an agreement entered into by the controlled foreign company before the relevant time (within the meaning of paragraph 15G of that Schedule)).
#### Losses other than terminal losses.
##### 751B
- (1) An application by a company under section 751A—
- (a) must be made in such form as the HMRC Commissioners may determine,
- (b) must be accompanied by such documents (or copies of documents) in the company's possession or power as those Commissioners may reasonably require for the purpose of determining whether to grant the application, and
- (c) must contain such information as those Commissioners may reasonably require for that purpose.
- (2) An application by a company under section 751A—
- (a) may be made at any time on or before the filing date (within the meaning of Schedule 18 to the Finance Act 1998) for the relevant company tax return of the company, and
- (b) may be amended or withdrawn at any time before the application is determined by those Commissioners.
- (3) If an application by a company under section 751A is granted after the company has delivered its relevant company tax return, it has 30 days beginning with the day on which the application is granted in which to amend that return to give effect to section 751A.
- (4) The time limits otherwise applicable to an amendment of a company tax return do not prevent an amendment being made under subsection (3).
- (5) If the HMRC Commissioners refuse an application by a company under section 751A, the company may appeal to the Special Commissioners against the refusal.
- (6) Notice of an appeal must be given in writing to the HMRC Commissioners within 30 days after the application is refused.
- (7) On an appeal—
- (a) if the Special Commissioners are satisfied that the relevant amount is a different amount from the amount specified in the application, they must direct the HMRC Commissioners to grant the application as if the amount specified in it were that different amount,
- (b) if the Special Commissioners are satisfied that the relevant amount is the amount specified in the application, they must direct the HMRC Commissioners to grant the application, and
- (c) in any other case, the Special Commissioners must confirm the refusal.
- (8) For the purposes of subsection (7) “*the relevant amount*” means the amount (if any) equal to so much of the chargeable profits mentioned in subsection (4) of section 751A as can reasonably be regarded as representing the value mentioned in that subsection.
- (9) Part 5 of the Management Act (appeals against assessments to tax), apart from section 50, applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to tax.
- (10) In this section “*relevant company tax return*”, in relation to a company, means the return for the accounting period for which—
- (a) any sum is chargeable on the company under section 747(4)(a), or
- (b) any sum would be so chargeable but for section 751A,
in respect of the chargeable profits of the controlled foreign company for the accounting period mentioned in section 751A(1).
- (11) In this section “*the HMRC Commissioners*” means the Commissioners for Her Majesty's Revenue and Customs.
#### Losses from overseas property business.
##### 752A
- (1) This section has effect for the purpose of determining for the purposes of this Chapter who has a relevant interest in a controlled foreign company at any time; and references in this Chapter to relevant interests shall be construed accordingly.
- (2) A UK resident company which has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (3) below otherwise provides.
- (3) A UK resident company which has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if it has the interest by virtue of having a direct or indirect interest in another UK resident company.
- (4) A related person who has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (5) or (6) below otherwise provides.
- (5) A related person who has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if he has the interest by virtue of having a direct or indirect interest in—
- (a) a UK resident company; or
- (b) another related person.
- (6) A related person who has a direct or indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest to the extent that a UK resident company—
- (a) has the whole or any part of the same interest indirectly, by virtue of having a direct or indirect interest in the related person, and
- (b) by virtue of that indirect interest in the controlled foreign company, has a relevant interest in the company by virtue of subsection (2) above.
- (7) A person who—
- (a) has a direct interest in a controlled foreign company, but
- (b) does not by virtue of subsections (2) to (6) above have a relevant interest in the company by virtue of that interest,
has a relevant interest in the company by virtue of that interest unless subsection (8) below otherwise provides.
- (8) A person does not by virtue of subsection (7) above have a relevant interest in a controlled foreign company by virtue of having a direct interest in the company to the extent that another person—
- (a) has the whole or any part of the same interest indirectly, and
- (b) by virtue of that indirect interest, has a relevant interest in the company by virtue of subsections (2) to (6) above.
- (9) No person has a relevant interest in a controlled foreign company otherwise than as provided by subsections (2) to (8) above.
- (10) In this section—
- “*related person*” means a person who—is not a UK resident company, butis connected or associated with a UK resident company which has by virtue of subsection (2) above a relevant interest in the controlled foreign company in question;
- “*UK resident company*” means a company resident in the United Kingdom.
##### 752B
- (1) For the purposes of section 752(3) above, where a person has a relevant interest in a controlled foreign company by virtue of indirectly holding issued ordinary shares of the company, the percentage of the issued ordinary shares of the company which the relevant interest represents is equal to—
$$P×S$where—P is the product of the appropriate fractions of that person and each of the share-linked companies through which he indirectly holds the shares in question, other than the lowest share-linked company; andS is the percentage of issued ordinary shares of the controlled foreign company which is held directly by the lowest share-linked company.$
- (2) In subsection (1) above and this subsection—
- “the appropriate fraction", in the case of a person who directly holds ordinary shares of a share-linked company, means that fraction of the issued ordinary shares of that company which his holding represents;
- “*the lowest share-linked company*”, in relation to a person who indirectly holds ordinary shares of a controlled foreign company, means the share-linked company which directly holds the shares in question;
- “*share-linked company*” means a company which is share-linked to the controlled foreign company in question.
- (3) Where a person has different indirect holdings of shares of the controlled foreign company (as in a case where different shares are held through different companies which are share-linked to the controlled foreign company)—
- (a) subsection (1) above shall apply separately in relation to the different holdings with any necessary modifications; and
- (b) for the purposes of section 752(3) above the percentage of the issued ordinary shares of the company which the relevant interest represents is the aggregate of the percentages resulting from those separate applications.
- (4) Where, for the purposes of subsection (3) of section 752, the percentage of the issued ordinary shares of the controlled foreign company which a person directly or indirectly holds varies during the relevant accounting period, he shall be treated for the purposes of that subsection as holding throughout that period that percentage of the issued ordinary shares of the company which is equal to the sum of the relevant percentages for each holding period in the relevant accounting period.
- (5) For the purposes of subsection (4) above—
- “holding period", in the case of any person, means a part of the relevant accounting period during which the percentage of the issued ordinary shares of the controlled foreign company which the person holds (whether directly or indirectly) remains the same;
- “the relevant percentage", in the case of a holding period, means the percentage equal to—$P×HA$where—P is the percentage of the issued ordinary shares of the controlled foreign company which the person in question directly or indirectly holds in the holding period, as calculated in accordance with subsections (1) to (3) above so far as applicable;H is the number of days in the holding period; andA is the number of days in the relevant accounting period.
##### 752C
- (1) In this section “*the relevant provisions*” means sections 752 to 752B and this section.
- (2) For the purposes of the relevant provisions—
- (a) a person has a direct interest in a company if (and only if) he has an interest in the company otherwise than by virtue of having an interest in another company;
- (b) a person has an indirect interest in a company if (and only if) he has an interest in the company by virtue of having an interest in another company;
- (c) a person indirectly holds shares of a controlled foreign company if (and only if) he directly holds ordinary shares of a company which is share-linked to the controlled foreign company.
- (3) For the purposes of the relevant provisions, a company is “share-linked" to a controlled foreign company if it has an interest in the controlled foreign company only by virtue of directly holding ordinary shares—
- (a) of the controlled foreign company, or
- (b) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) above, or
- (c) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) or (b) above,
and so on.
- (4) For the purposes of the relevant provisions, a company (“company A") has an intermediate interest in a controlled foreign company if (and only if)—
- (a) it has a direct or indirect interest in the controlled foreign company; and
- (b) one or more other persons have relevant interests in the controlled foreign company by virtue of having a direct or indirect interest in company A.
- (5) Any interest or shares held by a nominee or bare trustee shall be treated for the purposes of the relevant provisions as held by the person or persons for whom the nominee or bare trustee holds the interest or shares.
- (6) Where—
- (a) an interest in a controlled foreign company is held in a fiduciary or representative capacity, and
- (b) subsection (5) above does not apply, but
- (c) there are one or more identifiable beneficiaries,
the interest shall be treated for the purposes of the relevant provisions as held by that beneficiary or, as the case may be, as apportioned on a just and reasonable basis among those beneficiaries.
- (7) In the relevant provisions—
- “*bare trustee*” means a person acting as trustee—for a person absolutely entitled as against the trustee; orfor any person who would be so entitled but for being a minor or otherwise under a disability; orfor two or more persons who are or would, but for all or any of them being a minor or otherwise under a disability, be jointly so entitled;
- “ordinary shares", in the case of any company, means shares of a single class, however described, which is the only class of shares issued by the company;
- “*the relevant accounting period*” means the accounting period mentioned in section 752(1);
- “*share*” includes a reference to a fraction of a share.
##### 754A
- (1) This section applies where—
- (a) a company resident in the United Kingdom (“the UK company") has an interest in a controlled foreign company at any time during an accounting period of the controlled foreign company;
- (b) the UK company delivers a company tax return; and
- (c) at the time when the UK company delivers the company tax return, it is not established whether or not the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period.
- (2) If the UK company is of the opinion that the controlled foreign company is likely to pursue an acceptable distribution policy in relation to the accounting period, the UK company shall make the company tax return on the basis that the accounting period of the controlled foreign company is one in relation to which the controlled foreign company pursues such a policy.
- (3) If the UK company is not of the opinion that the controlled foreign company is likely to pursue an acceptable distribution policy in relation to the accounting period, the UK company shall make the company tax return on the basis that the accounting period of the controlled foreign company is one in relation to which the controlled foreign company does not pursue such a policy.
- (4) In any case where—
- (a) the UK company acts in pursuance of subsection (2) above, but
- (b) it becomes established that the controlled foreign company has not pursued an acceptable distribution policy in relation to the accounting period,
the UK company shall amend the company tax return on the basis that the accounting period is not one in relation to which the controlled foreign company pursues an acceptable distribution policy.
- (5) In any case where—
- (a) the UK company acts in pursuance of subsection (3) above, but
- (b) it becomes established that the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period,
the UK company shall amend the company tax return on the basis that the accounting period is one in relation to which the controlled foreign company pursues an acceptable distribution policy.
- (6) Any amendment required to be made to the company tax return by virtue of subsection (4) or (5) above (“*an ADP amendment*”) shall be made by the UK company before the expiration of the period of 30 days next following the end of the period allowed for establishing an ADP in relation to the accounting period of the controlled foreign company.
- (7) Subject to subsection (8) below, the making of any ADP amendment is subject to, and must be in accordance with, the other provisions of the Corporation Tax Acts as they apply for the purposes of this Chapter.
- (8) The time limits otherwise applicable to amendment of a company tax return do not apply to an ADP amendment.
- (9) A company which fails to make an ADP amendment required by subsection (4) above within the time allowed for doing so shall be liable to a tax-related penalty under paragraph 20 of Schedule 18 to the Finance Act 1998 (penalty, not exceeding amount of tax understated, for incorrect or uncorrected return).
- (10) For the purposes of this section, if it has not previously been established whether or not the controlled foreign company has pursued an acceptable distribution policy in relation to the accounting period, it shall be taken to be established immediately after the end of the period allowed for establishing an ADP in relation to that accounting period.
- (11) In this section, “*the period allowed for establishing an ADP*” means, in relation to an accounting period of a controlled foreign company, the period ending with the expiration of—
- (a) subject to paragraph (b) below, the period of eighteen months next following the end of the accounting period; or
- (b) if the Board have, in the case of the accounting period, allowed further time under paragraph 2(1)(b) of Schedule 25, the further time so allowed.
- (12) In this section any reference to a controlled foreign company pursuing an acceptable distribution policy in relation to an accounting period shall be construed in accordance with Part I of Schedule 25.
##### 754B
- (1) This section has effect where a determination requiring the Board’s sanction is made for any of the following purposes, that is to say—
- (a) the giving of a closure notice; or
- (b) the making of a discovery assessment.
- (2) If the closure notice or, as the case may be, notice of the discovery assessment is given to any person without—
- (a) the determination, so far as it is taken into account in the closure notice or the discovery assessment, having been approved by the Board, or
- (b) notification of the Board’s approval having been served on that person at or before the time of the giving of the notice,
the closure notice or, as the case may be, the discovery assessment shall be deemed to have been given or made (and in the case of an assessment notified) in the terms (if any) in which it would have been given or made had that determination not been taken into account.
- (3) A notification under subsection (2)(b) above—
- (a) must be in writing;
- (b) must state that the Board have given their approval on the basis that—
- (i) an amount of chargeable profits, and
- (ii) an amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question fall to be apportioned under section 747(3) to the person in question;
- (c) must state the amounts mentioned in sub-paragraphs (i) and (ii) of paragraph (b) above; and
- (d) subject to paragraphs (a) to (c) above, may be in such form as the Board may determine.
- (4) For the purposes of this section, the Board’s approval of a determination requiring their sanction—
- (a) must be given specifically in relation to the case in question and must apply to the amount determined; but
- (b) subject to that, may be given by the Board (either before or after the making of the determination) in any such form or manner as they may determine.
- (5) In this section references to a determination requiring the Board’s sanction are references (subject to subsection (6) below) to any determination of the amount of chargeable profits or creditable tax for an accounting period of a controlled foreign company which falls to be apportioned to a particular person under section 747(3).
- (6) For the purposes of this section, a determination shall be taken, in relation to a closure notice or a discovery assessment, not to be a determination requiring the Board’s sanction if—
- (a) an agreement about the relevant amounts has been made between an officer of the Board and the person in whose case it is made;
- (b) that agreement is in force at the time of the giving of the closure notice or, as the case may be, notice of the assessment; and
- (c) the matters to which the agreement relates include the amount determined.
- (7) In paragraph (a) of subsection (6) above, “*the relevant amounts*” means—
- (a) the amount of chargeable profits, and
- (b) the amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question which fall to be apportioned under section 747(3) to the person mentioned in that paragraph.
- (8) For the purposes of subsection (6) above an agreement made between an officer of the Board and any person (“the taxpayer") in relation to any matter shall be taken to be in force at any time if, and only if—
- (a) the agreement is one which has been made or confirmed in writing;
- (b) that time is after the end of the period of thirty days beginning—
- (i) in the case of an agreement made in writing, with the day of the making of the agreement, and
- (ii) in any other case, with the day of the agreement’s confirmation in writing; and
- (c) the taxpayer has not, before the end of that period of thirty days, served a notice on an officer of the Board stating that he is repudiating or resiling from the agreement.
- (9) The references in subsection (8) above to the confirmation in writing of an agreement are references to the service on the taxpayer by an officer of the Board of a notice—
- (a) stating that the agreement has been made; and
- (b) setting out the terms of the agreement.
- (10) The matters that may be questioned on so much of any appeal by virtue of any provision of the Management Act or Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) as relates to a determination the making of which has been approved by the Board for the purposes of this section shall not include the Board’s approval, except to the extent that the grounds for questioning the approval are the same as the grounds for questioning the determination itself.
- (11) In this section—
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998 (completion of enquiry and statement of conclusions);
- “*discovery assessment*” means a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule).
##### 755A
- (1) This section applies in any case where—
- (a) an amount (“the apportioned profit") of a controlled foreign company’s chargeable profits for an accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (b) the UK company carries on life assurance business in that one of its accounting periods (“the relevant accounting period") in which ends the accounting period of the controlled foreign company; and
- (c) the property or rights which represent the UK company’s relevant interest in the controlled foreign company constitute to any extent assets of the UK company’s long-term insurance fund.
- (2) Subsections (3) and (4) below apply if, in the case of the relevant accounting period, the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business.
- (3) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 in relation to the policy holders’ part of any BLAGAB apportioned profit shall be—
- (a) if a single rate of tax under section 88(1) of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the relevant accounting period, that rate; or
- (b) if more than one such rate of tax is applicable in relation to the relevant accounting period, the average of those rates over the whole of that period.
- (4) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 shall be nil in relation to so much of the apportioned profit as is referable to—
- (a) pension business,
- (b) life reinsurance business, or
- (c) overseas life assurance business,
carried on by the UK company.
- (4A) In any case where—
- (a) paragraph 4 of Schedule 26 to this Act applies to a dividend received by the UK company, and
- (b) but for this subsection, subsection (4) of section 804B of this Act would apply to that dividend,
the amount of credit for foreign tax in respect of that dividend shall be treated, for the purposes of that section, as wholly attributable to basic life assurance and general annuity business.
- (5) If, in the case of the relevant accounting period, the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, the “*appropriate rate*” for the purposes of—
- (a) section 747(4)(a), and
- (b) paragraph 1 of Schedule 26,
shall be nil in relation to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of its long-term insurance fund.
- (6) If, in the case of the relevant accounting period,—
- (a) the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business,
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, and
- (c) the apportioned profit is to any extent referable to a category of business specified in paragraphs (a) to (c) of subsection (4) above,
so much of the creditable tax so apportioned as is attributable to the apportioned profit so far as so referable shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (7) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, and
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company,
so much of the creditable tax so apportioned as is attributable to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of the UK company’s long-term insurance fund shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (8) Any set off under paragraph 1 . . . of Schedule 26 against the UK company’s liability to tax under section 747(4)(a) in respect of the apportioned profit shall be made against only so much of that liability as is attributable to the eligible part of the apportioned profit.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of this section, the “eligible part" of the apportioned profit is any BLAGAB apportioned profit, other than the policy holders’ part.
- (11) For the purposes of this section the policy holders' part of any BLAGAB apportioned profit is—
- (a) where subsection (11A) below applies, the whole of that profit, and
- (b) in any other case, the relevant fraction (within the meaning of subsection (11B) below) of that profit.
- (11A) This subsection applies if—
- (a) the UK company’s life assurance business is mutual business,
- (b) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is equal to all those profits, or
- (c) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is more than its BLAGAB profits for that period.
- (11B) The relevant fraction for the purposes of subsection (11)(b) above is the fraction arrived at by dividing—
- (a) the policy holders' share of the UK company’s relevant profits for the relevant accounting period, by
- (b) the UK company’s BLAGAB profits for that period.
- (11C) In subsections (11A) and (11B) above—
- (a) references to the policy holders' share of the UK company’s share of the relevant profits are to be construed in accordance with sections 88(3) and 89 of the Finance Act 1989, and
- (b) references to the UK company’s BLAGAB profits are to be construed in accordance with section 89(1B) of that Act.
- (12) In this section—
- “*BLAGAB apportioned profit*” means so much of the apportioned profit as is referable to basic life assurance and general annuity business carried on by the UK company;
- “*long-term insurance fund*” has the meaning given by section 431(2).
- (13) For the purposes of this section, the part of the apportioned profit which is referable to—
- (a) pension business,
- (b) life reinsurance business,
- (c) overseas life assurance business, or
- (d) basic life assurance and general annuity business,
carried on by the UK company is the part which would have been so referable under section 432A had the apportioned profit been a dividend paid to the UK company at the end of the accounting period mentioned in subsection (1)(a) above in respect of the property or rights which represent the UK company’s relevant interest in the controlled foreign company.
- (14) For the purposes of this section, any attribution of creditable tax to a particular part of the apportioned profit shall be made in the proportion which that part of the apportioned profit bears to the whole of the apportioned profit.
##### 755B
- (1) This section applies where—
- (a) a controlled foreign company carries on general insurance business in an accounting period;
- (b) an amount of the company’s chargeable profits, and an amount of its creditable tax (if any), for that accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (c) the UK company delivers a company tax return for that one of its accounting periods in which the controlled foreign company’s accounting period ends; and
- (d) in making or amending the return, the UK company has regard to accounts of the controlled foreign company drawn up using a method falling within subsection (2) below.
- (2) The methods which fall within this subsection are—
- (a) the method described in paragraph 52 of Schedule 9A to the Companies Act 1985 (which provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding); and
- (b) any method which would have fallen within paragraph (a) above, had final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of that Schedule, taken place, and been required to take place, no later than the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (3) Where this section applies—
- (a) the UK company may make any amendments of its company tax return arising from the replacement of the technical provision in the controlled foreign company’s accounts at any time within twelve months from the date on which the provision was replaced; and
- (b) notice of intention to enquire into the return under paragraph 24 of Schedule 18 to the Finance Act 1998 may be given at any time up to two years from that date (or at any later time in accordance with the general rule in sub-paragraph (3) of that paragraph).
- (4) If, in a case where this section applies, the accounts of the controlled foreign company are drawn up using a method falling within paragraph (b) of subsection (2) above—
- (a) the controlled foreign company, and
- (b) any person with an interest in the controlled foreign company,
shall be treated for the purposes of this section as if final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of Schedule 9A to the Companies Act 1985, had taken place at, and been required to take place no later than, the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (5) Regulations under section 755C may make provision with respect to the determination of the amount of the provision by which the technical provision is to be treated as replaced in cases falling within subsection (4) above.
- (6) In this section “general insurance business” means business which consists of the effecting or carrying out of contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
##### 755C
- (1) The Treasury may by regulations provide for the provisions of this Chapter to have effect with prescribed modifications in any case where a non-resident company—
- (a) carries on general insurance business; and
- (b) draws up accounts relating to that business using a method falling within subsection (2) of section 755B.
- (2) Regulations under subsection (1) above may—
- (a) make different provision for different cases;
- (b) make provision having effect in relation to accounting periods of non-resident companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit.
- (3) In this section—
- “*general insurance business*” has the same meaning as in section 755B;
- “*non-resident company*” means a company resident outside the United Kingdom;
- “*prescribed*” means prescribed in regulations under this section.
##### 755D
- (1) For the purposes of this Chapter “control", in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (2) Where two or more persons, taken together, have the power mentioned in subsection (1) above, they shall be taken for the purposes of this Chapter to control the company.
- (3) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing at least 40 per cent of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (4) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing—
- (a) at least 40 per cent, but
- (b) not more than 55 per cent,
of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (5) For the purposes of this Chapter any question—
- (a) whether a company is controlled by a person, or by two or more persons taken together, or
- (b) whether, in the case of any company, the applicable 40 per cent test is satisfied in the case of each of two persons who, taken together, control the company,
shall be determined after attributing to each of the persons all the rights and powers mentioned in subsection (6) below that are not already attributed to that person for the purposes of subsections (1) to (4) above.
- (6) The rights and powers referred to in subsection (5) above are—
- (a) rights and powers which the person is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of other persons, to the extent that they are rights or powers falling within subsection (7) below;
- (c) if the person is resident in the United Kingdom, rights and powers of any person who is resident in the United Kingdom and connected with the person; and
- (d) if the person is resident in the United Kingdom, rights and powers which for the purposes of subsection (5) above would be attributed to a person who is resident in the United Kingdom and connected with the person (a “*UK connected person*”) if the UK connected person were himself the person.
- (7) Rights and powers fall within this subsection to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the person;
- (ii) under the direction of the person; or
- (iii) for the benefit of the person; and
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (8) In subsections (6)(b) to (d) and (7) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (9) In paragraph (d) of subsection (6) above, the reference to rights and powers which would be attributed to a UK connected person if he were the person includes a reference to rights and powers which, by applying that paragraph wherever one person resident in the United Kingdom is connected with another person, would be so attributed to him through a number of persons each of whom is resident in the United Kingdom and connected with at least one of the others.
- (10) In determining for the purposes of this section whether one person is connected with another in relation to a company, subsection (7) of section 839 shall be disregarded.
- (11) References in this section—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
### Meaning of offshore fund
#### Losses of ring fence trade: set off against profits of an earlier accounting period
##### 756A
- (1) In this Chapter references to an offshore fund are to a collective investment scheme constituted by—
- (a) a company that is resident outside the United Kingdom, or
- (b) a unit trust scheme the trustees of which are not resident in the United Kingdom, or
- (c) arrangements not falling within paragraph (a) or (b) taking effect by virtue of the law of a territory outside the United Kingdom and which under that law create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of any part of the United Kingdom).
- (2) Subsection (1) has effect subject to—
- section 756B (treatment of umbrella funds), and
- section 756C (treatment of funds comprising more than one class of interest).
- (3) In this section “*collective investment scheme*” has the meaning given by section 235 of the Financial Services and Markets Act 2000.
### Treatment of umbrella funds
##### 756B
- (1) In this Chapter, an “*umbrella fund*” means an offshore fund—
- (a) which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are made to them; and
- (b) under which the participants are entitled to exchange rights in one pool for rights in another;
and references in this Chapter to a part of an umbrella fund are to such of the arrangements as relate to a separate pool.
- (2) For the purposes of this Chapter (except subsection (1))—
- (a) each part of an umbrella fund shall be regarded as a separate offshore fund, and
- (b) the umbrella fund as a whole shall not be regarded as an offshore fund.
- (3) In this Chapter, in relation to a part of an umbrella fund—
- (a) a reference to the assets of an offshore fund is to such of the assets of the umbrella fund as under the arrangements form part of the separate pool to which that part of the umbrella fund relates;
- (b) a reference to the income of an offshore fund is to the income arising from those assets;
- (c) a reference to a person having an interest in an offshore fund is to a person for the time being having an interest in that separate pool; and
- (d) a reference to an offshore fund being a non-qualifying fund shall be read in relation to times before the coming into force of this section as a reference to the umbrella fund being a non-qualifying fund.
### Treatment of funds comprising more than one class of interest
##### 756C
- (1) For the purposes of this Chapter where there is more than one class of interest in an offshore fund (the “*main fund*”)—
- (a) each class of interest shall be regarded as a separate offshore fund, and
- (b) the main fund shall not be regarded as an offshore fund.
- (2) In this section, references to a class of interest in an offshore fund do not include—
- (a) a part of an umbrella fund which is regarded as an offshore fund by virtue of section 756B, or
- (b) a class of interest in an offshore fund which by virtue of section 759(5), (6) or (8) is not a material interest in the fund.
- (3) In this Chapter, in relation to a class of interest in an offshore fund—
- (a) a reference to the assets of an offshore fund is to the assets of the main fund;
- (b) a reference to the income of an offshore fund is to such of the income of the main fund as is attributable to interests of that class under the arrangements constituting the main fund;
- (c) a reference to a person having an interest in an offshore fund is to a person for the time being having an interest of that class; and
- (d) a reference to an offshore fund being a non-qualifying fund shall be read in relation to times before the coming into force of this section as a reference to the main fund being a non-qualifying fund.
#### Transactions in deposits with and without certificates or in debts.
##### 762ZA
- (1) Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) applies in relation to an offshore income gain arising to a person resident or domiciled outside the United Kingdom as if the offshore income gain were income becoming payable to the person.
- (2) Income treated as arising under that Chapter by virtue of subsection (1) is regarded as “*foreign*” for the purposes of section 726, 730 or 735 of that Act.
- (3) Subsection (1) does not apply in relation to an offshore income gain if (and to the extent that) it is treated, by virtue of section 762(1), as arising to a person resident or ordinarily resident in the United Kingdom.
- (4) The following provisions apply if section 762(2) applies in relation to an offshore income gain (“the relevant offshore income gain”).
- (5) If—
- (a) by virtue of section 762(3) an offshore income gain is treated as arising in a tax year to a person resident or ordinarily resident in the United Kingdom, and
- (b) it is so treated by reason of the relevant offshore income gain (or part of it),
for that and subsequent tax years subsection (1) does not apply in relation to the relevant offshore income gain (or that part).
- (6) If, by virtue of subsection (1) as it applies in relation to the relevant offshore income gain, income is treated under Chapter 2 of Part 13 of ITA 2007 as arising in a tax year, reduce (with effect from the following tax year) the OIG amount in question by the amount of the income.
##### 762ZB
- (1) This section applies to income treated as arising under section 761(1) to an individual in a tax year if—
- (a) section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for that year, and
- (b) the individual is not domiciled in the United Kingdom in that year.
- (2) Treat the income as relevant foreign income of the individual.
- (3) For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis)—
- (a) treat any consideration obtained on the disposal of the asset as deriving from the income, and
- (b) unless the consideration so obtained is of an amount equal to the market value of the asset, treat the asset as deriving from the income.
- (4) In subsection (3)—
- (a) “*the asset*” means the asset the disposal of which causes the income to be treated as arising, and
- (b) “*the disposal*” means the disposal mentioned in paragraph (a).
##### 762A
- (1) This section applies where—
- (a) classes of interest in an offshore fund (the “*main fund*”) are treated as separate offshore funds under section 756C; and
- (b) as the result of—
- (i) a reorganisation within the meaning of section 126 of the 1992 Act, or
- (ii) a conversion of securities within the meaning of section 132 of that Act,
a person exchanges an interest of one class (A) in the main fund for an interest of another class (B) in that fund.
- (2) Where—
- (a) the interest of class A—
- (i) is at the time of the exchange an interest in a non-qualifying offshore fund, or
- (ii) has been an interest in such a fund at any material time, and
- (b) the interest of class B is at the time of the exchange an interest in a fund which is certified by the Board as a distributing offshore fund,
section 127 of the 1992 Act (equation of original shares and new holding) shall not prevent the exchange constituting a disposal for the purposes of this Chapter.
- (3) Any such disposal shall be treated as a disposal for a consideration equal to the market value of the rights at the time of the exchange.
- (4) In this section—
- “*class of interest*” has the same meaning as in section 756C(1);
- “*material time*” has the same meaning as in section 757.
##### 765A
- (1) Section 765(1) shall not apply to a transaction which is a movement of capital to which Article 1 of the Directive of the Council of the European Communities dated 24th June 1988 No. [88/361/EEC](https://www.legislation.gov.uk/european/directive/1988/0361) applies.
- (2) Where if that Article did not apply to it a transaction would be unlawful under section 765(1), the body corporate in question (that is to say, the body corporate resident in the United Kingdom) shall—
- (a) give to the Board within six months of the carrying out of the transaction such information relating to the transaction, or to persons connected with the transaction, as regulations made by the Board may require, and
- (b) where notice is given to the body corporate by the Board, give to the Board within such period as is prescribed by regulations made by the Board (or such longer period as the Board may in the case allow) such further particulars relating to the transaction, to related transactions, or to persons connected with the transaction or related transactions, as the Board may require.
#### Write-off of government investment.
##### 767A
- (1) Where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“*the tax-payer company*”),
- (b) any corporation tax assessed on the tax-payer company for an accounting period beginning before the change remains unpaid at any time after the relevant date, and
- (c) any of the three conditions mentioned below is fulfilled,
any person mentioned in subsection (2) below may be assessed by the Board and charged (in the name of the tax-payer company) to an amount of corporation tax in accordance with this section.
- (2) The persons are—
- (a) any person who at any time during the relevant period before the change in the ownership of the tax-payer company had control of it;
- (b) any company of which the person mentioned in paragraph (a) above has at any time had control within the period of three years before that change.
- (3) In subsection (2) above, “*the relevant period*” means—
- (a) the period of three years before the change in the ownership of the tax-payer company; or
- (b) if during the period of three years before that change (“*the later change*”) there was a change in the ownership of the tax-payer company (“*the earlier change*”), the period elapsing between the earlier change and the later change.
- (4) The first condition is that—
- (a) at any time during the period of three years before the change in the ownership of the tax-payer company the activities of a trade or business of that company cease or the scale of those activities become small or negligible; and
- (b) there is no significant revival of those activities before that change occurs.
- (5) The second condition is that at any time after the change in the ownership of the tax-payer company, but under arrangements made before that change, the activities of a trade or business of that company cease or the scale of those activities become small or negligible.
- (6) The third condition is that—
- (a) at any time during the period of six years beginning three years before the change in the ownership of the tax-payer company there is a major change in the nature or conduct of a trade or business of that company;
- (b) there is a transfer or there are transfers of assets of the tax-payer company to a person mentioned in subsection (7) below or to any person under arrangements which enable any of those assets or any assets representing those assets to be transferred to a person mentioned in subsection (7) below;
- (c) that transfer occurs or those transfers occur during the period of three years before the change in the ownership of the tax-payer company or after that change but under arrangements made before that change; and
- (d) the major change mentioned in paragraph (a) above is attributable to that transfer or those transfers.
- (7) The persons are—
- (a) any person mentioned in subsection (2)(a) above; and
- (b) any person connected with him.
- (8) The amount of tax charged in an assessment made under this section must not exceed the amount of the tax which, at the time of that assessment, remains unpaid by the tax-payer company.
- (9) For the purposes of this section the relevant date is the date six months from the date on which the corporation tax is assessed as mentioned in subsection (1)(b) above.
- (10) Any assessment made under this section shall not be out of time if made within three years from the date on which the liability of the tax-payer company to corporation tax for the accounting period mentioned in subsection (1)(b) above is finally determined.
##### 767AA
- (1) Where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“the transferred company"),
- (b) any corporation tax relating to an accounting period ending on or after the change has been assessed on the transferred company or an associated company,
- (c) that tax remains unpaid at any time more than six months after it was assessed, and
- (d) the condition set out in subsection (2) below is fulfilled,
any person mentioned in subsection (4) below may be assessed by the Board and charged to an amount of corporation tax not exceeding the amount remaining unpaid.
- (2) The condition is that it would be reasonable (apart from this section) to infer, from either or both of—
- (a) the terms of any transactions entered into in connection with the change, and
- (b) the other circumstances of the change and of any such transactions,
that at least one of those transactions was entered into by one or more of its parties on the assumption, as regards a potential tax liability, that that liability would be unlikely to be met, or met in full, if it were to arise.
- (3) In subsection (2) above the reference to a potential tax liability is a reference to a liability to pay corporation tax which—
- (a) in circumstances which were reasonably foreseeable at the time of the change in ownership, or
- (b) in circumstances the occurrence of which is something of which there was at that time a reasonably foreseeable risk,
would or might arise from an assessment made, after the change in ownership, on the transferred company or an associated company (whether or not a particular associated company).
- (4) The persons mentioned in subsection (1) above are—
- (a) any person who at any time during the relevant period had control of the transferred company;
- (b) any company of which the person mentioned in paragraph (a) above has at any time had control within the period of three years before the change in the ownership of the transferred company.
- (5) In subsection (4) above, “*the relevant period*” means—
- (a) the period of three years before the change in the ownership of the transferred company; or
- (b) if during the period of three years before that change (“the later change") there was a change in the ownership of the transferred company (“the earlier change"), the period elapsing between the earlier change and the later change.
- (6) For the purposes of this section a transaction is entered into in connection with a change in the ownership of a company if—
- (a) it is the transaction, or one of the transactions, by which that change is effected; or
- (b) it is entered into as part of a series of transactions, or scheme, of which transactions effecting the change in ownership have formed or will form a part.
- (7) For the purposes of this section—
- (a) references to a scheme are references to any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving a single transaction or two or more transactions;
- (b) it shall be immaterial in determining whether any transactions have formed or will form part of a series of transactions or scheme that the parties to any of the transactions are different from the parties to another of the transactions; and
- (c) the cases in which any two or more transactions are to be taken as forming part of a series of transactions or scheme shall include any case in which it would be reasonable to assume that one or more of them—
- (i) would not have been entered into independently of the other or others; or
- (ii) if entered into independently of the other or others, would not have taken the same form or been on the same terms.
- (8) In this section references, in relation to the transferred company and an assessment to tax, to an associated company are references to any compnay (whenever formed) which, at the time of the assessment or at an earlier time after the change in ownership—
- (a) has control of the transferred company;
- (b) is a company of which the transferred company has control; or
- (c) is a company under the control of the same person or persons as the transferred company.
- (9) A person assessed and charged to tax under this section shall be assessed and charged in the name of the company by whom the tax to which the assessment relates remains unpaid.
- (10) Any assessment made under this section shall not be out of time if made within three years from the date of the final determination of the liability of the company by whom the tax remains unpaid to corporation tax for the accounting period for which that tax was assessed.
##### 767B
- (1) In relation to corporation tax assessed under section 767A—
- (a) section 86 of the Management Act (interest on overdue tax), in so far as it has effect in relation to accounting periods ending on or before 30th September 1993, and
- (b) section 87A of that Act (corresponding provision for corporation tax due for accounting periods ending after that date),
shall have effect as if the references in section 86 to the reckonable date and in section 87A to the date when the tax becomes due and payable were, respectively, references to the date which is the reckonable date in relation to the tax-payer company and the date when the tax became due and payable by the tax-payer company.
- (1A) In relation to corporation tax assessed under section 767AA, section 87A of the Management Act shall have effect as if the references to the date when the tax becomes due and payable were references to the date when the tax became due and payable by the transferred company or the associated company (as the case may be).
- (2) A payment in pursuance of an assessment under section 767A or 767AA shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes; but any person making such a payment shall be entitled to recover an amount equal to the payment from the tax-payer company or the transferred company or associated company (as the case may be).
- (3) In subsection (2) above the reference to a payment in pursuance of an assessment includes a reference to a payment of interest under section 86 or 87A of the Management Act (as they have effect by virtue of subsection (1) above).
- (4) For the purposes of sections 767A, 767AA and 767C, “*control*”, in relation to a company, shall be construed in accordance with section 416 as modified by subsections (5) and (6) below.
- (5) In subsection (2)(a) for “the greater part of” there shall be substituted “50 per cent. of”.
- (6) For subsection (3) there shall be substituted—
- (”) Where two or more persons together satisfy any of the conditions in subsection (2) above and do so by reason of having acted together to put themselves in a position where they will in fact satisfy the condition in question, each of those persons shall be treated as having control of the company.”
- (7) In section 767A(6) “*a major change in the nature or conduct of a trade or business*” includes any change mentioned in any of paragraphs (a) to (d) of section 245(4); and also includes a change falling within any of those paragraphs which is achieved gradually as the result of a series of transfers.
- (8) In section 767A(6) “*transfer*”, in relation to an asset, includes any disposal, letting or hiring of it, and any grant or transfer of any right, interest or licence in or over it, or the giving of any business facilities with respect to it.
- (9) Section 839 shall apply for the purposes of section 767A(7).
- (10) Subsection (9) of section 768 shall apply for the purposes of sections 767A and 767AA as it applies for the purposes of section 768.
##### 767C
- (1) This section applies where it appears to the Board that—
- (a) there has been a change in the ownership of a company (“the subject company"); and
- (b) in connection with that change a person (“the seller") may be or become liable to be assessed and charged to corporation tax under section 767A or 767AA.
- (2) The Board may by notice require any person to supply to them—
- (a) any document in the person’s possession or power which appears to the Board to be relevant for determining any one or more of the matters referred to in subsection (3) below; or
- (b) any particulars which appear to them to be so relevant.
- (3) Those matters are—
- (a) whether the seller is or may become liable as mentioned in subsection (1) above and the extent of the liability or potential liability; and
- (b) whether the subject company or an associated company is or may become liable to be assessed to any tax in respect of which the seller is or could become liable as mentioned in subsection (1) above, and the extent of the liability or potential liability of the subject company or associated company.
- (4) Without prejudice to the following provisions of this section, the references in subsection (2) above to documents and particulars are references to the documents and particulars specified or described in the notice.
- (5) A notice under subsection (2) above must specify the period, which must not be less than 30 days, within which the notice must be complied with.
- (6) Any person to whom any documents are supplied under this section may take copies of them or of any extracts from them.
- (7) A notice under subsection (2) above shall not oblige a person to supply any documents or particulars relating to the conduct of any pending appeal relating to tax.
- (8) In relation to any notice under subsection (2) above—
- (a) subsection (4) of section 20B of the Taxes Management Act 1970 (rules relating to copies of documents) shall apply as it applies in relation to a notice under section 20(1) of that Act; and
- (b) subsections (8) to (14) of section 20B of that Act (rules about obtaining documents etc. from professional advisers) shall apply as they apply in relation to a notice under section 20(3) of that Act but as if any reference to an inspector were a reference to the Board;
and subsection (8C) of section 20 of that Act (exclusion of personal records and journalistic material) shall apply for the purposes of this section as it applies for the purposes of that section.
- (9) In this section references, in relation to the subject company and an assessment to tax, to an associated company are references to any company which, at the time of the assessment or at an earlier time after the change in ownership—
- (a) has control of the subject company;
- (b) is a company of which the subject company has control; or
- (c) is a company under the control of the same person or persons as the subject company.
- (10) In this section “*document*” means anything in which information of any description is recorded.
##### 768A
- (1) In any case where—
- (a) within any period of three years there is both a change in the ownership of a company and (either earlier or later in that period, or at the same time) a major change in the nature or conduct of a trade carried on by the company, or
- (b) at any time after the scale of the activities in a trade carried on by a company has become small or negligible, and before any considerable revival of the trade, there is a change in the ownership of the company,
no relief shall be given under section 393A(1) by setting a loss incurred by the company in an accounting period ending after the change in ownership against any profits of an accounting period beginning before the change in ownership.
- (2) Subsections (2) to (4), (8) and (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (3) This section applies in relation to changes in ownership occurring on or after 14th June 1991.
##### 768B
- (1) This section applies where there is a change in the ownership of a company with investment business and—
- (a) after the change there is a significant increase in the amount of the company’s capital; or
- (b) within the period of six years beginning three years before the change there is a major change in the nature or conduct of the business carried on by the company; or
- (c) the change in the ownership occurs at any time after the scale of the activities in the business carried on by the company has become small or negligible and before any considerable revival of the business.
- (2) For the purposes of subsection (1)(a) above, whether there is a significant increase in the amount of a company’s capital after a change in the ownership of the company shall be determined in accordance with the provisions of Part I of Schedule 28A.
- (3) In paragraph (b) of subsection (1) above “*major change in the nature or conduct of a business*” includes a major change in the nature of the investments held by the company, even if the change is the result of a gradual process which began before the period of six years mentioned in that paragraph.
- (4) For the purposes of this section—
- (a) the accounting period of the company in which the change in the ownership occurs shall be divided into two parts, the first the part ending with the change, the second the part after;
- (b) those parts shall be treated as two separate accounting periods; and
- (c) the amounts in issue for the accounting period being divided shall be apportioned to those parts.
- (5) In Schedule 28A—
- (a) Part II shall have effect for identifying the amounts in issue for the accounting period being divided; and
- (b) Part III shall have effect for the purpose of apportioning those amounts to the parts of that accounting period.
- (6) Any sums which—
- (a) are, or are treated as, expenses of management referable to the accounting period being divided, and
- (b) under Part III of Schedule 28A are apportioned to either part of that period,
shall be treated for the purposes of section 75 expenses of management referable to that part.
- (7) Any charges which under Part III of Schedule 28A are apportioned to either part of the accounting period being divided shall be treated for the purposes of sections 338 and 75 as paid in that part.
- (8) Any allowances which under Part III of Schedule 28A are apportioned to either part of the accounting period being divided shall be treated for the purposes of section 253 of the Capital Allowances Act and section 75(7) as falling to be made in that part.
- (9) In computing the total profits of the company for an accounting period ending after the change in the ownership, no deduction shall be made under section 75 by reference to—
- (a) expenses of management deductible or allowances falling to be made for an accounting period beginning before the change; or
- (b) charges paid in such an accounting period.
- (10) Part IV of Schedule 28A shall have effect for the purpose of restricting, in a case where this section applies, the debits and non-trading deficits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of the company’s loan relationships (including debits so brought into account by virtue of paragraph 14(3)of Schedule 26 to the Finance Act 2002).
- (12) Subject to the modification in subsection (13) below, subsections (6) to (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (13) The modification is that in subsection (6) of section 768 for the words “relief in respect of a company’s losses has been restricted” there shall be substituted “deductions from a company’s total profits , or the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in the case of a company in respect of its loan relationships (or its derivative contracts by virtue of paragraph 14(3) of Schedule 26 to the Finance Act 2002), have been restricted.”
- (14) In this section “*company with investment business*” has the same meaning as in Part IV.
##### 768C
- (1) This section applies where—
- (a) there is a change in the ownership of a company with investment business (“the relevant company”);
- (b) none of paragraphs (a) to (c) of section 768B(1) applies;
- (c) after the change in the ownership the relevant company acquires an asset from another company in circumstances such that section 171(1) of the 1992 Act applies to the acquisition; and
- (d) a chargeable gain (“a relevant gain”) accrues to the relevant company on a disposal of the asset within the period of three years beginning with the change in the ownership.
- (2) For the purposes of subsection (1)(d) above an asset acquired by the relevant company as mentioned in subsection (1)(c) above shall be treated as the same as an asset owned at a later time by that company if the value of the second asset is derived in whole or in part from the first asset, and in particular where the second asset is a freehold and the first asset was a leasehold and the lessee has acquired the reversion.
- (3) For the purposes of this section—
- (a) the accounting period of the relevant company in which the change in the ownership occurs shall be divided into two parts, the first the part ending with the change, the second the part after;
- (b) those parts shall be treated as two separate accounting periods; and
- (c) the amounts in issue for the accounting period being divided shall be apportioned to those parts.
- (4) In Schedule 28A—
- (a) Part V shall have effect for identifying the amounts in issue for the accounting period being divided; and
- (b) Part VI shall have effect for the purpose of apportioning those amounts to the parts of that accounting period.
- (5) Subsections (6) to (8) of section 768B shall apply in relation to the relevant company as they apply in relation to the company mentioned in subsection (1) of that section except that any reference in those subsections to Part III of Schedule 28A shall be read as a reference to Part VI of that Schedule.
- (6) Subsections (7) and (9) below apply only where, in accordance with the relevant provisions of the 1992 Act and Part VI of Schedule 28A, an amount is included in respect of chargeable gains in the total profits for the accounting period of the relevant company in which the relevant gain accrues.
- (7) In computing the total profits of the relevant company for the accounting period in which the relevant gain accrues, no deduction shall be made under section 75 by reference to—
- (a) expenses of management deductible or allowances falling to be made for an accounting period of the relevant company beginning before the change in ownership, or
- (b) charges paid in such an accounting period,
from an amount of the total profits equal to the amount which represents the relevant gain.
- (8) For the purposes of this section, the amount of the total profits for an accounting period which represents the relevant gain is—
- (a) where the amount of the relevant gain does not exceed the amount which is included in respect of chargeable gains for that period, an amount equal to the amount of the relevant gain;
- (b) where the amount of the relevant gain exceeds the amount which is included in respect of chargeable gains for that period, the amount so included.
- (9) Part IV of Schedule 28A shall have effect for the purpose of restricting, in a case where this section applies, the debits and non-trading deficits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of the relevant company’s loan relationships (including debits so brought into account by virtue of paragraph 14(3) of Schedule 26 to the Finance Act 2002).
- (11) Subsections (8) and (9) of section 768 shall apply for the purposes of this section as they apply for the purposes of that section.
- (12) In this section—
- “*the relevant provisions of the 1992 Act*” means section 8(1) of and Schedule 7A to that Act; and
- “*company with investment business*” has the same meaning as in Part 4.
- (13) This section applies in relation to an asset to which Schedule 29 to the Finance Act 2002 applies (intangible fixed assets), with the following adaptations—
- (a) for the reference to section 171(1) of the 1992 Act substitute a reference to paragraph 55 of that Schedule;
- (b) for any reference to a chargeable gain under that Act substitute a reference to a chargeable realisation gain within the meaning of that Schedule that is a credit within paragraph 34(1)(a) of that Schedule (non-trading credits);
- (c) for any reference to a disposal of the asset substitute a reference to its realisation within the meaning of that Schedule;
- (d) for the reference to the relevant provisions of the 1992 Act substitute a reference to Part 6 of that Schedule.
##### 768D
- (1) This section applies where there is a change in the ownership of a company carrying on a Schedule A business and—
- (a) in the case of a company with investment business, either—
- (i) paragraph (a), (b) or (c) of section 768B(1) applies, or
- (ii) section 768C applies;
- (b) in the case of a company which is not a company with investment business, paragraph (a) or (b) of section 768(1) applies.
- (2) Where this section applies the following provisions have effect to prevent relief being given under section 392A by setting a Schedule A loss incurred by the company before the change of ownership against profits arising after the change.
- (3) The accounting period in which the change of ownership occurs is treated for that purpose as two separate accounting periods, the first ending with the change and the second consisting of the remainder of the period.
- (4) The profits or losses of the period in which the change occurs are apportioned to those two periods—
- (a) in the case of a company with investment business—
- (i) where paragraph (a), (b) or (c) of section 768B(1) applies, in accordance with Parts II and III of Schedule 28A, or
- (ii) where section 768C applies, in accordance with Parts V and VI of that Schedule, and
- (b) in the case of a company which is not a company with investment business, according to the length of the periods,
unless in any case the specified method of apportionment would work unjustly or unreasonably in which case such other method shall be used as appears just and reasonable.
- (5) Relief under section 392A(1) against total profits of the same accounting period is available only in relation to each of those periods considered separately.
- (6) A loss made in any accounting period beginning before the change of ownership may not be set off under section 392A(2) against, or deducted by virtue of section 392A(3) from—
- (a) in the case of—
- (i) a company with investment business where paragraph (a), (b) or (c) of section 768B(1) applies, or
- (ii) a company which is not a company with investment business,
profits of an accounting period ending after the change of ownership;
- (b) in the case of a company with investment business where section 768C applies, from so much of those profits as represents the relevant gain within the meaning of that section.
- (7) Subsections (8) and (9) of section 768 (time limits for assessment; information powers) apply for the purposes of this section as they apply for the purposes of that section.
- (8) In this section—
- (a) any reference to a case where paragraph (a) or (b) of section 768(1) applies includes the case where that paragraph would apply if the reference there to a trade carried on by the company were to a Schedule A business carried on by it;
- (b) “*company with investment business*” has the same meaning as in Part 4.
- (9) The provisions of this section apply in relation to an overseas property business as they apply in relation to a Schedule A business.
##### 768E
- (1) Where there is a change in the ownership of a company with investment business and either—
- (a) paragraph (a), (b) or (c) of section 768B(1) applies, or
- (b) section 768C applies,
the following provisions have effect to prevent relief being given under paragraph 35 of Schedule 29 to the Finance Act 2002 by setting a non-trading loss on intangible fixed assets incurred by the company before the change of ownership against profits arising after the change.
- (2) The accounting period in which the change of ownership occurs is treated for that purpose as two separate accounting periods, the first ending with the change and the second consisting of the remainder of the period.
- (3) The profits or losses of the period in which the change occurs are apportioned to those two periods—
- (a) where paragraph (a), (b) or (c) of section 768B(1) applies, in accordance with Parts 2 and 3 of Schedule 28A, or
- (b) where section 768C applies, in accordance with Parts 5 and 6 of that Schedule,
unless in any case the specified method of apportionment would work unjustly or unreasonably in which case such other method shall be used as appears just and reasonable.
- (4) Relief under paragraph 35 of Schedule 29 to the Finance Act 2002 against total profits of the same accounting period is available only in relation to each of those periods considered separately.
- (5) A loss made in any accounting period beginning before the change of ownership may not be set off under paragraph 35(3) of Schedule 29 to the Finance Act 2002 against—
- (a) in a case where paragraph (a), (b) or (c) of section 768B(1) applies, profits of an accounting period ending after the change of ownership;
- (b) in a case where section 768C applies, so much of those profits as represents the relevant gain within the meaning of that section.
- (6) Subsections (8) and (9) of section 768 (time limits for assessment; information powers) apply for the purposes of this section as they apply for the purposes of that section.
- (7) In this section “company with investment business” has the same meaning as in Part 4.
##### 770A
Schedule 28AA (which deals with provision made or imposed otherwise than at arm’s length) shall have effect.
#### Dealings in commodity futures etc: withdrawal of loss relief.
### Factoring of income receipts etc
##### 774A
- (1) For the purposes of section 774B an arrangement is a structured finance arrangement in relation to a person (“*the borrower*”) if the following condition is met in relation to the borrower.
- (2) The condition is that—
- (a) under the arrangement the borrower receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (b) in accordance with generally accepted accounting practice the accounts of the borrower for that period record a financial liability in respect of the advance,
- (c) the borrower, or a person connected with the borrower, makes a disposal of an asset (“the security”) under the arrangement to or for the benefit of the lender or a person connected with the lender,
- (d) the lender, or a person connected with the lender, is entitled under the arrangement to payments in respect of the security, and
- (e) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower.
- (3) For the purposes of this section, in any case where the borrower is a partnership, references to the accounts of the borrower include the accounts of any member of the partnership.
- (4) For the purposes of this section and section 774B—
- (a) references to a person connected with the borrower do not include the lender, and
- (b) references to a person connected with the lender do not include the borrower.
##### 774B
- (1) If—
- (a) an arrangement is a structured finance arrangement in relation to a person (“*the borrower*”), and
- (b) the arrangement would (disregarding this section) have had the relevant effect (see subsections (2) and (3)),
the arrangement is not to have that effect.
- (2) If the borrower is a person other than a partnership, the relevant effect is that—
- (a) an amount of income on which the borrower, or a person connected with the borrower, would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of the borrower, or of a person connected with the borrower, is not so brought into account, or
- (c) the borrower, or a person connected with the borrower, becomes entitled to an income deduction.
- (3) If the borrower is a partnership, the relevant effect is that—
- (a) an amount of income on which a member of the partnership would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a member of the partnership is not so brought into account, or
- (c) a member of the partnership becomes entitled to an income deduction.
- (4) If—
- (a) a person in relation to whom the structured finance arrangement would otherwise have had the relevant effect is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the person record an amount as a finance charge in respect of the advance,
that person may treat the amount for income tax purposes as interest payable on a loan.
- (5) If a person in relation to whom the structured finance arrangement would otherwise have had the relevant effect is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 as a money debt owed by the company,
- (b) the arrangement is to be treated, in relation to the company, for the purposes of that Chapter as a loan relationship of the company (as a debtor relationship), and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the company as a finance charge in respect of the advance is to be treated as interest payable under that relationship.
- (6) For the purposes of this section, in any case where the borrower is a partnership,—
- (a) references to accounts include the accounts of the partnership, and
- (b) any deemed interest is treated as payable by the partnership (whether or not the finance charge is recorded in the accounts of the partnership).
- (7) For the purpose of determining when any deemed interest in respect of the advance is paid—
- (a) the payments mentioned in section 774A(2)(d) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and
- (b) the interest elements of those payments are treated as paid when those payments are paid,
and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid.
- (8) In this section “*deemed interest*” means any amount which is treated as interest as a result of subsection (4) or (5).
- (9) This section is subject to the exceptions contained in section 774E.
##### 774C
- (1) For the purposes of section 774D an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”) if condition A or B is met in relation to the borrower partnership.
- (2) Condition A is that—
- (a) a person (“the transferor partner”) disposes of an asset (“the security”) under the arrangement to the borrower partnership,
- (b) the transferor partner is a member of the borrower partnership immediately after the disposal (whether or not a member immediately before the disposal),
- (c) under the arrangement the borrower partnership receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (d) in accordance with generally accepted accounting practice the accounts of the borrower partnership for that period record a financial liability in respect of the advance,
- (e) there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender (see subsection (6)),
- (f) under the arrangement the share of the lender or person connected with the lender in the profits of the borrower partnership is determined by reference (wholly or partly) to payments in respect of the security, and
- (g) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership.
- (3) For the purposes of condition A, references to the accounts of the borrower partnership include the accounts of the transferor partner.
- (4) Condition B is that—
- (a) the borrower partnership holds an asset (“the security”) as a partnership asset at any time before the arrangement is made,
- (b) under the arrangement the borrower partnership receives from another person (“*the lender*”) any money or other asset (“the advance”) in any period,
- (c) in accordance with generally accepted accounting practice the accounts of the borrower partnership for that period record a financial liability in respect of the advance,
- (d) there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender,
- (e) under the arrangement the share of the lender or person connected with the lender in the profits of the borrower partnership is determined by reference (wholly or partly) to payments in respect of the security, and
- (f) in accordance with generally accepted accounting practice those payments reduce the amount of the financial liability in respect of the advance recorded in the accounts of the borrower partnership.
- (5) For the purposes of condition B, references to the accounts of the borrower partnership include the accounts of any person who is a member of the partnership immediately before the arrangement is made.
- (6) For the purposes of this section and section 774D there is a relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender if directly or indirectly in consequence of, or otherwise in connection with, the arrangement—
- (a) the lender, or a person connected with the lender, becomes a member of the borrower partnership at any time, or
- (b) there is at any time a change in the share of a member of the borrower partnership in the profits of the borrower partnership in a case where that member is the lender or a person connected with the lender.
- (7) For the purposes of subsection (6)(b) the reference to a person connected with the lender includes a person who at any time becomes connected with the lender directly or indirectly in consequence of, or otherwise in connection with, the arrangement.
##### 774D
- (1) This section applies if—
- (a) an arrangement is a structured finance arrangement in relation to a partnership (“the borrower partnership”), and
- (b) any relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender would (disregarding this section) have had the following effect.
- (2) The effect is that—
- (a) an amount of income on which a relevant member of the borrower partnership would otherwise have been charged to tax is not so charged,
- (b) an amount which would otherwise have been brought into account in calculating for tax purposes any income of a relevant member of the borrower partnership is not so brought into account, or
- (c) a relevant member of the borrower partnership becomes entitled to an income deduction.
- (3) In this section “*relevant member of the borrower partnership*” means—
- (a) in any case where condition A in section 774C is met in relation to the arrangement, the transferor partner, and
- (b) in any case where condition B in that section is met in relation to the arrangement, any person other than the lender who is a member of the borrower partnership immediately before the time at which the relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender occurs.
- (4) Part 9 of ITTOIA 2005 and section 114 above are to have effect in relation to any relevant member of the borrower partnership as if the relevant change in relation to the membership of the borrower partnership involving the lender or a person connected with the lender had not occurred.
Accordingly, the structured finance arrangement is not to have the effect mentioned in subsection (2).
- (5) The following provisions of this section confer relief from tax the availability of which depends on which of the conditions in section 774C is met in relation to the arrangement.
- (6) In any case where condition A in section 774C is met, if—
- (a) the transferor partner is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance,
the transferor partner may treat the amount for income tax purposes as interest payable by the transferor partner on a loan.
- (7) In any case where condition A in that section is met, if the transferor partner is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by the borrower partnership,
- (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the borrower partnership as a finance charge in respect of the advance is to be treated as interest payable by the company under that transaction.
- (8) For the purposes of subsections (6) and (7), references to the accounts of the borrower partnership include the accounts of the transferor partner.
- (9) In any case where condition B in section 774C is met, if—
- (a) a relevant member of the borrower partnership is a person within the charge to income tax, and
- (b) in accordance with generally accepted accounting practice the accounts of the borrower partnership record an amount as a finance charge in respect of the advance,
the relevant partner may treat the amount for income tax purposes as interest payable by the borrower partnership on a loan.
- (10) In any case where condition B in that section is met, if a relevant member of the borrower partnership is a company within the charge to corporation tax—
- (a) the advance is to be treated, in relation to the company, for the purposes of paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act) as a money debt owed by that partnership,
- (b) the arrangement is to be treated, in relation to the company, as a transaction for the lending of money from which that debt is treated as arising for those purposes, and
- (c) any amount which, in accordance with generally accepted accounting practice, is recorded in the accounts of the borrower partnership as a finance charge in respect of the advance is to be treated as interest payable by the borrower partnership under that transaction.
- (11) For the purposes of subsections (9) and (10), references to the accounts of the borrower partnership include the accounts of any relevant member of the borrower partnership.
- (12) For the purpose of determining when any deemed interest in respect of the advance is paid—
- (a) the payments mentioned in section 774C(2)(f) or (4)(e) are treated as consisting of amounts for repaying the advance and amounts (“the interest elements”) in respect of interest on the advance, and
- (b) the interest elements of those payments are treated as paid when those payments are paid,
and the deemed interest in respect of the advance is treated as paid at the times when the interest elements are treated as paid.
- (13) In this section “*deemed interest*” means any amount which is treated as interest as a result of any of subsections (6) to (10).
- (14) This section is subject to the exceptions contained in section 774E.
##### 774E
- (1) Section 774B or 774D does not apply if the whole of the advance under the structured finance arrangement—
- (a) is charged to tax on a relevant person (see subsection (7)) as an amount of income,
- (b) is brought into account in calculating for tax purposes any income of a relevant person, or
- (c) is brought into account for the purposes of any provision of the Capital Allowances Act as a disposal receipt, or proceeds from a balancing event or disposal event, of a relevant person.
For the purposes of this subsection the effect of section 785A (rent factoring of leases of plant or machinery) is to be disregarded.
- (2) Subsection (1)(c) is not to be taken as met in any case where—
- (a) the receipt or proceeds gives rise to a balancing charge, and
- (b) the amount of the balancing charge is limited by any provision of the Capital Allowances Act.
- (3) Section 774B or 774D does not apply if, at all times, the whole of the advance under the structured finance arrangement—
- (a) is a debtor relationship of a relevant person for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships), or
- (b) would be a debtor relationship of a relevant person for those purposes if that person were a company within the charge to corporation tax.
For the purposes of this subsection references to a debtor relationship do not include a relationship to which section 100 of the Finance Act 1996 (money debts etc not arising from the lending of money) applies.
- (4) Section 774B or 774D does not apply in so far as the structured finance arrangement is an arrangement in relation to which—
- (a) section 263A of the 1992 Act (agreements for sale and repurchase of securities) applies,
- (b) paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending) applies, or
- (c) Chapter 5 of Part 2 of the Finance Act 2005 (alternative finance arrangements) has effect.
- (5) Section 774B or 774D does not apply in so far as—
- (a) the security under the structured finance arrangement is plant or machinery which is the subject of a sale and finance leaseback, or
- (b) the structured finance arrangement is an arrangement in relation to which sections 228B to 228D of the Capital Allowances Act apply with the modifications contained in section 228F of that Act (lease and finance leaseback).
- (6) For the purposes of subsection (5)(a), whether plant or machinery is the subject of a sale and finance leaseback is determined in accordance with section 221 of the Capital Allowances Act.
But, in applying that section, it is to be assumed that the words “and which are not a long funding lease in the case of the lessor” were omitted from section 219(1)(b) of that Act (meaning of “finance lease”).
- (7) For the purposes of this section a “*relevant person*” means—
- (a) if section 774B applies, a person in relation to whom the structured finance arrangement would (but for that section) otherwise have had the relevant effect (within the meaning of that section), and
- (b) if section 774D applies, a relevant member of the borrower partnership (within the meaning of that section).
##### 774F
- (1) The Treasury may make regulations prescribing other circumstances in which section 774B or 774D is not to apply in relation to a structured finance arrangement.
- (2) Any regulations under subsection (1) may make provision amending section 774E.
- (3) The power to make regulations under subsection (1) includes—
- (a) power to make provision having effect in relation to times before the making of the regulations (but not times earlier than 6th June 2006),
- (b) power to make different provision for different cases or different purposes, and
- (c) power to make incidental, supplemental, consequential or transitional provision and savings.
##### 774G
- (1) For the purposes of sections 774A to 774D “*arrangement*” includes any agreement or understanding (whether or not legally enforceable).
- (2) For the purposes of sections 774A to 774D “*income deduction*” means—
- (a) a deduction in calculating any income for tax purposes, or
- (b) a deduction against total income or total profits.
- (3) For the purposes of sections 774A to 774D—
- (a) references to a person's receiving any asset include the person's obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it,
- (b) references to a disposal of an asset include anything which constitutes a disposal of the asset for the purposes of the 1992 Act,
- (c) references to payments in respect of any asset include obtaining directly or indirectly the value of any asset or otherwise deriving directly or indirectly any benefit from it.
- (4) For the purposes of sections 774A to 774D, section 839 (connected persons) applies.
- (5) For the purposes of sections 774A to 774D references to the accounts of any person who is a company include the consolidated group accounts of a group of companies of which it is a member.
- (6) If any person does not draw up accounts in accordance with generally accepted accounting practice, sections 774A to 774D apply as if the accounts had been drawn up by the person in accordance with that practice.
- (7) Sections 277 to 281 of ITTOIA 2005 and section 34 above (lease premiums) are not to apply in relation to a premium paid in respect of a grant of a lease where the grant constitutes a disposal of an asset for the purposes of section 774A(2)(c) or 774C(2)(a).
##### 775A
- (1) This section applies in any case where—
- (a) a person sells or transfers the right to receive an annual payment to which this section applies (see subsection (4)), and
- (b) the consideration (if any) for the sale or transfer would not, apart from this section, be chargeable to tax.
- (2) In any such case, tax is charged—
- (a) in the case of income tax, under this section; or
- (b) in the case of corporation tax, under Case III of Schedule D.
- (3) Where this section applies—
- (a) the tax is charged on an amount equal to the market value of the right to receive the annual payment;
- (b) the tax is charged for the chargeable period in which the sale or transfer takes place;
- (c) the person liable for the tax is the person who sells or transfers the right to the annual payment.
- (4) This section applies to any annual payment other than—
- (a) an annual payment under a life annuity;
- (b) an annual payment under a pension annuity;
- (c) an annual payment to which section 347A applies (annual payments that are not charges on income);
- (d) an annual payment in respect of which, by virtue of section 727 of ITTOIA 2005 (payments by individuals arising in UK), no liability to income tax arises under Part 5 of that Act.
- (5) This section applies in relation to part of an annual payment as it applies in relation to the whole of an annual payment.
- (6) For the purposes of this section, a sale or transfer of all rights under an agreement for annual payments, or under an annuity, is a sale or transfer of the rights to each individual payment under the agreement or annuity.
- “*overseas permanent establishment*” means a permanent establishment through which a company carries on a trade in a territory outside the United Kingdom; and
- “*permanent establishment*”—if there are arrangements having effect under section 788 in relation to the territory concerned that define the expression, has the meaning given by those arrangements, andif there are no such arrangements, or if they do not define the expression, has the meaning given by section 148 of the Finance Act 2003.
##### 806M
- (1) This section has effect for the purposes of section 806L and shall be construed as one with that section.
- (2) If, in any accounting period, a company ceases to have a particular overseas permanent establishment, the amount of any unrelieved foreign tax which arises in that accounting period in respect of the company’s income from that overseas permanent establishment shall, to the extent that it is not treated as mentioned in section 806L(2)(b), be reduced to nil (so that no amount arises which falls to be treated as mentioned in section 806L(2)(a)).
- (3) If a company—
- (a) at any time ceases to have a particular overseas permanent establishment in a particular territory (“*the old permanent establishment*”), but
- (b) subsequently again has an overseas permanent establishment in that territory (“*the new permanent establishment*”),
the old permanent establishment and the new permanent establishment shall be regarded as different overseas permanent establishments.
- (4) If, under the law of a territory outside the United Kingdom, tax is charged in the case of a company resident in the United Kingdom in respect of the profits of two or more of its overseas permanent establishments in that territory, taken together, then, for the purposes of—
- (a) section 806L, and
- (b) subsection (3) above,
those overseas permanent establishments shall be treated as if they together constituted a single overseas permanent establishment of the company.
- (5) Unrelieved foreign tax arising in respect of qualifying income from a particular overseas permanent establishment in any accounting period shall only be treated as mentioned in subsection (2) of section 806L on a claim.
- (6) Any such claim must specify the amount (if any) of the unrelieved foreign tax—
- (a) which is to be treated as mentioned in paragraph (a) of that subsection; and
- (b) which is to be treated as mentioned in paragraph (b) of that subsection.
- (7) A claim under subsection (5) above may only be made before the expiration of the period of—
- (a) six years after the end of the accounting period mentioned in that subsection, or
- (b) if later, one year after the end of the accounting period in which the foreign tax in question is paid.
##### 807A
- (1) This Part shall have effect for the purposes of corporation tax in relation to any company as if tax falling within subsection (2) below were to be disregarded.
- (2) Subject to subsection (2A) below, tax falls within this subsection in relation to a company to the extent that it is—
- (a) tax under the law of a territory outside the United Kingdom; and
- (b) is attributable, on a just and reasonable apportionment,
- (i) to interest accruing under a loan relationship at a time when the company is not a party to the relationship ; or
- (ii) to so much of a relevant payment as, on such an apportionment, is attributable to a time when the company is not a party to the derivative contract concerned.
- (2A) Tax attributable to interest accruing to a company under a loan relationship does not fall within subsection (2) above if—
- (a) at the time when the interest accrues, that company has ceased to be a party to that relationship by reason of having made the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship; and
- (b) that time falls during the period for which those arrangements have effect.
- (2B) Where, in the case of any share, section 91A or 91B of the Finance Act 1996 (shares treated as loan relationships) applies in relation to a company for an accounting period, this section has effect—
- (a) in relation to a distribution in respect of the share as it has effect in relation to interest under a loan relationship, and
- (b) in relation to a distribution accruing in respect of the share at a time when the company does not (within the meaning of the section in question) hold the share as it applies in relation to interest accruing under a loan relationship at a time when the company is not a party to the loan relationship.
- (3) Subject to subsections (1), (4) and (5) of this section, where—
- (a) any non-trading credit relating to an amount of interest under a loan relationship is brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in the case of any company,
- (b) that amount falls, as a result of any related transaction other than the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship, to be paid to a person other than the company, and
- (c) had the company been entitled, at the time of that transaction, to receive a payment of an amount of interest equal to the amount of interest to which the non-trading credit relates, the company would have been liable in respect of the amount of interest received to an amount of tax under the law of a territory outside the United Kingdom,
credit for that amount of tax shall be allowable under section 790(4) as if that amount of tax were an amount of tax paid under the law of that territory in respect of the amount of interest to which the non-trading credit relates.
- (4) Subsection (3) above does not apply in the case of a credit brought into account in accordance with paragraph 1(2) of Schedule 11 to the Finance Act 1996 (the I minus E basis).
- (5) The Treasury may by regulations provide for subsection (3) above to apply—
- (a) in the case of trading credits, as well as in the case of non-trading credits;
- (b) in the case of any credit (“an insurance credit”) in the case of which, by virtue of subsection (4) above, it would not otherwise apply.
- (6) Regulations under subsection (5) above may—
- (a) provide for subsection (3) above to apply in the case of a trading credit or an insurance credit only if the circumstances are such as may be described in the regulations;
- (b) provide for subsection (3) above to apply, in cases where it applies by virtue of any such regulations, subject to such exceptions, adaptations or other modifications as may be specified in the regulations;
- (c) make different provision for different cases; and
- (d) contain such incidental, supplemental, consequential and transitional provision as the Treasury think fit.
- (6A) In this section “*repo or stock-lending arrangements*” has the same meaning as in paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending); and, in relation to any such arrangements—
- (a) a reference to the initial transfer is a reference to the transfer mentioned in sub-paragraph (3)(a) of that paragraph; and
- (b) a reference to the period for which the arrangements have effect is a reference to the period from the making of the initial transfer until whichever is the earlier of the following—
- (i) the discharge of the obligations arising by virtue of the entitlement or requirement mentioned in sub-paragraph (3)(b) of that paragraph; and
- (ii) the time when it becomes apparent that the discharge mentioned in sub-paragraph (i) above will not take place.
- (7) In this section—
- “*life annuity*” means—a life annuity, as defined in section 657(1); ora life annuity, as defined in section 473(2) of ITTOIA 2005;
- “*pension annuity*” means an annuity which is pension income within the meaning of Part 9 of ITEPA 2003 (see section 566(2) of that Act).
#### Close companies.
##### 785ZA
- (1) This section applies for corporation tax purposes if—
- (a) a company carries on a business in respect of which the company is within the charge to corporation tax,
- (b) the company carries on the business in partnership with other persons in an accounting period of the partnership,
- (c) the business (“the leasing business”) is, on any day in that period, a business of leasing plant or machinery,
- (d) the company incurs a loss in its notional business in any accounting period comprised (wholly or partly) in the accounting period of the partnership, and
- (e) the interest of the company in the leasing business during the accounting period of the partnership is not determined on an allowable basis (see subsections (2) to (4)).
- (2) The interest of the company in the leasing business during the accounting period of the partnership is determined on an allowable basis if (and only if) the following condition is met.
- (3) The condition is met if, for the purposes of section 114(2),—
- (a) the company's share in the profits or loss of the leasing business for that period is determined wholly by reference to a single percentage, and
- (b) the company's share in any relevant capital allowances for that period is determined wholly by reference to the same percentage.
- (4) For the purposes of this condition “*profits*” does not include chargeable gains.
- (5) The following restrictions apply in respect of so much of the loss incurred by the company in its notional business as derives from any relevant capital allowances (“the restricted part of the loss”).
- (6) Apart from by way of set off against any relevant leasing income, relief is not to be given to the company under any relevant loss relief provision in respect of the restricted part of the loss.
- (7) If the leasing business is a trade, relief is not to be given to the company under section 393A(1) in respect of the restricted part of the loss.
- (8) The restricted part of the loss is not available for set off by way of group relief in accordance with section 403.
- (9) For the purpose of determining how much of a loss derives from any relevant capital allowances, the loss is to be calculated on the basis that any relevant capital allowances are the final amounts to be deducted.
##### 785ZB
- (1) This section applies for the purposes of section 785ZA.
- (2) “*Business of leasing plant or machinery*” has the same meaning as in Part 3 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc).
- (3) “*Lease*” has the same meaning as in section 785A.
- (4) “*Notional business*”, in relation to a company, means the business—
- (a) from which the company's share in the profits or loss of the leasing business is treated under section 114(2) as deriving for the purposes of the charge to corporation tax, and
- (b) which is treated under that provision as carried on alone by the company for those purposes.
- (5) “*Plant or machinery*” has the same meaning as in Part 2 of the Capital Allowances Act.
- (6) “*Relevant capital allowance*” means an allowance under Part 2 of the Capital Allowances Act in respect of expenditure incurred on the provision of plant or machinery wholly or partly for the purposes of the leasing business.
- (7) “*Relevant leasing income*” means any income of the company's notional business deriving from any lease—
- (a) which is a lease of plant or machinery, and
- (b) which was entered into before the end of the accounting period of the company in which the loss in its notional business was incurred.
- (8) “*Relevant loss relief provision*” means any of the following provisions—
- (a) section 392A (Schedule A losses),
- (b) section 392B (losses from overseas property businesses),
- (c) section 393 (trade losses),
- (d) section 396 (Case VI losses).
##### 785A
- (1) This section applies in any case where the following conditions are satisfied—
- (a) a person (call him “P”) is entitled to receive rentals under a lease of plant or machinery,
- (b) the rentals, so far as receivable by him, fall to be brought into account as income for the purpose of calculating his tax liability,
- (c) P enters into arrangements for the transfer of his right to receive some or all of the rentals to another person,
- (d) apart from this section, some or all of the amount or value of the consideration for the transfer (“the relevant portion of the consideration”) would fall to be brought into account neither—
- (i) as income, nor
- (ii) as a capital allowances disposal receipt,
for the purpose of calculating P’s tax liability.
- (2) In any such case, the relevant portion of the consideration—
- (a) shall be treated for tax purposes as income of P,
- (b) shall be taxable as rentals receivable by P under the lease (apart from any transfer of his right to receive some or all of the rentals), and
- (c) shall be brought into account in a period of account to the extent that it is receivable in that period of account.
- (3) Any reference to the transfer from P to another person of a right to receive rentals includes a reference to any arrangement under which rental ceases to form part of the receipts taken into account as income for the purposes of calculating P’s tax liability.
- (4) Where P is a partnership, any reference in this section to calculating P’s tax liability includes a reference to calculating the tax liability of the partners, notwithstanding that the partnership has legal personality.
- (5) A partnership has legal personality for the purposes of subsection (4) above if it is regarded as a legal person, or as a body corporate, under the law of the country or territory under which it is formed.
- (5A) This section does not apply in so far as section 774B or 774D (structured finance arrangements) applies in relation to the arrangements mentioned in paragraph (c) of subsection (1) above as a result of the transfer mentioned in that paragraph.
- “*related transaction*” has the same meaning as in section 84 of the Finance Act 1996;
- “*relevant payment*” means a payment the amount of which falls to be determined (wholly or mainly) by applying to a notional principal amount specified in a derivative contract, for a period so specified, a rate the value of which at all times is the same as that of a rate of interest so specified;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and
- “*trading credit*” means any credit falling to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in accordance with section 82(2) of that Act.
##### 808A
- (1) Subsection (2) below applies where any arrangements having effect by virtue of section 788—
- (a) make provision, whether for relief or otherwise, in relation to interest (as defined in the arrangements), and
- (b) make provision (the special relationship provision) that where owing to a special relationship the amount of the interest paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
- (2) The special relationship provision shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the loan would have been made at all in the absence of the relationship,
- (b) the amount which the loan would have been in the absence of the relationship, and
- (c) the rate of interest and other terms which would have been agreed in the absence of the relationship.
- (3) The special relationship provision shall be construed as requiring the taxpayer to show that there is no special relationship or (as the case may be) to show the amount of interest which would have been paid in the absence of the special relationship.
- (4) In a case where—
- (a) a company makes a loan to another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to make loans generally,
the fact that it is not part of the first company’s business to make loans generally shall be disregarded in construing subsection (2) above.
- (5) Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the debt on which the interest is paid in determining the excess interest (and accordingly expressly limits the factors to be taken into account).
##### 808B
- (1) Subsection (2) below applies where any arrangements having effect by virtue of section 788—
- (a) make provision, whether for relief or otherwise, in relation to royalties (as defined in the arrangements), and
- (b) make provision (the special relationship provision) that where owing to a special relationship the amount of the royalties paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
- (2) The special relationship provision shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the agreement under which the royalties are paid would have been made at all in the absence of the relationship,
- (b) the rate or amounts of royalties and other terms which would have been agreed in the absence of the relationship, and
- (c) where subsection (3) below applies, the factors specified in subsection (4) below.
- (3) This subsection applies if the asset in respect of which the royalties are paid, or any asset which that asset represents or from which it is derived, has previously been in the beneficial ownership of—
- (a) the person who is liable to pay the royalties,
- (b) a person who is, or has at any time been, an associate of the person who is liable to pay the royalties,
- (c) a person who has at any time carried on a business which, at the time when the liability to pay the royalties arises, is being carried on in whole or in part by the person liable to pay those royalties, or
- (d) a person who is, or has at any time been, an associate of a person who has at any time carried on such a business as is mentioned in paragraph (c) above.
- (4) The factors mentioned in subsection (2)(c) above are—
- (a) the amounts which were paid under the transaction, or under each of the transactions in the series of transactions, as a result of which the asset has come to be an asset of the beneficial owner for the time being,
- (b) the amounts which would have been so paid in the absence of a special relationship, and
- (c) the question whether the transaction or series of transactions would have taken place in the absence of such a relationship.
- (5) The special relationship provision shall be construed as requiring the taxpayer to show—
- (a) the absence of any special relationship, or
- (b) the rate or amount of royalties that would have been payable in the absence of the relationship,
as the case may be.
- (6) The requirement on the taxpayer to show in accordance with subsection (5)(a) above the absence of any special relationship includes a requirement—
- (a) to show that no person of any of the descriptions in paragraphs (a) to (d) of subsection (3) above has previously been the beneficial owner of the asset in respect of which the royalties are paid, or of any asset which that asset represents or from which it is derived, or
- (b) to show the matters specified in subsection (7) below,
as the case may be.
- (7) Those matters are—
- (a) that the transaction or series of transactions mentioned in subsection (4)(a) above would have taken place in the absence of a special relationship, and
- (b) the amounts which would have been paid under the transaction, or under each of the transactions in the series of transactions, in the absence of such a relationship.
- (8) Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the use, right or information for which royalties are paid in determining the excess royalties (and accordingly expressly limits the factors to be taken into account).
- (9) For the purposes of this section one person (“*person A*”) is an associate of another person (“*person B*”) at a given time if—
- (a) person A was, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person B at that time, or
- (b) the same person was or same persons were, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person A and person B at that time.
#### Additions to non-profit funds: amount of loss reduction
#### Additions to non-profit funds: amount of loss reduction
##### 815A
- (1) This section applies where section 269C of the 1970 Act or section 140C or 140F of the Taxation of Chargeable Gains Act 1992 applies; and references in this section to company A, the transfer and the trade shall be construed accordingly.
- (2) Where gains accruing to company A on the transfer would have been chargeable to tax under the law of the relevant member State but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount of tax, calculated on the required basis, which would have been payable under that law in respect of the gains so accruing but for that Directive, were tax payable under that law.
- (5) For the purposes of this section, the required basis is that—
- (a) so far as permitted under the law of the relevant member State, any losses arising on the transfer are set against any gains so arising, and
- (b) any relief available to company A under that law has been duly claimed.
- (6) In this section—
- “*capital allowances disposal receipt*” means a disposal receipt within the meaning of Part 2 of the Capital Allowances Act 2001 (see section 60 of that Act);
- “*lease*” includes an underlease, sublease, tenancy or licence and an agreement for any of those things;
- “*tax liability*” means liability to income tax or corporation tax.
##### 785B
- (1) This section applies if—
- (a) there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or
- (b) a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.
- (2) The lessor is treated for corporation tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.
- (3) The income is treated—
- (a) if subsection (1)(a) applies, as income for the period of account in which there is first an obligation of the kind mentioned there, and
- (b) if subsection (1)(b) applies, as income for the period of account in which the payment is made.
##### 785C
- (1) The expressions used in section 785B and this section are to be interpreted as follows.
- (2) “*Capital payment*” means any payment except one which, if made to the lessor—
- (a) would fall to be included in a calculation of the lessor's income for corporation tax purposes, or
- (b) would fall to be included in such a calculation but for section 502B (rental earnings under long funding finance lease).
- (3) “*Lease*” includes—
- (a) a licence, and
- (b) the letting of a ship or aircraft on charter or the letting of any other asset on hire,
and “*lessor*” and “*lessee*” are to be read accordingly.
- (4) “*Lease of plant or machinery*” includes a lease of plant or machinery and other property but does not include—
- (a) a lease where the income attributable to the lease received by the lessor (if any) would be chargeable to tax under Schedule A, or
- (b) a lease of plant or machinery where the lessor has incurred what would (but for section 34A of the Capital Allowances Act) be qualifying expenditure (within the meaning of Part 2 of that Act) on the plant or machinery.
- (5) “*Relevant arrangement*” means any agreement or arrangement relating to a lease of plant or machinery, including one made before the lease is entered into or after it has ended (and, accordingly, “lessor” and lessee” include prospective and former lessors and lessees).
- (6) A capital payment, in relation to a lease or relevant arrangement, is “relevant” if condition A or B is met (but this is subject to subsection (9)).
- (7) Condition A is that the capital payment is payable (or paid), directly or indirectly, by (or on behalf of) the lessee to (or on behalf of) the lessor in connection with—
- (a) the grant, assignment, novation or termination of the lease, or
- (b) any provision of the lease or relevant arrangement (including the variation or waiver of any such provision).
- (8) Condition B is that rentals payable under the lease are less than (or payable later than) they might reasonably be expected to be if there were no obligation to make the capital payment (and the capital payment were not made).
- (9) A capital payment is not “relevant” if or to the extent that—
- (a) the capital payment reduces (or would but for section 536 of the Capital Allowances Act reduce) the amount of expenditure incurred by the lessor for the purposes of the Capital Allowances Act in respect of the plant or machinery in question,
- (b) the capital payment is compensation for loss resulting from damage to, or damage caused by, the plant or machinery in question, or
- (c) the capital payment would fall (or falls) to be brought into account by the lessor as a disposal receipt within the meaning of Part 2 of the Capital Allowances Act (see section 60(1) of that Act).
- (10) References to payment include the provision of value by any means other than the making of a payment, and accordingly—
- (a) references to the making of a payment include the passing of value (by any other means), and
- (b) references to the amount of the payment include the value passed.
##### 785D
- (1) This section applies if section 785B applies in relation to a lease of plant or machinery and other property (see section 785C(4)).
- (2) The relevant capital payment is to be apportioned, on a just and reasonable basis, between—
- (a) the plant and machinery, and
- (b) the other property.
- (3) If the income (if any) received by the lessor that is attributable to any of the plant or machinery is chargeable to tax under Schedule A, treat that plant or machinery as falling within subsection (2)(b) (and not subsection (2)(a)).
- (4) Section 785B(2) has effect as if the reference to the amount of the capital payment were to such amount as is apportioned under subsection (2) in respect of the plant or machinery within subsection (2)(a).
#### Meaning of “participator”, “associate”, “director” and “loan creditor”.
##### 785E
- (1) This section applies for corporation tax purposes if—
- (a) section 785B applies by virtue of subsection (1)(a) of that section, and
- (b) at any time, the lessor reasonably expects that the relevant capital payment will not be paid (or will not be paid in full).
- (2) For the purposes of calculating the profits of the lessor, a deduction is allowed for the period of account which includes that time.
- (3) The amount of the deduction is equal to the amount reasonably expected not to be paid.
- (4) No other deduction is allowed in respect of the matters mentioned in subsection (1).
#### Section 432B: apportionment of business transfer-in
#### Section 432B: apportionment of business transfer-in
##### 793A
- (1) Where relief in respect of an amount of tax that would otherwise be payable under the law of a territory outside the United Kingdom may be allowed—
- (a) under arrangements made in relation to that territory, or
- (b) under the law of that territory in consequence of any such arrangements,
credit may not be allowed in respect of that tax, whether the relief has been used or not.
- (2) Where, under arrangements having effect by virtue of section 788, credit may be allowed in respect of an amount of tax, credit by way of unilateral relief may not be allowed in respect of that tax.
- (3) Where arrangements made in relation to a territory outside the United Kingdom contain express provision to the effect that relief by way of credit shall not be given under the arrangements in cases or circumstances specified or described in the arrangements, then neither shall credit by way of unilateral relief be allowed in those cases or circumstances.
##### 795A
- (1) The amount of credit for foreign tax which, under any arrangements, is to be allowed against tax in respect of any income or chargeable gain shall not exceed the credit which would be allowed had all reasonable steps been taken—
- (a) under the law of the territory concerned, and
- (b) under any arrangements made in relation to that territory,
to minimise the amount of tax payable in that territory.
- (2) The steps mentioned in subsection (1) above include—
- (a) claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances; and
- (b) making elections for tax purposes.
- (3) For the purposes of subsection (1) above, any question as to the steps which it would have been reasonable for a person to take shall be determined on the basis of what the person might reasonably be expected to have done in the absence of relief under this Part against tax in the United Kingdom.
##### 797A
- (1) This section applies for the purposes of any arrangements where, in the case of any company—
- (a) any non-trading credit relating to an item is brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for any accounting period (“the applicable accounting period”); and
- (b) there is in respect of that item an amount of foreign tax for which, under the arrangements, credit is allowable against United Kingdom tax computed by reference to that interest.
- (2) It shall be assumed that tax chargeable under paragraph (a) of Case III of Schedule D on the profits and gains arising for the applicable accounting period from the company’s loan relationships falls to be computed on the actual amount of its non-trading credits for that period, and without any deduction in respect of non-trading debits.
- (3) Section 797(3) shall have effect (subject to subsection (7) below) as if—
- (a) there were for the applicable accounting period an amount equal to the adjusted amount of the non-trading debits falling to be brought into account by being set against profits of the company for that period of any description; and
- (b) different parts of that amount might be set against different profits.
- (4) For the purposes of this section, the adjusted amount of a company’s non-trading debits for any accounting period is the amount equal, in the case of that company, to the aggregate of the non-trading debits given for that period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) less the aggregate of the amounts specified in subsection (5) below.
- (5) Those amounts are—
- (a) so much of any non-trading deficit for the applicable accounting period as is an amount to which a claim under subsection (2)(c) of section 83 of the Finance Act 1996 or paragraph 4(3) of Schedule 11 to that Act (deficit carried back and set against profits) relates; and
- (aa) so much of any non-trading deficit for that period as is surrendered as group relief by virtue of section 403 of the Taxes Act 1988; and
- (b) so much of any non-trading deficit for that period as falls to be carried forward to a subsequent period in accordance with subsection (3A) of that section or paragraph 4(4) of that Schedule; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Section 797(3) shall have effect as if any amount carried forward to the applicable accounting period under section 83(3A) of that Act were an amount capable of being allocated only to any non-trading profits of the company.
- (7) Where—
- (a) the company has a non-trading deficit for the applicable accounting period,
- (b) the amount of that deficit exceeds the aggregate of the amounts specified in subsection (5) above, and
- (c) in pursuance of a claim under—
- (i) subsection (2)(a) of section 83 of the Finance Act 1996 (deficit set against current year profits), or
- (ii) paragraph 4(2) of Schedule 11 to that Act (set-off of deficits in the case of insurance companies),
the excess falls to be set off against profits of any description,
section 797(3) shall have effect as if non-trading debits of the company which in aggregate are equal to the amount of the excess were required to be allocated to the profits against which they are set off in pursuance of the claim.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) In this section “*non-trading profits*” has the same meaning as in paragraph 4 of Schedule 8 to the Finance Act 1996.
##### 797B
- (1) This section applies for the purposes of any arrangements where, in the case of a company—
- (a) a non-trading credit relating to an item is brought into account for the purposes of Schedule 29 to the Finance Act 2002 (intangible fixed assets) for an accounting period (“*the applicable accounting period*”), and
- (b) there is in respect of that item an amount of foreign tax for which, under the arrangements, credit is allowable against United Kingdom tax computed by reference to that item.
- (2) It shall be assumed that tax chargeable under Case VI of Schedule D on the profits and gains arising for the applicable accounting period from the company’s intangible fixed assets falls to be computed on the actual amount of its non-trading credits for that period, and without any deduction in respect of non-trading debits.
- (3) Section 797(3) shall have effect as if—
- (a) there were for the applicable accounting period an amount equal to the adjusted amount of the non-trading debits falling to be brought into account by being set against profits of the company for that period of any description, and
- (b) different parts of that amount might be set against different profits.
- (4) For this purpose the adjusted amount of a company’s non-trading debits for an accounting period is given by:
$$TotalDebits-AmountCarriedForward$where—Total Debits is the aggregate amount of the company’s non-trading debits for that accounting period under Schedule 29 to the Finance Act 2002 (intangible fixed assets), andAmount Carried Forward is the amount (if any) carried forward to the next accounting period of the company under paragraph 35(3) of that Schedule (carry-forward of non-trading loss in respect of which no claim is made for it to be set against total profits of current period).$
#### Computation of losses and limitation on relief.
##### 798A
- (1) This section has effect in relation to the application of section 797(1) to the allowance of credit for foreign tax against corporation tax in respect of trade income.
- (2) The reference in section 797(1) to the relevant income or gain shall be treated as referring only to income arising or gains accruing out of the transaction, arrangement or asset in connection with which the credit for foreign tax arises.
- (3) In determining for the purposes of section 797(1) the amount of corporation tax attributable to any income or gain, there shall be taken into account—
- (a) deductions or expenses which would be allowable in the computation of the taxpayer's liability,
- (b) a reasonable apportionment of allowable deductions or expenses which relate partly to the transaction, arrangement or asset from which the income or gain arises and partly to other matters, and
- (c) expenses of a company connected (within the meaning given by section 839) with the taxpayer, in so far as reasonably attributable to the income or gain.
- (4) In this section and section 798B “*trade income*” means—
- (a) income or profits chargeable to tax under Case I, II or V of Schedule D,
- (b) profits of a Schedule A business computed in same way as the profits of a trade in accordance with section 21A of ICTA,
- (c) sums charged to tax under Case VI of Schedule D in accordance with section 104 of ICTA, and
- (d) any other income or profits which by a provision of ICTA is chargeable to tax under, or computed in accordance with, Case I of Schedule D;
but this section shall not apply in relation to income to which section 804C below applies.
##### 798B
- (1) Where—
- (a) a credit for foreign tax arises in connection with an asset, and
- (b) the asset is in a hedging relationship with a derivative contract,
in the application of section 798A(2) the reference to the income arising out of the asset shall be taken as a reference to the income arising out of the asset and the derivative contract taken together (but taking account of the income or loss from the derivative contract only in so far as reasonably attributable to the hedging relationship).
- (2) For the purposes of subsection (1)(b) an asset is in a hedging relationship with a derivative contract if—
- (a) the asset is acquired as a hedge of risk in connection with the contract, or
- (b) the contract is entered into as a hedge of risk in connection with the asset;
and if an asset or a contract is wholly or partly designated as a hedge for the purposes of a person's accounts, that shall be conclusive for the purpose of this subsection.
- (3) Where royalties (as defined in arrangements having effect by virtue of section 788) are paid in respect of an asset in more than one jurisdiction outside the United Kingdom, for the purposes of section 798A(2)—
- (a) royalty income arising in more than one jurisdiction (other than the United Kingdom) in a year of assessment in respect of that asset shall be treated as income arising from a single transaction, arrangement or asset, and
- (b) credits available for foreign tax in respect of the royalty income shall be aggregated accordingly.
- (4) If a person (“A”) carrying on a trade giving rise to trade income enters into a scheme or arrangement with another person (“B”) a main purpose of which is to alter the effect of section 798A in relation to A, income received in pursuance of the scheme or arrangement shall be treated for the purposes of section 798A as trade income of B (and not as income of A).
- (5) Where—
- (a) transactions, arrangements or assets are treated by a taxpayer as a series or group (the “portfolio”),
- (b) a number of credits for foreign tax arise in respect of the portfolio, and
- (c) either—
- (i) it is not reasonably practicable to prepare a separate computation of income or gain for the purposes of section 798A(2) in respect of each transaction, arrangement or asset, or
- (ii) a separate computation of income or gain in respect of each transaction, arrangement or asset for the purposes of section 798A(2) would not, compared with an aggregated computation, make a material difference to the amount of credit for foreign tax which is allowable,
the income or gains arising from the portfolio, or part of the portfolio, may be aggregated and apportioned for the purposes of section 798A(2) in a fair and reasonable manner.
##### 798C
- (1) This section applies where the application of section 796(1) or 797(1) prevents an amount of credit for foreign tax from being allowable against income tax or corporation tax.
- (2) The amount of disallowed credit may be taken into account as a deduction in computing the taxpayer's liability for income tax or corporation tax, but only in so far as it does not exceed the amount of any loss attributable to the income or gain in respect of which the foreign tax was paid (for which purpose payment of the foreign tax is to be taken into account, despite section 795(2)).
##### 801A
- (1) This section applies where—
- (a) a company (“*the claimant company*”) makes a claim for an allowance by way of credit in accordance with this Part;
- (b) the claim relates to underlying tax on a dividend paid to that company by a company resident outside the United Kingdom (“*the overseas company*”);
- (c) that underlying tax is or includes an amount in respect of tax (“*the high rate tax*”) payable by—
- (i) the overseas company, or
- (ii) such a third, fourth or successive company as is mentioned in section 801,
at a rate in excess of the relievable rate; and
- (d) the whole or any part of the amount in respect of the high rate tax which is or is included in the underlying tax would not be, or be included in, that underlying tax but for the existence of, or for there having been, an avoidance scheme.
- (2) Where this section applies, the amount of the credit to which the claimant company is entitled on the claim shall be determined as if the high rate tax had been tax at the relievable rate, instead of at a rate in excess of that rate.
- (3) For the purposes of this section tax shall be taken to be payable at a rate in excess of the relievable rate if, and to the extent that, the amount of that tax exceeds the amount that would represent tax on the relevant profits at the relievable rate.
- (4) In subsection (3) above “*the relevant profits*”, in relation to any tax, means the profits of the overseas company or, as the case may be, of the third, fourth or successive company which, for the purposes of this Part, are taken to bear that tax.
- (5) In this section “*the relievable rate*” means the rate of corporation tax in force when the dividend mentioned in subsection (1)(b) above was paid.
- (6) In this section “*an avoidance scheme*” means any scheme or arrangement which—
- (a) falls within subsection (7) below; and
- (b) is a scheme or arrangement the purpose, or one of the main purposes, of which is to have an amount of underlying tax taken into account on a claim for an allowance by way of credit in accordance with this Part.
- (7) A scheme or arrangement falls within this subsection if the parties to it include both—
- (a) the claimant company, a company related to that company or a person connected with the claimant company; and
- (b) a person who was not under the control of the claimant company at any time before the doing of anything as part of, or in pursuance of, the scheme or arrangement.
- (8) In this section “*arrangement*” means an arrangement of any kind, whether in writing or not.
- (9) Section 839 (meaning of “*connected persons*”) applies for the purposes of this section.
- (10) Subsection (5) of section 801 (meaning of “*related company*”) shall apply for the purposes of this section as it applies for the purposes of that section.
- (11) For the purposes of this section a person who is a party to a scheme or arrangement shall be taken to have been under the control of the claimant company at all the following times, namely—
- (a) any time when that company would have been taken (in accordance with section 416) to have had control of that person for the purposes of Part XI;
- (b) any time when that company would have been so taken if that section applied (with the necessary modifications) in the case of partnerships and unincorporated associations as it applies in the case of companies; and
- (c) any time when that person acted in relation to that scheme or arrangement, or any proposal for it, either directly or indirectly under the direction of that company.
##### 801B
- (1) This section applies where—
- (a) a company (“*company A*”) resident outside the United Kingdom has paid tax under the law of a territory outside the United Kingdom in respect of any of its profits;
- (b) some or all of those profits become profits of another company resident outside the United Kingdom (“*company B*”) otherwise than by virtue of the payment of a dividend to company B; and
- (c) company B pays a dividend out of those profits to another company (“*company C*”), wherever resident.
- (2) Where this section applies, this Part shall have effect, so far as relating to the determination of underlying tax in relation to any dividend paid—
- (a) by any company resident outside the United Kingdom (whether or not company B),
- (b) to a company resident in the United Kingdom,
as if company B had paid the tax paid by company A in respect of those profits of company A which have become profits of company B as mentioned in subsection (1)(b) above.
- (3) But the amount of relief under this Part which is allowable to a company resident in the United Kingdom shall not exceed the amount which would have been allowable to that company had those profits become profits of company B by virtue of the payment of a dividend by company A to company B.
##### 801C
- (1) This section applies in any case where—
- (a) by virtue only of section 748(1)(a), no apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company; and
- (b) one or more of the dividends paid by the controlled foreign company by virtue of which the condition in paragraph (a) above is satisfied are dividends falling within subsection (2) below.
- (2) A dividend falls within this subsection if, for the purposes of Part I of Schedule 25, the whole or any part of it falls to be treated by virtue of paragraph 4 of that Schedule as paid by the controlled foreign company to a United Kingdom resident.
- (3) If, in a case where this section applies,—
- (a) an initial dividend is paid to a company resident outside the United Kingdom, and
- (b) that company, or any other company which is related to it, pays an intermediate dividend which for the purposes of paragraph 4 of Schedule 25 to any extent represents that initial dividend,
subsection (4) below shall have effect in relation to the UK recipient concerned.
- (4) Where this subsection has effect, it shall be assumed for the purposes of allowing credit relief under this Part to that UK recipient—
- (a) that, instead of the intermediate dividend, the dividends described in subsection (5) below had been paid and the circumstances had been as described in subsection (6) or (7) below, as the case may be; and
- (b) that any tax paid under the law of any territory in respect of the intermediate dividend, or which is underlying tax in relation to that dividend, had instead fallen to be borne accordingly (taking account of any reduction falling to be made under section 799(2)).
- (5) The dividends mentioned in subsection (4)(a) above are—
- (a) as respects each of the initial dividends which are, for the purposes of paragraph 4 of Schedule 25, to any extent represented by the intermediate dividend, a separate dividend (an “*ADP dividend*”) representing, and of an amount equal to, so much of that initial dividend as is for those purposes represented by the intermediate dividend; and
- (b) a further separate dividend (a “*residual dividend*”) representing, and of an amount equal to, the remainder (if any) of the intermediate dividend.
- (6) As respects each of the ADP dividends, the intermediate company is to be treated as if it were a separate company whose distributable profits are of a constitution corresponding to, and an amount equal to, that of the ADP dividend.
- (7) As respects the residual dividend (if any), the relevant profits out of which it is to be regarded for the purposes of section 799(1) as paid by the intermediate company are, in consequence of subsection (6) above, to be treated as being of such constitution and amount as remains after excluding accordingly so much of those relevant profits as constitute the whole or any part of the distributable profits out of which the ADP dividends are paid.
- (8) If, in a case where this section applies, an intermediate company also pays a dividend which is not an intermediate dividend (an “*independent dividend*”) and either—
- (a) that dividend is paid to a United Kingdom resident, or
- (b) if it is not so paid, a dividend which to any extent represents it is paid by a company which is related to that company and resident outside the United Kingdom to a United Kingdom resident,
subsection (9) below shall have effect in relation to the United Kingdom resident.
- (9) Where this subsection has effect, it shall be assumed for the purposes of allowing credit relief under this Part to the United Kingdom resident—
- (a) that the relevant profits out of which the independent dividend is to be regarded for the purposes of section 799(1) as paid by the intermediate company are, in consequence of subsection (6) above, to be treated as being of such constitution and amount as remains after excluding so much of those relevant profits as constitute the whole or any part of the distributable profits out of which the ADP dividends are paid; and
- (b) that any tax paid under the law of any territory in respect of the independent dividend, or which is underlying tax in relation to that dividend, had instead fallen to be borne accordingly (taking account of any reduction falling to be made under section 799(2)).
- (10) For the purposes of this section—
- (a) a controlled foreign company is an “ADP controlled foreign company" as respects any of its accounting periods if the condition in paragraph (a) of subsection (1) above is satisfied as respects that accounting period;
- (b) an “initial dividend" (subject to subsection (14) below) is any of the dividends mentioned in paragraph (b) of subsection (1) above paid by an ADP controlled foreign company; and
- (c) a “*subsequent dividend*” is any dividend which, in relation to one or more initial dividends, is the subsequent dividend for the purposes of paragraph 4 of Schedule 25.
- (11) In this section—
- “*distributable profits*” means a company’s profits available for distribution, determined in accordance with section 799(6);
- “*intermediate company*” means any company resident outside the United Kingdom which pays an intermediate dividend;
- “*intermediate dividend*” means any dividend which is paid by a company resident outside the United Kingdom and which—for the purposes of paragraph 4 of Schedule 25, to any extent represents one or more initial dividends paid by other companies; andeither is the subsequent dividend in the case of those initial dividends or is itself to any extent represented for those purposes by a subsequent dividend;
- “*the UK recipient*” means the United Kingdom resident to whom a subsequent dividend is paid.
- (12) Where—
- (a) one company pays a dividend (“*dividend A*”) to another company, and
- (b) that other company, or a company which is related to it, pays a dividend (“*dividend B*”) to another company,
then, for the purposes of this section, dividend B represents dividend A, and dividend A is represented by dividend B, to the extent that dividend B is paid out of profits which are derived, directly or indirectly, from the whole or part of dividend A.
- (13) Sub-paragraph (2) of paragraph 4 of Schedule 25 (related companies) shall apply for the purposes of this section as it applies for the purposes of that paragraph.
- (14) Where an intermediate company which is an ADP controlled foreign company pays a dividend—
- (a) by virtue of which (whether taken alone or with other dividends) the condition in subsection (1)(a) above is satisfied as regards an accounting period of the company, but
- (b) which also for the purposes of paragraph 4 of Schedule 25 to any extent represents one or more initial dividends paid by other ADP controlled foreign companies,
the dividend shall not be regarded for the purposes of this section as an initial dividend paid by the company, to the extent that it so represents initial dividends paid by other ADP controlled foreign companies.
##### 803A
- (1) This section applies in any case where, under the law of a territory outside the United Kingdom, tax is payable by any one company resident in that territory (“*the responsible company*”) in respect of the aggregate profits, or aggregate profits and aggregate gains, of that company and one or more other companies so resident, taken together as a single taxable entity.
- (1A) Where—
- (a) a company is (within the meaning of section 801) an ADP controlled foreign company as respects any of its accounting periods, and
- (b) the whole or any part of the profits or gains of that accounting period are included in the aggregate profits, or aggregate profits or gains, mentioned in subsection (1) above,
subsection (2) below shall have effect as if the companies mentioned in subsection (1) above did not include that company.
- (2) Where this section applies, this Part shall have effect, so far as relating to the determination of underlying tax in relation to any dividend paid by any of the companies mentioned in subsection (1) above (the “*non-resident companies*”) to another company (“*the recipient company*”), as if—
- (a) the non-resident companies, taken together, were a single company,
- (b) anything done by or in relation to any of the non-resident companies (including the payment of the dividend) were done by or in relation to that single company, and
- (c) that single company were related to the recipient company, if that one of the non-resident companies which actually pays the dividend is related to the recipient company,
(so that, in particular, the relevant profits for the purposes of section 799(1) is a single aggregate figure in respect of that single company and the foreign tax paid by the responsible company is foreign tax paid by that single company).
- (3) For the purposes of this section a company is related to another company if that other company—
- (a) controls directly or indirectly, or
- (b) is a subsidiary of a company which controls directly or indirectly,
not less than 10 per cent. of the voting power in the first-mentioned company.
##### 804ZA
- (1) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied in relation to any income or chargeable gain taken or to be taken into account for the purposes of determining a person's liability to tax in a chargeable period, they may give the person a notice under this section.
- (2) Condition A is that, in the case of the person, there is in respect of the income or gain an amount of foreign tax for which, under any arrangements, credit is allowable against United Kingdom tax for that chargeable period.
- (3) Condition B is that there is a scheme or arrangement the main purpose, or one of the main purposes, of which is to cause an amount of foreign tax to be taken into account in the case of the person for that chargeable period.
- (4) Condition C is that the scheme or arrangement is a prescribed scheme or arrangement.
- (5) Condition D is that the amount referred to in subsection (6) is more than a minimal amount.
- (6) The amount is the aggregate of—
- (a) the aggregate amount of the claims for credit that the person has made, or is in a position to make, for the chargeable period; and
- (b) for all the persons connected to that person, the aggregate amount of the claims for credit that the connected person has made, or is in a position to make, for a corresponding chargeable period.
- (7) A chargeable period of a person (“A”) corresponds to a chargeable period of another person (“B”) if at least one day of A's chargeable period falls within B's chargeable period.
- (8) A notice under this section is a notice—
- (a) informing the person of the Board's view under subsection (1),
- (b) specifying the chargeable period in relation to which the Board formed that view,
- (c) if the amount of foreign tax considered by the Board to satisfy condition B is an amount of underlying tax, specifying the body corporate resident in a territory outside the United Kingdom whose payment of foreign tax is relevant to that underlying tax, and
- (d) informing the person that as a consequence section 804ZB has effect in relation to him.
- (9) A notice under this section may specify the adjustments of a person's tax return that, in the view of the Board, fall to be made by him under section 804ZB(2).
- (10) The adjustments specified may, in a case where the notice given to a person specifies a body corporate resident outside the United Kingdom, include treating the body corporate as having paid or being liable to pay only so much foreign tax as would have been allowed to it as a credit if it were resident in the United Kingdom and a notice under this section had been given to it as regards an amount of foreign tax.
- (11) Schedule 28AB makes provision about what constitutes a prescribed scheme or arrangement.
- (12) In this section and sections 804ZB and 804ZC “*tax return*” means—
- (a) a return under section 8, 8A or 12AA of the Management Act, or
- (b) a company tax return;
and “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule.
##### 804ZB
- (1) This section applies in relation to a person if—
- (a) a notice under section 804ZA has been given to the person in respect of a chargeable period specified in the notice, and
- (b) the chargeable period specified is a chargeable period in relation to which conditions A to D of section 804ZA are satisfied.
- (2) The person must in his tax return for the period make (or must amend his return for the period so as to make) such adjustments as are necessary for counteracting the effects of the scheme or arrangement in that period that are referable to the purpose referred to in condition B of section 804ZA.
##### 804ZC
- (1) Subsection (2) applies if the Board give a notice to a person under section 804ZA before the person has made his tax return for the chargeable period specified in the notice.
- (2) If the person makes a tax return for that period before the end of the period of 90 days beginning with the day on which the notice is given, he may—
- (a) make a tax return that disregards the notice, and
- (b) at any time after making the return and before the end of the period of 90 days, amend the return for the purpose of complying with the notice.
- (3) If a person has made a tax return for a chargeable period, the Board may only give him a notice under section 804ZA in relation to that period if a notice of enquiry has been given to him in respect of his tax return for that period.
- (4) After any enquiries into the person's tax return for that period have been completed, the Board may only give him a notice under section 804ZA in relation to that period if the requirements in subsections (5) and (7) are satisfied.
- (5) The first requirement is that at the time the enquiries were completed, the Board could not have been reasonably expected, on the basis of the information made available to them or to an officer of theirs before that time, to have been aware that the circumstances were such that a notice under section 804ZA could have been given to the person in relation to that period.
- (6) For the purposes of subsection (5)—
- (a) section 29(6) and (7) of the Management Act (information made available) applies as it applies for the purposes of section 29(5), and
- (b) paragraph 44(2) and (3) of Schedule 18 to the Finance Act 1998 applies as it applies for the purposes of paragraph 44(1).
- (7) The second requirement is that—
- (a) the person was requested to produce, provide or furnish information during an enquiry into the return for that period, and
- (b) if the person had duly complied with the request, the Board could have been reasonably expected to give the person a notice under section 804ZA in relation to that period.
- (8) If a person is given a notice under section 804ZA in relation to a chargeable period after having made a tax return for that period, the person may amend the return for the purpose of complying with the notice at any time before the end of the period of 90 days beginning with the day on which the notice is given.
- (9) If the notice under section 804ZA is given to the person after he has been given a notice of enquiry in respect of his tax return for the period, no closure notice may be given in relation to his tax return until—
- (a) the end of the period of 90 days beginning with the day on which the notice under section 804ZA is given, or
- (b) the earlier amendment of the return for the purpose of complying with the notice.
- (10) If the notice under section 804ZA is given to the person after any enquiries into the return for the period are completed, no discovery assessment may be made as regards the income or chargeable gain to which the notice relates until—
- (a) the end of the period of 90 days beginning with the day on which the notice under section 804ZA is given, or
- (b) the earlier amendment of the return for the purpose of complying with the notice.
- (11) Subsections (2)(b) and (8) do not prevent a person's tax return for a chargeable period becoming incorrect if—
- (a) a notice under section 804ZA is given to the person in relation to that period,
- (b) the return is not amended in accordance with subsection (2)(b) or (8) for the purpose of complying with the notice, and
- (c) the return ought to have been so amended.
- (12) In this section—
- “*closure notice*” means a notice under—section 28A or 28B of the Management Act, orparagraph 32 of Schedule 18 to the Finance Act 1998;
- “*discovery assessment*” means an assessment under—section 29 of the Management Act, orparagraph 41 of Schedule 18 to the Finance Act 1998;
- “*notice of enquiry*” means a notice under—section 9A or 12AC of the Management Act, orparagraph 24 of Schedule 18 to the Finance Act 1998.
##### 804A
- (1) Subsection (2) below applies where credit for tax—
- (a) which is payable under the laws of a territory outside the United Kingdom in respect of insurance business carried on by a company through a permanent establishment in that territory, and
- (b) which is computed otherwise than wholly by reference to profits arising in that territory,
is to be allowed (in accordance with this Part) against corporation tax charged under Case I or Case VI of Schedule D in respect of the profits, computed in accordance with the provisions applicable to Case I of Schedule D, of life assurance business or any category of life assurance business carried on by the company in an accounting period (in this section referred to as “*the relevant profits*”).
- (1A) For the purposes of paragraph (b) of subsection (1) above, the cases where tax payable under the laws of a territory outside the United Kingdom is “*computed otherwise than wholly by reference to profits arising in that territory*” are those cases where the charge to tax in that territory falls within subsection (1B) below.
- (1B) A charge to tax falls within this subsection if it is such a charge made otherwise than by reference to profits as (by disallowing their deduction in computing the amount chargeable) to require sums payable and other liabilities arising under policies to be treated as sums or liabilities falling to be met out of amounts subject to tax in the hands of the company.
- (2) Where this subsection applies, the amount of the credit shall not exceed the greater of—
- (a) any such part of the tax payable under the laws of the territory outside the United Kingdom as is charged by reference to profits arising in that territory, and
- (b) the shareholders’ share of the tax so payable.
- (3) For the purposes of subsection (2) above the shareholders’ share of tax payable under the laws of a territory outside the United Kingdom is so much of that tax as is represented by the fraction
$$AB$where— A is an amount equal to the amount of the relevant profits before making any deduction authorised by subsection (5) below; andB is an amount equal to the excess of—$
- (a) the amount taken into account as receipts of the company in computing those profits, apart from premiums and sums received by virtue of a claim under a reinsurance contract, over
- (b) the amounts taken into account as expenses . . . in computing those profits.
- (4) Where there is no such excess as is mentioned in subsection (3) above, or where the profits are greater than any excess, the whole of the tax payable under the laws of the territory outside the United Kingdom shall be the shareholders’ share; and (subject to that) where there are no profits, none of it shall be the shareholders’ share.
- (5) Where, by virtue of this section, the credit for any tax payable under the laws of a territory outside the United Kingdom is less than it otherwise would be, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the relevant profits.
##### 804B
- (1) Where—
- (a) an insurance company carries on more than one category of business in an accounting period, and
- (b) there arises to the company in that period any income or gain (“*the relevant income*”) in respect of which credit for foreign tax falls to be allowed under any arrangements,
subsection (2) below shall have effect.
- (2) In any such case, the amount of the credit for foreign tax which, under the arrangements, is allowable against corporation tax in respect of so much of the relevant income as is referable (in accordance with the provisions of sections 432ZA to 432E or section 438B) to a particular category of business must not exceed the fraction of the foreign tax which, in accordance with the following provisions of this section, is attributable to that category of business.
- (3) Where the relevant income arises from an asset—
- (a) which is linked solely to a category of business (other than overseas life assurance business), or
- (b) which is an asset of the company’s overseas life assurance fund,
the whole of the foreign tax is attributable to the category mentioned in paragraph (a) above or, as the case may be, to the company’s overseas life assurance business, unless the case is one where subsection (7) below applies in relation to the category of business in question.
- (4) Where subsection (3) above does not apply and the category of business in question is—
- (a) basic life assurance and general annuity business, or
- (b) long-term business which is not life assurance business,
the fraction of the foreign tax that is attributable to that category of business is the fraction whose numerator is the part of the relevant income which is referable to that category by virtue of any provision of section 432A or 438B and whose denominator is the whole of the relevant income.
- (5) Subsections (6) and (7) below apply where the category of business in question is neither—
- (a) basic life assurance and general annuity business; nor
- (b) long-term business which is not life assurance business.
- (6) Where—
- (a) subsection (3) above does not apply, and
- (b) some or all of the relevant income is taken into account in accordance with section 83 of the Finance Act 1989 in an account in relation to which the provisions of section 432C or 432D apply,
the fraction of the foreign tax that is attributable to the category of business in question is the fraction whose numerator is the part of the relevant income which is referable to that category by virtue of any provision of section 432C or 432D and whose denominator is the whole of the relevant income.
- (7) Where some or all of the relevant income falls to be taken into account in determining in accordance with section 83(2) of the Finance Act 1989 the amount referred to in section 432E(1) as the net amount, the fraction of the foreign tax that is attributable to the category of business in question is the fraction—
- (a) whose numerator is the part of the investment income taken into account in that determination which would be referable to that category by virtue of section 432E if the investment income were the only amount included in the net amount; and
- (b) whose denominator is the whole of that investment income.
- (7A) The Treasury may by regulations amend subsection (7) above; and the regulations may include amendments having effect in relation to accounting periods during which they are made.
- (8) No part of the foreign tax is attributable to any category of business except as provided by subsections (3) to (7) above.
- (9) Where for the purposes of this section an amount of foreign tax is attributable to a category of life assurance business other than basic life assurance and general annuity business, credit in respect of the foreign tax so attributable shall be allowed only against corporation tax in respect of profits chargeable under Case VI of Schedule D arising from carrying on that category of business.
##### 804C
- (1) Where—
- (a) an insurance company carries on any category of insurance business in a period of account,
- (b) a computation in accordance with the provisions applicable to Case I of Schedule D falls to be made in relation to that category of business for that period, and
- (c) there arises to the company in that period any income or gain in respect of which credit for foreign tax falls to be allowed under any arrangements,
subsection (2) below shall have effect.
- (2) In any such case, the amount of the credit for foreign tax which, under the arrangements, is to be allowed against corporation tax in respect of so much of that income or gain as is referable to the category of business concerned (“*the relevant income*”) shall be limited by treating the amount of the relevant income as reduced in accordance with subsections (3) and (4) below.
- (3) The first limitation is to treat the amount of the relevant income as reduced (but not below nil) for the purposes of this Chapter by the amount of expenses (if any) attributable to the relevant income.
- (4) If—
- (a) the amount of the relevant income after any reduction under subsection (3) above,
exceeds
- (b) the relevant fraction of the profits of the category of business concerned for the period of account in question which are chargeable to corporation tax,
the second limitation is to treat the relevant income as further reduced (but not below nil) for the purposes of this Chapter to an amount equal to that fraction of those profits.
In this subsection any reference to the profits of a category of business is a reference to those profits after the set off of any losses of that category of business which have arisen in any previous accounting period.
- (5) In determining the amount of the credit for foreign tax which is to be allowed as mentioned in subsection (2) above, the relevant income shall not be reduced except in accordance with that subsection.
- (6) For the purposes of subsection (3) above, the amount of expenses attributable to the relevant income is the appropriate fraction of the total relevant expenses of the category of business concerned for the period of account in question.
- (7) In subsection (6) above, the “*appropriate fraction*” means the fraction—
- (a) whose numerator is the amount of the relevant income before any reduction in accordance with subsection (2) above, and
- (b) whose denominator is the total income of the category of business concerned for the period of account in question,
unless the denominator so determined is nil, in which case the denominator shall instead be the amount described in subsection (8) below.
- (8) That amount is so much in total of the income and gains—
- (a) which arise to the company in the period of account in question, and
- (b) in respect of which credit for foreign tax falls to be allowed under any arrangements,
as are referable to the category of business concerned (before any reduction in accordance with subsection (2) above).
- (9) In subsection (4) above, the “*relevant fraction*” means the fraction—
- (a) whose numerator is the amount of the relevant income before any reduction in accordance with subsection (2) above; and
- (b) whose denominator is the amount described in subsection (8) above.
- (10) Where a 75 per cent subsidiary of an insurance company is acting in accordance with a scheme or arrangement and—
- (a) the purpose, or one of the main purposes, of that scheme or arrangement is to prevent or restrict the application of subsection (2) above to the insurance company, and
- (b) the subsidiary does not carry on insurance business of any description,
the amount of corporation tax attributable (apart from this subsection) to any item of income or gain arising to the subsidiary shall be found by setting off against that item the amount of expenses that would be attributable to it under subsection (3) above if that item had arisen directly to the insurance company.
- (11) Where the credit allowed for any tax payable under the laws of a territory outside the United Kingdom is, by virtue of subsection (2) above, less than it would be if the relevant income were not treated as reduced in accordance with that subsection, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the profits of the category of business concerned.
- (12) Where, by virtue of subsection (10) above, the credit allowed for any tax payable under the laws of a territory outside the United Kingdom is less than it would be apart from that subsection, section 795(2)(a) shall not prevent a deduction being made for the difference in computing the income of the 75 per cent subsidiary.
- (13) For the purposes of the operation of this section in relation to any income or gain in respect of which credit falls to be allowed under any arrangements, the amount of the income or gain that is referable to a category of insurance business is the same fraction of the income and gain as the fraction of the foreign tax that is attributable to that category of business in accordance with section 804B.
- (14) This section shall be construed—
- (a) in accordance with section 804D, where the category of business concerned is life assurance business or a category of life assurance business; and
- (b) in accordance with section 804E, where the category of business concerned is not life assurance business or any category of life assurance business.
##### 804D
- (1) This section has effect for the interpretation of section 804C where the category of business concerned is life assurance business or a category of life assurance business.
- (2) The “total income" of the category of business concerned for the period of account in question is the amount (if any) by which—
- (a) so much of the total income shown in the revenue account in the periodical return of the company concerned for that period as is referable to that category of business,
exceeds
- (b) so much of any commissions payable and any expenses of management incurred in connection with the acquisition of the business, as shown in that return, so far as referable to that category of business.
- (3) Where any amounts fall to be brought into account in accordance with section 83 of the Finance Act 1989, the amounts that are referable to the category of business concerned shall be determined for the purposes of subsection (2) above in accordance with sections 432B to 432F.
- (4) The “total relevant expenses" of the category of business concerned for any period of account is the amount of the claims incurred—
- (a) increased by any increase in the liabilities of the company, or
- (b) reduced (but not below nil) by any decrease in the liabilities of the company.
- (5) For the purposes of subsection (4) above, the amounts to be taken into account in the case of any period of account are the amounts as shown in the company’s periodical return for the period so far as referable to the category of business concerned.
##### 804E
- (1) This section has effect for the interpretation of section 804C where the category of business concerned is not life assurance business or any category of life assurance business.
- (2) The “total income" of the category of business concerned for any period of account is the amount (if any) by which—
- (a) the sum of the amounts specified in subsection (3) below,
exceeds
- (b) the sum of the amounts specified in subsection (4) below.
- (3) The amounts mentioned in subsection (2)(a) above are—
- (a) earned premiums, net of reinsurance;
- (b) investment income and gains;
- (c) other technical income, net of reinsurance;
- (d) any amount treated under section 107(2) of the Finance Act 2000 as a receipt of the company’s trade.
- (4) The amounts mentioned in subsection (2)(b) above are—
- (a) acquisition costs;
- (b) the change in deferred acquisition costs;
- (c) losses on investments.
- (5) The “total relevant expenses" of the category of business concerned for any period of account is the sum of—
- (a) the claims incurred, net of reinsurance,
- (b) the changes in other technical provisions, net of reinsurance,
- (c) the change in the equalisation provision, and
- (d) investment management expenses,
unless that sum is a negative amount, in which case the total relevant expenses shall be taken to be nil.
- (6) The amounts to be taken into account for the purposes of the paragraphs of subsections (3) to (5) above are the amounts taken into account for the purposes of corporation tax.
- (7) Expressions used—
- (a) in the paragraphs of subsections (3) to (5) above, and
- (b) in the provisions of section B of Schedule 9A to the Companies Act 1985 (form and content of accounts of insurance companies and groups) which relate to the profit and loss account format (within the meaning of paragraph 7(1) of that section),
have the same meaning in those paragraphs as they have in those provisions.
##### 804F
Expressions used in sections 804A to 804E and in Chapter I of Part XII have the same meaning in those sections as in that Chapter.
##### 804G
- (1) This section applies if—
- (a) credit for foreign tax falls to be allowed to a person (“P”) under any arrangements, and
- (b) a payment is made by a tax authority to P, or any person connected with P, by reference to the foreign tax.
- (2) The amount of that credit is to be reduced by an amount equal to that payment.
- (3) Section 839 applies for the purposes of determining whether or not a person is connected with P.
### Foreign dividends: onshore pooling and utilisation of eligible unrelieved foreign tax
##### 806A
- (1) This section applies where, in any accounting period of a company resident in the United Kingdom, an amount of eligible unrelieved foreign tax arises in respect of a dividend falling within subsection (2) below paid to the company.
- (2) The dividends that fall within this subsection are any dividends chargeable under Case V of Schedule D, other than—
- (a) any dividend which is trading income for the purposes of section 393;
- (b) any dividend which, in the circumstances described in paragraphs (a) and (b) of subsection (8) of section 393, would by virtue of that subsection fall to be treated as trading income for the purposes of subsection (1) of that section;
- (c) in a case where section 801A applies, the dividend mentioned in subsection (1)(b) of that section;
- (d) in a case where section 803 applies, the dividend mentioned in subsection (1)(b) of that section;
- (e) any dividend the amount of which is, under section 811, treated as reduced.
- (3) For the purposes of this section—
- (a) the cases where an amount of eligible unrelieved foreign tax arises in respect of a dividend falling within subsection (2) above are the cases set out in subsections (4) and (5) below; and
- (b) the amounts of eligible unrelieved foreign tax which arise in any such case are those determined in accordance with section 806B.
- (4) Case A is where—
- (a) the amount of the credit for foreign tax which under any arrangements would, apart from section 797, be allowable against corporation tax in respect of the dividend,
exceeds
- (b) the amount of the credit for foreign tax which under the arrangements is allowed against corporation tax in respect of the dividend.
- (5) Case B is where the amount of tax which, by virtue of any provision of any arrangements, falls to be taken into account as mentioned in section 799(1) in the case of the dividend (whether or not by virtue of section 801(2) or (3)) is less than it would be apart from the mixer cap.
But if that is so in any case by reason only of the mixer cap restricting the amount of underlying tax that is treated as mentioned in subsection (2) or (3) of section 801 in the case of a dividend paid by a company resident in the United Kingdom, the case does not fall within Case B.
- (6) In determining whether the circumstances are as set out in subsection (4) or (5) above, sections 806C and 806D shall be disregarded.
##### 806B
- (1) This section has effect for determining the amounts of eligible unrelieved foreign tax which arise in the cases set out in section 806A(4) and (5).
- (2) In Case A, the difference between—
- (a) the amount of the credit allowed as mentioned in section 806A(4)(b), and
- (b) the greater amount of the credit that would have been so allowed if, for the purposes of subsection (2) of section 797, the rate of corporation tax payable as mentioned in that subsection were the upper percentage,
shall be an amount of eligible unrelieved foreign tax.
- (3) In Case B, the amount (if any) by which—
- (a) the aggregate of the upper rate amounts falling to be brought into account for the purposes of this paragraph by virtue of subsection (4) or (5) below, exceeds
- (b) the amount of tax to be taken into account as mentioned in section 799(1) in the case of the Case V dividend, before any increase under section 801(4B),
shall be an amount of eligible unrelieved foreign tax.
- (4) In the case of the Case V dividend (but not any lower level dividend), the upper rate amount to be brought into account for the purposes of subsection (3)(a) above—
- (a) in a case where the mixer cap does not restrict the amount of tax to be taken into account as mentioned in section 799(1) (before any increase under section 801(4B)) in the case of that dividend, is that amount of tax; or
- (b) in a case where the mixer cap restricts the amount of tax to be so taken into account in the case of that dividend, is the greater amount that would have been so taken into account if, in the application of the formula in section 799(1A) in the case of that dividend (but not any lower level dividend) M% had, in relation to—
- (i) so much of D as does not represent any lower level dividend, and
- (ii) so much of U as is not underlying tax attributable to any lower level dividend,
been the upper percentage.
- (5) In the case of any dividend (the “*relevant dividend*”) received as mentioned in subsection (2) or (3) of section 801 which is a lower level dividend in relation to the Case V dividend, the upper rate amount to be brought into account for the purposes of subsection (3)(a) above—
- (a) in a case where the mixer cap does not restrict the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of the relevant dividend, is the appropriate portion of that amount of underlying tax;
- (b) in a case where—
- (i) the relevant dividend was paid by a company resident in the United Kingdom, and
- (ii) the mixer cap restricts the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of that dividend,
is the appropriate portion of that restricted amount of underlying tax; or
- (c) in a case where—
- (i) the relevant dividend was paid by a company resident outside the United Kingdom, and
- (ii) the mixer cap restricts the amount of underlying tax that is treated as mentioned in subsection (2) or (3), as the case may be, of section 801 in the case of that dividend,
is the appropriate portion of the greater amount of tax that would have been so treated if, in the application of the formula in section 799(1A) in the case of that dividend (but not any other dividend) M% had, in relation to so much of D as does not represent any lower level dividend, and so much of U as is not underlying tax attributable to any lower level dividend, been the upper percentage.
- (6) For the purposes of subsection (5) above, the “*appropriate portion*” of any amount there mentioned in the case of a dividend is found by multiplying that amount by the product of the reducing fractions for each of the higher level dividends.
- (7) For the purposes of subsection (6) above, the “*reducing fraction*” for any dividend is the fraction—
- (a) whose numerator is the amount of the dividend; and
- (b) whose denominator is the amount of the relevant profits (within the meaning of section 799(1)) out of which the dividend is paid.
- (8) Any reference in this section to any tax being restricted by the mixer cap in the case of any dividend is a reference to that tax being so restricted otherwise than by virtue only of the application of the mixer cap in the case of one or more lower level dividends.
- (9) For the purpose of determining the amount described in subsection (2)(b), (4)(b) or (5)(c) above, sections 806C and 806D shall be disregarded.
- (10) In this section—
- “*the Case V dividend*” means the dividend mentioned in section 806A(1);
- “*higher level dividend*”, in relation to another dividend, means any dividend—by which that other dividend is to any extent represented; andwhich either is the Case V dividend or is to any extent represented by the Case V dividend;
- “*lower level dividend*”, in relation to another dividend, means any dividend which—is received as mentioned in section 801(2) or (3); andis to any extent represented by that other dividend;
- “*the relevant tax*” means—in the case of the Case V dividend, the foreign tax to be taken into account as mentioned in section 799(1); andin the case of any other dividend, the amount of underlying tax to be treated as mentioned in section 801(2) or (3) in the case of the dividend.
##### 806C
- (1) In this section “qualifying foreign dividend" means any dividend which falls within section 806A(2), other than—
- (a) an ADP dividend paid by a controlled foreign company;
- (b) so much of any dividend paid by any company as represents an ADP dividend paid by another company which is a controlled foreign company;
- (c) a dividend in respect of which an amount of eligible unrelieved foreign tax arises.
- (2) For the purposes of this section—
- (a) a “related qualifying foreign dividend" is any qualifying foreign dividend paid to a company resident in the United Kingdom by a company which, at the time of payment of the dividend, is related to that company;
- (b) an “unrelated qualifying foreign dividend" is any qualifying foreign dividend which is not a related qualifying foreign dividend.
- (3) For the purposes of giving credit relief under this Part to a company resident in the United Kingdom—
- (a) the related qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (b) the unrelated qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (c) the underlying tax in relation to the related qualifying foreign dividends that arise to the company in an accounting period shall be aggregated;
- (d) so much of the foreign tax paid in respect of the qualifying foreign dividends that arise to the company in an accounting period as is not underlying tax shall be aggregated.
- (4) Credit relief under this Part shall be given as if—
- (a) the related qualifying foreign dividends aggregated under paragraph (a) of subsection (3) above in the case of any accounting period instead together constituted a single related qualifying foreign dividend arising in that accounting period (“*the single related dividend*” arising in that accounting period);
- (b) the unrelated qualifying foreign dividends aggregated under paragraph (b) of that subsection in the case of any accounting period instead together constituted a single unrelated qualifying foreign dividend arising in that accounting period (“*the single unrelated dividend*” arising in that accounting period);
- (c) the underlying tax aggregated under paragraph (c) of that subsection for any accounting period were instead underlying tax in relation to the single related dividend arising in that accounting period (the “aggregated underlying tax" in respect of the single related dividend);
- (d) the tax aggregated under paragraph (d) of that subsection for any accounting period were instead foreign tax (other than underlying tax) paid in respect of, and computed by reference to,—
- (i) the single related dividend arising in that accounting period,
- (ii) the single unrelated dividend so arising, or
- (iii) partly the one dividend and partly the other,
(that aggregated tax being referred to as the “*aggregated withholding tax*”).
- (5) For the purposes of this section, a dividend paid by a controlled foreign company is an “*ADP dividend*” if it is a dividend by virtue of which (whether in whole or in part and whether taken alone or with one or more other dividends) no apportionment under section 747(3) falls to be made as regards an accounting period of the controlled foreign company in a case where such an apportionment would fall to be made apart from section 748(1)(a).
##### 806D
- (1) For the purposes of this section, where—
- (a) any eligible unrelieved foreign tax arises in an accounting period of a company, and
- (b) the dividend in relation to which it arises is paid by a company which, at the time of payment of the dividend, is related to that company,
that tax is “eligible underlying tax" to the extent that it consists of or represents underlying tax.
- (2) To the extent that any eligible unrelieved foreign tax is not eligible underlying tax it is for the purposes of this section “*eligible withholding tax*”.
- (3) For the purposes of giving credit relief under this Part to a company resident in the United Kingdom—
- (a) the amounts of eligible underlying tax that arise in an accounting period of the company shall be aggregated (that aggregate being referred to as the “relievable underlying tax" arising in that accounting period); and
- (b) the amounts of eligible withholding tax that arise in an accounting period of the company shall be aggregated (that aggregate being referred to as the “relievable withholding tax" arising in that accounting period).
- (4) The relievable underlying tax arising in an accounting period of the company shall be treated for the purposes of allowing credit relief under this Part as if it were—
- (a) underlying tax in relation to the single related dividend that arises in the same accounting period,
- (b) relievable underlying tax arising in the next accounting period (whether or not any related qualifying foreign dividend in fact arises to the company in that accounting period), or
- (c) underlying tax in relation to the single related dividend that arises in such one or more preceding accounting periods as result from applying the rules in section 806E,
or partly in one of those ways and partly in each or either of the others.
- (5) The relievable withholding tax arising in an accounting period of the company shall be treated for the purposes of allowing credit relief under this Part as if it were—
- (a) foreign tax (other than underlying tax) paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend that arises in the same accounting period,
- (b) relievable withholding tax arising in the next accounting period (whether or not any qualifying foreign dividend in fact arises to the company in that accounting period), or
- (c) foreign tax (other than underlying tax) paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend that arises in such one or more preceding accounting periods as result from applying the rules in section 806E,
or partly in one of those ways and partly in any one or more of the others.
- (6) The amount of relievable underlying tax or relievable withholding tax arising in an accounting period that is treated—
- (a) under subsection (4)(a) or (c) above as underlying tax in relation to the single related dividend arising in the same or any earlier accounting period, or
- (b) under subsection (5)(a) or (c) above as foreign tax paid in respect of, and computed by reference to, the single related dividend or the single unrelated dividend arising in the same or any earlier accounting period,
must not be such as would cause an amount of eligible unrelieved foreign tax to arise in respect of that dividend.
##### 806E
- (1) Where any relievable tax is to be treated as mentioned in section 806D(4)(c) or (5)(c), the rules for determining the accounting periods in question (and the amount of the relievable tax to be so treated in relation to each of them) are those set out in the following provisions of this section.
- (2) Rule 1 is that the accounting periods in question must be accounting periods beginning not more than three years before the accounting period in which the relievable tax arises.
- (3) Rule 2 is that the relievable tax must be so treated that—
- (a) credit for, or for any remaining balance of, the relievable tax is allowed against corporation tax in respect of the single dividend arising in a later one of the accounting periods beginning as mentioned in rule 1 above,
before
- (b) credit for any of the relievable tax is allowed against corporation tax in respect of the single dividend arising in any earlier such accounting period.
- (4) Rule 3 is that the relievable tax must be so treated that, before allowing credit for any of the relievable tax against corporation tax in respect of the single dividend arising in any accounting period, credit for foreign tax is allowed—
- (a) first for the aggregated foreign tax in respect of the single dividend arising in that accounting period, so far as not consisting of relievable tax arising in another accounting period; and
- (b) then for relievable tax arising in any accounting period before that in which the relievable tax in question arises.
- (5) The above rules are subject to sections 806D(6) and 806F.
- (6) In this section—
- “*aggregated foreign tax*” means aggregated underlying tax or aggregated withholding tax;
- “*relievable tax*” means relievable underlying tax or relievable withholding tax;
- “*the single dividend*” means—in relation to relievable underlying tax, the single related dividend; andin relation to relievable withholding tax, the single related dividend or the single unrelated dividend.
##### 806F
- (1) For the purposes of this Part, credit in accordance with any arrangements shall, in the case of any dividend, be given so far as possible—
- (a) for underlying tax (where allowable) before foreign tax other than underlying tax;
- (b) for foreign tax other than underlying tax before amounts treated as underlying tax; and
- (c) for amounts treated as underlying tax (where allowable) before amounts treated as foreign tax other than underlying tax.
- (2) Accordingly, where the amount of foreign tax to be brought into account for the purposes of allowing credit relief under this Part is subject to any limitation or restriction, the limitation or restriction shall be taken to have the effect of excluding foreign tax other than underlying tax before excluding underlying tax.
##### 806G
- (1) The relievable underlying tax or relievable withholding tax arising in any accounting period shall only be treated as mentioned in subsection (4) or (5) of section 806D on a claim.
- (2) Any such claim must specify the amount (if any) of that tax—
- (a) which is to be treated as mentioned in paragraph (a) of the subsection in question;
- (b) which is to be treated as mentioned in paragraph (b) of that subsection; and
- (c) which is to be treated as mentioned in paragraph (c) of that subsection.
- (3) A claim under subsection (1) above may only be made before the expiration of the period of—
- (a) six years after the end of the accounting period mentioned in that subsection; or
- (b) if later, one year after the end of the accounting period in which the foreign tax in question is paid.
##### 806H
- (1) The Board may by regulations make provision for, or in connection with, allowing a company which is a member of a group to surrender all or any part of the amount of the relievable tax arising to it in an accounting period to another company which is a member of that group at the time, or throughout the period, prescribed by the regulations.
- (2) The provision that may be made under subsection (1) above includes provision—
- (a) prescribing the conditions which must be satisfied if a surrender is to be made;
- (b) determining the amount of relievable tax which may be surrendered in any accounting period;
- (c) prescribing the conditions which must be satisfied if a claim to surrender is to be made;
- (d) prescribing the consequences for tax purposes of a surrender having been made;
- (e) allowing a claim to be withdrawn and prescribing the effect of such a withdrawal.
- (3) Regulations under subsection (1) above—
- (a) may make different provision for different cases; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) For the purposes of subsection (1) above a company is a member of a group if the conditions prescribed for that purpose in the regulations are satisfied.
##### 806J
- (1) This section has effect for the interpretation of the foreign dividend provisions of this Chapter.
- (2) In this section, “*the foreign dividend provisions of this Chapter*” means sections 806A to 806H and this section.
- (3) For the purposes of the foreign dividend provisions of this Chapter, where—
- (a) one company pays a dividend (“*dividend A*”) to another company, and
- (b) that other company, or a company which is related to it, pays a dividend (“*dividend B*”) to another company,
dividend B represents dividend A, and dividend A is represented by dividend B, to the extent that dividend B is paid out of profits which are derived, directly or indirectly, from the whole or part of dividend A.
- (4) Where—
- (a) one company is related to another, and
- (b) that other is related to a third company,
the first company shall be taken for the purposes of paragraph (b) of subsection (3) above to be related to the third, and so on where there is a chain of companies, each of which is related to the next.
- (5) In any case where—
- (a) a company resident outside the United Kingdom pays a dividend to a company resident in the United Kingdom, and
- (b) the circumstances are such that subsection (6)(b) of section 790 has effect in relation to that dividend,
the foreign dividend provisions of this Chapter shall have effect as if the company resident outside the United Kingdom were related to the company resident in the United Kingdom (and subsection (10) of that section shall have effect accordingly).
- (6) Subsection (5) of section 801 (related companies) shall apply for the purposes of the foreign dividend provisions of this Chapter as it applies for the purposes of that section.
- (7) In the foreign dividend provisions of this Chapter—
- “*aggregated underlying tax*” shall be construed in accordance with section 806C(4)(c);
- “*aggregated withholding tax*” shall be construed in accordance with section 806C(4)(d);
- “*controlled foreign company*” has the same meaning as in Chapter IV of Part XVII;
- “*eligible unrelieved foreign tax*” shall be construed in accordance with sections 806A and 806B;
- “*the mixer cap*” means section 799(1)(b);
- “*qualifying foreign dividend*” has the meaning given by section 806C(1);
- “*related qualifying foreign dividend*” has the meaning given by section 806C(2)(a);
- “*relievable tax*” has the meaning given by section 806E(6);
- “*relievable underlying tax*” shall be construed in accordance with 806D(3)(a);
- “*relievable withholding tax*” shall be construed in accordance with 806D(3)(b);
- “*single related dividend*” shall be construed in accordance with section 806C(4)(a);
- “*single unrelated dividend*” shall be construed in accordance with section 806C(4)(b);“the upper percentage" is 45 per cent.
### Application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere
##### 806K
- (1) Sections 806A to 806J shall apply in relation to an amount of eligible unrelieved foreign tax arising in a chargeable period in respect of any of the income of a branch or agency in the United Kingdom of a person resident outside the United Kingdom as they apply in relation to eligible unrelieved foreign tax arising in an accounting period of a company resident in the United Kingdom in respect of any of the company’s income, but with the modifications specified in subsection (2) below.
- (2) Those modifications are—
- (a) take any reference to an accounting period as a reference to a chargeable period;
- (b) take any reference to corporation tax as including a reference to income tax;
- (bb) in relation to income tax, take any reference to a dividend chargeable under Case V of Schedule D as a reference to a dividend chargeable under Chapter 4 of Part 4 of ITTOIA 2005;
- (c) take the reference in section 806A(4)(a) to section 797 as a reference to sections 796 and 797;
- (d) in relation to income tax, for subsection (2) of section 806B substitute the subsection (2) set out in subsection (3) below.
- (3) That subsection is—
- (“) In Case A, the difference between—
- (a) the amount of the credit allowed as mentioned in section 806A(4)(b), and
- (b) the greater amount of credit that would have been so allowed if, for the purposes of section 796, the amount of income tax borne on the dividend as computed under that section were charged at a rate equal to the upper percentage,
shall be an amount of eligible unrelieved foreign tax. ".
### Unrelieved foreign tax: profits of overseas branch or agency
##### 806L
- (1) This section applies where, in any accounting period of a company resident in the United Kingdom, an amount of unrelieved foreign tax arises in respect of any of the company’s qualifying income from an overseas permanent establishment of the company.
- (2) The amount of the unrelieved foreign tax so arising shall be treated for the purposes of allowing credit relief under this Part as if it were foreign tax paid in respect of, and computed by reference to, the company’s qualifying income from the same overseas permanent establishment—
- (a) in the next accounting period (whether or not the company in fact has any such income from that source in that accounting period), or
- (b) in such one or more preceding accounting periods, beginning not more than three years before the accounting period in which the unrelieved foreign tax arises, as result from applying the rules in subsection (3) below,
or partly in the one way and partly in the other.
- (3) Where any unrelieved foreign tax is to be treated as mentioned in paragraph (b) of subsection (2) above, the rules for determining the accounting periods in question (and the amount of the unrelieved foreign tax to be so treated in relation to each of them) are that the unrelieved foreign tax must be so treated under that paragraph—
- (1) that—
- (a) credit for, or for any remaining balance of, the unrelieved foreign tax is allowed against corporation tax in respect of income of a later one of the accounting periods beginning as mentioned in that paragraph,
before
- (b) credit for any of the unrelieved foreign tax is allowed against corporation tax in respect of income of any earlier such period;
- (2) that, before allowing credit for any of the unrelieved foreign tax against corporation tax in respect of income of any accounting period, credit for foreign tax is allowed—
- (a) first for foreign tax in respect of the income of that accounting period, other than unrelieved foreign tax arising in another accounting period; and
- (b) then for unrelieved foreign tax arising in any accounting period before that in which the unrelieved foreign tax in question arises.
- (4) For the purposes of this section, the cases where an amount of unrelieved foreign tax arises in respect of any of a company’s qualifying income from an overseas permanent establishment in an accounting period are those cases where—
- (a) the amount of the credit for foreign tax which under any arrangements would, apart from section 797, be allowable against corporation tax in respect of that income,
exceeds
- (b) the amount of the credit for foreign tax which under the arrangements is allowed against corporation tax in respect of that income;
and in any such case that excess is the amount of the unrelieved foreign tax in respect of that income.
- (5) For the purposes of this section, a company’s qualifying income from an overseas permanent establishment is the profits of the overseas permanent establishment which are—
- (a) chargeable under Case I of Schedule D; or
- (b) included in the profits of life reinsurance business or overseas life assurance business chargeable under Case VI of Schedule D by virtue of section 439B or 441.
- (6) Where (whether by virtue of this subsection or otherwise) an amount of unrelieved foreign tax arising in an accounting period falls to be treated under subsection (2) above for the purposes of allowing credit relief under this Part as foreign tax paid in respect of, and computed by reference to, qualifying income of an earlier accounting period, it shall not be so treated for the purpose of any further application of this section.
- (7) In this section—
- “*overseas permanent establishment*” means a permanent establishment through which a company carries on a trade in a territory outside the United Kingdom; and
- “*permanent establishment*”—if there are arrangements having effect under section 788 in relation to the territory concerned that define the expression, has the meaning given by those arrangements, andif there are no such arrangements, or if they do not define the expression, has the meaning given by section 148 of the Finance Act 2003.
##### 806M
- (1) This section has effect for the purposes of section 806L and shall be construed as one with that section.
- (2) If, in any accounting period, a company ceases to have a particular overseas permanent establishment, the amount of any unrelieved foreign tax which arises in that accounting period in respect of the company’s income from that overseas permanent establishment shall, to the extent that it is not treated as mentioned in section 806L(2)(b), be reduced to nil (so that no amount arises which falls to be treated as mentioned in section 806L(2)(a)).
- (3) If a company—
- (a) at any time ceases to have a particular overseas permanent establishment in a particular territory (“*the old permanent establishment*”), but
- (b) subsequently again has an overseas permanent establishment in that territory (“*the new permanent establishment*”),
the old permanent establishment and the new permanent establishment shall be regarded as different overseas permanent establishments.
- (4) If, under the law of a territory outside the United Kingdom, tax is charged in the case of a company resident in the United Kingdom in respect of the profits of two or more of its overseas permanent establishments in that territory, taken together, then, for the purposes of—
- (a) section 806L, and
- (b) subsection (3) above,
those overseas permanent establishments shall be treated as if they together constituted a single overseas permanent establishment of the company.
- (5) Unrelieved foreign tax arising in respect of qualifying income from a particular overseas permanent establishment in any accounting period shall only be treated as mentioned in subsection (2) of section 806L on a claim.
- (6) Any such claim must specify the amount (if any) of the unrelieved foreign tax—
- (a) which is to be treated as mentioned in paragraph (a) of that subsection; and
- (b) which is to be treated as mentioned in paragraph (b) of that subsection.
- (7) A claim under subsection (5) above may only be made before the expiration of the period of—
- (a) six years after the end of the accounting period mentioned in that subsection, or
- (b) if later, one year after the end of the accounting period in which the foreign tax in question is paid.
##### 807A
- (1) This Part shall have effect for the purposes of corporation tax in relation to any company as if tax falling within subsection (2) below were to be disregarded.
- (2) Subject to subsection (2A) below, tax falls within this subsection in relation to a company to the extent that it is—
- (a) tax under the law of a territory outside the United Kingdom; and
- (b) is attributable, on a just and reasonable apportionment,
- (i) to interest accruing under a loan relationship at a time when the company is not a party to the relationship ; or
- (ii) to so much of a relevant payment as, on such an apportionment, is attributable to a time when the company is not a party to the derivative contract concerned.
- (2A) Tax attributable to interest accruing to a company under a loan relationship does not fall within subsection (2) above if—
- (a) at the time when the interest accrues, that company has ceased to be a party to that relationship by reason of having made the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship; and
- (b) that time falls during the period for which those arrangements have effect.
- (2B) Where, in the case of any share, section 91A or 91B of the Finance Act 1996 (shares treated as loan relationships) applies in relation to a company for an accounting period, this section has effect—
- (a) in relation to a distribution in respect of the share as it has effect in relation to interest under a loan relationship, and
- (b) in relation to a distribution accruing in respect of the share at a time when the company does not (within the meaning of the section in question) hold the share as it applies in relation to interest accruing under a loan relationship at a time when the company is not a party to the loan relationship.
- (3) Subject to subsections (1), (4) and (5) of this section, where—
- (a) any non-trading credit relating to an amount of interest under a loan relationship is brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in the case of any company,
- (b) that amount falls, as a result of any related transaction other than the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship, to be paid to a person other than the company, and
- (c) had the company been entitled, at the time of that transaction, to receive a payment of an amount of interest equal to the amount of interest to which the non-trading credit relates, the company would have been liable in respect of the amount of interest received to an amount of tax under the law of a territory outside the United Kingdom,
credit for that amount of tax shall be allowable under section 790(4) as if that amount of tax were an amount of tax paid under the law of that territory in respect of the amount of interest to which the non-trading credit relates.
- (4) Subsection (3) above does not apply in the case of a credit brought into account in accordance with paragraph 1(2) of Schedule 11 to the Finance Act 1996 (the I minus E basis).
- (5) The Treasury may by regulations provide for subsection (3) above to apply—
- (a) in the case of trading credits, as well as in the case of non-trading credits;
- (b) in the case of any credit (“an insurance credit”) in the case of which, by virtue of subsection (4) above, it would not otherwise apply.
- (6) Regulations under subsection (5) above may—
- (a) provide for subsection (3) above to apply in the case of a trading credit or an insurance credit only if the circumstances are such as may be described in the regulations;
- (b) provide for subsection (3) above to apply, in cases where it applies by virtue of any such regulations, subject to such exceptions, adaptations or other modifications as may be specified in the regulations;
- (c) make different provision for different cases; and
- (d) contain such incidental, supplemental, consequential and transitional provision as the Treasury think fit.
- (6A) In this section “*repo or stock-lending arrangements*” has the same meaning as in paragraph 15 of Schedule 9 to the Finance Act 1996 (repo transactions and stock-lending); and, in relation to any such arrangements—
- (a) a reference to the initial transfer is a reference to the transfer mentioned in sub-paragraph (3)(a) of that paragraph; and
- (b) a reference to the period for which the arrangements have effect is a reference to the period from the making of the initial transfer until whichever is the earlier of the following—
- (i) the discharge of the obligations arising by virtue of the entitlement or requirement mentioned in sub-paragraph (3)(b) of that paragraph; and
- (ii) the time when it becomes apparent that the discharge mentioned in sub-paragraph (i) above will not take place.
- (7) In this section—
- “*related transaction*” has the same meaning as in section 84 of the Finance Act 1996;
- “*relevant payment*” means a payment the amount of which falls to be determined (wholly or mainly) by applying to a notional principal amount specified in a derivative contract, for a period so specified, a rate the value of which at all times is the same as that of a rate of interest so specified;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and
- “*trading credit*” means any credit falling to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in accordance with section 82(2) of that Act.
##### 808A
- (1) Subsection (2) below applies where any arrangements having effect by virtue of section 788—
- (a) make provision, whether for relief or otherwise, in relation to interest (as defined in the arrangements), and
- (b) make provision (the special relationship provision) that where owing to a special relationship the amount of the interest paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
- (2) The special relationship provision shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the loan would have been made at all in the absence of the relationship,
- (b) the amount which the loan would have been in the absence of the relationship, and
- (c) the rate of interest and other terms which would have been agreed in the absence of the relationship.
- (3) The special relationship provision shall be construed as requiring the taxpayer to show that there is no special relationship or (as the case may be) to show the amount of interest which would have been paid in the absence of the special relationship.
- (4) In a case where—
- (a) a company makes a loan to another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to make loans generally,
the fact that it is not part of the first company’s business to make loans generally shall be disregarded in construing subsection (2) above.
- (5) Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the debt on which the interest is paid in determining the excess interest (and accordingly expressly limits the factors to be taken into account).
##### 808B
- (1) Subsection (2) below applies where any arrangements having effect by virtue of section 788—
- (a) make provision, whether for relief or otherwise, in relation to royalties (as defined in the arrangements), and
- (b) make provision (the special relationship provision) that where owing to a special relationship the amount of the royalties paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
- (2) The special relationship provision shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the agreement under which the royalties are paid would have been made at all in the absence of the relationship,
- (b) the rate or amounts of royalties and other terms which would have been agreed in the absence of the relationship, and
- (c) where subsection (3) below applies, the factors specified in subsection (4) below.
- (3) This subsection applies if the asset in respect of which the royalties are paid, or any asset which that asset represents or from which it is derived, has previously been in the beneficial ownership of—
- (a) the person who is liable to pay the royalties,
- (b) a person who is, or has at any time been, an associate of the person who is liable to pay the royalties,
- (c) a person who has at any time carried on a business which, at the time when the liability to pay the royalties arises, is being carried on in whole or in part by the person liable to pay those royalties, or
- (d) a person who is, or has at any time been, an associate of a person who has at any time carried on such a business as is mentioned in paragraph (c) above.
- (4) The factors mentioned in subsection (2)(c) above are—
- (a) the amounts which were paid under the transaction, or under each of the transactions in the series of transactions, as a result of which the asset has come to be an asset of the beneficial owner for the time being,
- (b) the amounts which would have been so paid in the absence of a special relationship, and
- (c) the question whether the transaction or series of transactions would have taken place in the absence of such a relationship.
- (5) The special relationship provision shall be construed as requiring the taxpayer to show—
- (a) the absence of any special relationship, or
- (b) the rate or amount of royalties that would have been payable in the absence of the relationship,
as the case may be.
- (6) The requirement on the taxpayer to show in accordance with subsection (5)(a) above the absence of any special relationship includes a requirement—
- (a) to show that no person of any of the descriptions in paragraphs (a) to (d) of subsection (3) above has previously been the beneficial owner of the asset in respect of which the royalties are paid, or of any asset which that asset represents or from which it is derived, or
- (b) to show the matters specified in subsection (7) below,
as the case may be.
- (7) Those matters are—
- (a) that the transaction or series of transactions mentioned in subsection (4)(a) above would have taken place in the absence of a special relationship, and
- (b) the amounts which would have been paid under the transaction, or under each of the transactions in the series of transactions, in the absence of such a relationship.
- (8) Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the use, right or information for which royalties are paid in determining the excess royalties (and accordingly expressly limits the factors to be taken into account).
- (9) For the purposes of this section one person (“*person A*”) is an associate of another person (“*person B*”) at a given time if—
- (a) person A was, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person B at that time, or
- (b) the same person was or same persons were, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person A and person B at that time.
#### Additions to non-profit funds: amount of loss reduction
#### Additions to non-profit funds: amount of loss reduction
##### 815A
- (1) This section applies where section 269C of the 1970 Act or section 140C or 140F of the Taxation of Chargeable Gains Act 1992 applies; and references in this section to company A, the transfer and the trade shall be construed accordingly.
- (2) Where gains accruing to company A on the transfer would have been chargeable to tax under the law of the relevant member State but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount of tax, calculated on the required basis, which would have been payable under that law in respect of the gains so accruing but for that Directive, were tax payable under that law.
- (5) For the purposes of this section, the required basis is that—
- (a) so far as permitted under the law of the relevant member State, any losses arising on the transfer are set against any gains so arising, and
- (b) any relief available to company A under that law has been duly claimed.
- (6) In this section—
- “*the Mergers Directive*” means the Directive of the Council of the European Communities dated 23rd July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different member States (no. [90/434/EEC](https://www.legislation.gov.uk/european/directive/1990/0434));
- “*relevant member State*” means the member State in which, immediately before the time of the transfer, company A carried on the trade through a permanent establishment.
@@ -43982,7 +37690,7 @@
#### Transfers of life assurance business: Case VI losses of the transferor
#### Transfers of life assurance business: Case I losses of the transferor
#### Section 548A: further definitions
##### 826A
@@ -44014,17 +37722,7 @@
##### 827A
- (1) This section applies in relation to any amount chargeable to income tax under or by virtue of any provision to which section 836B applies (other than a provision listed in Part 2 of the table in that section).
- (2) An amount arising to a person who is resident in the United Kingdom is chargeable to tax whether or not it is from a source in the United Kingdom.
- (3) An amount arising to a person who is not resident in the United Kingdom is chargeable to tax only if it is from a source in the United Kingdom.
- (4) References in this section to amounts which are from a source in the United Kingdom include, in the case of any amount which does not have a source, references to amounts which have a comparable connection to the United Kingdom.
- (5) This section is subject to any express or implied provision to the contrary in any provision of the Income Tax Acts.
- (6) This section does not apply for the purposes of corporation tax.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Retained assets
@@ -44100,115 +37798,21 @@
##### 836B
- (1) In the Tax Acts references to any provision to which this section applies are references to any provision listed in the following table so far as it relates to income tax (but subject to any applicable limitation in subsections (3) to (5)).
- (2) This is the table—
| *Provisions of this Act* | *Description* |
| --- | --- |
| Section 214(1)(ab) | Chargeable payments connected with exempt distributions |
| Section 571(1) | Cancellation of certificates: schemes for rationalising industry |
| Section 591C(1) | Cessation of approval (retirement benefits scheme) |
| Section 598(1) | Repayment of employee's contribution |
| Section 599(1) or (1B) | Commutation of entire pension in special circumstances |
| Section 599A(2) | Payment out of surplus funds |
| Section 601(2) (as read with section 602(1)(a)) or 601(5) | Payments to employers (retirement benefits scheme) |
| Section 648B(1) | Return of contributions after pension date (approved personal pension scheme) |
| Section 650A(1) | Withdrawal of approval from arrangements (approved personal pension scheme) |
| Section 714(2) | Transfer of securities within accrued income scheme with or without accrued interest |
| Section 716(3) | Transfer of securities with unrealised interest where settlement day follows last interest period |
| Section 723(4) | Proceeds of transfer of foreign securities within the accrued income scheme ceasing to be unremittable |
| Section 730(4) | Transfers of income arising from securities |
| Section 740(2)(a) or (b) | Transfer of assets abroad (liability of non-transferors) |
| Section 743(1) | Transfer of assets abroad (liability of transferors) |
| Section 761(1)(b)(i) | Offshore income gains |
| Section 774(1) | Transactions between dealing company and associated company |
| Section 775(2A) | Sale by individual of income derived from his personal activities |
| Section 776(3A)(a) | Transactions in land |
| Section 780(3A)(a) | Sale and lease-back (taxation of consideration received) |
| Section 781(1) | Assets leased to traders and others |
| Section 786(5)(a) | Transactions associated with loans or credit |
| Section 804(5B)(a) | Double taxation relief |
| *Provisions of ITTOIA 2005* | *Description* |
| --- | --- |
| Chapter 18 of Part 2 | Post-cessation receipts: trades, professions and vocations |
| Chapter 8 of Part 3 | Rent receivable in connection with a UK section 12(4) concern |
| Chapter 9 of Part 3 | Rent receivable for UK electric-line wayleaves |
| Chapter 10 of Part 3 | Post-cessation receipts: UK property businesses |
| Chapter 2 of Part 4 | Interest |
| Chapter 9 of Part 4 | Gains from contracts for life insurance etc. |
| Chapter 11 of Part 4 | Transactions in deposits |
| Chapter 12 of Part 4 | Disposals of futures and options involving guaranteed returns |
| Section 579 | Royalties and other income from intellectual property |
| Section 583 | Income from disposals of know-how |
| Section 587 | Income from sales of patent rights |
| Chapter 3 of Part 5 | Films and sound recordings: non-trade businesses |
| Chapter 4 of Part 5 | Certain telecommunication rights: non-trading income |
| Chapter 5 of Part 5 | Settlements: amounts treated as income of settlor |
| Section 682(3) | Adjustments after the administration period |
| Chapter 8 of Part 5 | Income not otherwise charged |
| Section 844(4) | Withdrawal of relief for unremittable foreign income after source ceases |
| *Other provisions* | *Description* |
| --- | --- |
| Paragraph 8(2)(b)(i) of Schedule 3 to the Finance Act 1971 | Occupational pension schemes (refunds of contributions and commutation payments) |
| Section 68(2) of the Finance Act 1989 | Employee share ownership trust (chargeable event) |
| Section 71(4) of the Finance Act 1989 | Employee share ownership trust (borrowing) |
| Paragraph 3(1) of Schedule 12 to the Finance (No. 2) Act 1992 | Banks etc. in compulsory liquidation (taxation of certain receipts) |
| Paragraph 11(3) of Schedule 20 to the Finance Act 1994 | Self-assessment transitional |
| Section 258(4) of the Capital Allowances Act | Special leasing |
| Section 479(4) of the Capital Allowances Act | Persons having qualifying non-trade expenditure |
| Section 394(2) of ITEPA 2003 | Charge on administrator of non-approved pension scheme |
| Section 476(5) of ITEPA 2003 | Charge on occurrence of chargeable event |
| Section 583 of ITEPA 2003 | certain pension income (approved retirement benefits schemes: unauthorised payments) |
| Section 623 of ITEPA 2003 | certain pension income (return of surplus employee AVCs) |
| Section 119(4) of the Finance Act 2004 | Individuals benefited by film relief |
| Section 127(2) of the Finance Act 2004 | Losses derived from exploiting licence: individuals in partnership |
- (3) For the purposes of this section the reference to section 743 of this Act does not include that section so far as relating to income falling within subsection (1A) of that section.
- (4) For the purposes of this section—
- (a) any reference to any provision of ITTOIA 2005 does not include that provision so far as relating to relevant foreign income,
- (b) the reference to Chapter 2 of Part 4 of ITTOIA 2005 is a reference to that Chapter only so far as relating to interest falling within section 582(2)(b)(ii) of this Act (funding bonds issued in respect of interest on certain debts),
- (c) the reference to Chapter 9 of Part 4 of ITTOIA 2005 is a reference to that Chapter only so far as relating to gains—
- (i) which are from a policy or contract specified in section 531(3) of that Act, and
- (ii) which do not fall within section 532 or 534 of that Act,
- (d) the reference to section 579 of ITTOIA 2005 does not include that section so far as relating to any annual payment,
- (e) the reference to Chapter 4 of Part 5 of ITTOIA 2005 does not include that Chapter so far as relating to any annual payment, and
- (f) the reference to Chapter 5 of Part 5 of ITTOIA 2005 does not include that Chapter so far as relating to income which falls within section 619(3) of that Act.
- (5) For the purposes of this section the reference to section 583 of ITEPA 2003 is a reference to that section only where the paying scheme (see subsection (3) of that section) is a pilots' benefit fund (see section 587 of that Act).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of business: transferor shares are assets of transferee's long-term insurance fund etc
##### 837A
- (1) The following provisions have effect for the purposes of, and subject to, the provisions of the Tax Acts which apply this section.
- (1) The following provisions have effect for the purposes of, and subject to, the provisions of the Corporation Tax Acts which apply this section.
- (2) “*Research and development*” means activities that fall to be treated as research and development in accordance with generally accepted accounting practice.
This is subject to regulations under subsection (3) below.
- (3) The Treasury may by regulations provide—
- (a) that such activities as may be prescribed are not “*research and development*” for the purposes of this section, and
- (b) that such other activities as may be prescribed are “*research and development*” for those purposes.
- (4) Regulations under subsection (3) above may—
- (a) make provision by reference to guidelines issued (whether before or after the coming into force of this section) by the Secretary of State, and
- (b) make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient.
This is subject to subsections (2A) and (2B) below.
- (2A) Activities that, as a result of regulations made under section 1006 of ITA 2007, are “*research and development*” for the purposes of that section are also “*research and development*” for the purposes of this section.
- (2B) And activities that, as a result of any such regulations, are not “*research and development*” for the purposes of that section are also not “*research and development*” for the purposes of this section.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -44216,7 +37820,7 @@
##### 837B
- (1) References in the Tax Acts to “*oil and gas exploration and appraisal*” are to activities carried out for the purpose of—
- (1) References in the Corporation Tax Acts to “*oil and gas exploration and appraisal*” are to activities carried out for the purpose of—
- (a) searching for petroleum anywhere in an area, or
@@ -44232,7 +37836,7 @@
##### 837C
- (1) For the purposes of the Tax Acts, unless the context otherwise requires, “*offshore installation*” means a structure which is, is to be, or has been, put to a use specified in subsection (2) while—
- (1) For the purposes of the Corporation Tax Acts, unless the context otherwise requires, “*offshore installation*” means a structure which is, is to be, or has been, put to a use specified in subsection (2) while—
- (a) standing in any waters,
@@ -44270,7 +37874,7 @@
- (4) In this section “*structure*” includes a ship or other vessel.
- (5) The Treasury may make provision by regulations as to the meaning of “*offshore installation*” for the purposes of the Tax Acts.
- (5) The Treasury may make provision by regulations as to the meaning of “*offshore installation*” for the purposes of the Corporation Tax Acts.
- (6) The regulations may—
@@ -44306,7 +37910,7 @@
##### 840A
- (1) In any provision in relation to which it is provided that “*bank*” has the meaning given by this section “*bank*” means—
- (1) In any provision of the Corporation Tax Acts in relation to which it is provided that “*bank*” has the meaning given by this section “*bank*” means—
- (a) the Bank of England;
@@ -44322,6 +37926,8 @@
- (c) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to accept deposits; or
- (ca) the European Investment Bank; or
- (d) a relevant international organisation which is designated as a bank for the purposes of that provision by an order made by the Treasury.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -44334,169 +37940,11 @@
##### 842AA
- (1) In the Tax Acts “*venture capital trust*” means a company which is not a close company and which is for the time being approved for the purposes of this section by the Board; and an approval for the purposes of this section shall have effect as from such time as may be specified in the approval, being a time which, if it falls before the time when the approval is given, is no earlier than—
- (a) in the case of an approval given in the year 1995-96, 6th April 1995; or
- (b) in any other case, the time when the application for approval was made.
- (2) Subject to the following provisions of this section, the Board shall not approve a company for the purposes of this section unless it is shown to their satisfaction in relation to the most recent complete accounting period of the company—
- (a) that the company’s income in that period has been derived wholly or mainly from shares or securities;
- (b) that at least 70 per cent. by value of the company’s investments has been represented throughout that period by shares or securities comprised in qualifying holdings of the company;
- (c) that at least 30 per cent. by value of the company’s qualifying holdings has been represented throughout that period by holdings of eligible shares;
- (d) that no holding in any company, other than a venture capital trust or a company which would qualify as a venture capital trust but for paragraph (e) below, has at any time during that period represented more than 15 per cent. by value of the company’s investments;
- (e) that the shares making up the company’s ordinary share capital (or, if there are such shares of more than one class, those of each class) have throughout that period been listed in the Official List of the Stock Exchange; and
- (f) that the company has not retained an amount which is greater than 15 per cent. of the income it derived in that period from shares and securities.
- (3) Where, in the case of any company, the Board are satisfied that the conditions specified in subsection (2) above are fulfilled in relation to the company’s most recent complete accounting period, they shall not approve the company for the purposes of this section unless they are satisfied that the conditions will also be fulfilled in relation to the accounting period of the company which is current when the application for approval is made.
- (4) The Board may approve a company for the purposes of this section notwithstanding that conditions specified in subsection (2) above are not fulfilled with respect to that company in relation to its most recent complete accounting period if they are satisfied—
- (a) in the case of any of the conditions specified in paragraphs (a), (d), (e) and (f) of that subsection which are not fulfilled, that the conditions will be fulfilled in relation to the accounting period of the company which is current when the application for approval is made or in relation to its next accounting period;
- (b) in the case of any of the conditions specified in paragraphs (b) and (c) of that subsection which are not fulfilled, that the conditions will be fulfilled in relation to an accounting period of the company beginning no more than three years after the time when they give their approval or, if earlier, when the approval takes effect; and
- (c) in the case of every condition which is not fulfilled but with respect to which the Board are satisfied as mentioned in paragraph (a) or (b) above, that the condition will continue to be fulfilled in relation to accounting periods following the period in relation to which they are satisfied as so mentioned.
- (5) For the purposes of subsection (2)(b) to (d) above the value of any holding of investments of any description shall be taken—
- (a) unless—
- (i) it is added to by a further holding of investments of the same description, or
- (ii) any such payment is made in discharge, in whole or in part, of any obligation attached to the holding as (by discharging the whole or any part of that obligation) increases the value of the holding,
to be its value when acquired, and
- (b) where it is so added to or such a payment is made, to be its value immediately after the most recent addition or payment.
- (5AA) For the purposes of subsection (2)(b) to (d) above where—
- (a) any shares (“*new shares*”) are exchanged for other shares (“*old shares*”) under arrangements in relation to which paragraph 10C of Schedule 28B applies, and
- (b) those arrangements have not ceased by virtue of sub-paragraph (13) of that paragraph to be arrangements by reference to which requirements of that Schedule are deemed to be satisfied,
the value of the new shares, both at the time of their acquisition and immediately after any subsequent addition to a holding of the new shares that is made under those arrangements, shall be taken to be the same as the value, when last valued in accordance with subsection (5) above, of the old shares for which they are exchanged.
- (5AB) References in subsection (5AA) above to shares in a company include references to any securities of that company.
- (5AC) For the purposes of subsection (2)(b) to (d) above, where—
- (a) shares (“*new shares*”) are issued to a company by virtue of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“*convertibles*”), and
- (b) paragraph 10D of Schedule 28B applies in relation to the issue of the new shares,
the value of the new shares at the time of their acquisition shall be taken to be the same as the value, when last valued in accordance with subsection (5) above, of the convertibles for which they are exchanged.
- (5AD) Regulations under paragraph 11B of Schedule 28B may make provision for the purposes of subsection (2)(b) to (d) above for securing that where—
- (a) there is an exchange of shares to which regulations under that paragraph apply, and
- (b) the new shares are treated by virtue of the regulations as meeting the requirements of that Schedule,
the value of the holding of new shares, and of any original shares that are retained under the exchange, shall be taken to be an amount such that the requirements of subsection (2)(b) to (d) above do not cease to be met by reason of the exchange.
- (5AE) In subsection (5AD) above—
- (a) “*shares*” includes securities; and
- (b) “*exchange of shares*”, “*new shares*” and “*original shares*” have the same meaning as in paragraph 11B of Schedule 28B.
- (5A) Subsection (5B) below applies , subject to any regulations under paragraph 11 of Schedule 33 to the Finance Act 2002, where—
- (a) there has been an issue of ordinary share capital of a company (“*the first issue*”),
- (b) an approval of that company for the purposes of this section has taken effect on or before the day of the making of the first issue, and
- (c) a further issue of ordinary share capital of that company has been made since the making of the first issue.
- (5B) Where this subsection applies, the use to which the money raised by the further issue is put, and the use of any money deriving from that use, shall be disregarded in determining whether any of the conditions specified in subsection (2)(b) and (c) above are, have been or will be fulfilled in relation to—
- (a) the accounting period in which the further issue is made; or
- (b) any later accounting period ending no more than three years after the making of the further issue.
- (6) The Board may withdraw their approval of a company for the purposes of this section wherever it at any time appears to them that there are reasonable grounds for believing—
- (a) that the conditions for the approval of the company were not fulfilled at the time of the approval;
- (b) in a case where the Board were satisfied for the purposes of subsection (3) or (4) above that a condition would be fulfilled in relation to any period, that that condition is one which will not be or, as the case may be, has not been fulfilled in relation to that period;
- (c) in the case of a company approved in pursuance of subsection (4) above, that the company has not fulfilled such other conditions as may be prescribed by regulations made by the Board in relation to, or to any part of, the period of three years mentioned in subsection (4)(b) above;
- (ca) in a case where the use of any money falls to be disregarded for any accounting period in accordance with subsection (5B) above—
- (i) that the first accounting period of the company for which the use of that money will not be disregarded will be a period in relation to which a condition specified in subsection (2) above will fail to be fulfilled; or
- (ii) that the company has not fulfilled such other conditions as may be prescribed by regulations made by the Board in relation to, or to any part of, an accounting period for which the use of that money falls to be disregarded; or
- (d) that the company’s most recent complete accounting period or its current one is a period in relation to which there has been or will be a failure of a condition specified in subsection (2) above to be fulfilled, not being a failure which, at the time of the approval, was allowed for in relation to that period by virtue of subsection (4) above.
- (7) Subject to subsections (8) and (9) below, the withdrawal of the approval of any company for the purposes of this section shall have effect as from the time when the notice of the withdrawal is given to the company.
- (8) If, in the case of a company approved for the purposes of this section in exercise of the power conferred by subsection (4) above, the approval is withdrawn at a time before all the conditions specified in subsection (2) above have been fulfilled with respect to that company in relation either—
- (a) to a complete accounting period of twelve months, or
- (b) to successive complete accounting periods constituting a continuous period of twelve months or more,
the withdrawal of the approval shall have the effect that the approval shall, for all purposes, be deemed never to have been given.
- (9) A notice withdrawing the approval of a company for the purposes of this section may specify a time falling before the time mentioned in subsection (7) above as the time as from which the withdrawal is to be treated as having taken effect for the purposes of section 100 of the 1992 Act; but the time so specified shall be no earlier than the beginning of the accounting period in relation to which it appears to the Board that the condition by reference to which the approval is withdrawn has not been, or will not be, fulfilled.
- (10) Notwithstanding any limitation on the time for making assessments, an assessment to any tax chargeable in consequence of the withdrawal of any approval given for the purposes of this section may be made at any time before the end of the period of three years beginning with the time when the notice of withdrawal is given.
- (11) The following provisions of section 842 shall apply as follows for the purposes of this section as they apply for the purposes of that section, that is to say—
- (za) subsection (1AB) of that section shall apply in relation to subsection (2)(a) above as it applies in relation to subsection (1)(a) of that section;
- (a) subsections (1A) and (2) of that section shall apply in relation to subsection (2)(d) above (but with the omission of subsection (2)(a) of that section) as they apply in relation to subsection (1)(b) of that section;
- (b) subsections (1AB) and (2A) to (2C) of that section shall apply in relation to subsection (2)(f) above as they apply in relation to subsection (1)(e) of that section; and
- (c) without prejudice to their application in relation to provisions applied by paragraph (a) or (b) above, subsections (3) and (4) of that section shall apply in relation to any reference in this section to a holding or an addition to a holding as they apply in relation to any such reference in that section.
- (11A) A reference in this section, or in section 842(2)(b) as applied by subsection (11)(a) above, to a company's investments shall be taken to include, so far as it would not otherwise do so,—
- (a) money in the company's possession, and
- (b) any sum owed to the company by another person if the company has account-holder's rights over that sum.
- (11B) For the purposes of subsection (11A)(b) above, a company has “account-holder's rights” over a sum owed to the company if—
- (a) the company has a right (whether or not the exercise of the right is subject to conditions) to require the other person to pay out the sum, or amounts out of the sum, to the company or at the company's direction, and
- (b) the sum is owed to the company—
- (i) as a result of amounts having been paid to the other person by or for the company, or
- (ii) as a result of the other person having identified a sum in respect of which the company may exercise such a right.
- (11C) Subsection (11A) above does not have effect to cause a company's investments to be taken to include anything to which the company is not beneficially entitled, but for this purpose a company shall be taken to be beneficially entitled to—
- (a) sums subscribed for shares issued by it, and
- (b) anything to which it is entitled that (directly or indirectly) represents any such sums.
- (12) In this section, and in the provisions of section 842 as applied for the purposes of this section, “*securities*”, in relation to any company—
- (a) includes any liability of the company in respect of a loan (whether secured or not) which has been made to the company on terms that do not allow any person to require the loan to be repaid, or any stock or security relating to that loan to be re-purchased or redeemed, within the period of five years from the making of the loan or, as the case may be, the issue of the stock or security; but
- (b) does not include any stock or security relating to a loan which has been made to the company on terms which allow any person to require the loan to be repaid, or the stock or security to be re-purchased or redeemed, within that period.
- (13) Schedule 28B shall have effect for construing the references in this section to a qualifying holding.
- (14) In this section “*eligible shares*” means shares in a company which are comprised in the ordinary share capital of the company and carry no present or future preferential right to dividends or to the company’s assets on its winding up and no present or future . . . right to be redeemed.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 842A
- (1) Except so far as the context otherwise requires, in the Tax Acts “*local authority*” means—
- (1) Except so far as the context otherwise requires, in the Corporation Tax Acts“*local authority*” means—
- (a) in relation to England and Wales, an authority of a description specified for the purposes of this paragraph . . . .
@@ -44540,13 +37988,13 @@
##### 842B
- (1) In this Act—
- (a) an “*investment LLP*” means a limited liability partnership whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom; and
- (1) In the Corporation Tax Acts—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) a “*property investment LLP*” means a limited liability partnership whose business consists wholly or mainly in the making of investments in land and the principal part of whose income is derived therefrom.
- (2) Whether a limited liability partnership is an investment LLP or a property investment LLP is determined for each period of account of the partnership.
- (2) Whether a limited liability partnership is . . . a property investment LLP is determined for each period of account of the partnership.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -47328,7 +40776,7 @@
“*Business travel*” means travelling the expenses of which, if incurred and defrayed by the employee in question out of the emoluments of his employment, would (in the absence of sections 197AD to 197AF) be deductible under section 198(1) (general relief for necessary expenses).
#### Overseas life assurance business: life policies.
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
##### 3
@@ -51250,7 +44698,7 @@
- (a) carries on a ring fence trade, or
- (b) is engaged in oil and gas exploration and appraisal (see section 837B) with a view to carrying on a ring fence trade,
- (b) is engaged in oil and gas exploration and appraisal (see section 837B of this Act and section 1003 of ITA 2007) with a view to carrying on a ring fence trade,
and in this Schedule any such company is referred to as a “*qualifying company*”.
@@ -52296,12 +45744,14 @@
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*interest manufacturer*” has the meaning given by paragraph 3(1) below;
- “*manufactured dividend*”, “*manufactured interest*” and “*manufactured overseas dividend*” shall be construed respectively in accordance with paragraphs 2, 3 and 4 below, as shall references to the gross amount thereof;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*manufactured dividend*” . . . and “*manufactured overseas dividend*” shall be construed respectively in accordance with paragraphs 2 . . . and 4 below, as shall references to the gross amount thereof;
- “*manufactured interest*” means an amount—which is representative of a periodical payment of interest on United Kingdom securities, andwhich, under a contract or other arrangements for the transfer of the securities, one of the parties is required to pay to the other;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*overseas dividend*” means any interest, dividend or other annual payment payable in respect of any overseas securities;
- “*overseas dividend manufacturer*” has the meaning given by paragraph 4(1) below;
@@ -52338,7 +45788,7 @@
- (1) This paragraph applies in any case where, under a contract or other arrangements for the transfer of United Kingdom equities, one of the parties (a “*dividend manufacturer*”) is required to pay to the other (“*the recipient*”) an amount (a “*manufactured dividend*”) which is representative of a dividend on the equities.
- (2) Where a manufactured dividend is paid by a dividend manufacturer who is a company resident in the United Kingdom, the Tax Acts shall have effect—
- (2) Where a manufactured dividend is paid by a dividend manufacturer who is a company resident in the United Kingdom, the Corporation Tax Acts shall have effect—
- (a) in relation to the recipient, and persons claiming title through or under him, as if the manufactured dividend were a dividend on the UK equities in question; and
@@ -52348,9 +45798,9 @@
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the Tax Acts shall have effect in relation to the recipient, and persons claiming title through or under him, as if the manufactured dividend were a dividend on the United Kingdom equities in question; and
- (c) the Tax Acts shall have effect in relation to the dividend manufacturer subject to the provisions of paragraph 2A below.
- (b) the Corporation Tax Acts shall have effect in relation to the recipient, and persons claiming title through or under him, as if the manufactured dividend were a dividend on the United Kingdom equities in question; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -52358,7 +45808,9 @@
- (6) . . . Where—
- (a) a dividend manufacturer pays a manufactured dividend to which sub-paragraph (3) above applies, . . .
- (a) a dividend manufacturer pays a manufactured dividend . . . , . . . , and
- (aa) the dividend manufacturer is a non-UK resident company within the charge to corporation tax,
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -52370,7 +45822,7 @@
- (b) the date of the payment of the manufactured dividend; and
- (c) the amount of the tax credit to which, by virtue of sub-paragraph (3)(b) above, the recipient or a person claiming title through or under him either—
- (c) the amount of the tax credit to which, by virtue of sub-paragraph (3)(b) above or section 573(2) of ITA 2007, the recipient or a person claiming title through or under him either—
- (i) is entitled in respect of the manufactured dividend, or
@@ -52382,3774 +45834,3584 @@
##### 3
- (1) This paragraph applies (subject to paragraph 3A below) in any case where, under a contract or other arrangements for the transfer of United Kingdom securities, one of the parties (an “interest manufacturer”) is required to pay to the other (“*the recipient*”) an amount (“*the manufactured interest*”) which is representative of a periodical payment of interest on the securities.
- (2) For the relevant purposes of the Tax Acts, in their application in relation to the interest manufacturer—
- (a) the manufactured interest shall be treated, except in determining whether it is deductible, as if it—
- (i) were an annual payment to the recipient, but
- (ii) were neither yearly interest nor an amount payable wholly out of profits or gains brought into charge for income tax;
- (b) the gross amount of that deemed annual payment shall be taken—
- (i) to be equal to the gross amount of the interest of which the manufactured interest is representative; and
- (ii) to constitute income of the recipient falling within section 1A;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 3A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Deductibility of manufactured payment in the case of the manufacturer
##### 2A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured dividends representative of foreign income dividends
##### 2B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured overseas dividends
##### 4
- (1) This paragraph applies in any case where, under a contract or other arrangements for the transfer of overseas securities, one of the parties (the “*overseas dividend manufacturer*”) is required to pay to the other (“*the recipient*”) an amount representative of an overseas dividend on the overseas securities; and in this Schedule the “*manufactured overseas dividend*” means any payment which the overseas dividend manufacturer makes in discharge of that requirement.
- (1A) Where a manufactured overseas dividend is paid as set out in sub-paragraph (1) above it shall be treated—
- (a) as an expense of the trade where a company carries on a trade to which that payment relates;
- (b) where a company has investment business to which the payment relates, for the purposes of section 75 as expenses of management;
- (c) in the case of a company carrying on life assurance business—
- (i) so far as the payment is referable to basic life assurance and general annuity business, for the purposes of section 76 as if it were an expense payable falling to be brought into account at Step 3 of subsection (7) of that section, and
- (ii) the payment is to be treated as referable to basic life assurance and general annuity business to the extent that the overseas dividend of which it is representative is or would, if it were received by the company, be so referable by virtue of section 432A.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a manufactured overseas dividend is paid after deduction of the amount required by section 922(2) of ITA 2007 (amount of income tax to be deducted at source), or where the amount of tax required under section 923 of that Act (income tax to be accounted for and paid) in respect of such a dividend has been accounted for and paid, then for all purposes of the Corporation Tax Acts. . . —
- (a) the manufactured overseas dividend shall be treated in relation to the recipient, and all companies claiming title through or under the recipient, as if it were an overseas dividend of an amount equal to the gross amount of the manufactured overseas dividend, but paid after the withholding therefrom, on account of overseas tax, of the amount deducted under section 922(2) of ITA 2007; and
- (b) the amount so deducted shall accordingly be treated in relation to the recipient, and all companies claiming title through or under the recipient, as an amount so withheld instead of as an amount on account of income tax.
- (5) For the purposes of this paragraph—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the gross amount of a manufactured overseas dividend is an amount equal to the gross amount of that overseas dividend of which the manufactured overseas dividend is representative, as mentioned in sub-paragraph (1) above; and
- (c) the gross amount of an overseas dividend is an amount equal to the aggregate of—
- (i) so much of the overseas dividend as remains after the deduction of the overseas tax (if any) chargeable on it;
- (ii) the amount of the overseas tax (if any) so deducted; and
- (iii) the amount of the overseas tax credit (if any) in respect of the overseas dividend.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Without prejudice to section 97 of the Finance Act 1996 (manufactured interest), the references in this paragraph to all the purposes of the Corporation Tax Acts do not include the purposes of Chapter II of Part IV of that Act (loan relationships).
##### 4A
- (1) A reference in paragraph 4(4)(a) or (b) to the relevant amount in relation to an amount deducted under section 922(2) of ITA 2007 is—
- (a) where the deduction is made in respect of a manufactured overseas dividend that is treated as paid under paragraph 13(1) of Schedule 13 to FA 2007 (sale and repurchase of securities), to amount A, and
- (b) otherwise, to the amount deducted under section 922(2) of ITA 2007.
- (2) Amount A is—
- (a) in a case to which sub-paragraph (3) applies, the amount deducted under section 922(2) of ITA 2007,
- (b) in a case to which sub-paragraph (4) applies—
- (i) the amount deducted under section 922(2) of ITA 2007, less
- (ii) the excess mentioned in that sub-paragraph, and
- (c) in any other case, nil.
- (3) This sub-paragraph applies to a case in which—
- (a) an amount is actually paid by way of manufactured overseas dividend,
- (b) the amount so paid equals the relevant net amount, and
- (c) it is reasonable to assume that, in deciding the repurchase price of the securities, no account was taken of the fact that the amount would be so paid.
- (4) This sub-paragraph applies to a case in which—
- (a) an amount is actually paid by way of manufactured overseas dividend,
- (b) the amount so paid exceeds the relevant net amount, and
- (c) it is reasonable to assume that, in deciding the repurchase price of the securities, no account was taken of the fact that the amount would be so paid.
- (5) In this paragraph “the repurchase price” of the securities means the price at which the payer of the manufactured overseas dividend is entitled or obliged to sell the securities, or similar securities, to the recipient of the manufactured overseas dividend.
- (6) In this paragraph “*the securities*” means the securities in respect of which the overseas dividend of which the manufactured overseas dividend is representative is paid.
- (7) In this paragraph “*the relevant net amount*” means—
- (a) the gross amount of the overseas dividend of which the manufactured overseas dividend is representative, less
- (b) the amount deducted under section 922(2) of ITA 2007.
### Dividends and interest passing through the market
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Unapproved manufactured payments
##### 6
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Irregular manufactured payments
##### 7
- (1) . . . In any case where (apart from this paragraph)—
- (a) an amount paid by way of manufactured dividend would exceed the amount of the dividend of which it is representative, or
- (b) the aggregate of—
- (i) an amount paid by way of . . . manufactured overseas dividend, and
- (ii) the tax required to be accounted for in connection with the making of that payment,
would exceed the gross amount (as determined in accordance with paragraph . . . 4 above) of the . . . overseas dividend of which it is representative . . . ,
the payment shall, to the extent of an amount equal to the excess, not be regarded for the purposes of this Schedule as made in discharge of the requirement referred to in paragraph 2(1). . . or 4(1) above, as the case may be, but shall instead to that extent be taken for all purposes of the Corporation Tax Acts to constitute a separate fee for entering into the contract or other arrangements under which it was made, notwithstanding anything in paragraph 2 above or anything in paragraph 4 other than in sub-paragraph (1A).
- (1A) Sub-paragraph (1) above does not apply in the case of the amount of any . . . manufactured overseas dividend which falls in accordance with section 97 of the Finance Act 1996 to be treated for the purposes of Chapter II of Part IV of that Act as interest under a loan relationship.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) For the purpose of giving relief under any provision of the Corporation Tax Acts in a case falling within paragraph . . . 4(1) above where (apart from this paragraph) the aggregate referred to in sub-paragraph (1)(b) above would be less than the gross amount there mentioned—
- (a) the gross amount of the . . . manufactured overseas dividend shall be taken to be an amount equal to the aggregate referred to in sub-paragraph (1)(b) above, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
notwithstanding anything in paragraph . . . 4 above.
- (4) In this paragraph “*relief*” means relief by way of—
- (a) deduction in computing profits or gains; or
- (b) deduction . . . against . . . total profits.
### Manufactured payments under arrangements having an unallowable purpose
##### 7A
- (1) This paragraph applies in any case where—
- (a) a manufactured payment falls to be made by a company in an accounting period in pursuance of any arrangements (see sub-paragraphs (9) and (10) for definitions), and
- (b) the arrangements have an unallowable purpose at any time (see sub-paragraphs (3) to (5)).
But this is subject to sub-paragraph (8) below (cases where tax relief is denied apart from this paragraph).
- (2) The company is not entitled, by virtue of anything in this Schedule or any provision of regulations under it, or otherwise, to any relevant tax relief (see sub-paragraph (10)), to the extent that the relief is in respect of, or referable to, the whole or any part of so much of the manufactured payment as, on a just and reasonable apportionment, is attributable to the unallowable purpose.
- (3) Arrangements have an unallowable purpose at any time if at that time the purposes for which the company is a party to—
- (a) the arrangements,
- (b) any related transaction (see sub-paragraphs (6) and (7)), or
- (c) any transaction in pursuance of the arrangements,
include a purpose (“the unallowable purpose”) which is not among the business or other commercial purposes of the company.
- (4) The business and other commercial purposes of a company do not include the purposes of any part of its activities in respect of which it is not within the charge to corporation tax.
- (5) Where one of the purposes for which a company is at any time a party to—
- (a) any arrangements,
- (b) any related transaction in the case of any arrangements, or
- (c) any transaction in pursuance of any arrangements,
is a tax avoidance purpose, that purpose shall be taken to be a business or other commercial purpose of the company only where it is not the main purpose, or one of the main purposes, for which the company is party to the arrangements or transaction at that time.
- (6) One or more transactions are to be regarded as related transactions, in the case of any arrangements, if it would be reasonable to assume, from either or both of—
- (a) the likely effect of the transactions, and
- (b) the circumstances in which the transactions are entered into or effected,
that none of the transactions would have been entered into or effected independently of the arrangements.
- (7) Transactions are not prevented from being related transactions, in the case of any arrangements, just because the transactions—
- (a) are not between the same parties, or
- (b) are not between the parties to the arrangements.
- (8) This paragraph does not apply if, as a result of any of the following provisions—
- (a) section 75(4)(b) (expenses of management of companies with investment business: unallowable purposes),
- (b) section 76(4)(d) (expenses of insurance companies: unallowable purposes),
- (c) paragraph 13 of Schedule 9 to the Finance Act 1996 (loan relationships with unallowable purposes),
the company in question is not entitled to a relevant tax relief in respect of, or referable to, the whole or any part of the manufactured payment.
The references to sections 75 and 76 are references to those provisions as they have effect in relation to accounting periods beginning on or after 1st April 2004.
- (9) Any reference in this paragraph to a manufactured payment falling to be made by a company includes a reference to a manufactured payment which is deemed by or under any provision of the Tax Acts to be made by a company (and references to a transaction, or to a company being party to a transaction, are to be construed accordingly).
- (10) In this paragraph—
- “*arrangements*” includes schemes, arrangements and understandings of any kind, whether or not legally enforceable, and shall be taken to include any related transactions;
- “*manufactured payment*” means any of the following—any manufactured dividend;any manufactured interest;any manufactured overseas dividend;
- “*related transaction*” shall be construed in accordance with sub-paragraphs (6) and (7) above;
- “*relevant tax relief*” means any of the following—any deduction in computing profits or gains for the purposes of corporation tax;any deduction against total profits;the bringing into account of any debit for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships);the surrender of an amount by way of group relief;
- “*tax advantage*” has the meaning given by section 840ZA;
- “*tax avoidance purpose*” means any purpose that consists in securing a tax advantage (whether for the company in question or any other person);
- and sub-paragraphs (3) to (7) above have effect for the purposes of this paragraph.
### Dividend manufacturing regulations: general
##### 8
- (1) Dividend manufacturing regulations may make provision for—
- (a) such manufactured dividends . . . or manufactured overseas dividends as may be prescribed,
- (aa) such persons who receive, or become entitled to receive, manufactured dividends . . . or manufactured overseas dividends as may be prescribed, or
- (b) such dividend manufacturers . . . or overseas dividend manufacturers as may be prescribed,
to be treated in prescribed circumstances otherwise than as mentioned in paragraphs 2 and 4 above for the purposes of such provisions of the Corporation Tax Acts as may be prescribed.
- (1A) Dividend manufacturing regulations may provide, in relation to prescribed cases where a person makes or receives the payment of any amount representative of an overseas dividend, or is treated for any purposes of this Schedule or such regulations as a person making or receiving such a payment—
- (a) for any entitlement of that person to claim relief under Part XVIII to be extinguished or reduced to such extent as may be found under the regulations; and
- (b) for the adjustment, by reference to any provision having effect under the law of a territory outside the United Kingdom, of any amount falling to be taken, for any prescribed purposes of the Corporation Tax Acts . . . , to be the amount paid or payable by or to any person in respect of any sale, repurchase or other transfer of the overseas securities to which the payment relates.
- (2) Dividend manufacturing regulations may make provision with respect to—
- (a) the accounts and other records which are to be kept,
- (b) the vouchers which are to be issued or produced,
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
by persons by . . . whom manufactured dividends . . . are paid.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Dividend manufacturing regulations may—
- (a) make provision for prescribed provisions of the Management Act to apply for corporation tax purposes in relation to manufactured dividends, manufactured interest or manufactured overseas dividends with such modifications, specified in the regulations, as the Treasury think fit;
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Dividend manufacturing regulations may make different provision for different cases.
##### 4A
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##### 11A
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### Exchange gains and losses
##### 13
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##### 14
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##### 15
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##### 16
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##### 17
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##### 18
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##### 19
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### Transfer pricing
##### 20
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 2A
- (1) Paragraph 2 above shall have effect in accordance with this paragraph to determine whether a controlled foreign company . . . pursues an acceptable distribution policy in respect of a particular accounting period (“*the relevant accounting period*”).
- (2) Subject to sub-paragraph (4) below, where the distribution condition is satisfied in relation to the relevant accounting period, then, in addition to any dividend which falls within paragraph 2(1)(a) above apart from this paragraph—
- (a) any dividend which is paid for the accounting period (“*the preceding period*”) immediately preceding the relevant accounting period and which is not an excluded dividend shall be treated as falling within that paragraph, and
- (b) if the distribution condition is satisfied in relation to the preceding period, any dividend which is paid for the accounting period immediately preceding the preceding period and which is not an excluded dividend shall be treated as falling within that paragraph,
and so on; and in this sub-paragraph “*dividend*” means a dividend not paid out of specified profits.
- (3) For the purposes of this paragraph, the distribution condition is satisfied in relation to any accounting period if—
- (a) a dividend or dividends are paid for the period to persons resident in the United Kingdom,
- (b) the amount or, as the case may be, aggregate amount of any dividends falling within paragraph (a) above is not less than—
- (i) the relevant profits for that period, or
- (ii) where paragraph 2(4) or (5) above applies (with the modifications of paragraph 2 made by sub-paragraph (5) below), the appropriate portion of those profits, and
- (c) any dividends falling within that paragraph are paid not later than the time by which any dividend paid for the relevant accounting period is required by paragraph 2(1)(b) above to be paid;
or if there are no relevant profits for the period.
- (4) Where, by reason only of the fact that a company pursued an acceptable distribution policy in respect of any accounting period (“*the earlier period*”) earlier than the relevant accounting period, no apportionment under section 747(3) fell to be made in respect of the earlier period, sub-paragraph (2) above shall apply to any dividend required to be taken into account for the purpose of showing that the company pursued an acceptable distribution policy in respect of the earlier period only to the extent (if any) to which that dividend was not required to be taken into account for that purpose.
- (5) The modifications of paragraph 2 above referred to in sub-paragraph (3)(b) above are that—
- (a) the references in sub-paragraphs (4) and (5) to the accounting period in question are to be read as references to the accounting period for which the dividend or dividends are paid,
- (b) the references in those sub-paragraphs to sub-paragraph (1)(d) are to be read as references to sub-paragraph (3)(b) above, and
- (c) the reference in the definition of “X” in sub-paragraph (6) to net chargeable profits is to be read as a reference to relevant profits.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this paragraph—
- (aa) a dividend is an excluded dividend if it is paid, in whole or in part, out of the total profits from which (in accordance with section 747(6)(a)) the chargeable profits for an excluded period are derived,
- (a) a period is an excluded period if it is an accounting period in respect of which an apportionment under section 747(3) falls to be made, and
- (b) relevant profits for any accounting period are the profits which would be the relevant profits of that period for the purposes of section 799 if a dividend were actually paid for that period.
##### 2B
- (1) This paragraph has effect for the purposes of paragraph 2(1A)(b) above.
- (2) No payment of dividend by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period.
- (3) “*UK tax avoidance scheme*” means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax.
- (4) A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company—
- (a) would have been liable for any such tax or for a greater amount of any such tax; or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (5) In this paragraph—
- “*arrangement*” means an arrangement of any kind, whether in writing or not;
- “*United Kingdom tax*” means corporation tax or any tax chargeable as if it were corporation tax.
##### 4A
- (1) This paragraph has effect for the purposes of paragraph 4(1A)(b) above.
- (2) No payment to a company resident in the United Kingdom which represents the whole or part of a dividend paid by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that—
- (a) there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period, and
- (b) so much of the dividend as is represented by that payment will (if paragraph 4(1) above has effect) fall to be brought into account in determining whether the controlled foreign company has done so.
- (3) “*UK tax avoidance scheme*” means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax.
- (4) A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company—
- (a) would have been liable for any such tax or for a greater amount of any such tax; or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (5) In this paragraph—
- “*arrangement*” means an arrangement of any kind, whether in writing or not;
- “*United Kingdom tax*” means corporation tax or any tax chargeable as if it were corporation tax.
##### 11A
- (1) This paragraph has effect for the interpretation of paragraph 6(2B) above.
- (2) “*Contract of long-term insurance*” means any contract falling within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
- (3) “*Protection business*” means contracts of long-term insurance where—
- (a) either—
- (i) the contract has no surrender value; or
- (ii) the consideration consists of a single premium and the surrender value does not exceed the amount of that premium; and
- (b) the contract makes no provision for its conversion or extension in a manner which would result in its ceasing to fall within paragraph (a) above;
and references to protection business include a reference to reinsurance of protection business.
- (4) “*Insurance group*” shall be construed in accordance with section 255A(5) of the Companies Act 1985 (meaning of “insurance group” in Part 7) but reading Part 7 of that Act—
- (a) as if it extended to Northern Ireland, and
- (b) as if any reference to a company (within the meaning of that Act) included a reference to a company as defined in Article 3 of the Companies (Northern Ireland) Order 1986,
but does not include such an insurance group if it falls within sub-paragraph (5) below.
- (5) Such an insurance group falls within this sub-paragraph if (within the meaning of that Part as so read) the parent company is a subsidiary undertaking of a parent company which is neither—
- (a) the parent company of an insurance group; nor
- (b) a subsidiary undertaking of the parent company of an insurance group.
- (6) A controlled foreign company is, in accordance with sub-paragraphs (4) and (5) above, a “*member of an insurance group*” if (within the meaning of that Part as so read) it is the parent company, or a subsidiary undertaking of the parent company, of an insurance group which is by virtue of sub-paragraph (4) above an insurance group for the purposes of paragraph 6(2B) above.
- (7) A company’s main business is “*insuring or reinsuring large risks*” if (and only if)—
- (a) the company’s main business is the effecting or carrying out of contracts of insurance; and
- (b) 50% or more of its gross trading receipts from that business are derived from insuring or reinsuring large risks.
- “*Large risks*” is defined in paragraph 11B below.
- (8) In this paragraph—
- “*contract of insurance*” has the meaning given by article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*contract of long-term insurance*” has the meaning given by sub-paragraph (2) above.
##### 11B
- (1) In paragraph 11A above “*large risks*” means—
- (a) risks falling within classes 4, 5, 6, 7, 11 and 12 of Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- (b) risks falling within classes 14 and 15 of that Part which relate to a business carried on by the policy holder;
- (c) risks falling within classes 3, 8, 9, 10, 13 and 16 of that Part where the policy holder carries on a business in respect of which the condition specified in sub-paragraph (2) below is satisfied.
- (2) The condition referred to in sub-paragraph (1)(c) above is that, in the case of that business of the policy holder, at least two of the three following criteria were exceeded in the most recent financial year beginning on or after 1st January 1999 for which the information is available—
- (a) balance sheet total: 6.2 million euros;
- (b) net turnover: 12.8 million euros;
- (c) number of employees: 250.
- (3) For the purposes of sub-paragraph (2) above as it applies where the policy holder is a company, within the meaning of section 735(1) of the Companies Act 1985 or Article 3 of the Companies (Northern Ireland) Order 1986,—
- (a) “*balance sheet total*” has the meaning given by section 247(5) of that Act or Article 255(5) of that Order;
- (b) “*net turnover*” has the meaning given to “*turnover*” by section 262(1) of that Act or Article 270(1) of that Order; and
- (c) “*number of employees*” has the meaning given by section 247(6) of that Act or Article 255(6) of that Order;
and for a financial year which is a company’s financial year but not in fact a year, the net turnover of the company shall be proportionately reduced.
- (4) Where the policy holder is a member of a group for which consolidated accounts (within the meaning of Directive [83/349/EEC](https://www.legislation.gov.uk/european/directive/1983/0349)) are drawn up, the question whether the condition in sub-paragraph (2) above is met shall be determined by reference to those accounts.
- (5) For the purposes of sub-paragraph (1)(c) above as it applies where the policy holder is a professional association, joint venture or temporary grouping, the question whether the condition in sub-paragraph (2) above is met shall be determined by reference to the aggregate of the figures of the description in question for all the members of the professional association, joint venture or temporary grouping.
- (6) In sub-paragraphs (1) to (5) above “*business*” includes a trade or profession and, for the purposes of sub-paragraph (1)(c) above, any activity of a professional association, joint venture or temporary grouping.
- (7) For the purposes of this paragraph, where an amount is denominated in any accounts in a currency other than the euro, it shall be converted into its equivalent in euros using the London closing exchange rate for that currency and the euro for the last day of the period to which the accounts relate.
- (8) In this paragraph—
- “*euro*” means the single currency adopted or proposed to be adopted as its currency by a member State in accordance with the Treaty establishing the European Community;
- “*financial year*”, in relation to any person, means the period (not exceeding 12 months) for which that person makes up accounts.
##### 12A
- (1) In paragraphs 6, 8(3) and 12(5) above and this paragraph, “*superior holding company*” means—
- (a) a company whose business consists wholly or mainly in the holding of shares or securities of companies which—
- (i) are holding companies or local holding companies; or
- (ii) are themselves superior holding companies; or
- (b) a company which would fall within paragraph (a) above if there were disregarded so much of its business as consists in the holding of property or rights of any description for use wholly or mainly by companies which it controls and which are resident in the territory in which it is resident.
- (2) For the purposes of sub-paragraphs (4A) and (4B) of paragraph 6 above, the income of a company during any period which “*represents qualifying exempt activity income of its subsidiaries*” is any income of the company during that period which is directly or indirectly derived from companies—
- (a) which it controls, and
- (b) which, throughout that period, fall within sub-paragraph (4B)(a) of that paragraph, but
- (c) which are not holding companies other than local holding companies.
- (3) In determining for the purposes of sub-paragraph (4A) or (4B) of paragraph 6 above the companies from which, and the proportions in which, different descriptions of income of a company are derived (whether directly or indirectly), any dividend shall be taken to be paid out of the appropriate profits.
- (4) Subsections (3) and (4) of section 799 (which provide rules for determining the profits out of which a dividend is to be regarded as paid for the purpose of subsection (1) of that section) shall apply for determining the appropriate profits for the purposes of subsection (3) above as they apply for determining the relevant profits for the purposes of subsection (1) of that section.
- (5) Sub-paragraphs (4) to (6) of paragraph 12 above shall apply in relation to sub-paragraph (4A) or (4B) of paragraph 6 above and a superior holding company as they apply in relation to sub-paragraph (3) or (4) of paragraph 6 above and a holding company, but taking the reference in sub-paragraph (4) of paragraph 12 above to paragraph (a) or (b) of sub-paragraph (1) of that paragraph as a reference to paragraph (a) or (b) of sub-paragraph (1) above.
## Part 2A — Trading Companies with Limited UK Connection
### Introductory
##### 12B
- (1) For the purposes of section 748(1)(ba), a controlled foreign company (“C”) is exempt for an accounting period if the requirements of this Part of this Schedule are satisfied.
- (2) The requirements are those imposed as to C's—
- (a) business establishment (see paragraph 12C),
- (b) business activities (see paragraph 12D),
- (c) UK connection (see paragraph 12E), and
- (d) finance income and relevant IP income (see paragraph 12F).
### Business establishment
##### 12C
- (1) The requirement of this paragraph is that throughout the accounting period C has a business establishment in the territory in which it is resident.
- (2) For the purposes of sub-paragraph (1)—
- (a) paragraph 5(2) to (5) (special rules about residence of the company) applies as it applies for the purposes of Part 2 of this Schedule, and
- (b) paragraph 7 (meaning of “business establishment”) applies as it applies for the purposes of paragraph 6(1)(a).
### Business activities
##### 12D
- (1) The requirement of this paragraph is that—
- (a) C's business does not, at any time during the accounting period, include to a substantial extent non-exempt activities, or
- (b) if C is wholly engaged in business falling within paragraph 11(1)(c) (banking etc), C's business does not, at any time during the accounting period, include to a substantial extent non-exempt activities which do not constitute investment business.
- (2) For this purpose—
- “*non-exempt activities*” means—the holding or managing of shares or securities,the holding of intellectual property,dealing in securities, other than in the capacity of a broker,the leasing of any description of property or rights,the investment in any manner of funds which would otherwise be available, directly or indirectly, for investment by or on behalf of any person (whether resident in the United Kingdom or not) who has, or is connected or associated with a person who has, control, either alone or together with other persons, of C, andif C is not a member of an insurance group throughout the accounting period, the effecting or carrying out of contracts of insurance between C and persons related to C;
- “*investment business*” means activities within paragraphs (a) to (d) of paragraph 9(1).
- (3) For the purposes of sub-paragraph (2)(f), a person is “related” to C if—
- (a) the person is connected or associated with C,
- (b) the person has a 25 per cent assessable interest in C in the case of the accounting period in question (within the meaning of paragraph 6(4C)), or
- (c) if C is a controlled foreign company in that accounting period by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
- (4) In sub-paragraph (2)—
- “*broker*” includes any person offering to sell securities to, or purchase securities from, members of the public generally;
- “*contract of insurance*” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*insurance group*” has the meaning given by paragraph 11A(4);
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A);
- “*member of an insurance group*” has the meaning given by paragraph 11A(6).
### UK connection
##### 12E
- (1) The requirement of this paragraph is that C does not have a significant connection with the United Kingdom during the accounting period.
- (2) C has a significant connection with the United Kingdom during the accounting period if Condition A or B is met.
- (3) Condition A is that—
- (a) the UK-connected gross income of C's business for that period exceeds 10% of the gross income of that business for that period, and
- (b) sub-paragraph (4) does not apply.
- (4) This sub-paragraph applies if—
- (a) at all times in the accounting period there are sufficient individuals working for C in the territory in which it is resident, or in any other territory outside of the United Kingdom, who have the competence and authority to undertake all, or substantially all, of C's business,
- (b) C's relevant profits for the accounting period do not exceed 10% of C's relevant operating expenses for that period, and
- (c) the UK-connected gross income of C's business for that period does not exceed 50% of the gross income of that business for that period.
- (5) Condition B is that—
- (a) the UK-connected related-party business expenditure of C's business for that period exceeds 50% of the total related-party business expenditure of C's business for that period, and
- (b) during the accounting period C has been involved in a scheme where the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to achieve a reduction in corporation tax or any tax chargeable as if it were corporation tax.
- (6) For the purposes of sub-paragraph (4)(a), individuals are not to be regarded as working for C in any territory unless—
- (a) they are employed by C in the territory, or
- (b) they are otherwise directed by C to perform duties on its behalf in the territory.
- (7) In this paragraph—
- “*related-party business expenditure*” means any expenditure, other than capital expenditure, which gives rise, directly or indirectly, to income of a person related to C;
- “relevant profits”, for an accounting period, means the total profits of C for that period calculated in accordance with generally accepted accounting practice (disregarding any capital gains or losses), but before any deduction for interest or tax;
- “relevant operating expenses” of C means operating expenses of C other than—the cost of goods sold, andrelated-party business expenditure;
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions;
- “*UK-connected gross income*” means the gross income derived, directly or indirectly, from persons who are within the charge to United Kingdom tax for all or part of the accounting period;
- “*UK-connected related-party business expenditure*” means related-party business expenditure which gives rise, directly or indirectly, to income of a person within the charge to United Kingdom tax in respect of that income;
- “*United Kingdom tax*” means income tax or corporation tax;
and paragraph 12D(3) (persons “related” to C) applies for the purposes of this paragraph as it applies for the purposes of paragraph 12D(2)(f).
- (8) In the case of a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there, for the purposes of sub-paragraph (7)—
- (a) the gross income derived from that company is so much of the gross income as is attributable to that establishment, and
- (b) the income received by that company is such of its income as is attributable to that establishment.
### Finance income and relevant IP income
##### 12F
- (1) The requirement of this paragraph is that not more than 5% of C's gross income for the accounting period falls within sub-paragraph (2).
- (2) Gross income falls within this sub-paragraph to the extent that it is—
- (a) finance income, or
- (b) relevant IP income.
- (3) “*Finance income*” means—
- (a) any amount which in accordance with UK generally accepted accounting practice falls to be recognised as arising from a financial asset, and
- (b) any return, in relation to an amount, which—
- (i) is produced for C by an arrangement to which C is party, and
- (ii) is economically equivalent to interest,
except to the extent that the return is taken into account in determining an amount within paragraph (a).
- (4) “*Relevant IP income*” means royalties and receipts of a similar nature arising from intellectual property.
- (5) For the purposes of sub-paragraph (3)(b), the amount of a return is the amount which by virtue of the return would, in calculating C's chargeable profits, be treated under section 486B of CTA 2009 (disguised interest to be regarded as profit from loan relationship) as a profit arising to C from a loan relationship.
- (6) But, in calculating that profit for the purposes of sub-paragraph (5), sections 486B(7) and 486C to 486E of CTA 2009 are to be ignored.
- (7) In this paragraph—
- “*economically equivalent to interest*” is to be construed in accordance with section 486B(2) and (3) of CTA 2009;
- “*financial asset*” means a financial asset as defined for the purposes of UK generally accepted accounting practice or international accounting standards;
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A).
### Gross income
##### 12G
- (1) References in this Part of this Schedule to C's gross income are to be construed in accordance with this paragraph.
- (2) C's gross income for an accounting period does not include—
- (a) any distribution that would not be included in C's chargeable profits by reason of it being exempt for the purposes of Part 9A of CTA 2009 (see section 931A of that Act), or
- (b) any amount that would be taken into account in computing chargeable gains if C were within the charge to corporation tax.
- (3) C's gross income for an accounting period includes—
- (a) any income which accrues during that period to the trustees of a settlement in relation to which C is a settlor or a beneficiary, and
- (b) any income which accrues during that period to a partnership of which C is a partner, apportioned between C and the other partners on a just and reasonable basis.
- (4) Where there is more than one settlor or beneficiary in relation to the settlement mentioned in sub-paragraph (3)(a), the income is to be apportioned between C and the other settlors or beneficiaries on a just and reasonable basis.
- (5) In this paragraph—
- “*distribution*” has the same meaning as in the Corporation Tax Acts (see Part 23 of CTA 2010);
- “*partnership*” includes an entity established under the law of a country or territory outside the United Kingdom of a similar character to a partnership; and “partner” is to be read accordingly.
## Part 2B — Companies Exploiting Intellectual Property with Limited UK Connection
### Introductory
##### 12H
- (1) For the purposes of section 748(1)(bb), a company (“C”) is exempt for an accounting period if the requirements of this Part of this Schedule are satisfied.
- (2) The requirements are those imposed as to C's—
- (a) business establishment (see paragraph 12I),
- (b) intellectual property business (see paragraph 12J),
- (c) other business activities (see paragraph 12K),
- (d) UK connection (see paragraph 12L), and
- (e) finance income (see paragraph 12M).
### Business establishment
##### 12I
- (1) The requirement of this paragraph is that throughout the accounting period C has a business establishment in the territory in which it is resident.
- (2) For the purposes of sub-paragraph (1)—
- (a) paragraph 5(2) to (5) (special rules about residence of the company) applies as it applies for the purposes of Part 2 of this Schedule, and
- (b) paragraph 7 (meaning of “business establishment”) applies as it applies for the purposes of paragraph 6(1)(a).
### Intellectual property business
##### 12J
- (1) The requirement of this paragraph is that C's main business, throughout the accounting period, consists of the exploitation of intellectual property which does not have a relevant UK connection.
- (2) For the purposes of sub-paragraph (1), if any part of C's main business consists of the exploitation of intellectual property which has a relevant UK connection, that part is to be ignored if it is an insignificant part of C's main business.
- (3) Intellectual property has a relevant UK connection if—
- (a) at any time during the accounting period or the 6 years immediately preceding that period, it has been held by a person resident in the United Kingdom, or
- (b) activities relating to the creation, maintenance or enhancement of the intellectual property (other than activities of an incidental or insignificant nature) have been carried on by a person who for some or all of the period—
- (i) beginning when the activities were first carried on by the person, and
- (ii) ending at the end of the accounting period,
was related to C and within the charge to United Kingdom tax.
### Other business activities
##### 12K
- (1) The requirement of this paragraph is that—
- (a) C does not, at any time during the accounting period, carry on any activities otherwise than in the course of its main business, or
- (b) if it carries on any such activities (“secondary activities”), the secondary activities condition is met.
- (2) The secondary activities condition is that either—
- (a) the secondary activities do not, at any time during the accounting period, constitute a substantial part of the activities of C's business taken as a whole, or
- (b) section 748(1)(b) or (ba) would apply to prevent an apportionment under section 747(3) falling to be made as regards that period, if C's business consisted only of the secondary activities carried on by it during the accounting period.
### UK connection
##### 12L
- (1) The requirement of this paragraph is that C does not have a significant connection with the United Kingdom during the accounting period.
- (2) C has a significant connection with the United Kingdom during the accounting period if—
- (a) all or a substantial proportion of C's gross income for that period consists of income from the exploitation of intellectual property which derives from persons within the charge to United Kingdom tax, or
- (b) during that period C incurs expenditure (other than expenditure of an incidental or insignificant nature) on—
- (i) R&D sub-contractor payments, or
- (ii) the creation, development or maintenance of relevant intellectual property,
and that expenditure forms part of the income of a person who for some or all of that period is related to C and within the charge to United Kingdom tax.
- (3) In this paragraph—
- “*R&D sub-contractor payment*” means a payment made by C to another person in respect of research and development contracted out by C to that person;
- “*relevant intellectual property*” means intellectual property which does not have a relevant UK connection (see paragraph 12J(3)) and which C exploits in the course of its main business.
### Finance income
##### 12M
The requirement of this paragraph is that not more than 5% of C's gross income for the accounting period consists of finance income (within the meaning of paragraph 12F(3)).
### Interpretation of Part 2B
##### 12N
- (1) For the purpose of this Part of this Schedule—
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A);
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G (meaning of “gross income”) applies as it applies for the purposes of Part 2A of this Schedule.
- (2) For the purposes of this Part of this Schedule a person is “related” to C at a particular time if at that time—
- (a) the person is connected or associated with C,
- (b) the person has a 25 per cent assessable interest in C in the case of the accounting period of C in which that time falls (within the meaning of paragraph 6(4C)), or
- (c) if C is a controlled foreign company in the accounting period in which that time falls by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
- (3) In the case of a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there—
- (a) for the purposes of paragraph 12J(3)(b), the activities carried on by the company are such of the activities as are carried on through that establishment,
- (b) for the purposes of paragraph 12L(2)(a), the income derived from that company is such of the income so derived as is attributable to that establishment, and
- (c) for the purposes of paragraph 12L(2)(b), the income of that company is such of its income as is attributable to that establishment.
## Part 3A — Exempt Periods
### Introductory
##### 15A
The provisions of this Part of this Schedule have effect for the purposes of section 748(1)(f).
### Beginning of exempt period
##### 15B
- (1) An exempt period begins in relation to a company (“X”) at a time (“*the relevant time*”) when—
- (a) X is resident outside the United Kingdom,
- (b) X is controlled by persons resident in the United Kingdom,
- (c) there is at least one relevant UK corporate investor in X, and
- (d) the requirements of paragraph 15C or 15D are met.
- (2) There is a “relevant UK corporate investor in X” at a particular time if, at that time, there is a company which—
- (a) is resident in the United Kingdom, and
- (b) would, on the assumptions set out in sub-paragraph (3), be a company to which an apportionment of X's chargeable profits for the relevant accounting period would fall to be made in circumstances where section 747(5) would not prevent tax being chargeable on the company under section 747(4).
- (3) The assumptions are—
- (a) X has chargeable profits for the relevant accounting period,
- (b) an apportionment of those profits falls to be made under section 747(3) for that period, and
- (c) no reduction of those profits arises under section 751A, 751AA or 751AB.
- (4) “*The relevant accounting period*” means the accounting period of X in which the time mentioned in sub-paragraph (2) falls.
##### 15C
- (1) The requirements of this paragraph are that—
- (a) no company was, at any time before the relevant time, a relevant UK corporate investor in X,
- (b) no asset owned by X, or part of the business carried on by X, at the relevant time was previously owned, or carried on, by a company which—
- (i) was under the control of persons resident in the United Kingdom at any time it owned the asset or carried on the part of the business, and
- (ii) is or has been related to X,
- (c) condition A, B, C or D is met, and
- (d) no disqualifying relevant transaction occurs (see paragraph 15E).
- (2) Condition A is that, immediately before the relevant time, X—
- (a) was in existence, but
- (b) was not a member of the same group of companies as any person who, at the relevant time, was a controlling UK person.
- (3) Condition B is that—
- (a) at the relevant time X is controlled by a company which is resident in the United Kingdom, and
- (b) immediately before that time, X was controlled by that same company but that company was not then resident in the United Kingdom.
- (4) Condition C is that—
- (a) at the relevant time—
- (i) X is controlled by a company which is resident in the United Kingdom (“the intermediate parent”), and
- (ii) the intermediate parent is controlled by a company which is not resident in the United Kingdom (“the parent”), and
- (b) immediately before that time X was controlled by the parent but not the intermediate parent.
- (5) Condition D is that X—
- (a) is a controlled foreign company at the time it is formed, and
- (b) is formed by one or more persons for the purpose of controlling one or more companies in circumstances where it is expected that an exempt period will begin in relation to one or more of those companies at the time when X begins to control the company or companies.
- (6) In this paragraph “*controlling UK person*” means a person resident in the United Kingdom who alone, or together with other such persons, controls X.
##### 15D
- (1) The requirements of this paragraph are that—
- (a) the relevant time falls after 23 March 2011,
- (b) X has an accounting period during which 23 March 2011 falls,
- (c) no company was, at any time during that accounting period, a relevant UK corporate investor in X,
- (d) no company was, immediately before the relevant time, a relevant UK corporate investor in X,
- (e) at the relevant time X is controlled by a company which—
- (i) is resident in the United Kingdom, and
- (ii) is not under the control of another body corporate, or two or more other bodies corporate taken together, and
- (f) no disqualifying relevant transaction occurs (see paragraph 15E).
- (2) In determining for the purposes of sub-paragraph (1)(e)(ii) whether a company is under the control of two or more bodies corporate taken together, a body corporate which holds less than 10% of the issued ordinary shares of that company is to be disregarded.
- (3) For the purposes of sub-paragraph (2), a body corporate is treated as holding any shares held by persons who are connected or associated with the body corporate.
### Disqualifying relevant transactions
##### 15E
- (1) This paragraph applies for the purposes of paragraph 15C and 15D.
- (2) A disqualifying relevant transaction occurs if—
- (a) a relevant transaction occurs at the relevant time (whether or not the transaction occurs pursuant to an agreement entered into by X before that time), or
- (b) a relevant transaction occurs on or after 9 December 2010 but before the relevant time and that transaction forms part of an avoidance scheme.
- (3) “*Relevant transaction*” means—
- (a) the making by X of a loan or advance of an amount (other than a negligible amount) to a person who, at the time it is made, is related to X and subject to United Kingdom tax,
- (b) an increase (other than an increase of a negligible amount) in the amount of an existing loan or advance made by X to a person who, at the time of the increase, is related to X and subject to United Kingdom tax,
- (c) a change in the terms or conditions of an existing loan or advance made by X where—
- (i) the loan or advance is to a person who, at the time the change is made, is related to X and subject to United Kingdom tax, and
- (ii) the change has an effect (other than a negligible effect) on the amount of interest payable, or
- (d) a transaction to which sub-paragraph (4) applies.
- (4) This sub-paragraph applies to a transaction if—
- (a) it is referable to an activity carried on by X as part, or the whole, of any non-exempt activities carried on by X,
- (b) the results of the transaction are reflected in the profits arising in an accounting period of X and are not negligible in value, and
- (c) the results of the transaction alone, or together with the results of one or more other transactions, achieves a reduction in United Kingdom tax.
- (5) A transaction achieves, or two or more transactions together achieve, a reduction in United Kingdom tax if, had the transaction or transactions not been effected, any person—
- (a) would have been liable for any such tax or for a greater amount of any such tax, or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (6) In this paragraph—
- “*avoidance scheme*” means a scheme the main purpose, or one of the main purposes, of any party to which in entering into the scheme is to secure that section 748(1)(f) prevents an apportionment falling to be made under section 747(3) as regards an accounting period, or accounting periods, of X;
- “*non-exempt activities*” has the meaning given by paragraph 12D(2);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions;
- “*United Kingdom tax*” means corporation tax (or any tax chargeable as if it were corporation tax) or income tax.
### Ending of exempt period
##### 15F
- (1) An exempt period ends on the expiry of the period of 24 months which begins immediately after the first accounting period of X to end after the relevant time, unless sub-paragraph (2) applies.
- (2) If an early termination event occurs after the relevant time but before the time the exempt period would end under sub-paragraph (1), the exempt period ends immediately before that event.
- (3) An early termination event occurs if and when—
- (a) a relevant transaction occurs, whether or not the transaction occurs pursuant to an agreement entered into by X before that time, or
- (b) where the exempt period began because Condition D was met, X's business does not consist wholly in the holding of shares of companies which X controls, together with activities incidental to the holding of such shares.
### Interpretation of Part 3A
##### 15G
- (1) In this Part of this Schedule—
- “*group*” means a company and any other companies it controls;
- “*the relevant time*” has the meaning given by paragraph 15B;
- “*relevant transaction*” has the meaning given by paragraph 15E;
- “*relevant UK corporate investor in X*” has the meaning given by paragraph 15B(2);
- “*X*” is to be construed in accordance with paragraph 15B.
- (2) For the purposes of this Part of this Schedule a person is “related” to X at a particular time if—
- (a) the person is connected or associated with X at that time,
- (b) the person has a 25 per cent assessable interest in X in the case of the accounting period in which that time falls (within the meaning of paragraph 6(4C)), or
- (c) if X is a controlled foreign company in the accounting period in which that time falls by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
### Application of this Schedule in relation to umbrella funds and funds comprising more than one class of interest
##### 21
- (1) The Treasury may make provision by regulations as to the application of the provisions of this Schedule in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (2) Regulations under this paragraph may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
## Part 3 — Supplementary
### Application of this Schedule in relation to umbrella funds and funds comprising more than one class of interest
##### 9
- (1) The Treasury may make provision by regulations as to the application of the provisions of this Schedule in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (2) Regulations under this paragraph may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
## Schedule 28A
## Part I — Significant increase in company capital
### General
##### 1
The provisions referred to in section 768B(2) for determining whether there is a significant increase in the amount of a company’s capital after a change in the ownership of the company are as follows.
### The basic rule
##### 2
There is a significant increase in the amount of a company’s capital if amount B—
- (a) exceeds amount A by at least £1 million; or
- (b) is at least twice amount A.
### Amount A
##### 3
- (1) Amount A is the lower of—
- (a) the amount of the company’s capital immediately before the change in the ownership; and
- (b) the highest 60 day minimum amount for the pre-change year, found in accordance with sub-paragraphs (2) to (6) below.
- (2) Find the daily amounts of the company’s capital over the pre-change year.
- (3) Take the highest of the daily amounts.
- (4) Find out whether there was in the pre-change year a period of 60 days or more in which there was no daily amount lower than the amount taken.
- (5) If there was, the amount taken is the highest 60 day minimum amount for the pre-change year.
- (6) If there was not, take the next highest of the daily amounts and repeat the process in sub-paragraph (4) above; and so on, until the highest 60 day minimum amount for the pre-change year is found.
- (7) In this Part of this Schedule “*the pre-change year*” means the period of one year ending immediately before the change in the ownership of the company in question.
### Amount B
##### 4
- (1) Amount B is the highest 60 day minimum amount for the post-change period (finding that amount for that period in the same way as the highest 60 day minimum amount for the pre-change year is found).
- (2) In this paragraph “*the post-change period*” means the period of three years beginning with the change in the ownership of the company in question.
### Capital and amounts of capital
##### 5
- (1) The capital of a company consists of the aggregate of—
- (a) the amount of the paid up share capital of the company;
- (b) the amount outstanding of any debts incurred by the company which are of a description mentioned in any of paragraphs (a) to (c) of section 417(7); and
- (c) the amount outstanding of any redeemable loan capital issued by the company.
- (2) For the purposes of sub-paragraph (1) above—
- (a) the amount of the paid up share capital includes any amount in the share premium account of the company (construing “share premium account” in the same way as in section 130 of the Companies Act 1985); and
- (b) the amount outstanding of any debts includes any interest due on the debts.
- (3) Amounts of capital shall be expressed in sterling and rounded up to the nearest pound.
## Part II — Amounts in issue for purposes of section 768B
##### 6
The amounts in issue referred to in section 768B(4)(c) are—
- (a) the amount of any expenses of management referable to the accounting period (within the meaning of section 75) being divided, except any such expenses as would (apart from section 768B) be deductible in computing profits otherwise than under section 75;
- (b) the amount of any charges which are paid in that accounting period wholly and exclusively for the purposes of the company’s business;
- (c) the amount of any excess carried forward under section 75(9) to the accounting period being divided;
- (d) the amount of any allowances falling to be made for that accounting period by virtue of section 253 of the Capital Allowances Act which would (apart from section 768B) be added to the expenses of management for that accounting period by virtue of section 75(7);
- (da) the amount (if any) of the adjusted Case III profits and gains or non-trading deficit of the company for that accounting period (other than one within sub-paragraph (dc) below) ;
- (db) the amount of any non-trading debit (other than one within sub-paragraph . . . (dd) below) that falls to be brought into account for that accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of any debtor relationship of the company;
- (dc) the amount of any non-trading deficit carried forward to that accounting period under section 83(3A) of the Finance Act 1996 (carried forward deficit not set off against profits);
- (dd) the amount of any non-trading debit given for that accounting period by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company;
- (de) the amount of any non-trading credits or debits in respect of intangible fixed assets that fall to be brought into account for that period under paragraph 34 of Schedule 29 to the Finance Act 2002;
- (df) the amount of any non-trading loss on intangible fixed assets carried forward to that accounting period under paragraph 35(3) of that Schedule;
- (e) any other amounts by reference to which the profits or losses of that accounting period would (apart from section 768B) be calculated.
##### 6A
For the purposes of paragraph 6(da) above, the amount for any accounting period of the adjusted Case III profits and gains or non-trading deficit of a company is the amount which, as the case may be, would be—
- (a) the amount of the profits and gains chargeable under Case III of Schedule D as profits and gains arising from the company’s loan relationships, or
- (b) the amount of the company’s non-trading deficit on those relationships for that period,
if, in computing that amount, amounts for that period falling within paragraph 6(db) to (dd) above were disregarded.
## Part III — Apportionment for purposes of section 768B
##### 7
- (1) Subject to paragraph 8 below, the apportionment required by section 768B(4)(c) shall be made—
- (a) in the case of the sums mentioned in paragraph 6(a) above, by apportioning to each accounting period the amounts that would fall to be brought into account in that period as such sums, if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (aa) in the case of the charges mentioned in paragraph 6(b) above, by reference to the time when the charge is due to be paid;
- (b) in the case of the excess mentioned in paragraph 6(c) above, or in the case of the non-trading deficit mentioned in paragraph 6(dc) above, by apportioning the whole amount of the excess or, as the case may be, of the deficit to the first part of the accounting period being divided;
- (c) in the case of the amounts mentioned in paragraph 6(d) , (da) and (e) above, by reference to the respective lengths of the parts of the accounting period being divided;
- (d) in the case of any such debit as—
- (i) is mentioned in paragraph 6(db) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . .
- (iii) so falls to be brought into account otherwise than on the assumption, specified in paragraph 2(2) of Schedule 9 to that Act, that the interest to which it relates does not accrue until it is paid , and
- (iv) so falls to be brought into account without any adjustment under paragraph 17 or 18 of that Schedule (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed),
by reference to the time of accrual of the amount to which the debit relates;
- (e) in the case of any such debit as—
- (i) is mentioned in paragraph 6(db) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . . and
- (iii) so falls to be brought into account—
- — on the assumption mentioned in paragraph (d)(iii) above, or
- — with such an adjustment as is mentioned in paragraph (d)(iv) above,
by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (f) in the case of any such debit as is mentioned in paragraph 6(dd) above, by apportioning the whole amount of the debit to the first part of the accounting period being divided.
- (g) in the case of any such credit or debit as is mentioned in paragraph 6(de), by apportioning to each accounting period the credits or debits that would fall to be brought into account in that period if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (h) in the case of any such loss as is mentioned in paragraph 6(df) above, by apportioning the whole amount of the loss to the first part of the accounting period being divided.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 8
If it appears that any method of apportionment given by paragraph 7 above would work unreasonably or unjustly for any case for which it is given, such other method shall be used for that case as appears just and reasonable.
## Part IV — Excess overdue interest
### Introductory
##### 9
- (1) This paragraph has effect in a case to which section 768B applies for determining the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for—
- (a) the accounting period beginning immediately after the change in the ownership of the company; and
- (b) any subsequent accounting period.
- (2) The debits so brought into account shall not include the debits falling within paragraph 11 below to the extent (if at all) that the aggregate of—
- (a) the amount of those debits, and
- (b) the amount of any debits falling within that paragraph which have been brought into account for the purposes of that Chapter for any previous accounting period ending after the change in the ownership,
exceeds the profits for the accounting period ending with the change in the ownership.
- (3) The reference in sub-paragraph (2) above to the profits is a reference to profits after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given against the profits, including deductions and reliefs which under any provision are treated as reducing them for those purposes.
### The rules
##### 10
- (1) This paragraph has effect in a case to which section 768C applies for determining the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for—
- (a) the accounting period beginning immediately after the change in the ownership of the relevant company; and
- (b) any subsequent accounting period.
- (2) The debits so brought into account for any such accounting period shall not include the debits falling within paragraph 11 below to the extent (if at all) that the amount of those debits exceeds the modified total profits for the accounting period.
- (3) The reference in sub-paragraph (2) above to the modified total profits for an accounting period is a reference to the total profits for that period—
- (a) reduced, if that period is the period in which the relevant gain accrues, by an amount equal to the amount of the total profits for that period which represents the relevant gain; and
- (b) after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given against the profits, including deductions and reliefs which under any provision are treated as reducing them for those purposes, other than any reduction by virtue of paragraph 1(2) of Schedule 8 to the Finance Act 1996.
- (4) Where by virtue of sub-paragraph (2) above a debit is to any extent not brought into account for an accounting period, that debit may (to that extent) be brought into account for the next accounting period, but this is subject to the application of sub-paragraphs (1) to (3) above to that next accounting period.
##### 11
- (1) A debit falls within this paragraph if it is a non-trading debit which—
- (a) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting;
- (b) so falls to be brought into account—
- (i) with an adjustment under paragraph 17 or 18 of Schedule 9 to that Act (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed); or
- (ii) on the assumption, specified in sub-paragraph (2) of paragraph 2 of that Schedule, that the interest to which it relates does not accrue until it is paid; and
- (c) apart from paragraphs 2(2), 17 and 18 of that Schedule, would have fallen to be brought into account for those purposes for an accounting period ending before or with the change in the ownership of the company or, as the case may be, the relevant company.
- (2) The debits that fall within this paragraph also include—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any non-trading debit given by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company or, as the case may be, the relevant company.
- (3) The debits that fall within this paragraph also include any non-trading debit which—
- (a) is not such a debit as is mentioned in sub-paragraph (1) or (2) above;
- (b) is a debit in respect of a debtor relationship of the company or, as the case may be, the relevant company;
- (c) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting; and
- (d) relates to an amount that accrued before the change in the ownership of that company.
- (4) In this paragraph “*post-change accounting period*” means the accounting period beginning immediately after the change in the ownership of the company or, as the case may be, the relevant company.
##### 12
Expressions used both in this Part of this Schedule and in Chapter II of Part IV of the Finance Act 1996 have the same meanings in this Part of this Schedule as in that Chapter.
## Part IV — Disallowed debits
##### 9A
- (1) This paragraph has effect in any case to which section 768B applies where the non-trading deficit mentioned in paragraph 6(dc) above is apportioned by paragraph 7(b) above to the first part of the accounting period being divided.
- (2) In any such case, none of that non-trading deficit shall be carried forward to—
- (a) the accounting period beginning immediately after the change in the ownership of the company, or
- (b) any subsequent accounting period.
##### 10A
- (1) This paragraph has effect in any case to which section 768C applies where the non-trading deficit mentioned in paragraph 13(1)(ec) below is apportioned by paragraph 16(1)(b) below to the first part of the accounting period being divided.
- (2) In any such case, none of that non-trading deficit shall be carried forward to—
- (a) the accounting period beginning immediately after the change in the ownership of the company, or
- (b) any subsequent accounting period.
## Part V — Amounts in issue for purposes of section 768C
##### 13
- (1) The amounts in issue referred to in section 768C(3)(c) are—
- (a) the amount which would in accordance with the relevant provisions of the 1992 Act (and apart from section 768C) be included in respect of chargeable gains in the total profits for the accounting period being divided;
- (b) the amount of any expenses of management referable to the accounting period (within the meaning of section 75) being divided except any such expenses as would (apart from section 768C) be deductible in computing total profits otherwise than under section 75;
- (c) the amount of any charges which are paid in that accounting period wholly and exclusively for the purposes of the company’s business;
- (d) the amount of any excess carried forward under section 75(9) to the accounting period being divided;
- (e) the amount of any allowances falling to be made for that accounting period by virtue of section 253 of the Capital Allowances Act which would (apart from section 768C) be added to the expenses of management for that accounting period by virtue of section 75(7);
- (ea) the amount (if any) of the adjusted Case III profits and gains or non-trading deficit of the company for that accounting period (other than one within paragraph (ec) below);
- (eb) the amount of any non-trading debit (other than one within paragraph . . . (ed) below) that falls to be brought into account for that accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of any debtor relationship of the company;
- (ec) the amount of any non-trading deficit carried forward to that accounting period under section 83(3A) of the Finance Act 1996 (carried forward deficit not set off against profits);
- (ed) the amount of any non-trading debit given for that accounting period by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company;
- (ee) the amount of any non-trading credits or debits in respect of intangible fixed assets that fall to be brought into account for that period under paragraph 34 of Schedule 29 to the Finance Act 2002;
- (ef) the amount of any non-trading loss on intangible fixed assets carried forward to that accounting period under paragraph 35(3) of that Schedule; and
- (f) any other amounts by reference to which the profits or losses of the accounting period being divided would (apart from section 768C) be calculated.
- (2) In sub-paragraph (1)(a) above “*the relevant provisions of the 1992 Act*” means section 8(1) of and Schedule 7A to that Act.
##### 13A
Paragraph 6A above shall apply for the purposes of paragraph 13(1)(ea) above as it applies for the purposes of paragraph 6(da) above.
## Part VI — Apportionment for purposes of section 768C
##### 14
The apportionment required by section 768C(3)(c) shall be made as follows.
##### 15
In the case of the amount mentioned in paragraph 13(1)(a) above—
- (a) if it does not exceed the amount of the relevant gain, the whole of it shall be apportioned to the second part of the accounting period being divided;
- (b) if it exceeds the amount of the relevant gain, the excess shall be apportioned to the first part of the accounting period being divided and the relevant gain shall be apportioned to the second part.
##### 16
- (1) Subject to paragraph 17 below, the apportionment shall be made—
- (a) in the case of the sums mentioned in paragraph 13(1)(b) above, by apportioning to each accounting period the amounts that would fall to be brought into account in that period as such sums, if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (aa) in the case of the charges mentioned in paragraph 13(1)(c) above, by reference to the time when the charge is due to be paid;
- (b) in the case of the excess mentioned in paragraph 13(1)(d) above, or in the case of the non-trading deficit mentioned in paragraph 13(1)(ec) above, by apportioning the whole amount of the excess or, as the case may be, of the deficit to the first part of the accounting period being divided;
- (c) in the case of the amounts mentioned in paragraph 13(1)(e) , (ea) and (f) above, by reference to the respective lengths of the parts of the accounting period being divided;
- (d) in the case of any such debit as—
- (i) is mentioned in paragraph 13(1)(eb) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . .
- (iii) so falls to be brought into account otherwise than on the assumption, specified in paragraph 2(2) of Schedule 9 to that Act, that the interest to which it relates does not accrue until it is paid , and
- (iv) so falls to be brought into account without any adjustment under paragraph 17 or 18 of that Schedule (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed),
by reference to the time of accrual of the amount to which the debit relates;
- (e) in the case of any such debit as—
- (i) is mentioned in paragraph 13(1)(eb) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . . and
- (iii) so falls to brought into account—
- — on the assumption mentioned in paragraph (d)(iii) above, or
- — with such an adjustment as is mentioned in paragraph (d)(iv) above,
by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (f) in the case of any such debit as is mentioned in paragraph 13(1)(ed) above, by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (g) in the case of any such credit or debit as is mentioned in paragraph 13(ee), by apportioning to each accounting period the credits or debits that would fall to be brought into account in that period if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (h) in the case of any such loss as is mentioned in paragraph 13(ef), by apportioning the whole amount of the loss to the first part of the accounting period being divided.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 17
If it appears that any method of apportionment given by paragraph 16 above would work unreasonably or unjustly for any case for which it is given, such other method shall be used for that case as appears just and reasonable.
## SCHEDULE 28AA
### Basic rule on transfer pricing etc.
##### 1
- (1) This Schedule applies where—
- (a) provision (“the actual provision") has been made or imposed as between any two persons (“the affected persons") by means of a transaction or series of transactions, and
- (b) at the time of the making or imposition of the actual provision—
- (i) one of the affected persons was directly or indirectly participating in the management, control or capital of the other; or
- (ii) the same person or persons was or were directly or indirectly participating in the management, control or capital of each of the affected persons.
- (2) Subject to paragraphs 5A, 5B, 8, 10 and 13 below, if the actual provision—
- (a) differs from the provision (“the arm"s length provision’) which would have been made as between independent enterprises, and
- (b) confers a potential advantage in relation to United Kingdom taxation on one of the affected persons, or (whether or not the same advantage) on each of them,
the profits and losses of the potentially advantaged person or, as the case may be, of each of the potentially advantaged persons shall be computed for tax purposes as if the arm’s length provision had been made or imposed instead of the actual provision.
- (3) For the purposes of this Schedule the cases in which provision made or imposed as between any two persons is to be taken to differ from the provision that would have been made as between independent enterprises shall include the case in which provision is made or imposed as between any two persons but no provision would have been made as between independent enterprises; and references in this Schedule to the arm’s length provision shall be construed accordingly.
### Provision in relation to securities: determination of arm’s length provision
##### 1A
- (1) This paragraph applies where—
- (a) both of the affected persons are companies, and
- (b) the actual provision is provision in relation to a security issued by one of those companies (“the issuing company”).
- (2) Paragraph 1(2)(a) above shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the loan would have been made at all in the absence of the special relationship (see sub-paragraph (6) below),
- (b) the amount which the loan would have been in the absence of the special relationship, and
- (c) the rate of interest and other terms which would have been agreed in the absence of the special relationship,
but this is subject to the following provisions of this paragraph.
- (3) In a case where—
- (a) a company makes a loan to another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to make loans generally,
the fact that it is not part of the first company’s business to make loans generally shall be disregarded in construing sub-paragraph (2) above.
- (4) Paragraph 1(2)(a) above shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in sub-paragraph (5) below, of (or of any inference capable of being drawn from) any guarantee provided by a company with which the issuing company has a participatory relationship (see sub-paragraphs (7) and (8) below).
- (5) The matters are—
- (a) the appropriate level or extent of the issuing company’s overall indebtedness;
- (b) whether it might be expected that the issuing company and a particular person would have become parties to a transaction involving the issue of a security by the issuing company or the making of a loan, or a loan of a particular amount, to the issuing company;
- (c) the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
- (6) In this paragraph “*special relationship*” means any relationship by virtue of which the condition in paragraph 1(1)(b) above is satisfied in the case of the affected persons.
- (7) In this paragraph any reference to a guarantee includes a reference to a surety and to any other relationship, arrangements, connection or understanding (whether formal or informal) such that the person making the loan to the issuing company has a reasonable expectation that in the event of a default by the issuing company he will be paid by, or out of the assets of, one or more companies.
- (8) For the purposes of this paragraph, the cases where one company has a “*participatory relationship*”with another are those where—
- (a) one of them is directly or indirectly participating in the management, control or capital of the other; or
- (b) the same person or persons is or are directly or indirectly participating in the management, control or capital of each of them.
- (9) In this paragraph “*security*” includes securities not creating or evidencing a charge on assets.
- (10) For the purposes of this paragraph—
- (a) interest payable by a company on money advanced without the issue of a security for the advance, or
- (b) other consideration given by a company for the use of money so advanced,
shall be treated as if payable or given in respect of a security issued for the advance by the company, and references in this paragraph to a security shall be construed accordingly.
### Guarantees etc
##### 1B
- (1) This paragraph applies where the actual provision is made or imposed by means of a series of transactions which include—
- (a) the issuing of a security by a company which is one of the affected persons (“the issuing company”), and
- (b) the provision of a guarantee by a company which is the other of those persons.
- (2) Paragraph 1(2)(a) above shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the guarantee would have been provided at all in the absence of the special relationship,
- (b) the amount that would have been guaranteed in the absence of the special relationship, and
- (c) the consideration for the guarantee and other terms which would have been agreed in the absence of the special relationship,
but this is subject to the following provisions of this paragraph.
- (3) In a case where—
- (a) a company provides a guarantee in respect of another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to provide guarantees generally,
the fact that it is not part of the first company’s business to provide guarantees generally shall be disregarded in construing sub-paragraph (2) above.
- (4) Paragraph 1(2)(a) above shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in sub-paragraph (5) below, of (or of any inference capable of being drawn from) any guarantee provided by a company with which the issuing company has a participatory relationship.
- (5) The matters are—
- (a) the appropriate level or extent of the issuing company’s overall indebtedness;
- (b) whether it might be expected that the issuing company and a particular person would have become parties to a transaction involving the issue of a security by the issuing company or the making of a loan, or a loan of a particular amount, to the issuing company;
- (c) the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
- (6) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (6) (meaning of special relationship);
- (b) sub-paragraph (7) (construction of references to a guarantee);
- (c) sub-paragraph (8) (meaning of participatory relationship);
- (d) sub-paragraph (9) (meaning of security);
- (e) sub-paragraph (10) (extended meaning of security).
### Principles for construing rules in accordance with OECD principles
##### 2
- (1) This Schedule shall be construed (subject to paragraphs 8 to 11 below) in such manner as best secures consistency between—
- (a) the effect given to paragraph 1 above; and
- (b) the effect which, in accordance with the transfer pricing guidelines, is to be given, in cases where double taxation arrangements incorporate the whole or any part of the OECD model, to so much of the arrangements as does so.
- (2) In this paragraph “*the OECD model*” means—
- (a) the rules which, at the passing of this Act, were contained in Article 9 of the Model Tax Convention on Income and on Capital published by the Organisation for Economic Co-operation and Development; or
- (b) any rules in the same or equivalent terms.
- (3) In this paragraph “*the transfer pricing guidelines*” means—
- (a) all the documents published by the Organisation for Economic Co-operation and Development, at any time before 1st May 1998, as part of their Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations; and
- (b) such documents published by that Organisation on or after that date as may for the purposes of this Schedule be designated, by an order made by the Treasury, as comprised in the transfer pricing guidelines.
### Meaning of “transaction" and “series of transactions"
##### 3
- (1) In this Schedule “*transaction*” includes arrangements, understandings and mutual practices (whether or not they are, or are intended to be, legally enforceable).
- (2) References in this Schedule to a series of transactions include references to a number of transactions each entered into (whether or not one after the other) in pursuance of, or in relation to, the same arrangement.
- (3) A series of transactions shall not be prevented by reason only of one or more of the matters mentioned in sub-paragraph (4) below from being regarded for the purposes of this Schedule as a series of transactions by means of which provision has been made or imposed as between any two persons.
- (4) Those matters are—
- (a) that there is no transaction in the series to which both those persons are parties;
- (b) that the parties to any arrangement in pursuance of which the transactions in the series are entered into do not include one or both of those persons; and
- (c) that there is one or more transactions in the series to which neither of those persons is a party.
- (5) In this paragraph, “*arrangement*” means any scheme or arrangement of any kind (whether or not it is, or is intended to be, legally enforceable).
### Participation in the management, control or capital of a person
##### 4
- (1) For the purposes of this Schedule a person is directly participating in the management, control or capital of another person at a particular time if, and only if, that other person is at that time—
- (a) a body corporate or a partnership; and
- (b) controlled by the first person.
- (2) For the purposes of this Schedule a person (“*the potential participant*”) is indirectly participating in the management, control or capital of another person at a particular time if, and (subject to paragraphs 4A and 6(4C) below) only if—
- (a) he would be taken to be directly so participating at that time if the rights and powers attributed to him included all the rights and powers mentioned in sub-paragraph (3) below that are not already attributed to him for the purposes of sub-paragraph (1) above; or
- (b) he is, at that time, one of a number of major participants in that other person’s enterprise.
- (3) The rights and powers referred to in sub-paragraph (2)(a) above are—
- (a) rights and powers which the potential participant is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of persons other than the potential participant to the extent that they are rights or powers falling within sub-paragraph (4) below;
- (c) rights and powers of any person with whom the potential participant is connected; and
- (d) rights and powers which for the purposes of sub-paragraph (2)(a) above would be attributed to a person with whom the potential participant is connected if that connected person were himself the potential participant.
- (4) Rights and powers fall within this sub-paragraph to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the potential participant;
- (ii) under the direction of the potential participant; or
- (iii) for the benefit of the potential participant;
and
- (c) an amount equal to so much of the gross amount of the manufactured interest as is not otherwise deductible shall be allowable as a deduction against the total income or, as the case may be, total profits of the interest manufacturer , but only to the extent that—
- (i) it would be so allowable if it were interest, or
- (ii) so far as not falling within sub-paragraph (i) above, it falls within sub-paragraph (2A) below.
- (2A) An amount of manufactured interest falls within this sub-paragraph if and to the extent that the interest manufacturer—
- (a) receives the periodical payment of interest on the securities which is represented by the manufactured interest, or receives a payment which is representative of that periodical payment of interest, and is chargeable to income tax (and see section 714(5) for the amount so chargeable in a case where section 714(4) applies) on the periodical payment or representative payment so received;
- (b) is, by virtue of section 714(2), chargeable to income tax on income in respect of transfers of securities which are subject to the arrangement giving rise to the payment of manufactured interest; or
- (c) is treated under section 730A (repos) as receiving a payment of interest in respect of the securities and is chargeable to income tax on that payment.
- (2B) Where an amount is allowable under sub-paragraph (2)(c) above by reference to the whole or any part of—
- (a) a periodical payment of interest, or a payment representative of such a payment, falling within paragraph (a) of sub-paragraph (2A) above,
- (b) a sum falling within paragraph (b) of that sub-paragraph, or
- (c) a payment of interest which a person is treated as receiving, as mentioned in paragraph (c) of that sub-paragraph,
(the “*utilised portion*” of the interest, sum or other payment) no other amount shall be allowable under sub-paragraph (2)(c) above by reference to all or any of the utilised portion of the interest, sum or other payment.
- (3) For the relevant purposes of the Tax Acts, in their application in relation to the recipient and any persons claiming title through or under him—
- (a) the manufactured interest shall be treated as if it were a periodical payment of interest on the securities in question; and
- (b) the gross amount of that deemed periodical payment of interest shall be taken to be equal to the gross amount of the interest of which the manufactured interest is representative.
- (4) Sub-paragraph (2) above shall not require any deduction of tax to be made by the interest manufacturer if—
- (a) the interest manufacturer is not resident in the United Kingdom, and
- (b) the manufactured interest is paid otherwise than in the course of a trade carried on by the interest manufacturer in the United Kingdom through a branch or agency.
- (5) Where, in a case falling within sub-paragraph (4)(a) and (b) above, the recipient—
- (a) is resident in the United Kingdom, or
- (b) (without being so resident) receives the manufactured interest for the purposes of a trade carried on by him in the United Kingdom through a branch or agency,
the recipient shall be liable to account for income tax in respect of the manufactured interest.
- (6) The amount of the income tax for which the recipient is liable to account under sub-paragraph (5) above is the amount equal to the income tax which the interest manufacturer, had he been resident in the United Kingdom, would have been required, in respect of the manufactured interest, to account for and pay by virtue of sub-paragraph (2) above.
- (7) For the purposes of sub-paragraph (2) above, if the interest manufacturer is a company which—
- (a) is not resident in the United Kingdom, but
- (b) carries on a trade in the United Kingdom through a branch or agency,
Schedule 16 shall have effect in relation to the manufactured interest as it has effect in the case of a company which is resident in the United Kingdom but as if, in paragraph 7, the words “section 11(3)” were substituted for the words “section 7(2)”.
- (8) Where sub-paragraph (2) above has effect in the case of any manufactured interest so as to require any amount to be deducted by way of tax from the gross amount of the manufactured interest, the interest manufacturer shall, on paying the manufactured interest, provide the recipient with a statement in writing setting out—
- (a) the gross amount of the manufactured interest;
- (b) the amount deducted by way of tax by the interest manufacturer;
- (c) the amount actually paid by the interest manufacturer; and
- (d) the date of the payment by the interest manufacturer.
- (9) The duty imposed by sub-paragraph (8) above shall be enforceable at the suit or instance of the recipient.
- (10) The references in this paragraph to an amount being deductible are references to its being either—
- (a) deductible in computing the amount of any of the interest manufacturer’s profits or gains for the purposes of income tax or corporation tax; or
- (b) deductible for those purposes from the total income or, as the case may be, total profits of the interest manufacturer.
- (11) For the purposes of this paragraph “*the relevant purposes of the Tax Acts*” means all the purposes of those Acts except the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).
- (12) Without prejudice to the generality of section 80(5) of the Finance Act 1996 (matters to be brought into account only under that Chapter), this paragraph does not have effect for determining how any manufactured interest falls to be treated for any purpose in relation to a company in relation to which that interest falls to be treated in accordance with section 97 of that Act.
- (13) For the purposes of this paragraph references to the gross amount of any interest or payment are references to the amount of the interest or payment before the making of any deduction of income tax that is required to be deducted from it on its being paid or made.
##### 3A
- (1) Where any manufactured interest is representative of interest on securities to which this paragraph applies—
- (a) paragraph 3(2) above shall not require any deduction of tax to be made on the payment of that manufactured interest; and
- (b) without prejudice to any other liability of his to income tax in respect of the manufactured interest, the recipient shall not by virtue of paragraph 3(5) above be liable to account for any income tax in respect of that manufactured interest.
- (2) This paragraph applies to—
- (a) gilt-edged securities (within the meaning of section 50); and
- (b) securities not falling within paragraph (a) above on which the interest is payable without deduction of tax.
### Deductibility of manufactured payment in the case of the manufacturer
##### 2A
- (1) Where, in the case of a manufactured dividend, the dividend manufacturer is resident in the United Kingdom but is not a company, an amount (“*the relevant amount*”) equal to the lesser of—
- (a) the amount of the manufactured dividend paid (so far as it is not otherwise deductible), and
- (b) the amount of the dividend of which the manufactured dividend is representative,
shall be allowable as a deduction for the purposes of income tax only under sub-paragraph (1ZA) or (1A) below.
- (1ZA) The relevant amount shall be allowable under this sub-paragraph as a deduction for the purposes of income tax to the extent that the dividend manufacturer—
- (a) receives the dividend on the equities which is represented by the manufactured dividend or receives a payment which is representative of that dividend, and
- (b) is chargeable to income tax on the dividend or other payment so received;
and that deduction shall be made against the amount of the dividend or other payment so received on which the dividend manufacturer is chargeable to income tax.
- (1ZB) Sub-paragraph (1ZA) above shall apply only if the amount of the dividend or other payment so received is received by the dividend manufacturer in—
- (a) the year of assessment in which he pays the manufactured dividend, or
- (b) the year of assessment immediately before, or immediately after, that year.
- (1A) The relevant amount shall be allowable under this sub-paragraph as a deduction for the purposes of income tax against the total income of the dividend manufacturer to the extent that—
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (5) In sub-paragraphs (3)(b) to (d) and (4) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (6) In paragraph (d) of sub-paragraph (3) above, the reference to rights and powers which would be attributed to a connected person if he were the potential participant includes a reference to rights and powers which, by applying that paragraph wherever one person is connected with another, would be so attributed to him through a number of persons each of whom is connected with at least one of the others.
- (7) For the purposes of this paragraph a person (“*the potential major participant*”) is a major participant in another person’s enterprise at a particular time if at that time—
- (a) that other person (“*the subordinate*”) is a body corporate or partnership; and
- (b) the 40 per cent. test is satisfied in the case of each of two persons who, taken together, control the subordinate and of whom one is the potential major participant.
- (8) For the purposes of this paragraph the 40 per cent. test is satisfied in the case of each of two persons wherever each of them has interests, rights and powers representing at least 40 per cent. of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the subordinate.
- (9) For the purposes of this paragraph—
- (a) the question whether a person is controlled by any two or more persons taken together, and
- (b) any question whether the 40 per cent. test is satisfied in the case of a person who is one of two persons,
shall be determined after attributing to each of the persons all the rights and powers attributed to a potential participant for the purposes of sub-paragraph (2)(a) above.
- (10) References in this paragraph—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
- (11) For the purposes of this paragraph two persons are connected with each other if—
- (a) one of them is an individual and the other is his spouse or civil partner, a relative of his or of his spouse or civil partner, or the spouse or civil partner of such a relative; or
- (b) one of them is a trustee of a settlement and the other is—
- (i) a person who in relation to that settlement is a settlor; or
- (ii) a person who is connected with a person falling within sub-paragraph (i) above.
- (12) In sub-paragraph (11) above—
- “*relative*” means brother, sister, ancestor or lineal descendant; and
- “*settlement*” and “*settlor*” have the same meanings as in section 620 of ITTOIA 2005.
### Persons acting together in relation to financing arrangements
##### 4A
- (1) A person (“P”) shall be treated for the purposes of paragraph 1(1)(b)(i) above (but subject to sub-paragraph (7) below) as indirectly participating in the management, control or capital of another (“A”) at the time of the making or imposition of the actual provision if—
- (a) the actual provision relates, to any extent, to financing arrangements for A;
- (b) A is a body corporate or partnership;
- (c) P and other persons acted together in relation to the financing arrangements; and
- (d) P would be taken to have control of A if, at any relevant time, there were attributed to P the rights and powers of each of the other persons mentioned in paragraph (c) above.
- (2) A person (“Q”) shall be treated for the purposes of paragraph 1(1)(b)(ii) above (but subject to sub-paragraph (7) below) as indirectly participating in the management, control or capital of each of the affected persons at the time of the making or imposition of the actual provision if—
- (a) the actual provision relates, to any extent, to financing arrangements for one of the affected persons (“B”);
- (b) B is a body corporate or partnership;
- (c) Q and other persons acted together in relation to the financing arrangements; and
- (d) Q would be taken to have control of both B and the other affected person if, at any relevant time, there were attributed to Q the rights and powers of each of the other persons mentioned in paragraph (c) above.
- (3) It is immaterial for the purposes of sub-paragraph (1)(c) or (2)(c) above whether P or Q and the other persons acting together in relation to the financing arrangements did so at the time of the making or imposition of the actual provision or at some earlier time.
- (4) In sub-paragraph (1)(d) or (2)(d) “*relevant time*” means—
- (a) a time when P or Q and the other persons were acting together in relation to the financing arrangements; or
- (b) a time in the period of six months beginning with the day on which they ceased so to act.
- (5) In determining for the purposes of sub-paragraph (1)(d) or (2)(d) whether P or Q would be taken to have control of another person, the rights and powers of any person (and not just P or Q) shall be taken to include those that would be attributed to that person in determining under paragraph 4 above whether he is indirectly participating in the management, control or capital of the other person.
- (6) In this paragraph “*financing arrangements*” means arrangements made for providing or guaranteeing, or otherwise in connection with, any debt, capital or other form of finance.
- (7) Where the condition in paragraph 1(1)(b) above would not be satisfied but for this paragraph, paragraph 1(2) above applies only to the extent that the actual provision relates to the financing arrangements in question.
### Financing arrangements: anticipatory provision
##### 4B
- (1) To the extent that it applies to provision relating to financing arrangements, this Schedule has effect as if in paragraph 1(1)(b) above the words “or within the period of six months beginning with the day on which the actual provision was made or imposed” were inserted immediately before sub-paragraph (i).
- (2) In this paragraph “*financing arrangements*” has the same meaning as in paragraph 4A above.
### Advantage in relation to United Kingdom taxation
##### 5
- (1) For the purposes of this Schedule . . . the actual provision confers a potential advantage on a person in relation to United Kingdom taxation wherever, disregarding this Schedule, the effect of making or imposing the actual provision, instead of the arm’s length provision, would be one or both of the following, that is to say—
- (a) that a smaller amount (which may be nil) would be taken for tax purposes to be the amount of that person’s profits for any chargeable period; or
- (b) that a larger amount (or, if there would not otherwise have been losses, any amount of more than nil) would be taken for tax purposes to be the amount for any chargeable period of any losses of that person.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In determining for the purposes of sub-paragraph (1) above the amount that would be taken for tax purposes to be the amount of the profits or losses for a year of assessment in the case of a person who is not resident in the United Kingdom, there shall be left out of account any income of that person which is—
- (a) disregarded income within the meaning given by section 813 of ITA 2007 (limits on liability to income tax of non-UK residents), or
- (b) disregarded company income within the meaning given by section 816 of that Act.
### Exemption for dormant companies
##### 5A
- (1) Paragraph 1(2) above does not apply in computing for any chargeable period the profits and losses of a potentially advantaged person if that person is a company which satisfies the condition in sub-paragraph (2) below.
- (2) The condition is that—
- (a) the company was dormant throughout the pre-qualifying period, and
- (b) apart from paragraph 1 above, the company has continued to be dormant at all times since the end of the pre-qualifying period.
- (3) In sub-paragraph (2) above “*the pre-qualifying period*” means—
- (a) if there is an accounting period of the company that ends on 31st March 2004, that accounting period, or
- (b) if there is no such accounting period, the period of 3 months ending with that date.
- (4) In this paragraph “*dormant*” has the same meaning as in section 249AA of the Companies Act 1985 (see subsections (4) to (7) of that section).
### Exemption for small or medium-sized enterprises
##### 5B
- (1) Paragraph 1(2) above does not apply in computing for any chargeable period the profits and losses of a potentially advantaged person if that person is a small or medium-sized enterprise for that chargeable period (see paragraph 5D below).
- (2) Exceptions to sub-paragraph (1) above are provided—
- (a) in the case of a small enterprise, by sub-paragraphs (3) and (4) below, and
- (b) in the case of a medium-sized enterprise, by sub-paragraphs (3) and (4) and paragraph 5C below.
- (3) The first exception is where the small or medium-sized enterprise elects for sub-paragraph (1) above not to apply in relation to the chargeable period.
Any such election is irrevocable.
- (4) The second exception is where, at the time when the actual provision is or was made or imposed,—
- (a) the other affected person, or
- (b) a party to a relevant transaction (see sub-paragraph (5) below),
is a resident (see sub-paragraph (6) below) of a non-qualifying territory (whether or not that person is also a resident of a qualifying territory).
- (5) For the purposes of sub-paragraph (4) above, a “party to a relevant transaction” is a person who, in a case where the actual provision is or was imposed by means of a series of transactions, is or was a party to one or more of those transactions.
- (6) In this paragraph “*resident*”, in relation to a territory,—
- (a) means a person who, under the laws of that territory, is liable to tax there by reason of his domicile, residence or place of management, but
- (b) does not include a person who is liable to tax in that territory in respect only of income from sources in that territory or capital situated there.
- (7) The definitions of “qualifying territory” and “non-qualifying territory” are in paragraph 5E below.
### Additional provisions for medium-sized enterprises
##### 5C
- (1) Paragraph 5B(1) above does not apply as respects any provision made or imposed if—
- (a) the potentially advantaged person in question is a medium-sized enterprise for the chargeable period in question, and
- (b) the Board gives that person a notice under this sub-paragraph (a “*transfer pricing notice*”) requiring him to compute the profits and losses of that chargeable period in accordance with paragraph 1(2) above in the case of that provision.
- (2) A transfer pricing notice may be given in respect of —
- (a) any provision specified, or of a description specified, in the notice, or
- (b) every provision in relation to which the assumption in paragraph 1(2) above would fall to be made apart from paragraph 5B(1) above.
- (3) A transfer pricing notice may be given only after a notice of enquiry has been given to the potentially advantaged person in respect of his tax return for the chargeable period.
- (4) A transfer pricing notice must identify the officer of the Board to whom any notice of appeal under this paragraph is to be given.
- (5) A person to whom a transfer pricing notice is given may appeal against the decision to give the notice, but only on the grounds that the condition in sub-paragraph (1)(a) above is not satisfied.
- (6) Any such appeal must be brought by giving written notice of appeal to the officer of the Board identified for the purpose in the transfer pricing notice in accordance with sub-paragraph (4) above.
- (7) The notice of appeal must be given before the end of the period of 30 days beginning with the day on which the transfer pricing notice is given.
- (8) A person to whom a transfer pricing notice is given may amend his tax return for the purpose of complying with the notice at any time before the end of the period of 90 days beginning with—
- (a) the day on which the notice is given, or
- (b) if he appeals against the notice, the day on which the appeal is finally determined or abandoned.
- (9) Where a transfer pricing notice is given in the case of any tax return, no closure notice may be given in relation to that tax return until—
- (a) the end of the period of 90 days specified in sub-paragraph (8) above, or
- (b) the earlier amendment of the tax return for the purpose of complying with the notice.
- (10) So far as relating to any provision made or imposed by or in relation to a person—
- (a) who is a medium-sized enterprise for a chargeable period,
- (b) who does not make an election under paragraph 5B(3) above for that period, and
- (c) who is not excepted from paragraph 5B(1) above by virtue of paragraph 5B(4) above in relation to that provision for that period,
the tax return required to be made for that period is a return that disregards paragraph 1(2) above.
- (11) Sub-paragraph (10) above does not prevent a tax return for a period becoming incorrect if, in the case of any provision made or imposed,—
- (a) a transfer pricing notice is given which has effect in relation to that provision for that period,
- (b) the return is not amended in accordance with sub-paragraph (8) above for the purpose of complying with the notice, and
- (c) the return ought to have been so amended.
- (12) In this paragraph—
- “*closure notice*” means a notice under—section 28A or 28B of the Management Act, orparagraph 32 of Schedule 18 to the Finance Act 1998;
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule;
- “*notice of enquiry*” means a notice under—section 9A or 12AC of the Management Act, orparagraph 24 of Schedule 18 to the Finance Act 1998;
- “*tax return*” means—a return under section 8, 8A or 12AA of the Management Act, ora company tax return.
### Meaning of “small enterprise” and “medium-sized enterprise”
##### 5D
- (1) In this Schedule—
- (a) “*small enterprise*” means a small enterprise as defined in the Annex to the Commission Recommendation,
- (b) “*medium-sized enterprise*” means an enterprise which—
- (i) falls within the category of micro, small and medium-sized enterprises as defined in that Annex, and
- (ii) is not a small enterprise as defined in that Annex,
but for these purposes that Annex has effect with the modifications set out in sub-paragraphs (3) to (6) of this paragraph.
- (2) In this paragraph—
- “*the Annex*” means the Annex to the Commission Recommendation;
- “*the Commission Recommendation*” means Commission Recommendation 2003/361/EC of 6th May 2003 (concerning the definition of micro, small and medium-sized enterprises).
- (3) Where any enterprise is in liquidation or administration, the rights of the liquidator or administrator (in that capacity) shall be left out of account when applying Article 3(3)(b) of the Annex in determining for the purposes of this Schedule whether—
- (a) that enterprise, or
- (b) any other enterprise (including that of the liquidator or administrator),
is a small or medium-sized enterprise.
- (4) Article 3 of the Annex shall have effect with the omission of paragraph 5 (declaration in good faith where control cannot be determined etc).
- (5) The first sentence of Article 4(1) of the Annex shall have effect as if the data to apply to—
- (a) the headcount of staff, and
- (b) the financial amounts,
were the data relating to the chargeable period in paragraph 5B(1) above (instead of the period described in that sentence) and calculated on an annual basis.
- (6) Article 4 of the Annex shall have effect with the omission of the following provisions—
- (a) the second sentence of paragraph 1 (data to be taken into account from date of closure of accounts);
- (b) paragraph 2 (no change of status unless ceilings exceeded for two consecutive periods);
- (c) paragraph 3 (bona fide estimate in case of newly established enterprise).
### Meaning of “qualifying territory” and “non-qualifying territory”
##### 5E
- (1) In this Schedule—
- “*non-qualifying territory*” means any territory which is not a qualifying territory;
- “*qualifying territory*” means—the United Kingdom, orany territory as respects which Condition 1 or Condition 2 below is satisfied.
- (2) Condition 1 is that—
- (a) arrangements to which section 788 applies (double taxation relief by agreement with other territories) have been made in relation to the territory;
- (b) those arrangements contain a non-discrimination provision (see sub-paragraphs (4) and (5) below); and
- (c) the territory is not designated as a non-qualifying territory for the purposes of this sub-paragraph in regulations made by the Treasury.
- (3) Condition 2 is that—
- (a) arrangements to which section 788 applies have been made in relation to the territory; and
- (b) the territory is designated as a qualifying territory for the purposes of this sub-paragraph in regulations made by the Treasury.
- (4) For the purposes of this paragraph a “*non-discrimination provision*”, in relation to any arrangement to which section 788 applies, is a provision to the effect that nationals of a state which is a party to those arrangements (a “contracting state”) are not to be subject in any other contracting state to—
- (a) any taxation, or
- (b) any requirement connected with taxation,
which is other or more burdensome than the taxation and connected requirements to which nationals of that other state in the same circumstances (in particular with respect to residence) are or may be subjected.
- (5) In this paragraph, “*national*”, in relation to a contracting state, includes—
- (a) any individual possessing the nationality or citizenship of the contracting state,
- (b) any legal person, partnership or association deriving its status as such from the laws in force in that contracting state.
- (6) A statutory instrument containing regulations under this paragraph shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
### Elimination of double counting
##### 6
- (1) This paragraph applies where—
- (a) only one of the affected persons (“the advantaged person”) is a person on whom a potential advantage in relation to United Kingdom taxation is conferred by the actual provision; and
- (b) the other affected person (“the disadvantaged person”) is within the charge to income tax or corporation tax in respect of profits arising from the relevant activities.
- (2) Subject to sub-paragraphs (3) to (6) and paragraphs6C, 6D, 7 and 8 below, on the making of a claim by the disadvantaged person for the purposes of this paragraph—
- (a) the profits and losses of the disadvantaged person shall be computed for tax purposes as if the arm’s length provision had been made or imposed instead of the actual provision; and
- (b) notwithstanding any limit in the Tax Acts on the time within which any adjustment may be made, all such adjustments shall be made in his case as may be required to give effect to the assumption that the arm’s length provision was made or imposed instead of the actual provision.
- (3) A claim made by the disadvantaged person for the purposes of this paragraph—
- (a) shall not be made unless a computation has been made in the case of the advantaged person on the basis that the arm’s length provision was made or imposed instead of the actual provision; and
- (b) must be consistent with the computation made on that basis in the case of the advantaged person.
- (4) For the purposes of sub-paragraph (3) above a computation shall be taken to have been made in the case of the advantaged person on the basis that the arm’s length provision was made or imposed instead of the actual provision if, and only if—
- (a) the computations made for the purposes of any return by the advantaged person have been made on that basis by virtue of this Schedule; or
- (b) a relevant notice given to the advantaged person takes account of a determination in pursuance of this Schedule of an amount falling to be brought into account for tax purposes on that basis.
- (4A) A claim by the disadvantaged person for the purposes of this paragraph shall not be made where—
- (a) the condition in paragraph 1(1)(b) above would not be satisfied but for paragraph 4A above;
- (b) the actual provision is provision in relation to a security issued by one of the affected persons (“*the issuer*”);
- (c) a guarantee is provided in relation to the security by a person with whom the issuer has a participatory relationship.
In this sub-paragraph “*security*” and “*guarantee*” have the same meaning as in paragraph 1A above.
- (4B) For the purposes of sub-paragraph (4A) above, the cases where one person has a “*participatory relationship*” with another are those where—
- (a) one of them is directly or indirectly participating in the management, control or capital of the other; or
- (b) the same person or persons is or are directly or indirectly participating in the management, control or capital of each of them.
- (4C) Paragraph 4A above applies for the purposes of sub-paragraph (4B) above as it applies for the purposes of paragraph 1(1)(b) above.
- (5) Subject to section 111(3)(b) of the Finance Act 1998 (which provides for the extension of the period for making a claim), a claim for the purposes of this paragraph shall not be made except within one of the following periods—
- (a) in a case where a return has been made by the advantaged person on the basis mentioned in sub-paragraph (3)(a) above, the period of two years beginning with the day of the making of the return; and
- (b) in any case where a relevant notice taking account of such a determination as is mentioned in sub-paragraph (4)(b) above has been given to the advantaged person, the period of two years beginning with the day on which that notice was given.
- (6) Subject to section 111(3)(b) of the Finance Act 1998, where—
- (a) a claim for the purposes of this paragraph is made by the disadvantaged person in relation to a return made on the basis mentioned in sub-paragraph (3)(a) above, and
- (b) a relevant notice taking account of such a determination as is mentioned in sub-paragraph (4)(b) above is subsequently given to the advantaged person,
the disadvantaged person shall be entitled, within the period mentioned in sub-paragraph (5)(b) above, to make any such amendment of the claim as may be appropriate in consequence of the determination contained in that notice.
- (7) In this paragraph—
- “*relevant notice*” means—a closure notice under section 28A(1) or 28B(1) of the Management Act in relation to an enquiry into a return under section 8 or 8A of that Act or into a partnership return;a closure notice under paragraph 32 of Schedule 18 to the Finance Act 1998 in relation to an enquiry into a company tax return;a notice of an assessment under section 29 of the Management Act;a notice of any discovery assessment or discovery determination under paragraph 41 of Schedule 18 to the Finance Act 1998 (including any notice of an assessment by virtue of paragraph 52 of that Schedule);a notice under section 30B(1) of the Management Act amending a partnership return;
- “*return*” means any return required to be made under the Management Act or Schedule 18 to the Finance Act 1998 for income tax or corporation tax purposes or any voluntary amendment of such a return; and
- “*voluntary amendment*”, in relation to a return, means —an amendment under section 9ZA or 12ABA of the Management Act (amendment of personal, trustee or partnership return by taxpayer), oran amendment under Schedule 18 to the Finance Act 1998 other than one made in response to the giving of a relevant notice.
### Application of paragraph 6 in relation to transfers of trading stock etc
##### 6A
- (1) Paragraph 6(2)(a) above does not affect the credits to be brought into account by the disadvantaged person in respect of—
- (a) closing trading stock, or
- (b) closing work in progress in a trade,
for accounting periods ending on or after the last day of the relevant accounting period of the advantaged person.
- (2) For the purposes of sub-paragraph (1) above, the relevant accounting period of the advantaged person is the accounting period in which the actual provision was made or imposed.
- (3) For the purposes of this paragraph “*trading stock*”, in relation to any trade, has the same meaning as it has for the purposes of section 100 above (see subsection (2) of that section) or Chapter 12 of Part 2 of ITTOIA 2005 (see section 174 of that Act) (valuation of trading stock at discontinuance of trade).
### Compensating adjustment where advantaged person is a controlled foreign company
##### 6B
- (1) This paragraph applies in any case where—
- (a) the actual provision is provision made or imposed in relation to a controlled foreign company,
- (b) in determining for the purposes of Chapter 4 of Part 17 the amount of that company’s chargeable profits for an accounting period, its profits and losses fall to be computed in accordance with paragraph 1(2) above in the case of that provision,
- (c) the whole of those chargeable profits fall to be apportioned under section 747(3) to one or more companies resident in the United Kingdom, and
- (d) tax is chargeable by virtue of section 747(4) in respect of the whole of those chargeable profits, as so apportioned to those companies.
- (2) Where this paragraph applies, paragraph 6 above shall have effect as if the controlled foreign company were a person on whom a potential advantage in relation to United Kingdom taxation were conferred by the actual provision.
- (3) In the application of paragraph 6 above by virtue of this paragraph—
- (a) references to the advantaged person in sub-paragraphs (4)(a) and (b), (5)(a) and (b) and (6)(b) of that paragraph include a reference to any of the companies mentioned in sub-paragraph (1)(c) above, and
- (b) references to corporation tax include a reference to tax chargeable by virtue of section 747(4).
- (4) In this paragraph—
- “*controlled foreign company*” has the same meaning as in Chapter 4 of Part 17;
- “*accounting period*”, in relation to a controlled foreign company, has the same meaning as in Chapter 4 of Part 17.
### Claims under paragraph 6 where paragraph 1A applies
##### 6C
- (1) Where paragraph 1A above applies in relation to any provision, this paragraph has effect in relation to that provision.
- (2) A claim under paragraph 6(2) above may be made in accordance with this paragraph.
For the purposes of this Schedule a “paragraph 6C claim” is a claim under paragraph 6(2) above made in accordance with this paragraph.
- (3) A paragraph 6C claim may be made by—
- (a) the disadvantaged person, or
- (b) the advantaged person,
but any such claim made by the advantaged person shall be taken to be made on behalf of the disadvantaged person.
- (4) A paragraph 6C claim may be made before or after a computation falling within paragraph 6(3)(a) above has been made.
- (5) A paragraph 6C claim must be made either—
- (a) at any time before the end of the period mentioned in paragraph 6(5)(a) above, or
- (b) within the period mentioned in paragraph 6(5)(b) above,
but this is subject to section 111(3)(b) of the Finance Act 1998 (extension of period for making a claim).
- (6) A paragraph 6C claim is not a claim within paragraph 57 or 58 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters).
Accordingly, paragraph 59 of that Schedule (application of Schedule 1A to the Management Act) has effect in relation to a paragraph 6C claim.
- (7) Where—
- (a) a paragraph 6C claim is made before a computation falling within paragraph 6(3)(a) above has been made,
- (b) such a computation is subsequently made, and
- (c) the claim is not consistent with the computation,
the affected persons shall be treated as if (instead of the claim actually made) a claim had been made that was consistent with the computation.
- (8) All such adjustments shall be made (whether by discharge or repayment of tax, the making of assessments or otherwise) as are required to give effect to sub-paragraph (7) above.
- (9) Sub-paragraph (8) above has effect notwithstanding any limit on the time within which any adjustment may be made.
- (10) Where—
- (a) a paragraph 6C claim is made,
- (b) a return is subsequently made by the advantaged person on the basis mentioned in paragraph 6(3)(a) above, and
- (c) a relevant notice (within the meaning of paragraph 6 above) taking account of such a determination as is mentioned in paragraph 6(4)(b) above is subsequently given to the advantaged person,
sub-paragraph (11) below applies.
- (11) Where this sub-paragraph applies, any such amendment of the paragraph 6C claim as may be appropriate in consequence of the determination contained in the relevant notice may be made by—
- (a) the disadvantaged person, or
- (b) the advantaged person,
but any such amendment made by the advantaged person shall be taken to be made on behalf of the disadvantaged person.
- (12) Any such amendment must be made within the period mentioned in paragraph 6(5)(b) above.
But that is subject to section 111(3)(b) of the Finance Act 1998 (extension of period for making amendment).
### Compensating adjustment for guarantor company etc where paragraph 1B applies
##### 6D
- (1) This paragraph applies in any case where—
- (a) a company (“the issuing company”) has liabilities under a security issued by the company,
- (b) those liabilities are to any extent the subject of a guarantee provided by a company (“the guarantor company”), and
- (c) in computing the profits and losses of the issuing company for tax purposes, the amounts to be deducted in respect of interest or other amounts payable under the security fall to be reduced (whether or not to nil) under paragraph 1(2) above by virtue of paragraph 1B above.
- (2) On the making of a claim in any such case, the guarantor company shall, to the extent of that reduction, be treated for all purposes of the Taxes Acts as if it (and not the issuing company)—
- (a) had issued the security,
- (b) owed the liabilities under it, and
- (c) had paid any interest or other amounts paid under it by the issuing company,
and in computing the profits and losses of the guarantor company for those purposes amounts shall be brought into account accordingly.
This sub-paragraph is subject to the following provisions of this paragraph.
- (3) Where the issuing company’s liabilities under the security are the subject of two or more guarantees (whether or not provided by the same person) TD must not exceed TR, where—
- TD is the total of the amounts brought into account by the guarantor companies by virtue of sub-paragraph (2) above, and
- TR is the total amount of the reductions that fall within sub-paragraph (1)(c) above.
- (4) In this paragraph “*the loan provision*” means the actual provision made or imposed between—
- (a) the issuing company, and
- (b) another company (“the lending company”),
which is provision in relation to the security.
- (5) Where—
- (a) the guarantor company makes a claim under sub-paragraph (2) above, and
- (b) the lending company makes a claim under paragraph 6 above in respect of the loan provision,
sub-paragraphs (6) and (7) below apply.
- (6) In determining, in a case where this sub-paragraph applies, the arm’s length provision for the purposes of paragraph 6(2)(a) above in relation to the lending company’s claim, additional amounts shall be brought into account as credits corresponding to the debits that fall to be brought into account by virtue of sub-paragraph (2) above in relation to the guarantor company.
- (7) If, in a case where this sub-paragraph applies,—
- (a) the lending company makes its claim under paragraph 6 above before the guarantor company makes its claim under sub-paragraph (2) above, and
- (b) the computation on which the lending company’s claim is based does not comply with sub-paragraph (6) above,
the guarantor company’s claim shall be disallowed.
- (8) A claim under sub-paragraph (2) above may be made by—
- (a) the guarantor company,
- (b) where there are two or more guarantor companies, those companies acting together, or
- (c) the issuing company,
but any claim made by the issuing company shall be taken to be made on behalf of the guarantor company or companies.
- (9) Sub-paragraphs (3) to (6) of paragraph 6 above (claims and time limits) shall apply in relation to a claim under sub-paragraph (2) above made by or on behalf of any person or persons as they apply in relation to a claim under that paragraph made by the disadvantaged person, but taking references in those sub-paragraphs—
- (a) to the advantaged person, as references to the issuing company, and
- (b) to the disadvantaged person, as references to the guarantor company or companies.
- (10) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (7) (construction of references to a guarantee);
- (b) sub-paragraph (9) (meaning of security);
- (c) sub-paragraph (10) (extended meaning of security).
- (11) In this paragraph “*the Taxes Acts*” has the meaning given in section 118(1) of the Management Act.
### Certain interest not to be regarded as chargeable under Case III of Schedule D
##### 6E
Where—
- (a) interest is paid by any person under the actual provision,
- (b) paragraph 1(2) above applies in relation to the actual provision,
- (c) the amount of interest that would have been payable under the arm’s length provision is less than the amount of interest paid under the actual provision (or there would not have been any interest payable),
- (d) the person receiving the interest makes a claim under paragraph 6 above or a paragraph 6C claim,
the interest paid under the actual provision, to the extent that it exceeds the amount of interest that would have been payable under the arm’s length provision, shall not be regarded as chargeable under Case III of Schedule D or Chapter 2 of Part 4 of ITTOIA 2005.
### Adjustment of disadvantaged person’s double taxation relief
##### 7
- (1) Subject to sub-paragraph (4) below, where—
- (a) a claim is made for the purposes of paragraph 6 above, and
- (b) the disadvantaged person is entitled, on that claim, to make a computation, or to have an adjustment made in his case, on the basis that the arm’s length provision was made or imposed instead of the actual provision,
the assumptions specified in sub-paragraph (2) below shall apply, in the disadvantaged person’s case, as respects any credit for foreign tax which the disadvantaged person has been or may be given in pursuance of any double taxation arrangements or under section 790(1).
- (2) Those assumptions are—
- (a) that the foreign tax paid or payable by the disadvantaged person does not include any amount of foreign tax which would not be or have become payable were it to be assumed for the purposes of that tax that the arm’s length provision had been made or imposed instead of the actual provision; and
- (b) that the amount of the relevant profits of the disadvantaged person in respect of which he is given credit for foreign tax does not include the amount (if any) by which his relevant profits are treated as reduced in accordance with paragraph 6 above.
- (3) Sub-paragraph (4) below applies if—
- (a) a claim is made for the purposes of paragraph 6 above;
- (b) the disadvantaged person is entitled, on that claim, to make a computation, or to have an adjustment made in his case, on the basis that the arm’s length provision was made or imposed instead of the actual provision;
- (c) the application of that basis in the computation of the disadvantaged person’s profits or losses for any chargeable period involves a reduction in the amount of any income; and
- (d) that income is also income that falls to be treated as reduced in accordance with section 811(1).
- (4) Where this sub-paragraph applies—
- (a) the reduction mentioned in sub-paragraph (3)(c) above shall be treated as made before any reduction under section 811(1); and
- (b) tax paid, in the place in which any income arises, on so much of that income as is represented by the amount of the reduction mentioned in sub-paragraph (3)(c) above shall be disregarded for the purposes of section 811(1).
- (5) Where, in a case in which a claim has been made for the purposes of paragraph 6 above, any adjustment is required to be made for the purpose of giving effect to any of the preceding provisions of this paragraph—
- (a) it may be made in any case by setting the amount of the adjustment against any relief or repayment to which the disadvantaged person is entitled in pursuance of that claim; and
- (b) nothing in the Tax Acts limiting the time within which any assessment is to be or may be made or amended shall prevent that adjustment from being so made.
- (6) References in this paragraph to relevant profits of the disadvantaged person are references to profits arising to the disadvantaged person from the carrying on of the relevant activities.
### Balancing payments between affected persons: no charge to, or relief from, tax
##### 7A
- (1) This paragraph applies where—
- (a) the circumstances are as described in paragraph 6(1) above,
- (b) one or more payments (the “balancing payments”) are made to the advantaged person by the disadvantaged person, and
- (c) the sole or main reason for making those payments is that paragraph 1(2) above applies.
- (2) To the extent that the balancing payments do not in the aggregate exceed the amount of the available compensating adjustment, those payments—
- (a) shall not be taken into account in computing profits or losses of either of the affected persons for the purposes of income tax or corporation tax, and
- (b) shall not for any of the purposes of the Corporation Tax Acts be regarded as distributions . . . .
- (3) In this paragraph “*the available compensating adjustment*” means the difference between PL1 and PL2 where—
- PL1 is the profits and losses of the disadvantaged person computed for tax purposes on the basis of the actual provision, and
- PL2 is the profits and losses of the disadvantaged person as they fall (or would fall) to be computed for tax purposes on a claim under paragraph 6 above,
### Securities: election to discharge tax liability instead of making balancing payments
##### 7B
- (1) This paragraph applies in any case where—
- (a) both of the affected persons are companies,
- (b) the circumstances are as described in paragraph 6(1) above, and
- (c) the actual provision is provision in relation to a security (the “relevant security”).
- (2) The disadvantaged person may make an election under this paragraph in respect of the relevant security if the condition in sub-paragraph (3) below is satisfied.
- (3) The condition is that—
- (a) the actual provision forms part of a capital market arrangement,
- (b) the capital market arrangement involves the issue of a capital market investment,
- (c) the securities that represent the capital market investment are issued wholly or mainly to independent persons (see sub-paragraph (9) below), and
- (d) the total value of the capital market investments made under the capital market arrangement is at least £50 million.
- (4) An election under this paragraph in respect of the relevant security is an election for the disadvantaged person—
- (a) to make no balancing payment within paragraph 7A above to the advantaged person in respect of the application of paragraph 1(2) above in relation to the relevant security in a chargeable period by virtue of paragraph 1A above, but
- (b) instead, to undertake sole responsibility for discharging the advantaged person’s liability to tax for that period so far as resulting from the application of paragraph 1(2) above in relation to the relevant security by virtue of paragraph 1A above.
- (5) Where an election under this paragraph has effect in relation to an accounting period of the advantaged person, the tax mentioned in sub-paragraph (4)(b) above—
- (a) shall be recoverable from the disadvantaged person as if it were an amount of corporation tax due and owing from that person, and
- (b) shall not be recoverable from the advantaged person.
- (6) Any election under this paragraph in respect of the relevant security—
- (a) must be made by being included (whether by amendment or otherwise) in the disadvantaged person’s company tax return for the chargeable period in which the relevant security is issued,
- (b) has effect in relation to each of the affected persons for the chargeable period in which the relevant security is issued and all subsequent chargeable periods, and
- (c) is irrevocable.
For the purposes of this sub-paragraph a security issued in a chargeable period beginning before 1st April 2004 shall be treated as if it had been issued in the chargeable period beginning on that date.
- (7) An election under this paragraph by a person is of no effect if the Board give that person a notice under this sub-paragraph refusing to accept the election.
- (8) A notice under sub-paragraph (7) above may be given only after a notice of enquiry in respect of the company tax return containing the election has been given to the disadvantaged person.
- (9) In this paragraph—
- “*capital market arrangement*” has the same meaning as in section 72B(1) of the Insolvency Act 1986 (see paragraph 1 of Schedule 2A to that Act);
- “*capital market investment*” has the same meaning as in section 72B(1) of the Insolvency Act 1986 (see paragraphs 2 and 3 of Schedule 2A to that Act);
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule;
- “*independent person*” means a person—who is not the disadvantaged person, andwho does not have a participatory relationship with either of the affected persons.
- (10) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (8) (meaning of participatory relationship);
- (b) sub-paragraph (9) (meaning of security);
- (c) sub-paragraph (10) (extended meaning of security).
### Balancing payments by guarantor to issuer: no charge to, or relief from, tax
##### 7C
- (1) This paragraph applies in any case where—
- (a) the circumstances are as described in paragraph 6D(1) above,
- (b) one or more payments (the “balancing payments”) are made by the guarantor company to the issuing company, and
- (c) the sole or main reasons for making those payments are that paragraph 1(2) above applies by virtue of paragraph 1B above or that paragraph 6D above applies.
- (2) To the extent that the balancing payments made by all the guarantor companies do not in the aggregate exceed the amount TR in paragraph 6D(3) above (total reductions within paragraph 6D(1)(c) above), those payments—
- (a) shall not be taken into account in computing for the purposes of corporation tax the profits or losses of the guarantor company or companies or the issuing company, and
- (b) shall not for any purpose of the Corporation Tax Acts be regarded as distributions . . . .
### Guarantees: election to discharge tax liability instead of making balancing payments
##### 7D
- (1) This paragraph applies where the following conditions are satisfied—
- (a) both of the affected persons are companies,
- (b) the circumstances are as described in paragraph 6(1) above,
- (c) the actual provision falls within paragraph 1B(1) above.
- (2) Sub-paragraphs (2) to (8) of paragraph 7B above apply in a case where this paragraph applies as they apply in a case where that paragraph applies, but with the modifications in sub-paragraphs (3) and (4) below.
- (3) The relevant security is the security in paragraph 1B(1)(a) above.
- (4) In sub-paragraph (4) (nature of the election)—
- (a) for “paragraph 7A above” substitute paragraph 7C below;
- (b) for “paragraph 1A”, in both places, substitute paragraph 1B.
### Foreign exchange gains and losses and financial instruments
##### 8
- (1) Subject to sub-paragraph (3)and sub-paragraph (4) below, this Schedule shall not require the amounts brought into account in any person’s case under—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) in respect of exchange gains or losses from loan relationships (as defined in section 103(1A) and (1B) of that Act), or
- (b) Schedule 26 to the Finance Act 2002 (derivative contracts) in respect of exchange gains and losses (as defined in paragraph 54 of that Schedule),
to be computed in that person’s case on the assumption that the arm’s length provision had been made or imposed instead of the actual provision.
- (3) Sub-paragraph (1) above shall not affect so much of paragraph 11A of Schedule 9 to the Finance Act 1996 (loan relationships: exchange gains or losses where loan not on arm’s length terms) as has effect by reference to whether profits or losses fall to be computed by virtue of this Schedule as if the whole or any part of a loan had not been made.
- (4) Sub-paragraph (1) above shall not affect so much of paragraph 27 of Schedule 26 to the Finance Act 2002 (derivative contracts: exchange gains or losses where derivative contract not on arm’s length terms) as has effect by reference to whether profits or losses fall to be computed by virtue of this Schedule as if a company were not party to a derivative contract or as if the terms of the contract to which it is party were different.
### Special rules for sales etc. of oil
##### 9
- (1) Subject to paragraph 10 below, this paragraph applies to provision made or imposed by or in relation to the terms of a sale of oil if—
- (a) the oil sold is oil which has been, or is to be, extracted under rights exercisable by a company (“the producer") which (although it may be the seller) is not the buyer; and
- (b) at the time of the sale not less than 20 per cent. of the producer’s ordinary share capital is owned directly or indirectly by one or more of the following, that is to say, the buyer and the companies (if any) that are linked to the buyer.
- (2) Where this paragraph applies to provision made or imposed by or in relation to the terms of a sale of oil, this Schedule shall have effect as respects that provision as if the buyer, the seller and (if it is not the seller) the producer were all controlled by the same person at the time of the making or imposition of that provision.
- (3) For the purposes of this paragraph two companies are linked if—
- (a) one is under the control of the other; or
- (b) both are under the control of the same person or persons.
- (4) For the purposes of this paragraph—
- (a) any question whether ordinary share capital is owned directly or indirectly by a company shall be determined as for section 838;
- (b) rights to extract oil shall be taken to be exercisable by a company even if they are exercisable by that company only jointly with one or more other companies; and
- (c) a sale of oil shall be deemed to take place at the time of the completion of the sale or when possession of the oil passes, whichever is the earlier.
- (5) In this paragraph “*oil*” includes any mineral oil or relative hydrocarbon, as well as natural gas.
### Transactions and deemed transactions involving oil
##### 10
This Schedule does not apply in relation to provision made or imposed by means of any transaction or deemed transaction in the case of which the price or consideration is determined in accordance with any of subsections (1) to (4) of section 493 (transactions and deemed transactions involving oil treated as made at market value).
### Special provision for companies carrying on ring fence trades
##### 11
- (1) This paragraph applies where any person (“the taxpayer") carries on as, or as part of, a trade any activities (“the ring fence trade") which, in accordance with section 492(1) above or section 16(1) of ITTOIA 2005 either—
- (a) fall to be treated for any tax purposes as a separate trade, distinct from all other activities carried on by him as part of the trade; or
- (b) would so fall if the taxpayer did carry on any other activities as part of that trade.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to paragraph 10 above and sub-paragraph (4) below, this Schedule shall have effect as respects any provision made or imposed by the taxpayer as between the ring fence trade and any other activities carried on by him as if—
- (a) that trade and those activities were carried on by two different persons;
- (b) that provision were made or imposed as between those two persons by means of a transaction;
- (c) a potential advantage in relation to United Kingdom taxation were conferred by that provision on each of those two persons; and
- (d) those two persons were both controlled by the same person at the time of the making or imposition of that provision; . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This Schedule shall apply in accordance with this paragraph in relation to any provision mentioned in sub-paragraph . . . (3) above only where the effect of its application in relation to that provision is either—
- (a) that a larger amount (including, if there would not otherwise have been profits, an amount of more than nil) is taken for tax purposes to be the amount of the profits of the ring fence trade for any chargeable period; or
- (b) that a smaller amount (including nil) is taken for tax purposes to be the amount for any chargeable period of any losses of that trade.
### Appeals
##### 12
- (1) In so far as the question in dispute on any appeal falling within sub-paragraph (2) below—
- (a) is or involves a determination of whether this Schedule has effect as respects any provision made or imposed as between any two persons, or of how it so has effect, and
- (b) is not a question that would fall to be determined by the Special Commissioners apart from this sub-paragraph,
that question shall be determined by them.
- (2) The appeals falling within this sub-paragraph are—
- (a) any appeal under section 31 of, or Schedule 1A to, the Management Act;
- (b) any appeal under paragraph 34(3) of Schedule 18 to the Finance Act 1998 against an amendment of a company’s return; and
- (c) any appeal under paragraph 48 of that Schedule against a discovery assessment or a discovery determination.
- (3) Sub-paragraph (4) below applies where—
- (a) any such question as is mentioned in sub-paragraph (1) above falls to be determined by the Special Commissioners for the purposes of any proceedings before them; and
- (b) that question relates to any provision made or imposed as between two persons each of whom is within the charge to income tax or corporation tax in respect of profits arising from the relevant activities.
- (4) Where this sub-paragraph applies—
- (a) each of the persons as between whom the actual provision was made or imposed shall be entitled to appear and be heard by the Special Commissioners, or to make representations to them in writing;
- (b) the Special Commissioners shall determine that question separately from any other questions in those proceedings; and
- (c) their determination on that question shall have effect as if made in an appeal to which each of those persons was a party.
- (5) In this paragraph—
- “*discovery assessment*” means a discovery assessment under paragraph 41 of Schedule 18 to the Finance Act 1998 (including one by virtue of paragraph 52 of that Schedule); and
- “*discovery determination*” means a discovery determination under paragraph 41 of that Schedule.
### Saving for the provisions relating to capital allowances and capital gains
##### 13
- (1) Nothing in this Schedule shall be construed as affecting—
- (a) the computation of the amount of any capital allowance or balancing charge made under the Capital Allowances Act; or
- (b) the computation in accordance with the 1992 Act of the amount of any chargeable gain or allowable loss;
and nothing in this Schedule shall require the profits or losses of any person to be computed for tax purposes as if, in his case, instead of income or losses falling to be brought into account in connection with the taxation of income, there were gains or losses falling to be brought into account in accordance with the 1992 Act.
- (2) Nothing in sub-paragraph (1) above applies to paragraph 6 above.
### General interpretation etc.
##### 14
- (1) In this Schedule—
- “*the actual provision*” and “*the affected persons*” shall be construed in accordance with paragraph 1(1) above;
- “*the arm*”s length provision’ shall be construed in accordance with paragraph 1(2) and (3) above;
- “*double taxation arrangements*” means arrangements having effect by virtue of section 788;
- “*foreign tax*” means any tax under the law of a territory outside the United Kingdom or any amount which falls for the purposes of any double taxation arrangements to be treated as if it were such tax;
- “*insurance company*” has the same meaning as in Chapter I of Part XII;
- “*losses*” includes amounts which are not losses but in respect of which relief may be given in accordance with any of the following enactments—section 75(9) (excess of management expenses);section 468L(5) (allowance for interest distributions of a unit trust);Part X (loss relief and group relief);section 83 of and Schedule 8 to the Finance Act 1996 or paragraph 4 of Schedule 11 to that Act (deficits on loan relationships);
- “*medium-sized enterprise*” shall be construed in accordance with paragraph 5D above;
- “*non-qualifying territory*” has the meaning given by paragraph 5E above;
- “*paragraph 6C claim*” has the meaning given by paragraph 6C(2) above;
- “*profits*” includes income;
- “*qualifying territory*” has the meaning given by paragraph 5E above;
- “*the relevant activities*”, in relation to a person who is one of the persons as between whom any provision is made or imposed, means such of his activities as—comprise the activities in the course of which, or with respect to which, that provision is made or imposed; andare not activities carried on either separately from those activities or for the purposes of a different part of that person’s business;
- “*small enterprise*” shall be construed in accordance with paragraph 5D above;
- “*transaction*” and “*series of transactions*” shall be construed in accordance with paragraph 3 above.
- (2) Without prejudice to paragraphs 9(2) and 11(3) above, references in this Schedule to a person controlling a body corporate or a partnership shall be construed in accordance with section 840.
- (3) In determining for the purposes of this Schedule whether a person has an entitlement, in pursuance of any double taxation arrangements or under section 790(1), to be given credit for foreign tax, any requirement that a claim is made before such a credit is given shall be disregarded.
- (4) Any adjustments required to be made by virtue of this Schedule may be made by way of discharge or repayment of tax, by the modification of any assessment or otherwise.
- (5) This Schedule shall have effect as if—
- (a) a unit trust scheme were a company that is a body corporate;
- (b) the rights of the unit holders under such a scheme were shares in the company that the scheme is deemed to be;
- (c) rights and powers of a person in the capacity of a person entitled to act for the purposes of the scheme were rights and powers of the scheme; and
- (d) provision made or imposed as between any person in such a capacity and another person were made or imposed as between the scheme and that other person.
## SCHEDULE 28AB
### Introductory
##### 1
- (1) A scheme or arrangement, other than a scheme or arrangement falling within sub-paragraph (3), is a prescribed scheme or arrangement if one or more of paragraphs 2 to 6 apply to it.
- (2) A scheme or arrangement falling within sub-paragraph (3) is a prescribed scheme or arrangement if one or more of paragraphs 2 to 6 would, on the assumption in sub-paragraph (4), apply to it.
- (3) A scheme or arrangement falls within this sub-paragraph if its main purpose, or one of its main purposes, is to cause an amount of underlying tax allowable in respect of a dividend paid by a body corporate resident in a territory outside the United Kingdom to be taken into account in the case of a person.
- (4) The assumption is that the body corporate is resident in the United Kingdom.
- (5) Nothing in sub-paragraph (4) requires it to be assumed that there is any change in the place or places at which the body corporate carries on its activities.
### Attribution of foreign tax
##### 2
This paragraph applies to a scheme or arrangement if the scheme or arrangement enables a person who is party to, or concerned in, the scheme or arrangement to pay, in respect of a source of income or chargeable gain, an amount of foreign tax all or part of which is properly attributable to another source of income or chargeable gain (or to more than one such other source).
### Effect of paying foreign tax
##### 3
- (1) This paragraph applies to a scheme or arrangement if, under the scheme or arrangement, sub-paragraph (2) is satisfied in relation to a person who has claimed, or is in a position to claim, for a chargeable period an allowance under any arrangements by way of credit for foreign tax (“*the claimant*”).
- (2) This sub-paragraph is satisfied if—
- (a) an amount of foreign tax is paid by the claimant, and
- (b) at the time when the claimant entered into the scheme or arrangement, it could reasonably be expected that the effect of the payment of that amount of foreign tax on the foreign tax total would be to increase it by less than the amount allowable to the claimant as a credit in respect of the payment of that amount of foreign tax.
- (3) The foreign tax total is the amount found by—
- (a) aggregating the amounts of foreign tax paid or payable in respect of the transaction or transactions forming part of the scheme or arrangement by persons party to, or concerned in, the scheme or arrangement, and
- (b) taking into account any reliefs, deductions, reductions or allowances against or in respect of any tax that arise to the persons party to, or concerned in, the scheme or arrangement (including any reliefs, deductions, reductions or allowances arising to any one or more of those persons as a consequence of the payment by the claimant of that amount of foreign tax).
### Effect of claim, election or other arrangement
##### 4
- (1) This paragraph applies to a scheme or arrangement if under the scheme or arrangement—
- (a) a step is taken by a person who is party to, or concerned in, the scheme or arrangement, or
- (b) a step that could have been taken by such a person is not taken,
and that action or that failure to act has the effect of increasing a claim made by a person who is party to, or concerned in, the scheme or arrangement for an allowance by way of credit in accordance with this Part or of giving rise to such a claim.
- (2) The steps mentioned in sub-paragraph (1) are steps that may be made—
- (a) under the law of any territory, or
- (b) under arrangements made in relation to any territory.
- (3) The steps mentioned in sub-paragraph (1) include—
- (a) claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances;
- (b) making elections for tax purposes.
### Effect attributable to scheme or arrangement
##### 5
- (1) This paragraph applies to a scheme or arrangement if, under the scheme or arrangement, sub-paragraph (2) is satisfied in relation to a person who has claimed, or is in a position to claim, for a chargeable period an allowance under any arrangements by way of credit for foreign tax.
- (2) This sub-paragraph is satisfied if amount A is less than amount B.
- (3) Amount A is the amount of United Kingdom taxes payable by the person in respect of income and chargeable gains arising in the chargeable period.
- (4) Amount B is the amount of United Kingdom taxes that would be payable by the person in respect of income and chargeable gains arising in the chargeable period if, in determining that amount, the transactions forming part of the scheme or arrangement were disregarded.
### Tax deductible payments
##### 6
- (1) This paragraph applies to a scheme or arrangement if the scheme or arrangement includes—
- (a) the making by a person (“A”) of a relevant payment or payments, and
- (b) the giving, in respect of that payment or payments, of consideration that satisfies the requirements of sub-paragraph (3).
- (2) A payment made by A is a relevant payment if all or part of it may be brought into account in computing A's income for the purposes of United Kingdom taxes.
- (3) Consideration given in respect of a payment or payments made by A satisfies the requirements of this sub-paragraph if—
- (a) all or part of it consists of a payment or payments made to A or a person connected with A, and
- (b) tax is chargeable in respect of the payment or payments under the law of a territory outside the United Kingdom.
- (4) In this paragraph references to a payment include references to a transfer of money's worth.
- (5) Section 839 applies for the purposes of this paragraph.
## SCHEDULE 28B
### Introductory
##### 1
- (1) This Schedule applies, where any shares in or securities of any company (“the relevant company”) are at any time held by another company (“the trust company”), for determining whether and to what extent those shares or securities (“the relevant holding”) are, for the purposes of section 842AA, to be regarded as at that time comprised in the trust company’s qualifying holdings.
- (2) The relevant holding shall be regarded as comprised in the trust company’s qualifying holdings at any time if—
- (a) all the requirements of the following provisions of this Schedule are satisfied at that time in relation to the relevant company and the relevant holding; and
- (b) the relevant holding consists of shares or securities which were first issued by the relevant company to the trust company and have been held by the trust company ever since.
- (3) Subject to paragraph 6(3) below, where the requirements of paragraph 6 or 7 below would be satisfied as to only part of the money raised by the issue of the relevant holding and that holding is not otherwise capable of being treated as comprising separate holdings, this Schedule shall have effect in relation to that holding as if it were two holdings consisting of—
- (a) a holding from which that part of the money was raised; and
- (b) a holding from which the remainder was raised;
and section 842AA shall have effect as if the value of the holding were to be apportioned accordingly between the two holdings which are deemed to exist in pursuance of this sub-paragraph.
### Requirement that company must be unquoted company
##### 2
- (1) The requirement of this paragraph is that the relevant company (whether or not it is resident in the United Kingdom) must be an unquoted company.
- (2) In this paragraph “*unquoted company*” means a company none of whose shares, stocks, debentures or other securities is marketed to the general public.
- (3) For the purposes of this paragraph shares, stocks, debentures or other securities are marketed to the general public if they are—
- (a) listed on a recognised stock exchange,
- (b) listed on a designated exchange in a country outside the United Kingdom, or
- (c) dealt in on the Unlisted Securities Market or dealt in outside the United Kingdom by such means as may be designated.
- (4) In sub-paragraph (3) above “*designated*” means designated by an order made by the Board for the purposes of that sub-paragraph; and an order made for the purposes of paragraph (b) of that sub-paragraph may designate an exchange by name, or by reference to any class or description of exchanges, including a class or description framed by reference to any authority or approval given in a country outside the United Kingdom.
- (5) Section 828(1) does not apply to an order made for the purposes of sub-paragraph (3) above.
- (6) Where a company any shares in or securities of which are included in the qualifying holdings of the trust company ceases at any time while the trust company is approved as a venture capital trust to be an unquoted company, the requirements of this paragraph shall be deemed, in relation to shares or securities acquired by the trust company before that time, to continue to be satisfied for a period of five years after that time.
### Requirements as to company’s business
##### 3
- (1) The requirements of this paragraph are as follows.
- (2) The relevant company must be one of the following, that is to say—
- (a) a company which exists wholly for the purpose of carrying on one or more qualifying trades or which so exists apart from purposes capable of having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities; or
- (aa) the parent company of a trading group.
- (3) Subject to sub-paragraph (4) below, when the relevant holding was issued and at all times since, a qualifying company (whether or not the same such company at every such time) must have been either—
- (a) carrying on a qualifying trade wholly or mainly in the United Kingdom; or
- (b) preparing to carry on a qualifying trade which at the time when the relevant holding was issued was intended to be carried on wholly or mainly in the United Kingdom by a qualifying company,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The requirements of sub-paragraph (3) above shall not be capable of being satisfied by virtue of paragraph (b) of that sub-paragraph at any time after the end of the period of two years beginning with the issue of the relevant holding unless—
- (a) the intended trade was begun to be carried on by a qualifying company before the end of that period, and
- (b) at all times since the end of that period, a qualifying company (whether or not the same such company at every such time) has been carrying on a qualifying trade wholly or mainly in the United Kingdom.
- (5) The requirements of that sub-paragraph shall also be incapable of being so satisfied at any time after the abandonment, within the period mentioned in sub-paragraph (4) above, of the intention in question.
- (5A) In sub-paragraphs (3) and (4) above, “*qualifying company*” means the relevant company or any relevant qualifying subsidiary of that company.
- (5B) In determining for the purposes of sub-paragraph (4)(a) above when the intended trade was begun to be carried on by a qualifying company which is a relevant qualifying subsidiary of the relevant company there shall be disregarded any carrying on of the trade by it before it became such a subsidiary of the relevant company.
- (6) For the purposes of this paragraph a company is the parent company of a trading group if—
- (a) it has one or more subsidiaries;
- (b) each of its subsidiaries is a qualifying subsidiary of the company; and
- (c) the requirements of sub-paragraph (7) below are fulfilled by what would be the business of the company and its qualifying subsidiaries if all the activities, taken together, of the company and its qualifying subsidiaries were regarded as one business.
- (7) A business fulfils the requirements of this sub-paragraph if neither the business nor a substantial part of it consists in, or in either of, the following, that is to say—
- (a) activities falling within paragraph 4(2)(a) to (f) below but not within sub-paragraph (8) below; and
- (b) activities carried on otherwise than in the course of a trade.
- (8) The activities falling within this sub-paragraph are—
- (a) the receiving of royalties or licence fees in circumstances where the requirement mentioned in paragraph 4(5) below is satisfied in relation to the company receiving them;
- (b) the letting of ships, other than offshore installations or pleasure craft, on charter in circumstances where the requirements mentioned in paragraphs (a) to (d) of paragraph 4(7) below are satisfied in relation to the company so letting them.
- (9) Activities of a company or of any of its qualifying subsidiaries shall be disregarded for the purposes of sub-paragraphs (6) to (8) above to the extent that they consist in—
- (a) the holding of shares in or securities of, or the making of loans to, one or more of the company’s qualifying subsidiaries; or
- (b) the holding and managing of property used by the company or any of its qualifying subsidiaries for the purposes of—
- (i) research and development from which it is intended that a qualifying trade to be carried on by the company or any of its qualifying subsidiaries will be derived; or
- (ii) one or more qualifying trades so carried on.
- (10) Activities of a qualifying subsidiary of a company shall also be disregarded for the purposes of sub-paragraphs (6) to (8) above to the extent that they consist in—
- (a) the making of loans to the company; or
- (b) in the case of a mainly trading subsidiary, activities carried on in pursuance of its insignificant purposes (within the meaning given by sub-paragraph (11) below).
- (11) In sub-paragraph (10) above “*mainly trading subsidiary*” means a qualifying subsidiary which, apart from purposes (“*its insignificant purposes*”) which are capable of having no significant effect (other than in relation to incidental matters) on the extent of its activities, exists wholly for the purpose of carrying on one or more qualifying trades.
### Meaning of “qualifying trade”
##### 4
- (1) For the purposes of this Schedule—
- (a) a trade is a qualifying trade if it is a trade complying with this paragraph; and
- (b) the carrying on of any activities of research and development from which it is intended that there will be derived a trade that—
- (i) will comply with this paragraph, and
- (ii) will be carried on wholly or mainly in the United Kingdom,
shall be treated as the carrying on of a qualifying trade.
- (2) Subject to sub-paragraphs (3) to (9) below, a trade complies with this paragraph if neither that trade nor a substantial part of it consists in one or more of the following activities, that is to say—
- (a) dealing in land, in commodities or futures or in shares, securities or other financial instruments;
- (b) dealing in goods otherwise than in the course of an ordinary trade of wholesale or retail distribution;
- (c) banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities;
- (d) leasing (including letting ships on charter or other assets on hire) or receiving royalties or licence fees;
- (e) providing legal or accountancy services;
- (ea) property development;
- (eb) farming or market gardening;
- (ec) holding, managing or occupying woodlands, any other forestry activities or timber production;
- (ed) operating or managing hotels or comparable establishments, or managing property used as an hotel or comparable establishment;
- (ee) operating or managing nursing homes or residential care homes, or managing property used as a nursing home or residential care home;
- (f) providing services or facilities for any such trade carried on by another person (not being a company of which the company providing the services or facilities is a subsidiary) as—
- (i) consists, to a substantial extent, in activities within any of paragraphs (a) to (ee) above; and
- (ii) is a trade in which a controlling interest is held by a person who also has a controlling interest in the trade carried on by the company providing the services or facilities.
- (3) For the purposes of sub-paragraph (2)(b) above—
- (a) a trade of wholesale distribution is one in which the goods are offered for sale and sold to persons for resale by them, or for processing and resale by them, to members of the general public for their use or consumption;
- (b) a trade of retail distribution is one in which the goods are offered for sale and sold to members of the general public for their use or consumption; and
- (c) a trade is not an ordinary trade of wholesale or retail distribution if—
- (i) it consists, to a substantial extent, in dealing in goods of a kind which are collected or held as an investment, or in that activity and any other activity of a kind falling within sub-paragraph (2)(a) to (f) above, taken together; and
- (ii) a substantial proportion of those goods are held by the company for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value.
- (3A) For the purposes of this Schedule the activities of a person shall not be taken to fall within paragraph (ed) or (ee) of sub-paragraph (2) above except where that person has an estate or interest in, or is in occupation of, the hotels or comparable establishments or, as the case may be, the nursing homes or residential care homes.
- (4) In determining for the purposes of this paragraph whether a trade carried on by any person is an ordinary trade of wholesale or retail distribution, regard shall be had to the extent to which it has the following features, that is to say—
- (a) the goods are bought by that person in quantities larger than those in which he sells them;
- (b) the goods are bought and sold by that person in different markets;
- (c) that person employs staff and incurs expenses in the trade in addition to the cost of the goods and, in the case of a trade carried on by a company, to any remuneration paid to any person connected with it;
- (d) there are purchases or sales from or to persons who are connected with that person;
- (e) purchases are matched with forward sales or vice versa;
- (f) the goods are held by that person for longer than is normal for goods of the kind in question;
- (g) the trade is carried on otherwise than at a place or places commonly used for wholesale or retail trade;
- (h) that person does not take physical possession of the goods;
and for the purposes of this sub-paragraph the features specified in paragraphs (a) to (c) above shall be regarded as indications that the trade is such an ordinary trade and those in paragraphs (d) to (h) above shall be regarded as indications of the contrary.
- (5) A trade shall not be treated as failing to comply with this paragraph by reason only that it consists to a substantial extent in the receiving of royalties or licence fees if the royalties and licence fees (or all but for a part that is not a substantial part in terms of value) are attributable to the exploitation of relevant intangible assets.
- (6) For this purpose an intangible asset is a “*relevant intangible asset*” if the whole or greater part (in terms of value) of it has been created—
- (a) by the company carrying on the trade, or
- (b) by a company which at all times during which it created the intangible asset was—
- (i) the parent company of the company carrying on the trade, or
- (ii) a qualifying subsidiary of that parent company.
- (6A) In the case of a relevant asset that is intellectual property, references in sub-paragraph (6) above to the creation of the asset by a company are to its creation in circumstances in which the right to exploit it vests in the company (whether alone or jointly with others).
- (6B) For the purposes of sub-paragraphs (5) to (6A) above “*intangible asset*” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accounting practice.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) For the purposes of sub-paragraph (6) above
- (a) “*parent company*” means a company that—
- (i) has one or more 51% subsidiaries, but
- (ii) is not itself a 51% subsidiary of another company; and
- (b) paragraph 10 below (meaning of “*qualifying subsidiary*”) shall apply as if the references in that paragraph to the relevant company were references to the parent company referred to in sub-paragraph (6)(b) above.
- (6D) For the purposes of sub-paragraph (6A) above “*intellectual property*” means—
- (a) any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right; and
- (b) any rights under the law of a country or territory outside the United Kingdom which correspond or are similar to those falling within paragraph (a) above.
- (7) A trade shall not be treated as failing to comply with this paragraph by reason only of its consisting in letting ships, other than offshore installations or pleasure craft, on charter if—
- (a) every ship let on charter by the company carrying on the trade is beneficially owned by the company;
- (b) every ship beneficially owned by the company is registered in the United Kingdom;
- (c) the company is solely responsible for arranging the marketing of the services of its ships; and
- (d) the conditions mentioned in sub-paragraph (8) below are satisfied in relation to every letting of a ship on charter by the company;
but where any of the requirements mentioned in paragraphs (a) to (d) above are not satisfied in relation to any lettings, the trade shall not thereby be treated as failing to comply with this paragraph if those lettings and any other activity of a kind falling within sub-paragraph (2)(a) to (f) above do not, when taken together, amount to a substantial part of the trade.
- (8) The conditions are that—
- (a) the letting is for a period not exceeding 12 months and no provision is made at any time (whether in the charterparty or otherwise) for extending it beyond that period otherwise than at the option of the charterer;
- (b) during the period of the letting there is no provision in force (whether by virtue of being contained in the charterparty or otherwise) for the grant of a new letting to end, otherwise than at the option of the charterer, more than 12 months after that provision is made;
- (c) the letting is by way of a bargain made at arm’s length between the company and a person who is not connected with it;
- (d) under the terms of the charter the company is responsible as principal—
- (i) for taking, throughout the period of the charter, management decisions in relation to the ship, other than those of a kind generally regarded by persons engaged in trade of the kind in question as matters of husbandry; and
- (ii) for defraying all expenses in connection with the ship throughout that period, or substantially all such expenses, other than those directly incidental to a particular voyage or to the employment of the ship during that period;
and
- (e) no arrangements exist by virtue of which a person other than the company may be appointed to be responsible for the matters mentioned in paragraph (d) above on behalf of the company;
but this sub-paragraph shall have effect, in relation to any letting between one company and another where one of those companies is the relevant company and the other is a qualifying subsidiary of that company, or where both companies are qualifying subsidiaries of the relevant company, as if paragraph (c) were omitted.
- (9) A trade shall not comply with this paragraph unless it is conducted on a commercial basis and with a view to the realisation of profits.
### Provisions supplemental to paragraph 4
##### 5
- (1) In paragraph 4 above—
- “*film*” means an original master negative of a film, an original master film disc or an original master film tape;
- “*nursing home*” means any establishment which exists wholly or mainly for the provision of nursing care for persons suffering from sickness, injury or infirmity or for women who are pregnant or have given birth to children;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*pleasure craft*” means any ship of a kind primarily used for sport or recreation;
- “*property development*” means the development of land—by a company which has, or at any time has had, an interest in the land, andwith the sole or main object of realising a gain from the disposal of an interest in the land when it is developed;
- “*research and development*” has the meaning given by section 837A;
- “*residential care home*” means any establishment which exists wholly or mainly for the provision of residential accommodation, together with board and personal care, for persons in need of personal care by reason of old age, mental or physical disabilities, past or present dependence on alcohol or drugs or any past illnesses or past or present mental disorders; and
- “*sound recording*”, in relation to a film, means its sound track, original master audio disc or original master audio tape.
- (2) For the purposes of paragraph 4 above, in the case of a trade carried on by a company, a person has a controlling interest in that trade if—
- (a) he controls the company;
- (b) the company is a close company and he or an associate of his, being a director of the company, either—
- (i) is the beneficial owner of more than 30 per cent. of the ordinary share capital of the company, or
- (ii) is able, directly or through the medium of other companies or by any other indirect means, to control more than 30 per cent. of that share capital;
or
- (c) not less than half of the trade could, in accordance with section 344(2), be regarded as belonging to him for the purposes of section 343;
and, in any other case, a person has a controlling interest in a trade if he is entitled to not less than half of the assets used for, or of the income arising from, the trade.
- (3) For the purposes of sub-paragraph (2) above there shall be attributed to any person any rights or powers of any other person who is an associate of his.
- (4) References in paragraph 4 above or this paragraph to a trade, except the references in paragraph 4(2)(f) to the trade for which services or facilities are provided, shall be construed without reference to so much of the definition of trade in section 832(1) as relates to adventures or concerns in the nature of trade; and those references in paragraph 4(2)(f) above to a trade shall have effect, in relation to cases in which what is carried on is carried on by a person other than a company, as including references to any business, profession or vocation.
- (5) In this paragraph—
- “*associate*” has the meaning given in subsections (3) and (4) of section 417, except that in those subsections, as applied for the purposes of this paragraph, “*relative*” shall not include a brother or sister; and
- “*director*” shall be construed in accordance with subsection (5) of that section;
- “*interest in land*” means (subject to sub-paragraph (6) below)—any estate, interest or right in or over land, including any right affecting the use or disposition of land; orany right to obtain such an estate, interest or right from another which is conditional on the other’s ability to grant the estate, interest or right.
- (6) References in paragraph 4 above, in relation to an hotel, to a comparable establishment are references to a guest house, hostel or other establishment the main purpose of maintaining which is the provision of facilities for overnight accommodation (whether with or without catering services).
- (7) References in this paragraph to an interest in land do not include references to—
- (a) the interest of a creditor (other than a creditor in respect of a rentcharge) whose debt is secured by way of mortgage, an agreement for a mortgage or a charge of any kind over land; or
- (b) in the case of land in Scotland, the interest of a creditor in a charge or security of any kind over land.
### Meaning of “relevant qualifying subsidiary”
##### 5A
- (1) For the purposes of this Schedule, a company (“the subsidiary”) is a relevant qualifying subsidiary of the relevant company at any time when it falls within sub-paragraph (2) below.
- (2) The subsidiary falls within this sub-paragraph if—
- (a) the relevant company possesses not less than 90 per cent. of the issued share capital of, and not less than 90 per cent. of the voting power in, the subsidiary;
- (b) the relevant company would—
- (i) in the event of a winding up of the subsidiary, or
- (ii) in any other circumstances,
be beneficially entitled to receive not less than 90 per cent. of the assets of the subsidiary which would then be available for distribution to the equity holders of the subsidiary;
- (c) the relevant company is beneficially entitled to not less than 90 per cent. of any profits of the subsidiary which are available for distribution to the equity holders of the subsidiary;
- (d) no person other than the relevant company has control of the subsidiary within the meaning of section 840; and
- (e) no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) above would cease to be met.
- (3) Sub-paragraphs (4) to (4C) and (5) of paragraph 10 below apply in relation to sub-paragraph (2) of this paragraph as they apply in relation to sub-paragraph (3) of that paragraph, but with the following modification.
- (4) That modification is that sub-paragraph (5) of that paragraph is to be read as if the words “or (as the case may be) by another subsidiary of that company” were omitted.
- (5) For the purposes of this paragraph—
- (a) the persons who are equity holders of the subsidiary, and
- (b) the percentage of the assets of the subsidiary to which an equity holder would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18.
- (6) But in making that determination—
- (a) references in paragraph 3 of that Schedule to the first company are to be read as references to an equity holder, and
- (b) references in that paragraph to a winding up are to be read as including references to any other circumstances in which assets of the subsidiary are available for distribution to its equity holders.
### Requirements as to the money raised by the investment in question
##### 6
- (1) The requirements of this paragraph are that either—
- (a) at least 80% of the money raised by the issue of the relevant holding must—
- (i) have been employed wholly for the purposes of the trade by reference to which the requirements of paragraph 3(3) above are satisfied; or
- (ii) be money which is intended to be employed wholly for the purposes of that trade; or
- (b) all of the money so raised must have been employed as mentioned in paragraph (a)(i) above.
- (2) For the purposes of this Schedule—
- (a) the requirements of sub-paragraph (1) above shall not be capable of being satisfied by virtue of paragraph (a)(ii) of that sub-paragraph at any time after 12 months have expired from the trading time, and
- (b) the requirements of that sub-paragraph shall not be capable of being satisfied by virtue of paragraph (a)(i) of that sub-paragraph at any time after 24 months have expired from the trading time.
- (2AA) In sub-paragraph (2) above, “*the trading time*” means whichever is applicable of the following—
- (a) in a case where the requirements of sub-paragraph (3) of paragraph 3 above were satisfied in relation to the time when the relevant holding was issued by virtue of paragraph (a) of that sub-paragraph, that time; and
- (b) in a case where they were satisfied in relation to that time by virtue of paragraph (b) of that sub-paragraph, the time when the condition in paragraph 3(4)(a) above was satisfied.
- (2AB) The requirements of this paragraph are not satisfied if either of the following, namely—
- (a) the trade by reference to which the requirements of paragraph 3(3) above are satisfied, and
- (b) any preparations for that trade falling within paragraph 3(3)(b) above,
are carried on, at any time after the issue of the relevant holding, by a person other than the relevant company or a relevant qualifying subsidiary of that company.
- (2AC) Sub-paragraph (2AD) below applies where preparations mentioned in sub-paragraph (2AB)(b) above are carried on by the relevant company or a relevant qualifying subsidiary of that company at any time after the issue of the relevant holding.
- (2AD) Where this sub-paragraph applies, the requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied by reason only of the carrying on of the trade mentioned in sub-paragraph (2AB)(a) above by a person other than—
- (a) the relevant company, or
- (b) a qualifying subsidiary of that company,
at any time after the issue of the relevant holding but before the relevant company or any relevant qualifying subsidiary of that company carries on that trade.
- (2AE) The requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied by reason only of the carrying on of the trade mentioned in sub-paragraph (2AB)(a) above—
- (a) by the partners in a partnership of which the relevant company, or a relevant qualifying subsidiary of that company, is a member, or
- (b) by the parties to a joint venture to which the relevant company, or a relevant qualifying subsidiary of that company, is a party.
- (2AF) The requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied if—
- (a) by reason only of anything done as a consequence of the relevant company or any other company being in administration or receivership, or
- (b) by reason only of the relevant company or any other company being wound up or dissolved without winding up,
the trade mentioned in sub-paragraph (2AB)(a) above ceases to be carried on by the relevant company or a relevant qualifying subsidiary of that company and is subsequently carried on by a person who has not been connected, at any time after the date which is one year before the issue of the relevant holding, with the relevant company.
- (2AG) Sub-paragraph (2AF) above applies only if (as the case may be)—
- (a) the entry into administration or receivership and everything done as a consequence of the company concerned being in administration or receivership, or
- (b) the winding up or dissolution,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (2AH) Sub-paragraph (2) of paragraph 11A below applies for the purposes of sub-paragraphs (2AF) and (2AG) above as it applies for the purpose of that paragraph.
- (3) For the purposes of this paragraph money shall not be treated as employed otherwise than wholly for the purposes of a trade if the only amount employed for other purposes is an amount which is not a significant amount; and nothing in paragraph 1(3) above shall require any money whose use is disregarded by virtue of this sub-paragraph to be treated as raised by a different holding.
- (4) References in this paragraph to employing money for the purposes of a trade shall include references to employing it for the purpose of preparing for the carrying on of the trade.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Requirement imposing a maximum on qualifying investments in the relevant company
##### 7
- (1) The requirement of this paragraph is that the relevant holding did not, when it was issued, represent an investment in excess of the maximum qualifying investment for the relevant period.
- (2) Subject to sub-paragraph (4) below, the maximum qualifying investment for any period is exceeded to the extent that the aggregate amount of money raised in that period by the issue to the trust company during that period of shares in or securities of the relevant company exceeds £1 million.
- (3) Any question for the purposes of this paragraph as to whether any shares in or securities of the relevant company which are for the time being held by the trust company represent an investment in excess of the maximum qualifying investment for any period shall be determined on the assumption, in relation to disposals by the trust company, that, as between shares or securities of the same description, those representing the whole or any part of the excess are disposed of before those which do not.
- (4) Where—
- (a) at the time of the issue of the relevant holding the relevant company or any of its qualifying subsidiaries was a member of a partnership or a party to a joint venture,
- (b) the trade by virtue of which the requirements of paragraph 3(3) above are satisfied was at that time being carried on, or to be carried on, by those partners in partnership or by the parties to the joint venture as such, and
- (c) the other partners or parties to the joint venture include at least one other company,
this paragraph shall have effect in relation to the relevant company as if the sum of money for the time being specified in sub-paragraph (2) above were to be divided by the number of companies (including the relevant company) which, at the time when the relevant holding was issued, were members of the partnership or, as the case may be, parties to the joint venture.
- (5) For the purposes of this paragraph the relevant period is the period beginning with whichever is the earlier of—
- (a) the time six months before the issue of the relevant holding; and
- (b) the beginning of the year of assessment in which the issue of that holding took place.
### Requirement as to the assets of the relevant company
##### 8
- (1) The requirement of this paragraph is that the value of the relevant assets—
- (a) did not exceed £7 million immediately before the issue of the relevant holding; and
- (b) did not exceed £8 million immediately afterwards.
- (2) Subject to sub-paragraph (3) below, the reference in sub-paragraph (1) above to the value of the relevant assets is a reference—
- (a) in relation to a time when the relevant company did not have any qualifying subsidiaries, to the value of the gross assets of that company at that time; and
- (b) in relation to any other time, to the aggregate value at that time of the gross assets of all the companies in the relevant company’s group.
- (3) For the purposes of this paragraph assets of any member of the relevant company’s group that consist in rights against, or in shares in or securities of, another member of the group shall be disregarded.
- (4) In this paragraph references, in relation to any time, to the relevant company’s group are references to the relevant company and its qualifying subsidiaries at that time.
### Requirements as to the subsidiaries etc. of the relevant company
##### 9
- (1) The requirements of this paragraph are that . . . the relevant company must not be—
- (a) a company which controls (whether on its own or together with any person connected with it) any company that is not a qualifying subsidiary of the relevant company; or
- (b) a company which is under the control of another company (or of another company and a person connected with the other company);
and arrangements must not be in existence by virtue of which the relevant company could fall within paragraph (a) or (b) above.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Meaning of “qualifying subsidiary”
##### 10
- (1) Subject to the following provisions of this paragraph, a company is a qualifying subsidiary of the relevant company for the purposes of this Schedule if—
- (a) the company in question (“the subsidiary”), and
- (b) where the relevant company has more than one subsidiary, every other subsidiary of the relevant company,
is a company falling within sub-paragraph (3) below.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The subsidiary falls within this sub-paragraph if—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) the dividend manufacturer is treated under section 730A (repos) as receiving a payment of interest in respect of the equities and is chargeable to income tax on that payment; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1B) Where an amount is allowable under sub-paragraph (1ZA) or (1A) above by reference to the whole or any part of—
- (a) a dividend or other payment falling within sub-paragraph (1ZA) above , or
- (b) a payment of interest which a person is treated as receiving, as mentioned in sub-paragraph (1A) above, . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(the “*utilised portion*” of the dividend or other payment) no other amount shall be allowable under sub-paragraph (1ZA) or (1A) above by reference to all or any of the utilised portion of the dividend or other payment.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The references in this paragraph to an amount being deductible are references to its being either—
- (a) deductible in computing the amount of any of the dividend manufacturer’s profits or gains for the purposes of income tax . . . ; or
- (b) deductible for those purposes from the total income . . . of the dividend manufacturer.
### Manufactured dividends representative of foreign income dividends
##### 2B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured overseas dividends
##### 4
- (1) This paragraph applies in any case where, under a contract or other arrangements for the transfer of overseas securities, one of the parties (the “*overseas dividend manufacturer*”) is required to pay to the other (“*the recipient*”) an amount representative of an overseas dividend on the overseas securities; and in this Schedule the “*manufactured overseas dividend*” means any payment which the overseas dividend manufacturer makes in discharge of that requirement.
- (1A) Where a manufactured overseas dividend is paid as set out in sub-paragraph (1) above it shall be treated—
- (a) as an expense of the trade where a company carries on a trade to which that payment relates;
- (b) where a company has investment business to which the payment relates, for the purposes of section 75 as expenses of management;
- (c) in the case of a company carrying on life assurance business—
- (i) so far as the payment is referable to basic life assurance and general annuity business, for the purposes of section 76 as if it were an expense payable falling to be brought into account at Step 3 of subsection (7) of that section, and
- (ii) the payment is to be treated as referable to basic life assurance and general annuity business to the extent that the overseas dividend of which it is representative is or would, if it were received by the company, be so referable by virtue of section 432A.
- (2) Subject to sub-paragraph (3) below, where this paragraph applies the gross amount of the manufactured overseas dividend shall be treated , except in determining whether it is deductible, for all purposes of the Tax Acts as an annual payment, within section 349, but—
- (a) the amount which is to be deducted from that gross amount on account of income tax shall be an amount equal to the relevant withholding tax on that gross amount; and
- (b) in the application of section 350(4) in relation to manufactured overseas dividends the reference to Schedule 16 shall be taken as reference to dividend manufacturing regulations;
and paragraph (a) above is without prejudice to any further amount required to be deducted under dividend manufacturing regulations by virtue of sub-paragraph (8) below.
- (2A) Sub-paragraph (10) of paragraph 3 applies for the construction of the reference in sub-paragraph (2) above to an amount being deductible as it applies to references in that paragraph.
- (3) If, in a case where this paragraph applies, the overseas dividend manufacturer is not resident in the United Kingdom and the manufactured overseas dividend is paid by him otherwise than in the course of a trade which he carries on through a branch or agency in the United Kingdom, sub-paragraph (2) above shall not apply; but if the manufactured overseas dividend is received by a United Kingdom recipient, that recipient shall account for and pay an amount of tax in respect of the manufactured overseas dividend equal to that which the overseas dividend manufacturer would have been required to account for and pay had he been resident in the United Kingdom; and any reference in this Schedule to an amount deducted under sub-paragraph (2) above includes a reference to an amount of tax accounted for and paid under this sub-paragraph.
- (3A) For the purposes of sub-paragraph (3) above a person who receives a manufactured overseas dividend is a United Kingdom recipient if—
- (a) he is resident in the United Kingdom; or
- (b) he is not so resident but receives that dividend for the purposes of a trade carried on through a branch or agency in the United Kingdom.
- (3B) Dividend manufacturing regulations may make provision, in relation to cases falling within sub-paragraph (3) above, for the amount of tax required under that sub-paragraph to be taken to be reduced, to such extent and for such purposes as may be determined under the regulations, by reference to amounts of overseas tax charged on, or in respect of—
- (a) the making of the manufactured overseas dividend; or
- (b) the overseas dividend of which the manufactured overseas dividend is representative.
- (4) Where a manufactured overseas dividend is paid after deduction of the amount required by sub-paragraph (2) above, or where the amount of tax required under sub-paragraph (3) above in respect of such a dividend has been accounted for and paid, then for all purposes of the Tax Acts as they apply in relation to persons resident in the United Kingdom or to persons not so resident but carrying on business through a branch or agency in the United Kingdom—
- (a) the manufactured overseas dividend shall be treated in relation to the recipient, and all persons claiming title through or under him, as if it were an overseas dividend of an amount equal to the gross amount of the manufactured overseas dividend, but paid after the withholding therefrom, on account of overseas tax, of the amount deducted under sub-paragraph (2) above; and
- (b) the amount so deducted shall accordingly be treated in relation to the recipient, and all persons claiming title through or under him, as an amount so withheld instead of as an amount on account of income tax.
- (5) For the purposes of this paragraph—
- (a) “*relevant withholding tax*”, in relation to the gross amount of a manufactured overseas dividend, means an amount of tax representative of—
- (i) the amount (if any) that would have been deducted by way of overseas tax from an overseas dividend on the overseas securities of the same gross amount as the manufactured overseas dividend; and
- (ii) the amount of the overseas tax credit (if any) in respect of such an overseas dividend;
- (b) the gross amount of a manufactured overseas dividend is an amount equal to the gross amount of that overseas dividend of which the manufactured overseas dividend is representative, as mentioned in sub-paragraph (1) above; and
- (c) the gross amount of an overseas dividend is an amount equal to the aggregate of—
- (i) so much of the overseas dividend as remains after the deduction of the overseas tax (if any) chargeable on it;
- (ii) the amount of the overseas tax (if any) so deducted; and
- (iii) the amount of the overseas tax credit (if any) in respect of the overseas dividend.
- (6) Dividend manufacturing regulations may make provision with respect to the rates of relevant withholding tax which are to apply in relation to manufactured overseas dividends in relation to different overseas territories, but in prescribing those rates the Treasury shall have regard to—
- (a) the rates at which overseas tax would have fallen to be deducted, and
- (b) the rates of overseas tax credits,
in overseas territories, or in the particular overseas territory, in respect of payments of overseas dividends on overseas securities.
- (7) Dividend manufacturing regulations may make provision for a person who, in any chargeable period, is an overseas dividend manufacturer to be entitled in prescribed circumstances to set off in accordance with the regulations and to the prescribed extent, amounts falling within paragraph (a) of sub-paragraph (7AA) below against the sums falling within paragraph (b) of that sub-paragraph, and to accountto the Board for, or as the case may be, claim credit in respect of, the balance.
- (7AA) Those amounts and sums are—
- (a) amounts of overseas tax in respect of overseas dividends received by him in that chargeable period, amounts of overseas tax charged on, or in respect of, the making of manufactured overseas dividends so received by him and amounts deducted under sub-paragraph (2) above from any such manufactured overseas dividends; and
- (b) the sums due from him on account of the amounts deducted by him under sub-paragraph (2) above from the manufactured overseas dividends paid by him in that chargeable period.
- (7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) Without prejudice to section 97 of the Finance Act 1996 (manufactured interest), the references in this paragraph to all the purposes of the Tax Acts do not include the purposes of Chapter II of Part IV of that Act (loan relationships).
##### 4A
- (1) A reference in paragraph 4(4)(a) or (b) to the relevant amount in relation to an amount deducted under section 922(2) of ITA 2007 is—
- (a) where the deduction is made in respect of a manufactured overseas dividend that is treated as paid under paragraph 13(1) of Schedule 13 to FA 2007 (sale and repurchase of securities), to amount A, and
- (b) otherwise, to the amount deducted under section 922(2) of ITA 2007.
- (2) Amount A is—
- (a) in a case to which sub-paragraph (3) applies, the amount deducted under section 922(2) of ITA 2007,
- (b) in a case to which sub-paragraph (4) applies—
- (i) the amount deducted under section 922(2) of ITA 2007, less
- (ii) the excess mentioned in that sub-paragraph, and
- (c) in any other case, nil.
- (3) This sub-paragraph applies to a case in which—
- (a) an amount is actually paid by way of manufactured overseas dividend,
- (b) the amount so paid equals the relevant net amount, and
- (c) it is reasonable to assume that, in deciding the repurchase price of the securities, no account was taken of the fact that the amount would be so paid.
- (4) This sub-paragraph applies to a case in which—
- (a) an amount is actually paid by way of manufactured overseas dividend,
- (b) the amount so paid exceeds the relevant net amount, and
- (c) it is reasonable to assume that, in deciding the repurchase price of the securities, no account was taken of the fact that the amount would be so paid.
- (5) In this paragraph “the repurchase price” of the securities means the price at which the payer of the manufactured overseas dividend is entitled or obliged to sell the securities, or similar securities, to the recipient of the manufactured overseas dividend.
- (6) In this paragraph “*the securities*” means the securities in respect of which the overseas dividend of which the manufactured overseas dividend is representative is paid.
- (7) In this paragraph “*the relevant net amount*” means—
- (a) the gross amount of the overseas dividend of which the manufactured overseas dividend is representative, less
- (b) the amount deducted under section 922(2) of ITA 2007.
### Dividends and interest passing through the market
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Unapproved manufactured payments
##### 6
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Irregular manufactured payments
##### 7
- (1) . . . In any case where (apart from this paragraph)—
- (a) an amount paid by way of manufactured dividend would exceed the amount of the dividend of which it is representative, or
- (b) the aggregate of—
- (i) an amount paid by way of manufactured interest or manufactured overseas dividend, and
- (ii) the tax required to be accounted for in connection with the making of that payment,
would exceed the gross amount (as determined in accordance with paragraph 3 or 4 above) of the interest or overseas dividend of which it is representative, as the case may be,
the payment shall, to the extent of an amount equal to the excess, not be regarded for the purposes of this Schedule as made in discharge of the requirement referred to in paragraph 2(1), 3(1) or 4(1) above, as the case may be, but shall instead to that extent be taken for all purposes of the Tax Acts to constitute a separate fee for entering into the contract or other arrangements under which it was made, notwithstanding anything in paragraphs 2 or 3 above or anything in paragraph 4 other than in sub-paragraph (1A).
- (1A) Sub-paragraph (1) above does not apply in the case of the amount of any manufactured interest or manufactured overseas dividend which falls in accordance with section 97 of the Finance Act 1996 to be treated for the purposes of Chapter II of Part IV of that Act as interest under a loan relationship.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) For the purpose of giving relief under any provision of the Tax Acts in a case falling within paragraph 3(1) or 4(1) above where (apart from this paragraph) the aggregate referred to in sub-paragraph (1)(b) above would be less than the gross amount there mentioned—
- (a) the gross amount of the manufactured interest or manufactured overseas dividend shall be taken to be an amount equal to the aggregate referred to in sub-paragraph (1)(b) above, . . .
- (ca) the subsidiary is a 51 per cent. subsidiary of the relevant company;
- (d) no person other than the relevant company or another of its subsidiaries has control of the subsidiary within the meaning of section 840; and
- (e) no arrangements are in existence by virtue of which either of the conditions in paragraphs (ca) and (d) above would cease to be met.
- (4) The subsidiary shall not be regarded, at a time when it or any other company is being wound up, as having ceased on that account to be a company falling within sub-paragraph (3) above if . . . —
- (a) . . . it would fall within that sub-paragraph apart from the winding up; and
- (b) . . . the winding up is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
- (4A) Sub-paragraph (4B) below applies at a time when the subsidiary or any other company is in administration or receivership.
- (4B) The subsidiary shall not be regarded, by reason only of anything done as a consequence of the company concerned being in administration or receivership, as having ceased to be a company falling within sub-paragraph (3) above if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company concerned being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (4C) Sub-paragraph (2) of paragraph 11A below applies for the purposes of sub-paragraphs (4A) and (4B) above as it applies for the purpose of that paragraph.
- (5) The subsidiary shall not be regarded, at any time when arrangements are in existence for the disposal by the relevant company, or (as the case may be) by another subsidiary of that company, of all its interest in the subsidiary in question, as having ceased on that account to be a company falling within sub-paragraph (3) above if . . . the disposal is to be for bona fide commercial reasons and is not to be part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Requirement as to property managing subsidiaries
##### 10ZA
- (1) The requirement of this paragraph is that the relevant company must not have a property managing subsidiary which is not a relevant qualifying subsidiary of the relevant company.
- (2) “*Property managing subsidiary*” means a qualifying subsidiary of the relevant company whose business consists wholly or mainly in the holding or managing of land or any property deriving its value from land.
- (3) In sub-paragraph (2) above, “*land*” and “*property deriving its value from land*” have the same meaning as in section 776.
### Requirement that securities should not relate to a guaranteed loan
##### 10A
- (1) The requirement of this paragraph is that there are no securities relating to a guaranteed loan in the relevant holding.
- (2) For the purposes of this paragraph a security relates to a guaranteed loan if (and only if) there are arrangements for the trust company to be or become entitled, in the event of a failure by any person to comply with—
- (a) the terms of the loan to which the security relates, or
- (b) the terms of the security,
to receive anything (whether directly or indirectly) from a third party.
- (3) For the purposes of sub-paragraph (2) above it shall be immaterial whether the arrangements apply in all cases of a failure to comply or only in certain such cases.
- (4) For the purposes of this paragraph “*third party*” means any person except—
- (a) the relevant company; and
- (b) if the relevant company is the parent company of a trading group for the purposes of paragraph 3 above, the subsidiaries of the relevant company.
### Requirement that a proportion of the holding in each company must be eligible shares
##### 10B
- (1) The requirement of this paragraph is that eligible shares represent at least 10 per cent. by value of the totality of the shares in or securities of the relevant company (including the relevant holding) which are held by the trust company.
- (2) For the purposes of this paragraph the value at any time of any shares in or securities of a company shall be taken (subject to sub-paragraph (4) below) to be their value immediately after—
- (a) any relevant event occurring at that time; or
- (b) where no relevant event occurs at that time, the last relevant event to occur before that time.
- (3) In sub-paragraph (2) above “*relevant event*”, in relation to any shares in or securities of the relevant company, means—
- (a) the acquisition by the trust company of those shares or securities;
- (b) the acquisition by the trust company of any other shares in or securities of the relevant company which—
- (i) are of the same description as those shares or securities, and
- (ii) are acquired otherwise than by virtue of being allotted to the trust company without that company’s becoming liable to give any consideration;
or
- (c) the making of any such payment in discharge, in whole or in part, of any obligation attached to any shares in or securities of the relevant company held by the trust company as (by discharging that obligation) increases the value of any such shares or securities.
- (4) If at any time the value of any shares or securities held by the trust company is less than the amount of the consideration given by the trust company for those shares or securities, it shall be assumed for the purposes of this paragraph that the value of those shares or securities at that time is equal to the amount of that consideration.
- (5) In this paragraph “*eligible shares*” has the same meaning as in section 842AA.
### Acquisitions for restructuring purposes
##### 10C
- (1) This paragraph applies where—
- (a) arrangements are made for a company (“*the new company*”) to acquire all the shares (“*old shares*”) in another company (“*the old company*”);
- (b) the acquisition provided for by the arrangements falls within sub-paragraph (2) below; and
- (c) the Board have, before any exchange of shares takes place under the arrangements, given an approval notification.
- (2) An acquisition of shares falls within this sub-paragraph if—
- (a) the consideration for the old shares consists wholly of the issue of shares (“*new shares*”) in the new company;
- (b) new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than subscriber shares and new shares previously issued in consideration of old shares;
- (c) the consideration for new shares of each description consists wholly of old shares of the corresponding description; and
- (d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of, and in proportion to, their holdings.
- (3) For the purposes of sub-paragraph (1)(c) above an approval notification is one which, on an application by either the old company or the new company, is given to the applicant company and states that the Board are satisfied that the exchange of shares under the arrangements—
- (a) will be effected for bona fide commercial reasons; and
- (b) will not form part of any such scheme or arrangements as are mentioned in section 137(1) of the 1992 Act.
- (4) If the requirements of paragraph 3 above were satisfied in relation to the old company and any old shares immediately before the beginning of the period for giving effect to the arrangements, then (to the extent that it would not otherwise be the case) those requirements shall be deemed to be satisfied in relation to the new company and the matching new shares at all times which—
- (a) fall in that period; and
- (b) do not fall after a time when (apart from the arrangements) those requirements would have ceased by virtue of—
- (i) sub-paragraph (4) or (5) of that paragraph, or
- (ii) any cessation of a trade by any company,
to be satisfied in relation to the old company and the matching old shares.
- (5) For the purposes of paragraph 3 above the period of two years mentioned in sub-paragraph (4) of that paragraph shall be deemed, in the case of any new shares, to expire at the same time as it would have expired (or by virtue of this sub-paragraph would have been deemed to expire) in the case of the matching old shares.
- (6) Subject to sub-paragraph (7) below, where—
- (a) there is an exchange under the arrangements of any new shares for any old shares, and
- (b) those old shares are shares in relation to which the requirements of paragraphs 6 and 8 above were (or were deemed to be) satisfied to any extent immediately before the exchange,
those requirements shall be deemed, at all times after that time, to be satisfied to the same extent in relation to the matching new shares.
- (7) Where there is a time following any exchange under the arrangements of any new shares for any old shares when (apart from the arrangements) the requirements of paragraph 6 above would have ceased under—
- (a) sub-paragraph (2) of that paragraph, or
- (b) this sub-paragraph,
to be satisfied in relation to those old shares, those requirements shall cease at that time to be satisfied in relation to the matching new shares.
- (8) For the purposes of paragraph 7 above any new shares acquired under the arrangements shall be deemed to represent an investment which—
- (a) raised the same amount of money as was raised (or, by virtue of this sub-paragraph, is deemed to have been raised) by the issue of the matching old shares, and
- (b) raised that amount by an issue of shares in the new company made at the time when the issue of the matching old shares took place (or, as the case may be, is deemed to have taken place).
- (9) In determining whether the requirements of paragraph 9 above are satisfied in relation to the old company or the new company at a time in the period for giving effect to the arrangements, both—
- (a) the arrangements themselves, and
- (b) any exchange of new shares for old shares that has already taken place under the arrangements,
shall be disregarded.
- (10) For the purposes of paragraph 10B above the value of the new shares, both immediately after the time of their acquisition and immediately after the time of any subsequent relevant event occurring by virtue of the arrangements, shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the old shares for which they are exchanged.
- (11) Nothing in this paragraph shall deem any of the requirements of this Schedule to be satisfied in relation to any new shares unless the matching old shares were first issued to the trust company and have been held by that company from the time when they were issued until they are acquired by the new company.
- (12) References in this paragraph to the period for giving effect to the arrangements are references to the period which—
- (a) begins with the time when those arrangements first came into existence; and
- (b) ends with the time when the new company completes its acquisition under the arrangements of all the old shares.
- (13) If, at any time after the arrangements first came into existence and before the new company has acquired all the old shares, the arrangements—
- (a) cease to be arrangements for the acquisition of all the old shares by the new company, or
- (b) cease to be arrangements for an acquisition falling within sub-paragraph (2) above,
this paragraph shall not deem any requirement of this Schedule to be satisfied, and sub-paragraph (10) above shall not apply, in the case of any new shares at any time after the arrangements have so ceased.
- (14) Subject to sub-paragraph (15) below, references in this paragraph, except in the expression “subscriber shares”, to shares in a company include references to any securities of that company.
- (15) For the purposes of this paragraph, a relevant security of the old company shall not be treated as a security of that company if—
- (a) the arrangements do not provide for the acquisition of the security by the new company; or
- (b) such treatment prevents sub-paragraph (1)(b) above from being satisfied in connection with the arrangements.
- (16) In sub-paragraph (15) above “*relevant security*” means an instrument which is a security for the purposes of this Schedule by reason only of section 842AA(12).
- (17) For the purposes of this paragraph—
- (a) old shares and new shares are of a corresponding description if, were they shares in the same company, they would be of the same description; and
- (b) old shares and new shares are matching shares in relation to each other if the old shares are the shares for which those new shares are exchanged under the arrangements.
### Conversion of convertible shares and securities
##### 10D
- (1) This paragraph applies where—
- (a) shares have been issued to the trust company by virtue of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“*the convertibles*”);
- (b) the shares so issued are in the same company as the convertibles to which the right was attached;
- (c) the convertibles to which the right was attached were first issued to the trust company and were held by that company from the time they were issued until converted; and
- (d) the right was attached to the convertibles when they were first so issued and was not varied before it was exercised.
- (2) Sub-paragraphs (5) to (8) of paragraph 10C above shall apply in relation to the exchange of convertibles for shares by virtue of the exercise of the right of conversion as if—
- (a) that exchange were an exchange under any such arrangements as are mentioned in that paragraph of new shares for old shares; and
- (b) the references in those sub-paragraphs and sub-paragraph (17)(b) of that paragraph to the arrangements were references to the provision conferring the right of conversion.
- (3) For the purposes of paragraph 10B above the value of the new shares immediately after the time of their acquisition by the trust company shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the convertibles for which they are exchanged.
### Winding up of the relevant company
##### 11
None of the requirements of this Schedule shall be regarded, at a time when the relevant company is being wound up, as being, on that account, a requirement that is not satisfied in relation to that company if . . . —
- (a) . . . the requirements of this Schedule would be satisfied in relation to that company apart from the winding up; and
- (b) . . . the winding up is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
### Company in administration or receivership
##### 11A
- (1) A company which is in administration or receivership shall not be regarded as ceasing to comply with paragraph 3(2) or (3) by reason only of anything done as a consequence of its being in administration or receivership.
- (2) For this purpose—
- (a) a company is “in administration” if it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986, or there is in force in relation to it—
- (i) an administration order under Part III of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom; and
- (b) a company is “in receivership" if there is in force in relation to it—
- (i) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter I or II of Part III of the Insolvency Act 1986 or Part IV of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom.
- (3) This paragraph applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
### Company reorganisations etc. involving exchange of shares
##### 11B
- (1) The Treasury may by regulations make provision for cases where—
- (a) a holding of shares or securities that meets the requirements of this Schedule is exchanged for other shares or securities,
- (b) the exchange is made for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is the avoidance of tax, and
- (c) the new shares or securities do not meet some or all of the requirements of this Schedule,
providing that the new shares or securities shall be treated as meeting those requirements.
- (2) The references in sub-paragraph (1) to an exchange of shares or securities include any form of company reorganisation or other arrangement which involves a holder of shares or securities in a company receiving other shares or securities—
- (a) whether the original shares or securities are transferred, cancelled or retained, and
- (b) whether the new shares or securities are in the same or another company.
- (3) The regulations shall specify—
- (a) the cases in which, and conditions subject to which, they apply,
- (b) which requirements of this Schedule are to be treated as met, and
- (c) the period for which those requirements are to be treated as met.
- (4) The regulations may contain such administrative provisions (including provision for advance clearances) as appear to the Treasury to be necessary or expedient.
- (5) The regulations may authorise the Board to give notice to any person requiring him to provide such information, specified in the notice, as they may reasonably require in order to determine whether any conditions imposed by the regulations are met.
- (6) Regulations under this paragraph—
- (a) may make different provision for different cases,
- (b) may include such supplementary, incidental and transitional provisions as appear to the Treasury to be appropriate, and
- (c) may include provision having retrospective effect.
### Power to amend Schedule
##### 12
The Treasury may by order amend this Schedule for any or all of the following purposes, that is to say—
- (a) to make such modifications of paragraphs 3 to 5 above as they may consider expedient;
- (b) to substitute different sums for the sums of money for the time being specified in paragraphs 7(2) and 8(1) above.
### General interpretation
##### 13
- (1) Subject to paragraph 10C(15) above, in this Schedule—
- “*debenture*” has the meaning given by section 744 of the Companies Act 1985; and
- “*securities*” has the same meaning as in section 842AA;
and references in this Schedule to the issue of any securities, in relation to any security consisting in a liability in respect of an unsecured loan, shall have effect as references to the making of the loan.
- (2) For the purposes of paragraphs 5(2) and 9 above, the question whether a person controls a company shall be determined in accordance with subsections (2) to (6) of section 416 with the modification given by sub-paragraph (3) below.
- (3) The modification is that, in determining whether a person controls a company, there shall be disregarded—
- (a) his or any other person’s possession of, or entitlement to acquire, relevant fixed-rate preference shares of the company; and
- (b) his or any other person’s possession of, or entitlement to acquire, rights as a loan creditor of the company.
- (4) Section 839 shall apply for the purposes of this Schedule, but as if the reference in subsection (8) to section 416 were a reference to subsections (2) to (6) of section 416 with the modification given by sub-paragraph (3) above.
- (5) For the purposes of sub-paragraph (3) above—
- (a) relevant fixed-rate preference shares are fixed-rate preference shares that do not for the time being carry voting rights; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
notwithstanding anything in paragraph 3 or 4 above.
- (4) In this paragraph “*relief*” means relief by way of—
- (a) deduction in computing profits or gains; or
- (b) deduction or set off against income or total profits.
### Manufactured payments under arrangements having an unallowable purpose
##### 7A
- (1) This paragraph applies in any case where—
- (a) a manufactured payment falls to be made by a company in an accounting period in pursuance of any arrangements (see sub-paragraphs (9) and (10) for definitions), and
- (b) the arrangements have an unallowable purpose at any time (see sub-paragraphs (3) to (5)).
But this is subject to sub-paragraph (8) below (cases where tax relief is denied apart from this paragraph).
- (2) The company is not entitled, by virtue of anything in this Schedule or any provision of regulations under it, or otherwise, to any relevant tax relief (see sub-paragraph (10)), to the extent that the relief is in respect of, or referable to, the whole or any part of so much of the manufactured payment as, on a just and reasonable apportionment, is attributable to the unallowable purpose.
- (3) Arrangements have an unallowable purpose at any time if at that time the purposes for which the company is a party to—
- (a) the arrangements,
- (b) any related transaction (see sub-paragraphs (6) and (7)), or
- (c) any transaction in pursuance of the arrangements,
include a purpose (“the unallowable purpose”) which is not among the business or other commercial purposes of the company.
- (4) The business and other commercial purposes of a company do not include the purposes of any part of its activities in respect of which it is not within the charge to corporation tax.
- (5) Where one of the purposes for which a company is at any time a party to—
- (a) any arrangements,
- (b) any related transaction in the case of any arrangements, or
- (c) any transaction in pursuance of any arrangements,
is a tax avoidance purpose, that purpose shall be taken to be a business or other commercial purpose of the company only where it is not the main purpose, or one of the main purposes, for which the company is party to the arrangements or transaction at that time.
- (6) One or more transactions are to be regarded as related transactions, in the case of any arrangements, if it would be reasonable to assume, from either or both of—
- (a) the likely effect of the transactions, and
- (b) the circumstances in which the transactions are entered into or effected,
that none of the transactions would have been entered into or effected independently of the arrangements.
- (7) Transactions are not prevented from being related transactions, in the case of any arrangements, just because the transactions—
- (a) are not between the same parties, or
- (b) are not between the parties to the arrangements.
- (8) This paragraph does not apply if, as a result of any of the following provisions—
- (a) section 75(4)(b) (expenses of management of companies with investment business: unallowable purposes),
- (b) section 76(4)(d) (expenses of insurance companies: unallowable purposes),
- (c) paragraph 13 of Schedule 9 to the Finance Act 1996 (loan relationships with unallowable purposes),
the company in question is not entitled to a relevant tax relief in respect of, or referable to, the whole or any part of the manufactured payment.
The references to sections 75 and 76 are references to those provisions as they have effect in relation to accounting periods beginning on or after 1st April 2004.
- (9) Any reference in this paragraph to a manufactured payment falling to be made by a company includes a reference to a manufactured payment which is deemed by or under any provision of the Tax Acts to be made by a company (and references to a transaction, or to a company being party to a transaction, are to be construed accordingly).
- (10) In this paragraph—
- “*arrangements*” includes schemes, arrangements and understandings of any kind, whether or not legally enforceable, and shall be taken to include any related transactions;
- “*manufactured payment*” means any of the following—any manufactured dividend;any manufactured interest;any manufactured overseas dividend;
- “*related transaction*” shall be construed in accordance with sub-paragraphs (6) and (7) above;
- “*relevant tax relief*” means any of the following—any deduction in computing profits or gains for the purposes of corporation tax;any deduction against total profits;the bringing into account of any debit for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships);the surrender of an amount by way of group relief;
- “*tax advantage*” has the same meaning as in Chapter 1 of Part 17 (tax avoidance);
- “*tax avoidance purpose*” means any purpose that consists in securing a tax advantage (whether for the company in question or any other person);
- and sub-paragraphs (3) to (7) above have effect for the purposes of this paragraph.
### Dividend manufacturing regulations: general
##### 8
- (1) Dividend manufacturing regulations may make provision for—
- (a) such manufactured dividends, manufactured interest or manufactured overseas dividends as may be prescribed,
- (aa) such persons who receive, or become entitled to receive, manufactured dividends, manufactured interest or manufactured overseas dividends as may be prescribed, or
- (b) such dividend manufacturers, interest manufacturers or overseas dividend manufacturers as may be prescribed,
to be treated in prescribed circumstances otherwise than as mentioned in paragraphs 2 to 4 above for the purposes of such provisions of the Tax Acts as may be prescribed.
- (1A) Dividend manufacturing regulations may provide, in relation to prescribed cases where a person makes or receives the payment of any amount representative of an overseas dividend, or is treated for any purposes of this Schedule or such regulations as a person making or receiving such a payment—
- (a) for any entitlement of that person to claim relief under Part XVIII to be extinguished or reduced to such extent as may be found under the regulations; and
- (b) for the adjustment, by reference to any provision having effect under the law of a territory outside the United Kingdom, of any amount falling to be taken, for any prescribed purposes of the Tax Acts or the 1992 Act, to be the amount paid or payable by or to any person in respect of any sale, repurchase or other transfer of the overseas securities to which the payment relates.
- (2) Dividend manufacturing regulations may make provision with respect to—
- (a) the accounts and other records which are to be kept,
- (b) the vouchers which are to be issued or produced,
- (c) the returns which are to be made,
- (d) the manner in which amounts required to be deducted or accounted for under or by virtue of this Schedule on account of tax are to be accounted for and paid,
by persons by or to whom manufactured dividends, manufactured interest or manufactured overseas dividends are paid.
- (2A) Dividend manufacturing regulations with respect to any liability to account for tax may contain any of the following, that is to say—
- (a) provision for computing the amounts to be accounted for;
- (b) provision, in relation to the determination of the amount to be paid on any occasion, for setting other amounts against the amounts to be accounted for;
- (c) provision as to the liabilities against which amounts accounted for are to be, or are not to be, set for the purposes of income tax or corporation tax;
- (d) provision modifying, or applying (with or without modifications), any enactments contained in the Tax Acts.
- (3) Dividend manufacturing regulations may—
- (a) make provision for prescribed provisions of the Management Act to apply in relation to manufactured dividends, manufactured interest or manufactured overseas dividends with such modifications, specified in the regulations, as the Treasury think fit;
- (b) make such further provision with respect to the administration, assessment, collection and recovery of amounts required to be deducted or accounted for under or by virtue of this Schedule on account of tax as the Treasury think fit.
- (4) Dividend manufacturing regulations may make different provision for different cases.
##### 4A
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### Exchange gains and losses
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### Transfer pricing
##### 20
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##### 2A
- (1) Paragraph 2 above shall have effect in accordance with this paragraph to determine whether a controlled foreign company . . . pursues an acceptable distribution policy in respect of a particular accounting period (“*the relevant accounting period*”).
- (2) Subject to sub-paragraph (4) below, where the distribution condition is satisfied in relation to the relevant accounting period, then, in addition to any dividend which falls within paragraph 2(1)(a) above apart from this paragraph—
- (a) any dividend which is paid for the accounting period (“*the preceding period*”) immediately preceding the relevant accounting period and which is not an excluded dividend shall be treated as falling within that paragraph, and
- (b) if the distribution condition is satisfied in relation to the preceding period, any dividend which is paid for the accounting period immediately preceding the preceding period and which is not an excluded dividend shall be treated as falling within that paragraph,
and so on; and in this sub-paragraph “*dividend*” means a dividend not paid out of specified profits.
- (3) For the purposes of this paragraph, the distribution condition is satisfied in relation to any accounting period if—
- (a) a dividend or dividends are paid for the period to persons resident in the United Kingdom,
- (b) the amount or, as the case may be, aggregate amount of any dividends falling within paragraph (a) above is not less than—
- (i) the relevant profits for that period, or
- (ii) where paragraph 2(4) or (5) above applies (with the modifications of paragraph 2 made by sub-paragraph (5) below), the appropriate portion of those profits, and
- (c) any dividends falling within that paragraph are paid not later than the time by which any dividend paid for the relevant accounting period is required by paragraph 2(1)(b) above to be paid;
or if there are no relevant profits for the period.
- (4) Where, by reason only of the fact that a company pursued an acceptable distribution policy in respect of any accounting period (“*the earlier period*”) earlier than the relevant accounting period, no apportionment under section 747(3) fell to be made in respect of the earlier period, sub-paragraph (2) above shall apply to any dividend required to be taken into account for the purpose of showing that the company pursued an acceptable distribution policy in respect of the earlier period only to the extent (if any) to which that dividend was not required to be taken into account for that purpose.
- (5) The modifications of paragraph 2 above referred to in sub-paragraph (3)(b) above are that—
- (a) the references in sub-paragraphs (4) and (5) to the accounting period in question are to be read as references to the accounting period for which the dividend or dividends are paid,
- (b) the references in those sub-paragraphs to sub-paragraph (1)(d) are to be read as references to sub-paragraph (3)(b) above, and
- (c) the reference in the definition of “X” in sub-paragraph (6) to net chargeable profits is to be read as a reference to relevant profits.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) For the purposes of this paragraph—
- (aa) a dividend is an excluded dividend if it is paid, in whole or in part, out of the total profits from which (in accordance with section 747(6)(a)) the chargeable profits for an excluded period are derived,
- (a) a period is an excluded period if it is an accounting period in respect of which an apportionment under section 747(3) falls to be made, and
- (b) relevant profits for any accounting period are the profits which would be the relevant profits of that period for the purposes of section 799 if a dividend were actually paid for that period.
##### 2B
- (1) This paragraph has effect for the purposes of paragraph 2(1A)(b) above.
- (2) No payment of dividend by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period.
- (3) “*UK tax avoidance scheme*” means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax.
- (4) A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company—
- (a) would have been liable for any such tax or for a greater amount of any such tax; or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (5) In this paragraph—
- “*arrangement*” means an arrangement of any kind, whether in writing or not;
- “*United Kingdom tax*” means corporation tax or any tax chargeable as if it were corporation tax.
##### 4A
- (1) This paragraph has effect for the purposes of paragraph 4(1A)(b) above.
- (2) No payment to a company resident in the United Kingdom which represents the whole or part of a dividend paid by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that—
- (a) there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period, and
- (b) so much of the dividend as is represented by that payment will (if paragraph 4(1) above has effect) fall to be brought into account in determining whether the controlled foreign company has done so.
- (3) “*UK tax avoidance scheme*” means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax.
- (4) A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company—
- (a) would have been liable for any such tax or for a greater amount of any such tax; or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (5) In this paragraph—
- “*arrangement*” means an arrangement of any kind, whether in writing or not;
- “*United Kingdom tax*” means corporation tax or any tax chargeable as if it were corporation tax.
##### 11A
- (1) This paragraph has effect for the interpretation of paragraph 6(2B) above.
- (2) “*Contract of long-term insurance*” means any contract falling within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
- (3) “*Protection business*” means contracts of long-term insurance where—
- (a) either—
- (i) the contract has no surrender value; or
- (ii) the consideration consists of a single premium and the surrender value does not exceed the amount of that premium; and
- (b) the contract makes no provision for its conversion or extension in a manner which would result in its ceasing to fall within paragraph (a) above;
and references to protection business include a reference to reinsurance of protection business.
- (4) “*Insurance group*” shall be construed in accordance with section 255A(5) of the Companies Act 1985 (meaning of “insurance group” in Part 7) but reading Part 7 of that Act—
- (a) as if it extended to Northern Ireland, and
- (b) as if any reference to a company (within the meaning of that Act) included a reference to a company as defined in Article 3 of the Companies (Northern Ireland) Order 1986,
but does not include such an insurance group if it falls within sub-paragraph (5) below.
- (5) Such an insurance group falls within this sub-paragraph if (within the meaning of that Part as so read) the parent company is a subsidiary undertaking of a parent company which is neither—
- (a) the parent company of an insurance group; nor
- (b) a subsidiary undertaking of the parent company of an insurance group.
- (6) A controlled foreign company is, in accordance with sub-paragraphs (4) and (5) above, a “*member of an insurance group*” if (within the meaning of that Part as so read) it is the parent company, or a subsidiary undertaking of the parent company, of an insurance group which is by virtue of sub-paragraph (4) above an insurance group for the purposes of paragraph 6(2B) above.
- (7) A company’s main business is “*insuring or reinsuring large risks*” if (and only if)—
- (a) the company’s main business is the effecting or carrying out of contracts of insurance; and
- (b) 50% or more of its gross trading receipts from that business are derived from insuring or reinsuring large risks.
- “*Large risks*” is defined in paragraph 11B below.
- (8) In this paragraph—
- “*contract of insurance*” has the meaning given by article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*contract of long-term insurance*” has the meaning given by sub-paragraph (2) above.
##### 11B
- (1) In paragraph 11A above “*large risks*” means—
- (a) risks falling within classes 4, 5, 6, 7, 11 and 12 of Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- (b) risks falling within classes 14 and 15 of that Part which relate to a business carried on by the policy holder;
- (c) risks falling within classes 3, 8, 9, 10, 13 and 16 of that Part where the policy holder carries on a business in respect of which the condition specified in sub-paragraph (2) below is satisfied.
- (2) The condition referred to in sub-paragraph (1)(c) above is that, in the case of that business of the policy holder, at least two of the three following criteria were exceeded in the most recent financial year beginning on or after 1st January 1999 for which the information is available—
- (a) balance sheet total: 6.2 million euros;
- (b) net turnover: 12.8 million euros;
- (c) number of employees: 250.
- (3) For the purposes of sub-paragraph (2) above as it applies where the policy holder is a company, within the meaning of section 735(1) of the Companies Act 1985 or Article 3 of the Companies (Northern Ireland) Order 1986,—
- (a) “*balance sheet total*” has the meaning given by section 247(5) of that Act or Article 255(5) of that Order;
- (b) “*net turnover*” has the meaning given to “*turnover*” by section 262(1) of that Act or Article 270(1) of that Order; and
- (c) “*number of employees*” has the meaning given by section 247(6) of that Act or Article 255(6) of that Order;
and for a financial year which is a company’s financial year but not in fact a year, the net turnover of the company shall be proportionately reduced.
- (4) Where the policy holder is a member of a group for which consolidated accounts (within the meaning of Directive [83/349/EEC](https://www.legislation.gov.uk/european/directive/1983/0349)) are drawn up, the question whether the condition in sub-paragraph (2) above is met shall be determined by reference to those accounts.
- (5) For the purposes of sub-paragraph (1)(c) above as it applies where the policy holder is a professional association, joint venture or temporary grouping, the question whether the condition in sub-paragraph (2) above is met shall be determined by reference to the aggregate of the figures of the description in question for all the members of the professional association, joint venture or temporary grouping.
- (6) In sub-paragraphs (1) to (5) above “*business*” includes a trade or profession and, for the purposes of sub-paragraph (1)(c) above, any activity of a professional association, joint venture or temporary grouping.
- (7) For the purposes of this paragraph, where an amount is denominated in any accounts in a currency other than the euro, it shall be converted into its equivalent in euros using the London closing exchange rate for that currency and the euro for the last day of the period to which the accounts relate.
- (8) In this paragraph—
- “*euro*” means the single currency adopted or proposed to be adopted as its currency by a member State in accordance with the Treaty establishing the European Community;
- “*financial year*”, in relation to any person, means the period (not exceeding 12 months) for which that person makes up accounts.
##### 12A
- (1) In paragraphs 6, 8(3) and 12(5) above and this paragraph, “*superior holding company*” means—
- (a) a company whose business consists wholly or mainly in the holding of shares or securities of companies which—
- (i) are holding companies or local holding companies; or
- (ii) are themselves superior holding companies; or
- (b) a company which would fall within paragraph (a) above if there were disregarded so much of its business as consists in the holding of property or rights of any description for use wholly or mainly by companies which it controls and which are resident in the territory in which it is resident.
- (2) For the purposes of sub-paragraphs (4A) and (4B) of paragraph 6 above, the income of a company during any period which “*represents qualifying exempt activity income of its subsidiaries*” is any income of the company during that period which is directly or indirectly derived from companies—
- (a) which it controls, and
- (b) which, throughout that period, fall within sub-paragraph (4B)(a) of that paragraph, but
- (c) which are not holding companies other than local holding companies.
- (3) In determining for the purposes of sub-paragraph (4A) or (4B) of paragraph 6 above the companies from which, and the proportions in which, different descriptions of income of a company are derived (whether directly or indirectly), any dividend shall be taken to be paid out of the appropriate profits.
- (4) Subsections (3) and (4) of section 799 (which provide rules for determining the profits out of which a dividend is to be regarded as paid for the purpose of subsection (1) of that section) shall apply for determining the appropriate profits for the purposes of subsection (3) above as they apply for determining the relevant profits for the purposes of subsection (1) of that section.
- (5) Sub-paragraphs (4) to (6) of paragraph 12 above shall apply in relation to sub-paragraph (4A) or (4B) of paragraph 6 above and a superior holding company as they apply in relation to sub-paragraph (3) or (4) of paragraph 6 above and a holding company, but taking the reference in sub-paragraph (4) of paragraph 12 above to paragraph (a) or (b) of sub-paragraph (1) of that paragraph as a reference to paragraph (a) or (b) of sub-paragraph (1) above.
## Part 2A — Trading Companies with Limited UK Connection
### Introductory
##### 12B
- (1) For the purposes of section 748(1)(ba), a controlled foreign company (“C”) is exempt for an accounting period if the requirements of this Part of this Schedule are satisfied.
- (2) The requirements are those imposed as to C's—
- (a) business establishment (see paragraph 12C),
- (b) business activities (see paragraph 12D),
- (c) UK connection (see paragraph 12E), and
- (d) finance income and relevant IP income (see paragraph 12F).
### Business establishment
##### 12C
- (1) The requirement of this paragraph is that throughout the accounting period C has a business establishment in the territory in which it is resident.
- (2) For the purposes of sub-paragraph (1)—
- (a) paragraph 5(2) to (5) (special rules about residence of the company) applies as it applies for the purposes of Part 2 of this Schedule, and
- (b) paragraph 7 (meaning of “business establishment”) applies as it applies for the purposes of paragraph 6(1)(a).
### Business activities
##### 12D
- (1) The requirement of this paragraph is that—
- (a) C's business does not, at any time during the accounting period, include to a substantial extent non-exempt activities, or
- (b) if C is wholly engaged in business falling within paragraph 11(1)(c) (banking etc), C's business does not, at any time during the accounting period, include to a substantial extent non-exempt activities which do not constitute investment business.
- (2) For this purpose—
- “*non-exempt activities*” means—the holding or managing of shares or securities,the holding of intellectual property,dealing in securities, other than in the capacity of a broker,the leasing of any description of property or rights,the investment in any manner of funds which would otherwise be available, directly or indirectly, for investment by or on behalf of any person (whether resident in the United Kingdom or not) who has, or is connected or associated with a person who has, control, either alone or together with other persons, of C, andif C is not a member of an insurance group throughout the accounting period, the effecting or carrying out of contracts of insurance between C and persons related to C;
- “*investment business*” means activities within paragraphs (a) to (d) of paragraph 9(1).
- (3) For the purposes of sub-paragraph (2)(f), a person is “related” to C if—
- (a) the person is connected or associated with C,
- (b) the person has a 25 per cent assessable interest in C in the case of the accounting period in question (within the meaning of paragraph 6(4C)), or
- (c) if C is a controlled foreign company in that accounting period by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
- (4) In sub-paragraph (2)—
- “*broker*” includes any person offering to sell securities to, or purchase securities from, members of the public generally;
- “*contract of insurance*” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
- “*insurance group*” has the meaning given by paragraph 11A(4);
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A);
- “*member of an insurance group*” has the meaning given by paragraph 11A(6).
### UK connection
##### 12E
- (1) The requirement of this paragraph is that C does not have a significant connection with the United Kingdom during the accounting period.
- (2) C has a significant connection with the United Kingdom during the accounting period if Condition A or B is met.
- (3) Condition A is that—
- (a) the UK-connected gross income of C's business for that period exceeds 10% of the gross income of that business for that period, and
- (b) sub-paragraph (4) does not apply.
- (4) This sub-paragraph applies if—
- (a) at all times in the accounting period there are sufficient individuals working for C in the territory in which it is resident, or in any other territory outside of the United Kingdom, who have the competence and authority to undertake all, or substantially all, of C's business,
- (b) C's relevant profits for the accounting period do not exceed 10% of C's relevant operating expenses for that period, and
- (c) the UK-connected gross income of C's business for that period does not exceed 50% of the gross income of that business for that period.
- (5) Condition B is that—
- (a) the UK-connected related-party business expenditure of C's business for that period exceeds 50% of the total related-party business expenditure of C's business for that period, and
- (b) during the accounting period C has been involved in a scheme where the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to achieve a reduction in corporation tax or any tax chargeable as if it were corporation tax.
- (6) For the purposes of sub-paragraph (4)(a), individuals are not to be regarded as working for C in any territory unless—
- (a) they are employed by C in the territory, or
- (b) they are otherwise directed by C to perform duties on its behalf in the territory.
- (7) In this paragraph—
- “*related-party business expenditure*” means any expenditure, other than capital expenditure, which gives rise, directly or indirectly, to income of a person related to C;
- “relevant profits”, for an accounting period, means the total profits of C for that period calculated in accordance with generally accepted accounting practice (disregarding any capital gains or losses), but before any deduction for interest or tax;
- “relevant operating expenses” of C means operating expenses of C other than—the cost of goods sold, andrelated-party business expenditure;
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions;
- “*UK-connected gross income*” means the gross income derived, directly or indirectly, from persons who are within the charge to United Kingdom tax for all or part of the accounting period;
- “*UK-connected related-party business expenditure*” means related-party business expenditure which gives rise, directly or indirectly, to income of a person within the charge to United Kingdom tax in respect of that income;
- “*United Kingdom tax*” means income tax or corporation tax;
and paragraph 12D(3) (persons “related” to C) applies for the purposes of this paragraph as it applies for the purposes of paragraph 12D(2)(f).
- (8) In the case of a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there, for the purposes of sub-paragraph (7)—
- (a) the gross income derived from that company is so much of the gross income as is attributable to that establishment, and
- (b) the income received by that company is such of its income as is attributable to that establishment.
### Finance income and relevant IP income
##### 12F
- (1) The requirement of this paragraph is that not more than 5% of C's gross income for the accounting period falls within sub-paragraph (2).
- (2) Gross income falls within this sub-paragraph to the extent that it is—
- (a) finance income, or
- (b) relevant IP income.
- (3) “*Finance income*” means—
- (a) any amount which in accordance with UK generally accepted accounting practice falls to be recognised as arising from a financial asset, and
- (b) any return, in relation to an amount, which—
- (i) is produced for C by an arrangement to which C is party, and
- (ii) is economically equivalent to interest,
except to the extent that the return is taken into account in determining an amount within paragraph (a).
- (4) “*Relevant IP income*” means royalties and receipts of a similar nature arising from intellectual property.
- (5) For the purposes of sub-paragraph (3)(b), the amount of a return is the amount which by virtue of the return would, in calculating C's chargeable profits, be treated under section 486B of CTA 2009 (disguised interest to be regarded as profit from loan relationship) as a profit arising to C from a loan relationship.
- (6) But, in calculating that profit for the purposes of sub-paragraph (5), sections 486B(7) and 486C to 486E of CTA 2009 are to be ignored.
- (7) In this paragraph—
- “*economically equivalent to interest*” is to be construed in accordance with section 486B(2) and (3) of CTA 2009;
- “*financial asset*” means a financial asset as defined for the purposes of UK generally accepted accounting practice or international accounting standards;
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A).
### Gross income
##### 12G
- (1) References in this Part of this Schedule to C's gross income are to be construed in accordance with this paragraph.
- (2) C's gross income for an accounting period does not include—
- (a) any distribution that would not be included in C's chargeable profits by reason of it being exempt for the purposes of Part 9A of CTA 2009 (see section 931A of that Act), or
- (b) any amount that would be taken into account in computing chargeable gains if C were within the charge to corporation tax.
- (3) C's gross income for an accounting period includes—
- (a) any income which accrues during that period to the trustees of a settlement in relation to which C is a settlor or a beneficiary, and
- (b) any income which accrues during that period to a partnership of which C is a partner, apportioned between C and the other partners on a just and reasonable basis.
- (4) Where there is more than one settlor or beneficiary in relation to the settlement mentioned in sub-paragraph (3)(a), the income is to be apportioned between C and the other settlors or beneficiaries on a just and reasonable basis.
- (5) In this paragraph—
- “*distribution*” has the same meaning as in the Corporation Tax Acts (see Part 23 of CTA 2010);
- “*partnership*” includes an entity established under the law of a country or territory outside the United Kingdom of a similar character to a partnership; and “partner” is to be read accordingly.
## Part 2B — Companies Exploiting Intellectual Property with Limited UK Connection
### Introductory
##### 12H
- (1) For the purposes of section 748(1)(bb), a company (“C”) is exempt for an accounting period if the requirements of this Part of this Schedule are satisfied.
- (2) The requirements are those imposed as to C's—
- (a) business establishment (see paragraph 12I),
- (b) intellectual property business (see paragraph 12J),
- (c) other business activities (see paragraph 12K),
- (d) UK connection (see paragraph 12L), and
- (e) finance income (see paragraph 12M).
### Business establishment
##### 12I
- (1) The requirement of this paragraph is that throughout the accounting period C has a business establishment in the territory in which it is resident.
- (2) For the purposes of sub-paragraph (1)—
- (a) paragraph 5(2) to (5) (special rules about residence of the company) applies as it applies for the purposes of Part 2 of this Schedule, and
- (b) paragraph 7 (meaning of “business establishment”) applies as it applies for the purposes of paragraph 6(1)(a).
### Intellectual property business
##### 12J
- (1) The requirement of this paragraph is that C's main business, throughout the accounting period, consists of the exploitation of intellectual property which does not have a relevant UK connection.
- (2) For the purposes of sub-paragraph (1), if any part of C's main business consists of the exploitation of intellectual property which has a relevant UK connection, that part is to be ignored if it is an insignificant part of C's main business.
- (3) Intellectual property has a relevant UK connection if—
- (a) at any time during the accounting period or the 6 years immediately preceding that period, it has been held by a person resident in the United Kingdom, or
- (b) activities relating to the creation, maintenance or enhancement of the intellectual property (other than activities of an incidental or insignificant nature) have been carried on by a person who for some or all of the period—
- (i) beginning when the activities were first carried on by the person, and
- (ii) ending at the end of the accounting period,
was related to C and within the charge to United Kingdom tax.
### Other business activities
##### 12K
- (1) The requirement of this paragraph is that—
- (a) C does not, at any time during the accounting period, carry on any activities otherwise than in the course of its main business, or
- (b) if it carries on any such activities (“secondary activities”), the secondary activities condition is met.
- (2) The secondary activities condition is that either—
- (a) the secondary activities do not, at any time during the accounting period, constitute a substantial part of the activities of C's business taken as a whole, or
- (b) section 748(1)(b) or (ba) would apply to prevent an apportionment under section 747(3) falling to be made as regards that period, if C's business consisted only of the secondary activities carried on by it during the accounting period.
### UK connection
##### 12L
- (1) The requirement of this paragraph is that C does not have a significant connection with the United Kingdom during the accounting period.
- (2) C has a significant connection with the United Kingdom during the accounting period if—
- (a) all or a substantial proportion of C's gross income for that period consists of income from the exploitation of intellectual property which derives from persons within the charge to United Kingdom tax, or
- (b) during that period C incurs expenditure (other than expenditure of an incidental or insignificant nature) on—
- (i) R&D sub-contractor payments, or
- (ii) the creation, development or maintenance of relevant intellectual property,
and that expenditure forms part of the income of a person who for some or all of that period is related to C and within the charge to United Kingdom tax.
- (3) In this paragraph—
- “*R&D sub-contractor payment*” means a payment made by C to another person in respect of research and development contracted out by C to that person;
- “*relevant intellectual property*” means intellectual property which does not have a relevant UK connection (see paragraph 12J(3)) and which C exploits in the course of its main business.
### Finance income
##### 12M
The requirement of this paragraph is that not more than 5% of C's gross income for the accounting period consists of finance income (within the meaning of paragraph 12F(3)).
### Interpretation of Part 2B
##### 12N
- (1) For the purpose of this Part of this Schedule—
- “*intellectual property*” is to be construed in accordance with paragraph 9(1A);
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G (meaning of “gross income”) applies as it applies for the purposes of Part 2A of this Schedule.
- (2) For the purposes of this Part of this Schedule a person is “related” to C at a particular time if at that time—
- (a) the person is connected or associated with C,
- (b) the person has a 25 per cent assessable interest in C in the case of the accounting period of C in which that time falls (within the meaning of paragraph 6(4C)), or
- (c) if C is a controlled foreign company in the accounting period in which that time falls by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
- (3) In the case of a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there—
- (a) for the purposes of paragraph 12J(3)(b), the activities carried on by the company are such of the activities as are carried on through that establishment,
- (b) for the purposes of paragraph 12L(2)(a), the income derived from that company is such of the income so derived as is attributable to that establishment, and
- (c) for the purposes of paragraph 12L(2)(b), the income of that company is such of its income as is attributable to that establishment.
## Part 3A — Exempt Periods
### Introductory
##### 15A
The provisions of this Part of this Schedule have effect for the purposes of section 748(1)(f).
### Beginning of exempt period
##### 15B
- (1) An exempt period begins in relation to a company (“X”) at a time (“*the relevant time*”) when—
- (a) X is resident outside the United Kingdom,
- (b) X is controlled by persons resident in the United Kingdom,
- (c) there is at least one relevant UK corporate investor in X, and
- (d) the requirements of paragraph 15C or 15D are met.
- (2) There is a “relevant UK corporate investor in X” at a particular time if, at that time, there is a company which—
- (a) is resident in the United Kingdom, and
- (b) would, on the assumptions set out in sub-paragraph (3), be a company to which an apportionment of X's chargeable profits for the relevant accounting period would fall to be made in circumstances where section 747(5) would not prevent tax being chargeable on the company under section 747(4).
- (3) The assumptions are—
- (a) X has chargeable profits for the relevant accounting period,
- (b) an apportionment of those profits falls to be made under section 747(3) for that period, and
- (c) no reduction of those profits arises under section 751A, 751AA or 751AB.
- (4) “*The relevant accounting period*” means the accounting period of X in which the time mentioned in sub-paragraph (2) falls.
##### 15C
- (1) The requirements of this paragraph are that—
- (a) no company was, at any time before the relevant time, a relevant UK corporate investor in X,
- (b) no asset owned by X, or part of the business carried on by X, at the relevant time was previously owned, or carried on, by a company which—
- (i) was under the control of persons resident in the United Kingdom at any time it owned the asset or carried on the part of the business, and
- (ii) is or has been related to X,
- (c) condition A, B, C or D is met, and
- (d) no disqualifying relevant transaction occurs (see paragraph 15E).
- (2) Condition A is that, immediately before the relevant time, X—
- (a) was in existence, but
- (b) was not a member of the same group of companies as any person who, at the relevant time, was a controlling UK person.
- (3) Condition B is that—
- (a) at the relevant time X is controlled by a company which is resident in the United Kingdom, and
- (b) immediately before that time, X was controlled by that same company but that company was not then resident in the United Kingdom.
- (4) Condition C is that—
- (a) at the relevant time—
- (i) X is controlled by a company which is resident in the United Kingdom (“the intermediate parent”), and
- (ii) the intermediate parent is controlled by a company which is not resident in the United Kingdom (“the parent”), and
- (b) immediately before that time X was controlled by the parent but not the intermediate parent.
- (5) Condition D is that X—
- (a) is a controlled foreign company at the time it is formed, and
- (b) is formed by one or more persons for the purpose of controlling one or more companies in circumstances where it is expected that an exempt period will begin in relation to one or more of those companies at the time when X begins to control the company or companies.
- (6) In this paragraph “*controlling UK person*” means a person resident in the United Kingdom who alone, or together with other such persons, controls X.
##### 15D
- (1) The requirements of this paragraph are that—
- (a) the relevant time falls after 23 March 2011,
- (b) X has an accounting period during which 23 March 2011 falls,
- (c) no company was, at any time during that accounting period, a relevant UK corporate investor in X,
- (d) no company was, immediately before the relevant time, a relevant UK corporate investor in X,
- (e) at the relevant time X is controlled by a company which—
- (i) is resident in the United Kingdom, and
- (ii) is not under the control of another body corporate, or two or more other bodies corporate taken together, and
- (f) no disqualifying relevant transaction occurs (see paragraph 15E).
- (2) In determining for the purposes of sub-paragraph (1)(e)(ii) whether a company is under the control of two or more bodies corporate taken together, a body corporate which holds less than 10% of the issued ordinary shares of that company is to be disregarded.
- (3) For the purposes of sub-paragraph (2), a body corporate is treated as holding any shares held by persons who are connected or associated with the body corporate.
### Disqualifying relevant transactions
##### 15E
- (1) This paragraph applies for the purposes of paragraph 15C and 15D.
- (2) A disqualifying relevant transaction occurs if—
- (a) a relevant transaction occurs at the relevant time (whether or not the transaction occurs pursuant to an agreement entered into by X before that time), or
- (b) a relevant transaction occurs on or after 9 December 2010 but before the relevant time and that transaction forms part of an avoidance scheme.
- (3) “*Relevant transaction*” means—
- (a) the making by X of a loan or advance of an amount (other than a negligible amount) to a person who, at the time it is made, is related to X and subject to United Kingdom tax,
- (b) an increase (other than an increase of a negligible amount) in the amount of an existing loan or advance made by X to a person who, at the time of the increase, is related to X and subject to United Kingdom tax,
- (c) a change in the terms or conditions of an existing loan or advance made by X where—
- (i) the loan or advance is to a person who, at the time the change is made, is related to X and subject to United Kingdom tax, and
- (ii) the change has an effect (other than a negligible effect) on the amount of interest payable, or
- (d) a transaction to which sub-paragraph (4) applies.
- (4) This sub-paragraph applies to a transaction if—
- (a) it is referable to an activity carried on by X as part, or the whole, of any non-exempt activities carried on by X,
- (b) the results of the transaction are reflected in the profits arising in an accounting period of X and are not negligible in value, and
- (c) the results of the transaction alone, or together with the results of one or more other transactions, achieves a reduction in United Kingdom tax.
- (5) A transaction achieves, or two or more transactions together achieve, a reduction in United Kingdom tax if, had the transaction or transactions not been effected, any person—
- (a) would have been liable for any such tax or for a greater amount of any such tax, or
- (b) would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.
- (6) In this paragraph—
- “*avoidance scheme*” means a scheme the main purpose, or one of the main purposes, of any party to which in entering into the scheme is to secure that section 748(1)(f) prevents an apportionment falling to be made under section 747(3) as regards an accounting period, or accounting periods, of X;
- “*non-exempt activities*” has the meaning given by paragraph 12D(2);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions;
- “*United Kingdom tax*” means corporation tax (or any tax chargeable as if it were corporation tax) or income tax.
### Ending of exempt period
##### 15F
- (1) An exempt period ends on the expiry of the period of 24 months which begins immediately after the first accounting period of X to end after the relevant time, unless sub-paragraph (2) applies.
- (2) If an early termination event occurs after the relevant time but before the time the exempt period would end under sub-paragraph (1), the exempt period ends immediately before that event.
- (3) An early termination event occurs if and when—
- (a) a relevant transaction occurs, whether or not the transaction occurs pursuant to an agreement entered into by X before that time, or
- (b) where the exempt period began because Condition D was met, X's business does not consist wholly in the holding of shares of companies which X controls, together with activities incidental to the holding of such shares.
### Interpretation of Part 3A
##### 15G
- (1) In this Part of this Schedule—
- “*group*” means a company and any other companies it controls;
- “*the relevant time*” has the meaning given by paragraph 15B;
- “*relevant transaction*” has the meaning given by paragraph 15E;
- “*relevant UK corporate investor in X*” has the meaning given by paragraph 15B(2);
- “*X*” is to be construed in accordance with paragraph 15B.
- (2) For the purposes of this Part of this Schedule a person is “related” to X at a particular time if—
- (a) the person is connected or associated with X at that time,
- (b) the person has a 25 per cent assessable interest in X in the case of the accounting period in which that time falls (within the meaning of paragraph 6(4C)), or
- (c) if X is a controlled foreign company in the accounting period in which that time falls by virtue of subsection (1A) of section 747, the person is connected or associated with either or both of the two persons mentioned in that subsection.
### Application of this Schedule in relation to umbrella funds and funds comprising more than one class of interest
##### 21
- (1) The Treasury may make provision by regulations as to the application of the provisions of this Schedule in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (2) Regulations under this paragraph may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
## Part 3 — Supplementary
### Application of this Schedule in relation to umbrella funds and funds comprising more than one class of interest
##### 9
- (1) The Treasury may make provision by regulations as to the application of the provisions of this Schedule in relation to—
- (a) a part of an umbrella fund which is treated as an offshore fund under section 756B, or
- (b) a class of interest in an offshore fund which is treated as an offshore fund under section 756C.
- (2) Regulations under this paragraph may—
- (a) make different provision for different cases, and
- (b) include such supplementary, incidental, consequential or transitional provisions (including provisions modifying the effect of other enactments) as appear to the Treasury to be necessary or expedient.
## Schedule 28A
## Part I — Significant increase in company capital
### General
##### 1
The provisions referred to in section 768B(2) for determining whether there is a significant increase in the amount of a company’s capital after a change in the ownership of the company are as follows.
### The basic rule
##### 2
There is a significant increase in the amount of a company’s capital if amount B—
- (a) exceeds amount A by at least £1 million; or
- (b) is at least twice amount A.
### Amount A
##### 3
- (1) Amount A is the lower of—
- (a) the amount of the company’s capital immediately before the change in the ownership; and
- (b) the highest 60 day minimum amount for the pre-change year, found in accordance with sub-paragraphs (2) to (6) below.
- (2) Find the daily amounts of the company’s capital over the pre-change year.
- (3) Take the highest of the daily amounts.
- (4) Find out whether there was in the pre-change year a period of 60 days or more in which there was no daily amount lower than the amount taken.
- (5) If there was, the amount taken is the highest 60 day minimum amount for the pre-change year.
- (6) If there was not, take the next highest of the daily amounts and repeat the process in sub-paragraph (4) above; and so on, until the highest 60 day minimum amount for the pre-change year is found.
- (7) In this Part of this Schedule “*the pre-change year*” means the period of one year ending immediately before the change in the ownership of the company in question.
### Amount B
##### 4
- (1) Amount B is the highest 60 day minimum amount for the post-change period (finding that amount for that period in the same way as the highest 60 day minimum amount for the pre-change year is found).
- (2) In this paragraph “*the post-change period*” means the period of three years beginning with the change in the ownership of the company in question.
### Capital and amounts of capital
##### 5
- (1) The capital of a company consists of the aggregate of—
- (a) the amount of the paid up share capital of the company;
- (b) the amount outstanding of any debts incurred by the company which are of a description mentioned in any of paragraphs (a) to (c) of section 417(7); and
- (c) the amount outstanding of any redeemable loan capital issued by the company.
- (2) For the purposes of sub-paragraph (1) above—
- (a) the amount of the paid up share capital includes any amount in the share premium account of the company (construing “share premium account” in the same way as in section 130 of the Companies Act 1985); and
- (b) the amount outstanding of any debts includes any interest due on the debts.
- (3) Amounts of capital shall be expressed in sterling and rounded up to the nearest pound.
## Part II — Amounts in issue for purposes of section 768B
##### 6
The amounts in issue referred to in section 768B(4)(c) are—
- (a) the amount of any expenses of management referable to the accounting period (within the meaning of section 75) being divided, except any such expenses as would (apart from section 768B) be deductible in computing profits otherwise than under section 75;
- (b) the amount of any charges which are paid in that accounting period wholly and exclusively for the purposes of the company’s business;
- (c) the amount of any excess carried forward under section 75(9) to the accounting period being divided;
- (d) the amount of any allowances falling to be made for that accounting period by virtue of section 253 of the Capital Allowances Act which would (apart from section 768B) be added to the expenses of management for that accounting period by virtue of section 75(7);
- (da) the amount (if any) of the adjusted Case III profits and gains or non-trading deficit of the company for that accounting period (other than one within sub-paragraph (dc) below) ;
- (db) the amount of any non-trading debit (other than one within sub-paragraph . . . (dd) below) that falls to be brought into account for that accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of any debtor relationship of the company;
- (dc) the amount of any non-trading deficit carried forward to that accounting period under section 83(3A) of the Finance Act 1996 (carried forward deficit not set off against profits);
- (dd) the amount of any non-trading debit given for that accounting period by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company;
- (de) the amount of any non-trading credits or debits in respect of intangible fixed assets that fall to be brought into account for that period under paragraph 34 of Schedule 29 to the Finance Act 2002;
- (df) the amount of any non-trading loss on intangible fixed assets carried forward to that accounting period under paragraph 35(3) of that Schedule;
- (e) any other amounts by reference to which the profits or losses of that accounting period would (apart from section 768B) be calculated.
##### 6A
For the purposes of paragraph 6(da) above, the amount for any accounting period of the adjusted Case III profits and gains or non-trading deficit of a company is the amount which, as the case may be, would be—
- (a) the amount of the profits and gains chargeable under Case III of Schedule D as profits and gains arising from the company’s loan relationships, or
- (b) the amount of the company’s non-trading deficit on those relationships for that period,
if, in computing that amount, amounts for that period falling within paragraph 6(db) to (dd) above were disregarded.
## Part III — Apportionment for purposes of section 768B
##### 7
- (1) Subject to paragraph 8 below, the apportionment required by section 768B(4)(c) shall be made—
- (a) in the case of the sums mentioned in paragraph 6(a) above, by apportioning to each accounting period the amounts that would fall to be brought into account in that period as such sums, if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (aa) in the case of the charges mentioned in paragraph 6(b) above, by reference to the time when the charge is due to be paid;
- (b) in the case of the excess mentioned in paragraph 6(c) above, or in the case of the non-trading deficit mentioned in paragraph 6(dc) above, by apportioning the whole amount of the excess or, as the case may be, of the deficit to the first part of the accounting period being divided;
- (c) in the case of the amounts mentioned in paragraph 6(d) , (da) and (e) above, by reference to the respective lengths of the parts of the accounting period being divided;
- (d) in the case of any such debit as—
- (i) is mentioned in paragraph 6(db) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . .
- (iii) so falls to be brought into account otherwise than on the assumption, specified in paragraph 2(2) of Schedule 9 to that Act, that the interest to which it relates does not accrue until it is paid , and
- (iv) so falls to be brought into account without any adjustment under paragraph 17 or 18 of that Schedule (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed),
by reference to the time of accrual of the amount to which the debit relates;
- (e) in the case of any such debit as—
- (i) is mentioned in paragraph 6(db) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . . and
- (iii) so falls to be brought into account—
- — on the assumption mentioned in paragraph (d)(iii) above, or
- — with such an adjustment as is mentioned in paragraph (d)(iv) above,
by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (f) in the case of any such debit as is mentioned in paragraph 6(dd) above, by apportioning the whole amount of the debit to the first part of the accounting period being divided.
- (g) in the case of any such credit or debit as is mentioned in paragraph 6(de), by apportioning to each accounting period the credits or debits that would fall to be brought into account in that period if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (h) in the case of any such loss as is mentioned in paragraph 6(df) above, by apportioning the whole amount of the loss to the first part of the accounting period being divided.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 8
If it appears that any method of apportionment given by paragraph 7 above would work unreasonably or unjustly for any case for which it is given, such other method shall be used for that case as appears just and reasonable.
## Part IV — Excess overdue interest
### Introductory
##### 9
- (1) This paragraph has effect in a case to which section 768B applies for determining the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for—
- (a) the accounting period beginning immediately after the change in the ownership of the company; and
- (b) any subsequent accounting period.
- (2) The debits so brought into account shall not include the debits falling within paragraph 11 below to the extent (if at all) that the aggregate of—
- (a) the amount of those debits, and
- (b) the amount of any debits falling within that paragraph which have been brought into account for the purposes of that Chapter for any previous accounting period ending after the change in the ownership,
exceeds the profits for the accounting period ending with the change in the ownership.
- (3) The reference in sub-paragraph (2) above to the profits is a reference to profits after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given against the profits, including deductions and reliefs which under any provision are treated as reducing them for those purposes.
### The rules
##### 10
- (1) This paragraph has effect in a case to which section 768C applies for determining the debits to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) for—
- (a) the accounting period beginning immediately after the change in the ownership of the relevant company; and
- (b) any subsequent accounting period.
- (2) The debits so brought into account for any such accounting period shall not include the debits falling within paragraph 11 below to the extent (if at all) that the amount of those debits exceeds the modified total profits for the accounting period.
- (3) The reference in sub-paragraph (2) above to the modified total profits for an accounting period is a reference to the total profits for that period—
- (a) reduced, if that period is the period in which the relevant gain accrues, by an amount equal to the amount of the total profits for that period which represents the relevant gain; and
- (b) after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given against the profits, including deductions and reliefs which under any provision are treated as reducing them for those purposes, other than any reduction by virtue of paragraph 1(2) of Schedule 8 to the Finance Act 1996.
- (4) Where by virtue of sub-paragraph (2) above a debit is to any extent not brought into account for an accounting period, that debit may (to that extent) be brought into account for the next accounting period, but this is subject to the application of sub-paragraphs (1) to (3) above to that next accounting period.
##### 11
- (1) A debit falls within this paragraph if it is a non-trading debit which—
- (a) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting;
- (b) so falls to be brought into account—
- (i) with an adjustment under paragraph 17 or 18 of Schedule 9 to that Act (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed); or
- (ii) on the assumption, specified in sub-paragraph (2) of paragraph 2 of that Schedule, that the interest to which it relates does not accrue until it is paid; and
- (c) apart from paragraphs 2(2), 17 and 18 of that Schedule, would have fallen to be brought into account for those purposes for an accounting period ending before or with the change in the ownership of the company or, as the case may be, the relevant company.
- (2) The debits that fall within this paragraph also include—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) any non-trading debit given by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company or, as the case may be, the relevant company.
- (3) The debits that fall within this paragraph also include any non-trading debit which—
- (a) is not such a debit as is mentioned in sub-paragraph (1) or (2) above;
- (b) is a debit in respect of a debtor relationship of the company or, as the case may be, the relevant company;
- (c) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting; and
- (d) relates to an amount that accrued before the change in the ownership of that company.
- (4) In this paragraph “*post-change accounting period*” means the accounting period beginning immediately after the change in the ownership of the company or, as the case may be, the relevant company.
##### 12
Expressions used both in this Part of this Schedule and in Chapter II of Part IV of the Finance Act 1996 have the same meanings in this Part of this Schedule as in that Chapter.
## Part IV — Disallowed debits
##### 9A
- (1) This paragraph has effect in any case to which section 768B applies where the non-trading deficit mentioned in paragraph 6(dc) above is apportioned by paragraph 7(b) above to the first part of the accounting period being divided.
- (2) In any such case, none of that non-trading deficit shall be carried forward to—
- (a) the accounting period beginning immediately after the change in the ownership of the company, or
- (b) any subsequent accounting period.
##### 10A
- (1) This paragraph has effect in any case to which section 768C applies where the non-trading deficit mentioned in paragraph 13(1)(ec) below is apportioned by paragraph 16(1)(b) below to the first part of the accounting period being divided.
- (2) In any such case, none of that non-trading deficit shall be carried forward to—
- (a) the accounting period beginning immediately after the change in the ownership of the company, or
- (b) any subsequent accounting period.
## Part V — Amounts in issue for purposes of section 768C
##### 13
- (1) The amounts in issue referred to in section 768C(3)(c) are—
- (a) the amount which would in accordance with the relevant provisions of the 1992 Act (and apart from section 768C) be included in respect of chargeable gains in the total profits for the accounting period being divided;
- (b) the amount of any expenses of management referable to the accounting period (within the meaning of section 75) being divided except any such expenses as would (apart from section 768C) be deductible in computing total profits otherwise than under section 75;
- (c) the amount of any charges which are paid in that accounting period wholly and exclusively for the purposes of the company’s business;
- (d) the amount of any excess carried forward under section 75(9) to the accounting period being divided;
- (e) the amount of any allowances falling to be made for that accounting period by virtue of section 253 of the Capital Allowances Act which would (apart from section 768C) be added to the expenses of management for that accounting period by virtue of section 75(7);
- (ea) the amount (if any) of the adjusted Case III profits and gains or non-trading deficit of the company for that accounting period (other than one within paragraph (ec) below);
- (eb) the amount of any non-trading debit (other than one within paragraph . . . (ed) below) that falls to be brought into account for that accounting period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships) in respect of any debtor relationship of the company;
- (ec) the amount of any non-trading deficit carried forward to that accounting period under section 83(3A) of the Finance Act 1996 (carried forward deficit not set off against profits);
- (ed) the amount of any non-trading debit given for that accounting period by paragraph 13 of Schedule 15 to the Finance Act 1996 (transitional adjustment for past interest) in respect of any debtor relationship of the company;
- (ee) the amount of any non-trading credits or debits in respect of intangible fixed assets that fall to be brought into account for that period under paragraph 34 of Schedule 29 to the Finance Act 2002;
- (ef) the amount of any non-trading loss on intangible fixed assets carried forward to that accounting period under paragraph 35(3) of that Schedule; and
- (f) any other amounts by reference to which the profits or losses of the accounting period being divided would (apart from section 768C) be calculated.
- (2) In sub-paragraph (1)(a) above “*the relevant provisions of the 1992 Act*” means section 8(1) of and Schedule 7A to that Act.
##### 13A
Paragraph 6A above shall apply for the purposes of paragraph 13(1)(ea) above as it applies for the purposes of paragraph 6(da) above.
## Part VI — Apportionment for purposes of section 768C
##### 14
The apportionment required by section 768C(3)(c) shall be made as follows.
##### 15
In the case of the amount mentioned in paragraph 13(1)(a) above—
- (a) if it does not exceed the amount of the relevant gain, the whole of it shall be apportioned to the second part of the accounting period being divided;
- (b) if it exceeds the amount of the relevant gain, the excess shall be apportioned to the first part of the accounting period being divided and the relevant gain shall be apportioned to the second part.
##### 16
- (1) Subject to paragraph 17 below, the apportionment shall be made—
- (a) in the case of the sums mentioned in paragraph 13(1)(b) above, by apportioning to each accounting period the amounts that would fall to be brought into account in that period as such sums, if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (aa) in the case of the charges mentioned in paragraph 13(1)(c) above, by reference to the time when the charge is due to be paid;
- (b) in the case of the excess mentioned in paragraph 13(1)(d) above, or in the case of the non-trading deficit mentioned in paragraph 13(1)(ec) above, by apportioning the whole amount of the excess or, as the case may be, of the deficit to the first part of the accounting period being divided;
- (c) in the case of the amounts mentioned in paragraph 13(1)(e) , (ea) and (f) above, by reference to the respective lengths of the parts of the accounting period being divided;
- (d) in the case of any such debit as—
- (i) is mentioned in paragraph 13(1)(eb) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . .
- (iii) so falls to be brought into account otherwise than on the assumption, specified in paragraph 2(2) of Schedule 9 to that Act, that the interest to which it relates does not accrue until it is paid , and
- (iv) so falls to be brought into account without any adjustment under paragraph 17 or 18 of that Schedule (debit relating to amount of discount referable to the relevant accounting period to be brought into account instead for the accounting period in which the security is redeemed),
by reference to the time of accrual of the amount to which the debit relates;
- (e) in the case of any such debit as—
- (i) is mentioned in paragraph 13(1)(eb) above,
- (ii) falls to be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in accordance with an amortised cost basis of accounting, . . . and
- (iii) so falls to brought into account—
- — on the assumption mentioned in paragraph (d)(iii) above, or
- — with such an adjustment as is mentioned in paragraph (d)(iv) above,
by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (f) in the case of any such debit as is mentioned in paragraph 13(1)(ed) above, by apportioning the whole amount of the debit to the first part of the accounting period being divided;
- (g) in the case of any such credit or debit as is mentioned in paragraph 13(ee), by apportioning to each accounting period the credits or debits that would fall to be brought into account in that period if it were a period of account for which accounts were drawn up in accordance with generally accepted accounting practice;
- (h) in the case of any such loss as is mentioned in paragraph 13(ef), by apportioning the whole amount of the loss to the first part of the accounting period being divided.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 17
If it appears that any method of apportionment given by paragraph 16 above would work unreasonably or unjustly for any case for which it is given, such other method shall be used for that case as appears just and reasonable.
## SCHEDULE 28AA
### Basic rule on transfer pricing etc.
##### 1
- (1) This Schedule applies where—
- (a) provision (“the actual provision") has been made or imposed as between any two persons (“the affected persons") by means of a transaction or series of transactions, and
- (b) at the time of the making or imposition of the actual provision—
- (i) one of the affected persons was directly or indirectly participating in the management, control or capital of the other; or
- (ii) the same person or persons was or were directly or indirectly participating in the management, control or capital of each of the affected persons.
- (2) Subject to paragraphs 5A, 5B, 8, 10 and 13 below, if the actual provision—
- (a) differs from the provision (“the arm"s length provision’) which would have been made as between independent enterprises, and
- (b) confers a potential advantage in relation to United Kingdom taxation on one of the affected persons, or (whether or not the same advantage) on each of them,
the profits and losses of the potentially advantaged person or, as the case may be, of each of the potentially advantaged persons shall be computed for tax purposes as if the arm’s length provision had been made or imposed instead of the actual provision.
- (3) For the purposes of this Schedule the cases in which provision made or imposed as between any two persons is to be taken to differ from the provision that would have been made as between independent enterprises shall include the case in which provision is made or imposed as between any two persons but no provision would have been made as between independent enterprises; and references in this Schedule to the arm’s length provision shall be construed accordingly.
### Provision in relation to securities: determination of arm’s length provision
##### 1A
- (1) This paragraph applies where—
- (a) both of the affected persons are companies, and
- (b) the actual provision is provision in relation to a security issued by one of those companies (“the issuing company”).
- (2) Paragraph 1(2)(a) above shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the loan would have been made at all in the absence of the special relationship (see sub-paragraph (6) below),
- (b) the amount which the loan would have been in the absence of the special relationship, and
- (c) the rate of interest and other terms which would have been agreed in the absence of the special relationship,
but this is subject to the following provisions of this paragraph.
- (3) In a case where—
- (a) a company makes a loan to another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to make loans generally,
the fact that it is not part of the first company’s business to make loans generally shall be disregarded in construing sub-paragraph (2) above.
- (4) Paragraph 1(2)(a) above shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in sub-paragraph (5) below, of (or of any inference capable of being drawn from) any guarantee provided by a company with which the issuing company has a participatory relationship (see sub-paragraphs (7) and (8) below).
- (5) The matters are—
- (a) the appropriate level or extent of the issuing company’s overall indebtedness;
- (b) whether it might be expected that the issuing company and a particular person would have become parties to a transaction involving the issue of a security by the issuing company or the making of a loan, or a loan of a particular amount, to the issuing company;
- (c) the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
- (6) In this paragraph “*special relationship*” means any relationship by virtue of which the condition in paragraph 1(1)(b) above is satisfied in the case of the affected persons.
- (7) In this paragraph any reference to a guarantee includes a reference to a surety and to any other relationship, arrangements, connection or understanding (whether formal or informal) such that the person making the loan to the issuing company has a reasonable expectation that in the event of a default by the issuing company he will be paid by, or out of the assets of, one or more companies.
- (8) For the purposes of this paragraph, the cases where one company has a “*participatory relationship*”with another are those where—
- (a) one of them is directly or indirectly participating in the management, control or capital of the other; or
- (b) the same person or persons is or are directly or indirectly participating in the management, control or capital of each of them.
- (9) In this paragraph “*security*” includes securities not creating or evidencing a charge on assets.
- (10) For the purposes of this paragraph—
- (a) interest payable by a company on money advanced without the issue of a security for the advance, or
- (b) other consideration given by a company for the use of money so advanced,
shall be treated as if payable or given in respect of a security issued for the advance by the company, and references in this paragraph to a security shall be construed accordingly.
### Guarantees etc
##### 1B
- (1) This paragraph applies where the actual provision is made or imposed by means of a series of transactions which include—
- (a) the issuing of a security by a company which is one of the affected persons (“the issuing company”), and
- (b) the provision of a guarantee by a company which is the other of those persons.
- (2) Paragraph 1(2)(a) above shall be construed as requiring account to be taken of all factors, including—
- (a) the question whether the guarantee would have been provided at all in the absence of the special relationship,
- (b) the amount that would have been guaranteed in the absence of the special relationship, and
- (c) the consideration for the guarantee and other terms which would have been agreed in the absence of the special relationship,
but this is subject to the following provisions of this paragraph.
- (3) In a case where—
- (a) a company provides a guarantee in respect of another company with which it has a special relationship, and
- (b) it is not part of the first company’s business to provide guarantees generally,
the fact that it is not part of the first company’s business to provide guarantees generally shall be disregarded in construing sub-paragraph (2) above.
- (4) Paragraph 1(2)(a) above shall be construed as requiring no account to be taken, in the determination of any of the matters mentioned in sub-paragraph (5) below, of (or of any inference capable of being drawn from) any guarantee provided by a company with which the issuing company has a participatory relationship.
- (5) The matters are—
- (a) the appropriate level or extent of the issuing company’s overall indebtedness;
- (b) whether it might be expected that the issuing company and a particular person would have become parties to a transaction involving the issue of a security by the issuing company or the making of a loan, or a loan of a particular amount, to the issuing company;
- (c) the rate of interest and other terms that might be expected to be applicable in any particular case to such a transaction.
- (6) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (6) (meaning of special relationship);
- (b) sub-paragraph (7) (construction of references to a guarantee);
- (c) sub-paragraph (8) (meaning of participatory relationship);
- (d) sub-paragraph (9) (meaning of security);
- (e) sub-paragraph (10) (extended meaning of security).
### Principles for construing rules in accordance with OECD principles
##### 2
- (1) This Schedule shall be construed (subject to paragraphs 8 to 11 below) in such manner as best secures consistency between—
- (a) the effect given to paragraph 1 above; and
- (b) the effect which, in accordance with the transfer pricing guidelines, is to be given, in cases where double taxation arrangements incorporate the whole or any part of the OECD model, to so much of the arrangements as does so.
- (2) In this paragraph “*the OECD model*” means—
- (a) the rules which, at the passing of this Act, were contained in Article 9 of the Model Tax Convention on Income and on Capital published by the Organisation for Economic Co-operation and Development; or
- (b) any rules in the same or equivalent terms.
- (3) In this paragraph “*the transfer pricing guidelines*” means—
- (a) all the documents published by the Organisation for Economic Co-operation and Development, at any time before 1st May 1998, as part of their Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations; and
- (b) such documents published by that Organisation on or after that date as may for the purposes of this Schedule be designated, by an order made by the Treasury, as comprised in the transfer pricing guidelines.
### Meaning of “transaction" and “series of transactions"
##### 3
- (1) In this Schedule “*transaction*” includes arrangements, understandings and mutual practices (whether or not they are, or are intended to be, legally enforceable).
- (2) References in this Schedule to a series of transactions include references to a number of transactions each entered into (whether or not one after the other) in pursuance of, or in relation to, the same arrangement.
- (3) A series of transactions shall not be prevented by reason only of one or more of the matters mentioned in sub-paragraph (4) below from being regarded for the purposes of this Schedule as a series of transactions by means of which provision has been made or imposed as between any two persons.
- (4) Those matters are—
- (a) that there is no transaction in the series to which both those persons are parties;
- (b) that the parties to any arrangement in pursuance of which the transactions in the series are entered into do not include one or both of those persons; and
- (c) that there is one or more transactions in the series to which neither of those persons is a party.
- (5) In this paragraph, “*arrangement*” means any scheme or arrangement of any kind (whether or not it is, or is intended to be, legally enforceable).
### Participation in the management, control or capital of a person
##### 4
- (1) For the purposes of this Schedule a person is directly participating in the management, control or capital of another person at a particular time if, and only if, that other person is at that time—
- (a) a body corporate or a partnership; and
- (b) controlled by the first person.
- (2) For the purposes of this Schedule a person (“*the potential participant*”) is indirectly participating in the management, control or capital of another person at a particular time if, and (subject to paragraphs 4A and 6(4C) below) only if—
- (a) he would be taken to be directly so participating at that time if the rights and powers attributed to him included all the rights and powers mentioned in sub-paragraph (3) below that are not already attributed to him for the purposes of sub-paragraph (1) above; or
- (b) he is, at that time, one of a number of major participants in that other person’s enterprise.
- (3) The rights and powers referred to in sub-paragraph (2)(a) above are—
- (a) rights and powers which the potential participant is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of persons other than the potential participant to the extent that they are rights or powers falling within sub-paragraph (4) below;
- (c) rights and powers of any person with whom the potential participant is connected; and
- (d) rights and powers which for the purposes of sub-paragraph (2)(a) above would be attributed to a person with whom the potential participant is connected if that connected person were himself the potential participant.
- (4) Rights and powers fall within this sub-paragraph to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the potential participant;
- (ii) under the direction of the potential participant; or
- (iii) for the benefit of the potential participant;
and
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (5) In sub-paragraphs (3)(b) to (d) and (4) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (6) In paragraph (d) of sub-paragraph (3) above, the reference to rights and powers which would be attributed to a connected person if he were the potential participant includes a reference to rights and powers which, by applying that paragraph wherever one person is connected with another, would be so attributed to him through a number of persons each of whom is connected with at least one of the others.
- (7) For the purposes of this paragraph a person (“*the potential major participant*”) is a major participant in another person’s enterprise at a particular time if at that time—
- (a) that other person (“*the subordinate*”) is a body corporate or partnership; and
- (b) the 40 per cent. test is satisfied in the case of each of two persons who, taken together, control the subordinate and of whom one is the potential major participant.
- (8) For the purposes of this paragraph the 40 per cent. test is satisfied in the case of each of two persons wherever each of them has interests, rights and powers representing at least 40 per cent. of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the subordinate.
- (9) For the purposes of this paragraph—
- (a) the question whether a person is controlled by any two or more persons taken together, and
- (b) any question whether the 40 per cent. test is satisfied in the case of a person who is one of two persons,
shall be determined after attributing to each of the persons all the rights and powers attributed to a potential participant for the purposes of sub-paragraph (2)(a) above.
- (10) References in this paragraph—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
- (11) For the purposes of this paragraph two persons are connected with each other if—
- (a) one of them is an individual and the other is his spouse or civil partner, a relative of his or of his spouse or civil partner, or the spouse or civil partner of such a relative; or
- (b) one of them is a trustee of a settlement and the other is—
- (i) a person who in relation to that settlement is a settlor; or
- (ii) a person who is connected with a person falling within sub-paragraph (i) above.
- (12) In sub-paragraph (11) above—
- “*relative*” means brother, sister, ancestor or lineal descendant; and
- “*settlement*” and “*settlor*” have the same meanings as in section 620 of ITTOIA 2005.
### Persons acting together in relation to financing arrangements
##### 4A
- (1) A person (“P”) shall be treated for the purposes of paragraph 1(1)(b)(i) above (but subject to sub-paragraph (7) below) as indirectly participating in the management, control or capital of another (“A”) at the time of the making or imposition of the actual provision if—
- (a) the actual provision relates, to any extent, to financing arrangements for A;
- (b) A is a body corporate or partnership;
- (c) P and other persons acted together in relation to the financing arrangements; and
- (d) P would be taken to have control of A if, at any relevant time, there were attributed to P the rights and powers of each of the other persons mentioned in paragraph (c) above.
- (2) A person (“Q”) shall be treated for the purposes of paragraph 1(1)(b)(ii) above (but subject to sub-paragraph (7) below) as indirectly participating in the management, control or capital of each of the affected persons at the time of the making or imposition of the actual provision if—
- (a) the actual provision relates, to any extent, to financing arrangements for one of the affected persons (“B”);
- (b) B is a body corporate or partnership;
- (c) Q and other persons acted together in relation to the financing arrangements; and
- (d) Q would be taken to have control of both B and the other affected person if, at any relevant time, there were attributed to Q the rights and powers of each of the other persons mentioned in paragraph (c) above.
- (3) It is immaterial for the purposes of sub-paragraph (1)(c) or (2)(c) above whether P or Q and the other persons acting together in relation to the financing arrangements did so at the time of the making or imposition of the actual provision or at some earlier time.
- (4) In sub-paragraph (1)(d) or (2)(d) “*relevant time*” means—
- (a) a time when P or Q and the other persons were acting together in relation to the financing arrangements; or
- (b) a time in the period of six months beginning with the day on which they ceased so to act.
- (5) In determining for the purposes of sub-paragraph (1)(d) or (2)(d) whether P or Q would be taken to have control of another person, the rights and powers of any person (and not just P or Q) shall be taken to include those that would be attributed to that person in determining under paragraph 4 above whether he is indirectly participating in the management, control or capital of the other person.
- (6) In this paragraph “*financing arrangements*” means arrangements made for providing or guaranteeing, or otherwise in connection with, any debt, capital or other form of finance.
- (7) Where the condition in paragraph 1(1)(b) above would not be satisfied but for this paragraph, paragraph 1(2) above applies only to the extent that the actual provision relates to the financing arrangements in question.
### Financing arrangements: anticipatory provision
##### 4B
- (1) To the extent that it applies to provision relating to financing arrangements, this Schedule has effect as if in paragraph 1(1)(b) above the words “or within the period of six months beginning with the day on which the actual provision was made or imposed” were inserted immediately before sub-paragraph (i).
- (2) In this paragraph “*financing arrangements*” has the same meaning as in paragraph 4A above.
### Advantage in relation to United Kingdom taxation
##### 5
- (1) For the purposes of this Schedule . . . the actual provision confers a potential advantage on a person in relation to United Kingdom taxation wherever, disregarding this Schedule, the effect of making or imposing the actual provision, instead of the arm’s length provision, would be one or both of the following, that is to say—
- (a) that a smaller amount (which may be nil) would be taken for tax purposes to be the amount of that person’s profits for any chargeable period; or
- (b) that a larger amount (or, if there would not otherwise have been losses, any amount of more than nil) would be taken for tax purposes to be the amount for any chargeable period of any losses of that person.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) In determining for the purposes of sub-paragraph (1) above the amount that would be taken for tax purposes to be the amount of the profits or losses for a year of assessment in the case of a person who is not resident in the United Kingdom, there shall be left out of account any income of that person which is—
- (a) excluded income for the purposes of section 128 of the Finance Act 1995 (limit on income chargeable on non-residents: income tax), or
- (b) income to which section 151 of the Finance Act 2003 applies (non-resident companies: extent of charge to income tax).
### Exemption for dormant companies
##### 5A
- (1) Paragraph 1(2) above does not apply in computing for any chargeable period the profits and losses of a potentially advantaged person if that person is a company which satisfies the condition in sub-paragraph (2) below.
- (2) The condition is that—
- (a) the company was dormant throughout the pre-qualifying period, and
- (b) apart from paragraph 1 above, the company has continued to be dormant at all times since the end of the pre-qualifying period.
- (3) In sub-paragraph (2) above “*the pre-qualifying period*” means—
- (a) if there is an accounting period of the company that ends on 31st March 2004, that accounting period, or
- (b) if there is no such accounting period, the period of 3 months ending with that date.
- (4) In this paragraph “*dormant*” has the same meaning as in section 249AA of the Companies Act 1985 (see subsections (4) to (7) of that section).
### Exemption for small or medium-sized enterprises
##### 5B
- (1) Paragraph 1(2) above does not apply in computing for any chargeable period the profits and losses of a potentially advantaged person if that person is a small or medium-sized enterprise for that chargeable period (see paragraph 5D below).
- (2) Exceptions to sub-paragraph (1) above are provided—
- (a) in the case of a small enterprise, by sub-paragraphs (3) and (4) below, and
- (b) in the case of a medium-sized enterprise, by sub-paragraphs (3) and (4) and paragraph 5C below.
- (3) The first exception is where the small or medium-sized enterprise elects for sub-paragraph (1) above not to apply in relation to the chargeable period.
Any such election is irrevocable.
- (4) The second exception is where, at the time when the actual provision is or was made or imposed,—
- (a) the other affected person, or
- (b) a party to a relevant transaction (see sub-paragraph (5) below),
is a resident (see sub-paragraph (6) below) of a non-qualifying territory (whether or not that person is also a resident of a qualifying territory).
- (5) For the purposes of sub-paragraph (4) above, a “party to a relevant transaction” is a person who, in a case where the actual provision is or was imposed by means of a series of transactions, is or was a party to one or more of those transactions.
- (6) In this paragraph “*resident*”, in relation to a territory,—
- (a) means a person who, under the laws of that territory, is liable to tax there by reason of his domicile, residence or place of management, but
- (b) does not include a person who is liable to tax in that territory in respect only of income from sources in that territory or capital situated there.
- (7) The definitions of “qualifying territory” and “non-qualifying territory” are in paragraph 5E below.
### Additional provisions for medium-sized enterprises
##### 5C
- (1) Paragraph 5B(1) above does not apply as respects any provision made or imposed if—
- (a) the potentially advantaged person in question is a medium-sized enterprise for the chargeable period in question, and
- (b) the Board gives that person a notice under this sub-paragraph (a “*transfer pricing notice*”) requiring him to compute the profits and losses of that chargeable period in accordance with paragraph 1(2) above in the case of that provision.
- (2) A transfer pricing notice may be given in respect of —
- (a) any provision specified, or of a description specified, in the notice, or
- (b) every provision in relation to which the assumption in paragraph 1(2) above would fall to be made apart from paragraph 5B(1) above.
- (3) A transfer pricing notice may be given only after a notice of enquiry has been given to the potentially advantaged person in respect of his tax return for the chargeable period.
- (4) A transfer pricing notice must identify the officer of the Board to whom any notice of appeal under this paragraph is to be given.
- (5) A person to whom a transfer pricing notice is given may appeal against the decision to give the notice, but only on the grounds that the condition in sub-paragraph (1)(a) above is not satisfied.
- (6) Any such appeal must be brought by giving written notice of appeal to the officer of the Board identified for the purpose in the transfer pricing notice in accordance with sub-paragraph (4) above.
- (7) The notice of appeal must be given before the end of the period of 30 days beginning with the day on which the transfer pricing notice is given.
- (8) A person to whom a transfer pricing notice is given may amend his tax return for the purpose of complying with the notice at any time before the end of the period of 90 days beginning with—
- (a) the day on which the notice is given, or
- (b) if he appeals against the notice, the day on which the appeal is finally determined or abandoned.
- (9) Where a transfer pricing notice is given in the case of any tax return, no closure notice may be given in relation to that tax return until—
- (a) the end of the period of 90 days specified in sub-paragraph (8) above, or
- (b) the earlier amendment of the tax return for the purpose of complying with the notice.
- (10) So far as relating to any provision made or imposed by or in relation to a person—
- (a) who is a medium-sized enterprise for a chargeable period,
- (b) who does not make an election under paragraph 5B(3) above for that period, and
- (c) who is not excepted from paragraph 5B(1) above by virtue of paragraph 5B(4) above in relation to that provision for that period,
the tax return required to be made for that period is a return that disregards paragraph 1(2) above.
- (11) Sub-paragraph (10) above does not prevent a tax return for a period becoming incorrect if, in the case of any provision made or imposed,—
- (a) a transfer pricing notice is given which has effect in relation to that provision for that period,
- (b) the return is not amended in accordance with sub-paragraph (8) above for the purpose of complying with the notice, and
- (c) the return ought to have been so amended.
- (12) In this paragraph—
- “*closure notice*” means a notice under—section 28A or 28B of the Management Act, orparagraph 32 of Schedule 18 to the Finance Act 1998;
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule;
- “*notice of enquiry*” means a notice under—section 9A or 12AC of the Management Act, orparagraph 24 of Schedule 18 to the Finance Act 1998;
- “*tax return*” means—a return under section 8, 8A or 12AA of the Management Act, ora company tax return.
### Meaning of “small enterprise” and “medium-sized enterprise”
##### 5D
- (1) In this Schedule—
- (a) “*small enterprise*” means a small enterprise as defined in the Annex to the Commission Recommendation,
- (b) “*medium-sized enterprise*” means an enterprise which—
- (i) falls within the category of micro, small and medium-sized enterprises as defined in that Annex, and
- (ii) is not a small enterprise as defined in that Annex,
but for these purposes that Annex has effect with the modifications set out in sub-paragraphs (3) to (6) of this paragraph.
- (2) In this paragraph—
- “*the Annex*” means the Annex to the Commission Recommendation;
- “*the Commission Recommendation*” means Commission Recommendation 2003/361/EC of 6th May 2003 (concerning the definition of micro, small and medium-sized enterprises).
- (3) Where any enterprise is in liquidation or administration, the rights of the liquidator or administrator (in that capacity) shall be left out of account when applying Article 3(3)(b) of the Annex in determining for the purposes of this Schedule whether—
- (a) that enterprise, or
- (b) any other enterprise (including that of the liquidator or administrator),
is a small or medium-sized enterprise.
- (4) Article 3 of the Annex shall have effect with the omission of paragraph 5 (declaration in good faith where control cannot be determined etc).
- (5) The first sentence of Article 4(1) of the Annex shall have effect as if the data to apply to—
- (a) the headcount of staff, and
- (b) the financial amounts,
were the data relating to the chargeable period in paragraph 5B(1) above (instead of the period described in that sentence) and calculated on an annual basis.
- (6) Article 4 of the Annex shall have effect with the omission of the following provisions—
- (a) the second sentence of paragraph 1 (data to be taken into account from date of closure of accounts);
- (b) paragraph 2 (no change of status unless ceilings exceeded for two consecutive periods);
- (c) paragraph 3 (bona fide estimate in case of newly established enterprise).
### Meaning of “qualifying territory” and “non-qualifying territory”
##### 5E
- (1) In this Schedule—
- “*non-qualifying territory*” means any territory which is not a qualifying territory;
- “*qualifying territory*” means—the United Kingdom, orany territory as respects which Condition 1 or Condition 2 below is satisfied.
- (2) Condition 1 is that—
- (a) arrangements to which section 788 applies (double taxation relief by agreement with other territories) have been made in relation to the territory;
- (b) those arrangements contain a non-discrimination provision (see sub-paragraphs (4) and (5) below); and
- (c) the territory is not designated as a non-qualifying territory for the purposes of this sub-paragraph in regulations made by the Treasury.
- (3) Condition 2 is that—
- (a) arrangements to which section 788 applies have been made in relation to the territory; and
- (b) the territory is designated as a qualifying territory for the purposes of this sub-paragraph in regulations made by the Treasury.
- (4) For the purposes of this paragraph a “*non-discrimination provision*”, in relation to any arrangement to which section 788 applies, is a provision to the effect that nationals of a state which is a party to those arrangements (a “contracting state”) are not to be subject in any other contracting state to—
- (a) any taxation, or
- (b) any requirement connected with taxation,
which is other or more burdensome than the taxation and connected requirements to which nationals of that other state in the same circumstances (in particular with respect to residence) are or may be subjected.
- (5) In this paragraph, “*national*”, in relation to a contracting state, includes—
- (a) any individual possessing the nationality or citizenship of the contracting state,
- (b) any legal person, partnership or association deriving its status as such from the laws in force in that contracting state.
- (6) A statutory instrument containing regulations under this paragraph shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
### Elimination of double counting
##### 6
- (1) This paragraph applies where—
- (a) only one of the affected persons (“the advantaged person”) is a person on whom a potential advantage in relation to United Kingdom taxation is conferred by the actual provision; and
- (b) the other affected person (“the disadvantaged person”) is within the charge to income tax or corporation tax in respect of profits arising from the relevant activities.
- (2) Subject to sub-paragraphs (3) to (6) and paragraphs6C, 6D, 7 and 8 below, on the making of a claim by the disadvantaged person for the purposes of this paragraph—
- (a) the profits and losses of the disadvantaged person shall be computed for tax purposes as if the arm’s length provision had been made or imposed instead of the actual provision; and
- (b) notwithstanding any limit in the Tax Acts on the time within which any adjustment may be made, all such adjustments shall be made in his case as may be required to give effect to the assumption that the arm’s length provision was made or imposed instead of the actual provision.
- (3) A claim made by the disadvantaged person for the purposes of this paragraph—
- (a) shall not be made unless a computation has been made in the case of the advantaged person on the basis that the arm’s length provision was made or imposed instead of the actual provision; and
- (b) must be consistent with the computation made on that basis in the case of the advantaged person.
- (4) For the purposes of sub-paragraph (3) above a computation shall be taken to have been made in the case of the advantaged person on the basis that the arm’s length provision was made or imposed instead of the actual provision if, and only if—
- (a) the computations made for the purposes of any return by the advantaged person have been made on that basis by virtue of this Schedule; or
- (b) a relevant notice given to the advantaged person takes account of a determination in pursuance of this Schedule of an amount falling to be brought into account for tax purposes on that basis.
- (4A) A claim by the disadvantaged person for the purposes of this paragraph shall not be made where—
- (a) the condition in paragraph 1(1)(b) above would not be satisfied but for paragraph 4A above;
- (b) the actual provision is provision in relation to a security issued by one of the affected persons (“*the issuer*”);
- (c) a guarantee is provided in relation to the security by a person with whom the issuer has a participatory relationship.
In this sub-paragraph “*security*” and “*guarantee*” have the same meaning as in paragraph 1A above.
- (4B) For the purposes of sub-paragraph (4A) above, the cases where one person has a “*participatory relationship*” with another are those where—
- (a) one of them is directly or indirectly participating in the management, control or capital of the other; or
- (b) the same person or persons is or are directly or indirectly participating in the management, control or capital of each of them.
- (4C) Paragraph 4A above applies for the purposes of sub-paragraph (4B) above as it applies for the purposes of paragraph 1(1)(b) above.
- (5) Subject to section 111(3)(b) of the Finance Act 1998 (which provides for the extension of the period for making a claim), a claim for the purposes of this paragraph shall not be made except within one of the following periods—
- (a) in a case where a return has been made by the advantaged person on the basis mentioned in sub-paragraph (3)(a) above, the period of two years beginning with the day of the making of the return; and
- (b) in any case where a relevant notice taking account of such a determination as is mentioned in sub-paragraph (4)(b) above has been given to the advantaged person, the period of two years beginning with the day on which that notice was given.
- (6) Subject to section 111(3)(b) of the Finance Act 1998, where—
- (a) a claim for the purposes of this paragraph is made by the disadvantaged person in relation to a return made on the basis mentioned in sub-paragraph (3)(a) above, and
- (b) a relevant notice taking account of such a determination as is mentioned in sub-paragraph (4)(b) above is subsequently given to the advantaged person,
the disadvantaged person shall be entitled, within the period mentioned in sub-paragraph (5)(b) above, to make any such amendment of the claim as may be appropriate in consequence of the determination contained in that notice.
- (7) In this paragraph—
- “*relevant notice*” means—a closure notice under section 28A(1) or 28B(1) of the Management Act in relation to an enquiry into a return under section 8 or 8A of that Act or into a partnership return;a closure notice under paragraph 32 of Schedule 18 to the Finance Act 1998 in relation to an enquiry into a company tax return;a notice of an assessment under section 29 of the Management Act;a notice of any discovery assessment or discovery determination under paragraph 41 of Schedule 18 to the Finance Act 1998 (including any notice of an assessment by virtue of paragraph 52 of that Schedule);a notice under section 30B(1) of the Management Act amending a partnership return;
- “*return*” means any return required to be made under the Management Act or Schedule 18 to the Finance Act 1998 for income tax or corporation tax purposes or any voluntary amendment of such a return; and
- “*voluntary amendment*”, in relation to a return, means —an amendment under section 9ZA or 12ABA of the Management Act (amendment of personal, trustee or partnership return by taxpayer), oran amendment under Schedule 18 to the Finance Act 1998 other than one made in response to the giving of a relevant notice.
### Application of paragraph 6 in relation to transfers of trading stock etc
##### 6A
- (1) Paragraph 6(2)(a) above does not affect the credits to be brought into account by the disadvantaged person in respect of—
- (a) closing trading stock, or
- (b) closing work in progress in a trade,
for accounting periods ending on or after the last day of the relevant accounting period of the advantaged person.
- (2) For the purposes of sub-paragraph (1) above, the relevant accounting period of the advantaged person is the accounting period in which the actual provision was made or imposed.
- (3) For the purposes of this paragraph “*trading stock*”, in relation to any trade, has the same meaning as it has for the purposes of section 100 above (see subsection (2) of that section) or Chapter 12 of Part 2 of ITTOIA 2005 (see section 174 of that Act) (valuation of trading stock at discontinuance of trade).
### Compensating adjustment where advantaged person is a controlled foreign company
##### 6B
- (1) This paragraph applies in any case where—
- (a) the actual provision is provision made or imposed in relation to a controlled foreign company,
- (b) in determining for the purposes of Chapter 4 of Part 17 the amount of that company’s chargeable profits for an accounting period, its profits and losses fall to be computed in accordance with paragraph 1(2) above in the case of that provision,
- (c) the whole of those chargeable profits fall to be apportioned under section 747(3) to one or more companies resident in the United Kingdom, and
- (d) tax is chargeable by virtue of section 747(4) in respect of the whole of those chargeable profits, as so apportioned to those companies.
- (2) Where this paragraph applies, paragraph 6 above shall have effect as if the controlled foreign company were a person on whom a potential advantage in relation to United Kingdom taxation were conferred by the actual provision.
- (3) In the application of paragraph 6 above by virtue of this paragraph—
- (a) references to the advantaged person in sub-paragraphs (4)(a) and (b), (5)(a) and (b) and (6)(b) of that paragraph include a reference to any of the companies mentioned in sub-paragraph (1)(c) above, and
- (b) references to corporation tax include a reference to tax chargeable by virtue of section 747(4).
- (4) In this paragraph—
- “*controlled foreign company*” has the same meaning as in Chapter 4 of Part 17;
- “*accounting period*”, in relation to a controlled foreign company, has the same meaning as in Chapter 4 of Part 17.
### Claims under paragraph 6 where paragraph 1A applies
##### 6C
- (1) Where paragraph 1A above applies in relation to any provision, this paragraph has effect in relation to that provision.
- (2) A claim under paragraph 6(2) above may be made in accordance with this paragraph.
For the purposes of this Schedule a “paragraph 6C claim” is a claim under paragraph 6(2) above made in accordance with this paragraph.
- (3) A paragraph 6C claim may be made by—
- (a) the disadvantaged person, or
- (b) the advantaged person,
but any such claim made by the advantaged person shall be taken to be made on behalf of the disadvantaged person.
- (4) A paragraph 6C claim may be made before or after a computation falling within paragraph 6(3)(a) above has been made.
- (5) A paragraph 6C claim must be made either—
- (a) at any time before the end of the period mentioned in paragraph 6(5)(a) above, or
- (b) within the period mentioned in paragraph 6(5)(b) above,
but this is subject to section 111(3)(b) of the Finance Act 1998 (extension of period for making a claim).
- (6) A paragraph 6C claim is not a claim within paragraph 57 or 58 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters).
Accordingly, paragraph 59 of that Schedule (application of Schedule 1A to the Management Act) has effect in relation to a paragraph 6C claim.
- (7) Where—
- (a) a paragraph 6C claim is made before a computation falling within paragraph 6(3)(a) above has been made,
- (b) such a computation is subsequently made, and
- (c) the claim is not consistent with the computation,
the affected persons shall be treated as if (instead of the claim actually made) a claim had been made that was consistent with the computation.
- (8) All such adjustments shall be made (whether by discharge or repayment of tax, the making of assessments or otherwise) as are required to give effect to sub-paragraph (7) above.
- (9) Sub-paragraph (8) above has effect notwithstanding any limit on the time within which any adjustment may be made.
- (10) Where—
- (a) a paragraph 6C claim is made,
- (b) a return is subsequently made by the advantaged person on the basis mentioned in paragraph 6(3)(a) above, and
- (c) a relevant notice (within the meaning of paragraph 6 above) taking account of such a determination as is mentioned in paragraph 6(4)(b) above is subsequently given to the advantaged person,
sub-paragraph (11) below applies.
- (11) Where this sub-paragraph applies, any such amendment of the paragraph 6C claim as may be appropriate in consequence of the determination contained in the relevant notice may be made by—
- (a) the disadvantaged person, or
- (b) the advantaged person,
but any such amendment made by the advantaged person shall be taken to be made on behalf of the disadvantaged person.
- (12) Any such amendment must be made within the period mentioned in paragraph 6(5)(b) above.
But that is subject to section 111(3)(b) of the Finance Act 1998 (extension of period for making amendment).
### Compensating adjustment for guarantor company etc where paragraph 1B applies
##### 6D
- (1) This paragraph applies in any case where—
- (a) a company (“the issuing company”) has liabilities under a security issued by the company,
- (b) those liabilities are to any extent the subject of a guarantee provided by a company (“the guarantor company”), and
- (c) in computing the profits and losses of the issuing company for tax purposes, the amounts to be deducted in respect of interest or other amounts payable under the security fall to be reduced (whether or not to nil) under paragraph 1(2) above by virtue of paragraph 1B above.
- (2) On the making of a claim in any such case, the guarantor company shall, to the extent of that reduction, be treated for all purposes of the Taxes Acts as if it (and not the issuing company)—
- (a) had issued the security,
- (b) owed the liabilities under it, and
- (c) had paid any interest or other amounts paid under it by the issuing company,
and in computing the profits and losses of the guarantor company for those purposes amounts shall be brought into account accordingly.
This sub-paragraph is subject to the following provisions of this paragraph.
- (3) Where the issuing company’s liabilities under the security are the subject of two or more guarantees (whether or not provided by the same person) TD must not exceed TR, where—
- TD is the total of the amounts brought into account by the guarantor companies by virtue of sub-paragraph (2) above, and
- TR is the total amount of the reductions that fall within sub-paragraph (1)(c) above.
- (4) In this paragraph “*the loan provision*” means the actual provision made or imposed between—
- (a) the issuing company, and
- (b) another company (“the lending company”),
which is provision in relation to the security.
- (5) Where—
- (a) the guarantor company makes a claim under sub-paragraph (2) above, and
- (b) the lending company makes a claim under paragraph 6 above in respect of the loan provision,
sub-paragraphs (6) and (7) below apply.
- (6) In determining, in a case where this sub-paragraph applies, the arm’s length provision for the purposes of paragraph 6(2)(a) above in relation to the lending company’s claim, additional amounts shall be brought into account as credits corresponding to the debits that fall to be brought into account by virtue of sub-paragraph (2) above in relation to the guarantor company.
- (7) If, in a case where this sub-paragraph applies,—
- (a) the lending company makes its claim under paragraph 6 above before the guarantor company makes its claim under sub-paragraph (2) above, and
- (b) the computation on which the lending company’s claim is based does not comply with sub-paragraph (6) above,
the guarantor company’s claim shall be disallowed.
- (8) A claim under sub-paragraph (2) above may be made by—
- (a) the guarantor company,
- (b) where there are two or more guarantor companies, those companies acting together, or
- (c) the issuing company,
but any claim made by the issuing company shall be taken to be made on behalf of the guarantor company or companies.
- (9) Sub-paragraphs (3) to (6) of paragraph 6 above (claims and time limits) shall apply in relation to a claim under sub-paragraph (2) above made by or on behalf of any person or persons as they apply in relation to a claim under that paragraph made by the disadvantaged person, but taking references in those sub-paragraphs—
- (a) to the advantaged person, as references to the issuing company, and
- (b) to the disadvantaged person, as references to the guarantor company or companies.
- (10) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (7) (construction of references to a guarantee);
- (b) sub-paragraph (9) (meaning of security);
- (c) sub-paragraph (10) (extended meaning of security).
- (11) In this paragraph “*the Taxes Acts*” has the meaning given in section 118(1) of the Management Act.
### Certain interest not to be regarded as chargeable under Case III of Schedule D
##### 6E
Where—
- (a) interest is paid by any person under the actual provision,
- (b) paragraph 1(2) above applies in relation to the actual provision,
- (c) the amount of interest that would have been payable under the arm’s length provision is less than the amount of interest paid under the actual provision (or there would not have been any interest payable),
- (d) the person receiving the interest makes a claim under paragraph 6 above or a paragraph 6C claim,
the interest paid under the actual provision, to the extent that it exceeds the amount of interest that would have been payable under the arm’s length provision, shall not be regarded as chargeable under Case III of Schedule D or Chapter 2 of Part 4 of ITTOIA 2005.
### Adjustment of disadvantaged person’s double taxation relief
##### 7
- (1) Subject to sub-paragraph (4) below, where—
- (a) a claim is made for the purposes of paragraph 6 above, and
- (b) the disadvantaged person is entitled, on that claim, to make a computation, or to have an adjustment made in his case, on the basis that the arm’s length provision was made or imposed instead of the actual provision,
the assumptions specified in sub-paragraph (2) below shall apply, in the disadvantaged person’s case, as respects any credit for foreign tax which the disadvantaged person has been or may be given in pursuance of any double taxation arrangements or under section 790(1).
- (2) Those assumptions are—
- (a) that the foreign tax paid or payable by the disadvantaged person does not include any amount of foreign tax which would not be or have become payable were it to be assumed for the purposes of that tax that the arm’s length provision had been made or imposed instead of the actual provision; and
- (b) that the amount of the relevant profits of the disadvantaged person in respect of which he is given credit for foreign tax does not include the amount (if any) by which his relevant profits are treated as reduced in accordance with paragraph 6 above.
- (3) Sub-paragraph (4) below applies if—
- (a) a claim is made for the purposes of paragraph 6 above;
- (b) the disadvantaged person is entitled, on that claim, to make a computation, or to have an adjustment made in his case, on the basis that the arm’s length provision was made or imposed instead of the actual provision;
- (c) the application of that basis in the computation of the disadvantaged person’s profits or losses for any chargeable period involves a reduction in the amount of any income; and
- (d) that income is also income that falls to be treated as reduced in accordance with section 811(1).
- (4) Where this sub-paragraph applies—
- (a) the reduction mentioned in sub-paragraph (3)(c) above shall be treated as made before any reduction under section 811(1); and
- (b) tax paid, in the place in which any income arises, on so much of that income as is represented by the amount of the reduction mentioned in sub-paragraph (3)(c) above shall be disregarded for the purposes of section 811(1).
- (5) Where, in a case in which a claim has been made for the purposes of paragraph 6 above, any adjustment is required to be made for the purpose of giving effect to any of the preceding provisions of this paragraph—
- (a) it may be made in any case by setting the amount of the adjustment against any relief or repayment to which the disadvantaged person is entitled in pursuance of that claim; and
- (b) nothing in the Tax Acts limiting the time within which any assessment is to be or may be made or amended shall prevent that adjustment from being so made.
- (6) References in this paragraph to relevant profits of the disadvantaged person are references to profits arising to the disadvantaged person from the carrying on of the relevant activities.
### Balancing payments between affected persons: no charge to, or relief from, tax
##### 7A
- (1) This paragraph applies where—
- (a) the circumstances are as described in paragraph 6(1) above,
- (b) one or more payments (the “balancing payments”) are made to the advantaged person by the disadvantaged person, and
- (c) the sole or main reason for making those payments is that paragraph 1(2) above applies.
- (2) To the extent that the balancing payments do not in the aggregate exceed the amount of the available compensating adjustment, those payments—
- (a) shall not be taken into account in computing profits or losses of either of the affected persons for the purposes of income tax or corporation tax, and
- (b) shall not for any of the purposes of the Corporation Tax Acts be regarded as distributions . . . .
- (3) In this paragraph “*the available compensating adjustment*” means the difference between PL1 and PL2 where—
- PL1 is the profits and losses of the disadvantaged person computed for tax purposes on the basis of the actual provision, and
- PL2 is the profits and losses of the disadvantaged person as they fall (or would fall) to be computed for tax purposes on a claim under paragraph 6 above,
### Securities: election to discharge tax liability instead of making balancing payments
##### 7B
- (1) This paragraph applies in any case where—
- (a) both of the affected persons are companies,
- (b) the circumstances are as described in paragraph 6(1) above, and
- (c) the actual provision is provision in relation to a security (the “relevant security”).
- (2) The disadvantaged person may make an election under this paragraph in respect of the relevant security if the condition in sub-paragraph (3) below is satisfied.
- (3) The condition is that—
- (a) the actual provision forms part of a capital market arrangement,
- (b) the capital market arrangement involves the issue of a capital market investment,
- (c) the securities that represent the capital market investment are issued wholly or mainly to independent persons (see sub-paragraph (9) below), and
- (d) the total value of the capital market investments made under the capital market arrangement is at least £50 million.
- (4) An election under this paragraph in respect of the relevant security is an election for the disadvantaged person—
- (a) to make no balancing payment within paragraph 7A above to the advantaged person in respect of the application of paragraph 1(2) above in relation to the relevant security in a chargeable period by virtue of paragraph 1A above, but
- (b) instead, to undertake sole responsibility for discharging the advantaged person’s liability to tax for that period so far as resulting from the application of paragraph 1(2) above in relation to the relevant security by virtue of paragraph 1A above.
- (5) Where an election under this paragraph has effect in relation to an accounting period of the advantaged person, the tax mentioned in sub-paragraph (4)(b) above—
- (a) shall be recoverable from the disadvantaged person as if it were an amount of corporation tax due and owing from that person, and
- (b) shall not be recoverable from the advantaged person.
- (6) Any election under this paragraph in respect of the relevant security—
- (a) must be made by being included (whether by amendment or otherwise) in the disadvantaged person’s company tax return for the chargeable period in which the relevant security is issued,
- (b) has effect in relation to each of the affected persons for the chargeable period in which the relevant security is issued and all subsequent chargeable periods, and
- (c) is irrevocable.
For the purposes of this sub-paragraph a security issued in a chargeable period beginning before 1st April 2004 shall be treated as if it had been issued in the chargeable period beginning on that date.
- (7) An election under this paragraph by a person is of no effect if the Board give that person a notice under this sub-paragraph refusing to accept the election.
- (8) A notice under sub-paragraph (7) above may be given only after a notice of enquiry in respect of the company tax return containing the election has been given to the disadvantaged person.
- (9) In this paragraph—
- “*capital market arrangement*” has the same meaning as in section 72B(1) of the Insolvency Act 1986 (see paragraph 1 of Schedule 2A to that Act);
- “*capital market investment*” has the same meaning as in section 72B(1) of the Insolvency Act 1986 (see paragraphs 2 and 3 of Schedule 2A to that Act);
- “*company tax return*” means the return required to be delivered pursuant to a notice under paragraph 3 of Schedule 18 to the Finance Act 1998, as read with paragraph 4 of that Schedule;
- “*independent person*” means a person—who is not the disadvantaged person, andwho does not have a participatory relationship with either of the affected persons.
- (10) The following provisions of paragraph 1A above also apply for the purposes of this paragraph—
- (a) sub-paragraph (8) (meaning of participatory relationship);
- (b) sub-paragraph (9) (meaning of security);
- (c) sub-paragraph (10) (extended meaning of security).
### Balancing payments by guarantor to issuer: no charge to, or relief from, tax
##### 7C
- (1) This paragraph applies in any case where—
- (a) the circumstances are as described in paragraph 6D(1) above,
- (b) one or more payments (the “balancing payments”) are made by the guarantor company to the issuing company, and
- (c) the sole or main reasons for making those payments are that paragraph 1(2) above applies by virtue of paragraph 1B above or that paragraph 6D above applies.
- (2) To the extent that the balancing payments made by all the guarantor companies do not in the aggregate exceed the amount TR in paragraph 6D(3) above (total reductions within paragraph 6D(1)(c) above), those payments—
- (a) shall not be taken into account in computing for the purposes of corporation tax the profits or losses of the guarantor company or companies or the issuing company, and
- (b) shall not for any purpose of the Corporation Tax Acts be regarded as distributions . . . .
### Guarantees: election to discharge tax liability instead of making balancing payments
##### 7D
- (1) This paragraph applies where the following conditions are satisfied—
- (a) both of the affected persons are companies,
- (b) the circumstances are as described in paragraph 6(1) above,
- (c) the actual provision falls within paragraph 1B(1) above.
- (2) Sub-paragraphs (2) to (8) of paragraph 7B above apply in a case where this paragraph applies as they apply in a case where that paragraph applies, but with the modifications in sub-paragraphs (3) and (4) below.
- (3) The relevant security is the security in paragraph 1B(1)(a) above.
- (4) In sub-paragraph (4) (nature of the election)—
- (a) for “paragraph 7A above” substitute paragraph 7C below;
- (b) for “paragraph 1A”, in both places, substitute paragraph 1B.
### Foreign exchange gains and losses and financial instruments
##### 8
- (1) Subject to sub-paragraph (3)and sub-paragraph (4) below, this Schedule shall not require the amounts brought into account in any person’s case under—
- (a) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships) in respect of exchange gains or losses from loan relationships (as defined in section 103(1A) and (1B) of that Act), or
- (b) Schedule 26 to the Finance Act 2002 (derivative contracts) in respect of exchange gains and losses (as defined in paragraph 54 of that Schedule),
to be computed in that person’s case on the assumption that the arm’s length provision had been made or imposed instead of the actual provision.
- (3) Sub-paragraph (1) above shall not affect so much of paragraph 11A of Schedule 9 to the Finance Act 1996 (loan relationships: exchange gains or losses where loan not on arm’s length terms) as has effect by reference to whether profits or losses fall to be computed by virtue of this Schedule as if the whole or any part of a loan had not been made.
- (4) Sub-paragraph (1) above shall not affect so much of paragraph 27 of Schedule 26 to the Finance Act 2002 (derivative contracts: exchange gains or losses where derivative contract not on arm’s length terms) as has effect by reference to whether profits or losses fall to be computed by virtue of this Schedule as if a company were not party to a derivative contract or as if the terms of the contract to which it is party were different.
### Special rules for sales etc. of oil
##### 9
- (1) Subject to paragraph 10 below, this paragraph applies to provision made or imposed by or in relation to the terms of a sale of oil if—
- (a) the oil sold is oil which has been, or is to be, extracted under rights exercisable by a company (“the producer") which (although it may be the seller) is not the buyer; and
- (b) at the time of the sale not less than 20 per cent. of the producer’s ordinary share capital is owned directly or indirectly by one or more of the following, that is to say, the buyer and the companies (if any) that are linked to the buyer.
- (2) Where this paragraph applies to provision made or imposed by or in relation to the terms of a sale of oil, this Schedule shall have effect as respects that provision as if the buyer, the seller and (if it is not the seller) the producer were all controlled by the same person at the time of the making or imposition of that provision.
- (3) For the purposes of this paragraph two companies are linked if—
- (a) one is under the control of the other; or
- (b) both are under the control of the same person or persons.
- (4) For the purposes of this paragraph—
- (a) any question whether ordinary share capital is owned directly or indirectly by a company shall be determined as for section 838;
- (b) rights to extract oil shall be taken to be exercisable by a company even if they are exercisable by that company only jointly with one or more other companies; and
- (c) a sale of oil shall be deemed to take place at the time of the completion of the sale or when possession of the oil passes, whichever is the earlier.
- (5) In this paragraph “*oil*” includes any mineral oil or relative hydrocarbon, as well as natural gas.
### Transactions and deemed transactions involving oil
##### 10
This Schedule does not apply in relation to provision made or imposed by means of any transaction or deemed transaction in the case of which the price or consideration is determined in accordance with any of subsections (1) to (4) of section 493 (transactions and deemed transactions involving oil treated as made at market value).
### Special provision for companies carrying on ring fence trades
##### 11
- (1) This paragraph applies where any person (“the taxpayer") carries on as, or as part of, a trade any activities (“the ring fence trade") which, in accordance with section 492(1) above or section 16(1) of ITTOIA 2005 either—
- (a) fall to be treated for any tax purposes as a separate trade, distinct from all other activities carried on by him as part of the trade; or
- (b) would so fall if the taxpayer did carry on any other activities as part of that trade.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subject to paragraph 10 above and sub-paragraph (4) below, this Schedule shall have effect as respects any provision made or imposed by the taxpayer as between the ring fence trade and any other activities carried on by him as if—
- (a) that trade and those activities were carried on by two different persons;
- (b) that provision were made or imposed as between those two persons by means of a transaction;
- (c) a potential advantage in relation to United Kingdom taxation were conferred by that provision on each of those two persons; and
- (d) those two persons were both controlled by the same person at the time of the making or imposition of that provision; . . .
- (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) This Schedule shall apply in accordance with this paragraph in relation to any provision mentioned in sub-paragraph . . . (3) above only where the effect of its application in relation to that provision is either—
- (a) that a larger amount (including, if there would not otherwise have been profits, an amount of more than nil) is taken for tax purposes to be the amount of the profits of the ring fence trade for any chargeable period; or
- (b) that a smaller amount (including nil) is taken for tax purposes to be the amount for any chargeable period of any losses of that trade.
### Appeals
##### 12
- (1) In so far as the question in dispute on any appeal falling within sub-paragraph (2) below—
- (a) is or involves a determination of whether this Schedule has effect as respects any provision made or imposed as between any two persons, or of how it so has effect, and
- (b) is not a question that would fall to be determined by the Special Commissioners apart from this sub-paragraph,
that question shall be determined by them.
- (2) The appeals falling within this sub-paragraph are—
- (a) any appeal under section 31 of, or Schedule 1A to, the Management Act;
- (b) any appeal under paragraph 34(3) of Schedule 18 to the Finance Act 1998 against an amendment of a company’s return; and
- (c) any appeal under paragraph 48 of that Schedule against a discovery assessment or a discovery determination.
- (3) Sub-paragraph (4) below applies where—
- (a) any such question as is mentioned in sub-paragraph (1) above falls to be determined by the Special Commissioners for the purposes of any proceedings before them; and
- (b) that question relates to any provision made or imposed as between two persons each of whom is within the charge to income tax or corporation tax in respect of profits arising from the relevant activities.
- (4) Where this sub-paragraph applies—
- (a) each of the persons as between whom the actual provision was made or imposed shall be entitled to appear and be heard by the Special Commissioners, or to make representations to them in writing;
- (b) the Special Commissioners shall determine that question separately from any other questions in those proceedings; and
- (c) their determination on that question shall have effect as if made in an appeal to which each of those persons was a party.
- (5) In this paragraph—
- “*discovery assessment*” means a discovery assessment under paragraph 41 of Schedule 18 to the Finance Act 1998 (including one by virtue of paragraph 52 of that Schedule); and
- “*discovery determination*” means a discovery determination under paragraph 41 of that Schedule.
### Saving for the provisions relating to capital allowances and capital gains
##### 13
- (1) Nothing in this Schedule shall be construed as affecting—
- (a) the computation of the amount of any capital allowance or balancing charge made under the Capital Allowances Act; or
- (b) the computation in accordance with the 1992 Act of the amount of any chargeable gain or allowable loss;
and nothing in this Schedule shall require the profits or losses of any person to be computed for tax purposes as if, in his case, instead of income or losses falling to be brought into account in connection with the taxation of income, there were gains or losses falling to be brought into account in accordance with the 1992 Act.
- (2) Nothing in sub-paragraph (1) above applies to paragraph 6 above.
### General interpretation etc.
##### 14
- (1) In this Schedule—
- “*the actual provision*” and “*the affected persons*” shall be construed in accordance with paragraph 1(1) above;
- “*the arm*”s length provision’ shall be construed in accordance with paragraph 1(2) and (3) above;
- “*double taxation arrangements*” means arrangements having effect by virtue of section 788;
- “*foreign tax*” means any tax under the law of a territory outside the United Kingdom or any amount which falls for the purposes of any double taxation arrangements to be treated as if it were such tax;
- “*insurance company*” has the same meaning as in Chapter I of Part XII;
- “*losses*” includes amounts which are not losses but in respect of which relief may be given in accordance with any of the following enactments—section 75(9) (excess of management expenses);section 468L(5) (allowance for interest distributions of a unit trust);Part X (loss relief and group relief);section 83 of and Schedule 8 to the Finance Act 1996 or paragraph 4 of Schedule 11 to that Act (deficits on loan relationships);
- “*medium-sized enterprise*” shall be construed in accordance with paragraph 5D above;
- “*non-qualifying territory*” has the meaning given by paragraph 5E above;
- “*paragraph 6C claim*” has the meaning given by paragraph 6C(2) above;
- “*profits*” includes income;
- “*qualifying territory*” has the meaning given by paragraph 5E above;
- “*the relevant activities*”, in relation to a person who is one of the persons as between whom any provision is made or imposed, means such of his activities as—comprise the activities in the course of which, or with respect to which, that provision is made or imposed; andare not activities carried on either separately from those activities or for the purposes of a different part of that person’s business;
- “*small enterprise*” shall be construed in accordance with paragraph 5D above;
- “*transaction*” and “*series of transactions*” shall be construed in accordance with paragraph 3 above.
- (2) Without prejudice to paragraphs 9(2) and 11(3) above, references in this Schedule to a person controlling a body corporate or a partnership shall be construed in accordance with section 840.
- (3) In determining for the purposes of this Schedule whether a person has an entitlement, in pursuance of any double taxation arrangements or under section 790(1), to be given credit for foreign tax, any requirement that a claim is made before such a credit is given shall be disregarded.
- (4) Any adjustments required to be made by virtue of this Schedule may be made by way of discharge or repayment of tax, by the modification of any assessment or otherwise.
- (5) This Schedule shall have effect as if—
- (a) a unit trust scheme were a company that is a body corporate;
- (b) the rights of the unit holders under such a scheme were shares in the company that the scheme is deemed to be;
- (c) rights and powers of a person in the capacity of a person entitled to act for the purposes of the scheme were rights and powers of the scheme; and
- (d) provision made or imposed as between any person in such a capacity and another person were made or imposed as between the scheme and that other person.
## SCHEDULE 28AB
### Introductory
##### 1
- (1) A scheme or arrangement, other than a scheme or arrangement falling within sub-paragraph (3), is a prescribed scheme or arrangement if one or more of paragraphs 2 to 6 apply to it.
- (2) A scheme or arrangement falling within sub-paragraph (3) is a prescribed scheme or arrangement if one or more of paragraphs 2 to 6 would, on the assumption in sub-paragraph (4), apply to it.
- (3) A scheme or arrangement falls within this sub-paragraph if its main purpose, or one of its main purposes, is to cause an amount of underlying tax allowable in respect of a dividend paid by a body corporate resident in a territory outside the United Kingdom to be taken into account in the case of a person.
- (4) The assumption is that the body corporate is resident in the United Kingdom.
- (5) Nothing in sub-paragraph (4) requires it to be assumed that there is any change in the place or places at which the body corporate carries on its activities.
### Attribution of foreign tax
##### 2
This paragraph applies to a scheme or arrangement if the scheme or arrangement enables a person who is party to, or concerned in, the scheme or arrangement to pay, in respect of a source of income or chargeable gain, an amount of foreign tax all or part of which is properly attributable to another source of income or chargeable gain (or to more than one such other source).
### Effect of paying foreign tax
##### 3
- (1) This paragraph applies to a scheme or arrangement if, under the scheme or arrangement, sub-paragraph (2) is satisfied in relation to a person who has claimed, or is in a position to claim, for a chargeable period an allowance under any arrangements by way of credit for foreign tax (“*the claimant*”).
- (2) This sub-paragraph is satisfied if—
- (a) an amount of foreign tax is paid by the claimant, and
- (b) at the time when the claimant entered into the scheme or arrangement, it could reasonably be expected that the effect of the payment of that amount of foreign tax on the foreign tax total would be to increase it by less than the amount allowable to the claimant as a credit in respect of the payment of that amount of foreign tax.
- (3) The foreign tax total is the amount found by—
- (a) aggregating the amounts of foreign tax paid or payable in respect of the transaction or transactions forming part of the scheme or arrangement by persons party to, or concerned in, the scheme or arrangement, and
- (b) taking into account any reliefs, deductions, reductions or allowances against or in respect of any tax that arise to the persons party to, or concerned in, the scheme or arrangement (including any reliefs, deductions, reductions or allowances arising to any one or more of those persons as a consequence of the payment by the claimant of that amount of foreign tax).
### Effect of claim, election or other arrangement
##### 4
- (1) This paragraph applies to a scheme or arrangement if under the scheme or arrangement—
- (a) a step is taken by a person who is party to, or concerned in, the scheme or arrangement, or
- (b) a step that could have been taken by such a person is not taken,
and that action or that failure to act has the effect of increasing a claim made by a person who is party to, or concerned in, the scheme or arrangement for an allowance by way of credit in accordance with this Part or of giving rise to such a claim.
- (2) The steps mentioned in sub-paragraph (1) are steps that may be made—
- (a) under the law of any territory, or
- (b) under arrangements made in relation to any territory.
- (3) The steps mentioned in sub-paragraph (1) include—
- (a) claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances;
- (b) making elections for tax purposes.
### Effect attributable to scheme or arrangement
##### 5
- (1) This paragraph applies to a scheme or arrangement if, under the scheme or arrangement, sub-paragraph (2) is satisfied in relation to a person who has claimed, or is in a position to claim, for a chargeable period an allowance under any arrangements by way of credit for foreign tax.
- (2) This sub-paragraph is satisfied if amount A is less than amount B.
- (3) Amount A is the amount of United Kingdom taxes payable by the person in respect of income and chargeable gains arising in the chargeable period.
- (4) Amount B is the amount of United Kingdom taxes that would be payable by the person in respect of income and chargeable gains arising in the chargeable period if, in determining that amount, the transactions forming part of the scheme or arrangement were disregarded.
### Tax deductible payments
##### 6
- (1) This paragraph applies to a scheme or arrangement if the scheme or arrangement includes—
- (a) the making by a person (“A”) of a relevant payment or payments, and
- (b) the giving, in respect of that payment or payments, of consideration that satisfies the requirements of sub-paragraph (3).
- (2) A payment made by A is a relevant payment if all or part of it may be brought into account in computing A's income for the purposes of United Kingdom taxes.
- (3) Consideration given in respect of a payment or payments made by A satisfies the requirements of this sub-paragraph if—
- (a) all or part of it consists of a payment or payments made to A or a person connected with A, and
- (b) tax is chargeable in respect of the payment or payments under the law of a territory outside the United Kingdom.
- (4) In this paragraph references to a payment include references to a transfer of money's worth.
- (5) Section 839 applies for the purposes of this paragraph.
## SCHEDULE 28B
### Introductory
##### 1
- (1) This Schedule applies, where any shares in or securities of any company (“the relevant company”) are at any time held by another company (“the trust company”), for determining whether and to what extent those shares or securities (“the relevant holding”) are, for the purposes of section 842AA, to be regarded as at that time comprised in the trust company’s qualifying holdings.
- (2) The relevant holding shall be regarded as comprised in the trust company’s qualifying holdings at any time if—
- (a) all the requirements of the following provisions of this Schedule are satisfied at that time in relation to the relevant company and the relevant holding; and
- (b) the relevant holding consists of shares or securities which were first issued by the relevant company to the trust company and have been held by the trust company ever since.
- (3) Subject to paragraph 6(3) below, where the requirements of paragraph 6 or 7 below would be satisfied as to only part of the money raised by the issue of the relevant holding and that holding is not otherwise capable of being treated as comprising separate holdings, this Schedule shall have effect in relation to that holding as if it were two holdings consisting of—
- (a) a holding from which that part of the money was raised; and
- (b) a holding from which the remainder was raised;
and section 842AA shall have effect as if the value of the holding were to be apportioned accordingly between the two holdings which are deemed to exist in pursuance of this sub-paragraph.
### Requirement that company must be unquoted company
##### 2
- (1) The requirement of this paragraph is that the relevant company (whether or not it is resident in the United Kingdom) must be an unquoted company.
- (2) In this paragraph “*unquoted company*” means a company none of whose shares, stocks, debentures or other securities is marketed to the general public.
- (3) For the purposes of this paragraph shares, stocks, debentures or other securities are marketed to the general public if they are—
- (a) listed on a recognised stock exchange,
- (b) listed on a designated exchange in a country outside the United Kingdom, or
- (c) dealt in on the Unlisted Securities Market or dealt in outside the United Kingdom by such means as may be designated.
- (4) In sub-paragraph (3) above “*designated*” means designated by an order made by the Board for the purposes of that sub-paragraph; and an order made for the purposes of paragraph (b) of that sub-paragraph may designate an exchange by name, or by reference to any class or description of exchanges, including a class or description framed by reference to any authority or approval given in a country outside the United Kingdom.
- (5) Section 828(1) does not apply to an order made for the purposes of sub-paragraph (3) above.
- (6) Where a company any shares in or securities of which are included in the qualifying holdings of the trust company ceases at any time while the trust company is approved as a venture capital trust to be an unquoted company, the requirements of this paragraph shall be deemed, in relation to shares or securities acquired by the trust company before that time, to continue to be satisfied for a period of five years after that time.
### Requirements as to company’s business
##### 3
- (1) The requirements of this paragraph are as follows.
- (2) The relevant company must be one of the following, that is to say—
- (a) a company which exists wholly for the purpose of carrying on one or more qualifying trades or which so exists apart from purposes capable of having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities; or
- (aa) the parent company of a trading group.
- (3) Subject to sub-paragraph (4) below, when the relevant holding was issued and at all times since, a qualifying company (whether or not the same such company at every such time) must have been either—
- (a) carrying on a qualifying trade wholly or mainly in the United Kingdom; or
- (b) preparing to carry on a qualifying trade which at the time when the relevant holding was issued was intended to be carried on wholly or mainly in the United Kingdom by a qualifying company,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The requirements of sub-paragraph (3) above shall not be capable of being satisfied by virtue of paragraph (b) of that sub-paragraph at any time after the end of the period of two years beginning with the issue of the relevant holding unless—
- (a) the intended trade was begun to be carried on by a qualifying company before the end of that period, and
- (b) at all times since the end of that period, a qualifying company (whether or not the same such company at every such time) has been carrying on a qualifying trade wholly or mainly in the United Kingdom.
- (5) The requirements of that sub-paragraph shall also be incapable of being so satisfied at any time after the abandonment, within the period mentioned in sub-paragraph (4) above, of the intention in question.
- (5A) In sub-paragraphs (3) and (4) above, “*qualifying company*” means the relevant company or any relevant qualifying subsidiary of that company.
- (5B) In determining for the purposes of sub-paragraph (4)(a) above when the intended trade was begun to be carried on by a qualifying company which is a relevant qualifying subsidiary of the relevant company there shall be disregarded any carrying on of the trade by it before it became such a subsidiary of the relevant company.
- (6) For the purposes of this paragraph a company is the parent company of a trading group if—
- (a) it has one or more subsidiaries;
- (b) each of its subsidiaries is a qualifying subsidiary of the company; and
- (c) the requirements of sub-paragraph (7) below are fulfilled by what would be the business of the company and its qualifying subsidiaries if all the activities, taken together, of the company and its qualifying subsidiaries were regarded as one business.
- (7) A business fulfils the requirements of this sub-paragraph if neither the business nor a substantial part of it consists in, or in either of, the following, that is to say—
- (a) activities falling within paragraph 4(2)(a) to (f) below but not within sub-paragraph (8) below; and
- (b) activities carried on otherwise than in the course of a trade.
- (8) The activities falling within this sub-paragraph are—
- (a) the receiving of royalties or licence fees in circumstances where the requirement mentioned in paragraph 4(5) below is satisfied in relation to the company receiving them;
- (b) the letting of ships, other than offshore installations or pleasure craft, on charter in circumstances where the requirements mentioned in paragraphs (a) to (d) of paragraph 4(7) below are satisfied in relation to the company so letting them.
- (9) Activities of a company or of any of its qualifying subsidiaries shall be disregarded for the purposes of sub-paragraphs (6) to (8) above to the extent that they consist in—
- (a) the holding of shares in or securities of, or the making of loans to, one or more of the company’s qualifying subsidiaries; or
- (b) the holding and managing of property used by the company or any of its qualifying subsidiaries for the purposes of—
- (i) research and development from which it is intended that a qualifying trade to be carried on by the company or any of its qualifying subsidiaries will be derived; or
- (ii) one or more qualifying trades so carried on.
- (10) Activities of a qualifying subsidiary of a company shall also be disregarded for the purposes of sub-paragraphs (6) to (8) above to the extent that they consist in—
- (a) the making of loans to the company; or
- (b) in the case of a mainly trading subsidiary, activities carried on in pursuance of its insignificant purposes (within the meaning given by sub-paragraph (11) below).
- (11) In sub-paragraph (10) above “*mainly trading subsidiary*” means a qualifying subsidiary which, apart from purposes (“*its insignificant purposes*”) which are capable of having no significant effect (other than in relation to incidental matters) on the extent of its activities, exists wholly for the purpose of carrying on one or more qualifying trades.
### Meaning of “qualifying trade”
##### 4
- (1) For the purposes of this Schedule—
- (a) a trade is a qualifying trade if it is a trade complying with this paragraph; and
- (b) the carrying on of any activities of research and development from which it is intended that there will be derived a trade that—
- (i) will comply with this paragraph, and
- (ii) will be carried on wholly or mainly in the United Kingdom,
shall be treated as the carrying on of a qualifying trade.
- (2) Subject to sub-paragraphs (3) to (9) below, a trade complies with this paragraph if neither that trade nor a substantial part of it consists in one or more of the following activities, that is to say—
- (a) dealing in land, in commodities or futures or in shares, securities or other financial instruments;
- (b) dealing in goods otherwise than in the course of an ordinary trade of wholesale or retail distribution;
- (c) banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities;
- (d) leasing (including letting ships on charter or other assets on hire) or receiving royalties or licence fees;
- (e) providing legal or accountancy services;
- (ea) property development;
- (eb) farming or market gardening;
- (ec) holding, managing or occupying woodlands, any other forestry activities or timber production;
- (ed) operating or managing hotels or comparable establishments, or managing property used as an hotel or comparable establishment;
- (ee) operating or managing nursing homes or residential care homes, or managing property used as a nursing home or residential care home;
- (f) providing services or facilities for any such trade carried on by another person (not being a company of which the company providing the services or facilities is a subsidiary) as—
- (i) consists, to a substantial extent, in activities within any of paragraphs (a) to (ee) above; and
- (ii) is a trade in which a controlling interest is held by a person who also has a controlling interest in the trade carried on by the company providing the services or facilities.
- (3) For the purposes of sub-paragraph (2)(b) above—
- (a) a trade of wholesale distribution is one in which the goods are offered for sale and sold to persons for resale by them, or for processing and resale by them, to members of the general public for their use or consumption;
- (b) a trade of retail distribution is one in which the goods are offered for sale and sold to members of the general public for their use or consumption; and
- (c) a trade is not an ordinary trade of wholesale or retail distribution if—
- (i) it consists, to a substantial extent, in dealing in goods of a kind which are collected or held as an investment, or in that activity and any other activity of a kind falling within sub-paragraph (2)(a) to (f) above, taken together; and
- (ii) a substantial proportion of those goods are held by the company for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value.
- (3A) For the purposes of this Schedule the activities of a person shall not be taken to fall within paragraph (ed) or (ee) of sub-paragraph (2) above except where that person has an estate or interest in, or is in occupation of, the hotels or comparable establishments or, as the case may be, the nursing homes or residential care homes.
- (4) In determining for the purposes of this paragraph whether a trade carried on by any person is an ordinary trade of wholesale or retail distribution, regard shall be had to the extent to which it has the following features, that is to say—
- (a) the goods are bought by that person in quantities larger than those in which he sells them;
- (b) the goods are bought and sold by that person in different markets;
- (c) that person employs staff and incurs expenses in the trade in addition to the cost of the goods and, in the case of a trade carried on by a company, to any remuneration paid to any person connected with it;
- (d) there are purchases or sales from or to persons who are connected with that person;
- (e) purchases are matched with forward sales or vice versa;
- (f) the goods are held by that person for longer than is normal for goods of the kind in question;
- (g) the trade is carried on otherwise than at a place or places commonly used for wholesale or retail trade;
- (h) that person does not take physical possession of the goods;
and for the purposes of this sub-paragraph the features specified in paragraphs (a) to (c) above shall be regarded as indications that the trade is such an ordinary trade and those in paragraphs (d) to (h) above shall be regarded as indications of the contrary.
- (5) A trade shall not be treated as failing to comply with this paragraph by reason only that it consists to a substantial extent in the receiving of royalties or licence fees if the royalties and licence fees (or all but for a part that is not a substantial part in terms of value) are attributable to the exploitation of relevant intangible assets.
- (6) For this purpose an intangible asset is a “*relevant intangible asset*” if the whole or greater part (in terms of value) of it has been created—
- (a) by the company carrying on the trade, or
- (b) by a company which at all times during which it created the intangible asset was—
- (i) the parent company of the company carrying on the trade, or
- (ii) a qualifying subsidiary of that parent company.
- (6A) In the case of a relevant asset that is intellectual property, references in sub-paragraph (6) above to the creation of the asset by a company are to its creation in circumstances in which the right to exploit it vests in the company (whether alone or jointly with others).
- (6B) For the purposes of sub-paragraphs (5) to (6A) above “*intangible asset*” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accounting practice.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) For the purposes of sub-paragraph (6) above
- (a) “*parent company*” means a company that—
- (i) has one or more 51% subsidiaries, but
- (ii) is not itself a 51% subsidiary of another company; and
- (b) paragraph 10 below (meaning of “*qualifying subsidiary*”) shall apply as if the references in that paragraph to the relevant company were references to the parent company referred to in sub-paragraph (6)(b) above.
- (6D) For the purposes of sub-paragraph (6A) above “*intellectual property*” means—
- (a) any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right; and
- (b) any rights under the law of a country or territory outside the United Kingdom which correspond or are similar to those falling within paragraph (a) above.
- (7) A trade shall not be treated as failing to comply with this paragraph by reason only of its consisting in letting ships, other than offshore installations or pleasure craft, on charter if—
- (a) every ship let on charter by the company carrying on the trade is beneficially owned by the company;
- (b) every ship beneficially owned by the company is registered in the United Kingdom;
- (c) the company is solely responsible for arranging the marketing of the services of its ships; and
- (d) the conditions mentioned in sub-paragraph (8) below are satisfied in relation to every letting of a ship on charter by the company;
but where any of the requirements mentioned in paragraphs (a) to (d) above are not satisfied in relation to any lettings, the trade shall not thereby be treated as failing to comply with this paragraph if those lettings and any other activity of a kind falling within sub-paragraph (2)(a) to (f) above do not, when taken together, amount to a substantial part of the trade.
- (8) The conditions are that—
- (a) the letting is for a period not exceeding 12 months and no provision is made at any time (whether in the charterparty or otherwise) for extending it beyond that period otherwise than at the option of the charterer;
- (b) during the period of the letting there is no provision in force (whether by virtue of being contained in the charterparty or otherwise) for the grant of a new letting to end, otherwise than at the option of the charterer, more than 12 months after that provision is made;
- (c) the letting is by way of a bargain made at arm’s length between the company and a person who is not connected with it;
- (d) under the terms of the charter the company is responsible as principal—
- (i) for taking, throughout the period of the charter, management decisions in relation to the ship, other than those of a kind generally regarded by persons engaged in trade of the kind in question as matters of husbandry; and
- (ii) for defraying all expenses in connection with the ship throughout that period, or substantially all such expenses, other than those directly incidental to a particular voyage or to the employment of the ship during that period;
and
- (e) no arrangements exist by virtue of which a person other than the company may be appointed to be responsible for the matters mentioned in paragraph (d) above on behalf of the company;
but this sub-paragraph shall have effect, in relation to any letting between one company and another where one of those companies is the relevant company and the other is a qualifying subsidiary of that company, or where both companies are qualifying subsidiaries of the relevant company, as if paragraph (c) were omitted.
- (9) A trade shall not comply with this paragraph unless it is conducted on a commercial basis and with a view to the realisation of profits.
### Provisions supplemental to paragraph 4
##### 5
- (1) In paragraph 4 above—
- “*film*” means an original master negative of a film, an original master film disc or an original master film tape;
- “*nursing home*” means any establishment which exists wholly or mainly for the provision of nursing care for persons suffering from sickness, injury or infirmity or for women who are pregnant or have given birth to children;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*pleasure craft*” means any ship of a kind primarily used for sport or recreation;
- “*property development*” means the development of land—by a company which has, or at any time has had, an interest in the land, andwith the sole or main object of realising a gain from the disposal of an interest in the land when it is developed;
- “*research and development*” has the meaning given by section 837A;
- “*residential care home*” means any establishment which exists wholly or mainly for the provision of residential accommodation, together with board and personal care, for persons in need of personal care by reason of old age, mental or physical disabilities, past or present dependence on alcohol or drugs or any past illnesses or past or present mental disorders; and
- “*sound recording*”, in relation to a film, means its sound track, original master audio disc or original master audio tape.
- (2) For the purposes of paragraph 4 above, in the case of a trade carried on by a company, a person has a controlling interest in that trade if—
- (a) he controls the company;
- (b) the company is a close company and he or an associate of his, being a director of the company, either—
- (i) is the beneficial owner of more than 30 per cent. of the ordinary share capital of the company, or
- (ii) is able, directly or through the medium of other companies or by any other indirect means, to control more than 30 per cent. of that share capital;
or
- (c) not less than half of the trade could, in accordance with section 344(2), be regarded as belonging to him for the purposes of section 343;
and, in any other case, a person has a controlling interest in a trade if he is entitled to not less than half of the assets used for, or of the income arising from, the trade.
- (3) For the purposes of sub-paragraph (2) above there shall be attributed to any person any rights or powers of any other person who is an associate of his.
- (4) References in paragraph 4 above or this paragraph to a trade, except the references in paragraph 4(2)(f) to the trade for which services or facilities are provided, shall be construed without reference to so much of the definition of trade in section 832(1) as relates to adventures or concerns in the nature of trade; and those references in paragraph 4(2)(f) above to a trade shall have effect, in relation to cases in which what is carried on is carried on by a person other than a company, as including references to any business, profession or vocation.
- (5) In this paragraph—
- “*associate*” has the meaning given in subsections (3) and (4) of section 417, except that in those subsections, as applied for the purposes of this paragraph, “*relative*” shall not include a brother or sister; and
- “*director*” shall be construed in accordance with subsection (5) of that section;
- “*interest in land*” means (subject to sub-paragraph (6) below)—any estate, interest or right in or over land, including any right affecting the use or disposition of land; orany right to obtain such an estate, interest or right from another which is conditional on the other’s ability to grant the estate, interest or right.
- (6) References in paragraph 4 above, in relation to an hotel, to a comparable establishment are references to a guest house, hostel or other establishment the main purpose of maintaining which is the provision of facilities for overnight accommodation (whether with or without catering services).
- (7) References in this paragraph to an interest in land do not include references to—
- (a) the interest of a creditor (other than a creditor in respect of a rentcharge) whose debt is secured by way of mortgage, an agreement for a mortgage or a charge of any kind over land; or
- (b) in the case of land in Scotland, the interest of a creditor in a charge or security of any kind over land.
### Meaning of “relevant qualifying subsidiary”
##### 5A
- (1) For the purposes of this Schedule, a company (“the subsidiary”) is a relevant qualifying subsidiary of the relevant company at any time when it falls within sub-paragraph (2) below.
- (2) The subsidiary falls within this sub-paragraph if—
- (a) the relevant company possesses not less than 90 per cent. of the issued share capital of, and not less than 90 per cent. of the voting power in, the subsidiary;
- (b) the relevant company would—
- (i) in the event of a winding up of the subsidiary, or
- (ii) in any other circumstances,
be beneficially entitled to receive not less than 90 per cent. of the assets of the subsidiary which would then be available for distribution to the equity holders of the subsidiary;
- (c) the relevant company is beneficially entitled to not less than 90 per cent. of any profits of the subsidiary which are available for distribution to the equity holders of the subsidiary;
- (d) no person other than the relevant company has control of the subsidiary within the meaning of section 840; and
- (e) no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) above would cease to be met.
- (3) Sub-paragraphs (4) to (4C) and (5) of paragraph 10 below apply in relation to sub-paragraph (2) of this paragraph as they apply in relation to sub-paragraph (3) of that paragraph, but with the following modification.
- (4) That modification is that sub-paragraph (5) of that paragraph is to be read as if the words “or (as the case may be) by another subsidiary of that company” were omitted.
- (5) For the purposes of this paragraph—
- (a) the persons who are equity holders of the subsidiary, and
- (b) the percentage of the assets of the subsidiary to which an equity holder would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18.
- (6) But in making that determination—
- (a) references in paragraph 3 of that Schedule to the first company are to be read as references to an equity holder, and
- (b) references in that paragraph to a winding up are to be read as including references to any other circumstances in which assets of the subsidiary are available for distribution to its equity holders.
### Requirements as to the money raised by the investment in question
##### 6
- (1) The requirements of this paragraph are that either—
- (a) at least 80% of the money raised by the issue of the relevant holding must—
- (i) have been employed wholly for the purposes of the trade by reference to which the requirements of paragraph 3(3) above are satisfied; or
- (ii) be money which is intended to be employed wholly for the purposes of that trade; or
- (b) all of the money so raised must have been employed as mentioned in paragraph (a)(i) above.
- (2) For the purposes of this Schedule—
- (a) the requirements of sub-paragraph (1) above shall not be capable of being satisfied by virtue of paragraph (a)(ii) of that sub-paragraph at any time after 12 months have expired from the trading time, and
- (b) the requirements of that sub-paragraph shall not be capable of being satisfied by virtue of paragraph (a)(i) of that sub-paragraph at any time after 24 months have expired from the trading time.
- (2AA) In sub-paragraph (2) above, “*the trading time*” means whichever is applicable of the following—
- (a) in a case where the requirements of sub-paragraph (3) of paragraph 3 above were satisfied in relation to the time when the relevant holding was issued by virtue of paragraph (a) of that sub-paragraph, that time; and
- (b) in a case where they were satisfied in relation to that time by virtue of paragraph (b) of that sub-paragraph, the time when the condition in paragraph 3(4)(a) above was satisfied.
- (2AB) The requirements of this paragraph are not satisfied if either of the following, namely—
- (a) the trade by reference to which the requirements of paragraph 3(3) above are satisfied, and
- (b) any preparations for that trade falling within paragraph 3(3)(b) above,
are carried on, at any time after the issue of the relevant holding, by a person other than the relevant company or a relevant qualifying subsidiary of that company.
- (2AC) Sub-paragraph (2AD) below applies where preparations mentioned in sub-paragraph (2AB)(b) above are carried on by the relevant company or a relevant qualifying subsidiary of that company at any time after the issue of the relevant holding.
- (2AD) Where this sub-paragraph applies, the requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied by reason only of the carrying on of the trade mentioned in sub-paragraph (2AB)(a) above by a person other than—
- (a) the relevant company, or
- (b) a qualifying subsidiary of that company,
at any time after the issue of the relevant holding but before the relevant company or any relevant qualifying subsidiary of that company carries on that trade.
- (2AE) The requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied by reason only of the carrying on of the trade mentioned in sub-paragraph (2AB)(a) above—
- (a) by the partners in a partnership of which the relevant company, or a relevant qualifying subsidiary of that company, is a member, or
- (b) by the parties to a joint venture to which the relevant company, or a relevant qualifying subsidiary of that company, is a party.
- (2AF) The requirements of this paragraph are not to be regarded, by virtue of sub-paragraph (2AB) above, as failing to be satisfied if—
- (a) by reason only of anything done as a consequence of the relevant company or any other company being in administration or receivership, or
- (b) by reason only of the relevant company or any other company being wound up or dissolved without winding up,
the trade mentioned in sub-paragraph (2AB)(a) above ceases to be carried on by the relevant company or a relevant qualifying subsidiary of that company and is subsequently carried on by a person who has not been connected, at any time after the date which is one year before the issue of the relevant holding, with the relevant company.
- (2AG) Sub-paragraph (2AF) above applies only if (as the case may be)—
- (a) the entry into administration or receivership and everything done as a consequence of the company concerned being in administration or receivership, or
- (b) the winding up or dissolution,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (2AH) Sub-paragraph (2) of paragraph 11A below applies for the purposes of sub-paragraphs (2AF) and (2AG) above as it applies for the purpose of that paragraph.
- (3) For the purposes of this paragraph money shall not be treated as employed otherwise than wholly for the purposes of a trade if the only amount employed for other purposes is an amount which is not a significant amount; and nothing in paragraph 1(3) above shall require any money whose use is disregarded by virtue of this sub-paragraph to be treated as raised by a different holding.
- (4) References in this paragraph to employing money for the purposes of a trade shall include references to employing it for the purpose of preparing for the carrying on of the trade.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Requirement imposing a maximum on qualifying investments in the relevant company
##### 7
- (1) The requirement of this paragraph is that the relevant holding did not, when it was issued, represent an investment in excess of the maximum qualifying investment for the relevant period.
- (2) Subject to sub-paragraph (4) below, the maximum qualifying investment for any period is exceeded to the extent that the aggregate amount of money raised in that period by the issue to the trust company during that period of shares in or securities of the relevant company exceeds £1 million.
- (3) Any question for the purposes of this paragraph as to whether any shares in or securities of the relevant company which are for the time being held by the trust company represent an investment in excess of the maximum qualifying investment for any period shall be determined on the assumption, in relation to disposals by the trust company, that, as between shares or securities of the same description, those representing the whole or any part of the excess are disposed of before those which do not.
- (4) Where—
- (a) at the time of the issue of the relevant holding the relevant company or any of its qualifying subsidiaries was a member of a partnership or a party to a joint venture,
- (b) the trade by virtue of which the requirements of paragraph 3(3) above are satisfied was at that time being carried on, or to be carried on, by those partners in partnership or by the parties to the joint venture as such, and
- (c) the other partners or parties to the joint venture include at least one other company,
this paragraph shall have effect in relation to the relevant company as if the sum of money for the time being specified in sub-paragraph (2) above were to be divided by the number of companies (including the relevant company) which, at the time when the relevant holding was issued, were members of the partnership or, as the case may be, parties to the joint venture.
- (5) For the purposes of this paragraph the relevant period is the period beginning with whichever is the earlier of—
- (a) the time six months before the issue of the relevant holding; and
- (b) the beginning of the year of assessment in which the issue of that holding took place.
### Requirement as to the assets of the relevant company
##### 8
- (1) The requirement of this paragraph is that the value of the relevant assets—
- (a) did not exceed £7 million immediately before the issue of the relevant holding; and
- (b) did not exceed £8 million immediately afterwards.
- (2) Subject to sub-paragraph (3) below, the reference in sub-paragraph (1) above to the value of the relevant assets is a reference—
- (a) in relation to a time when the relevant company did not have any qualifying subsidiaries, to the value of the gross assets of that company at that time; and
- (b) in relation to any other time, to the aggregate value at that time of the gross assets of all the companies in the relevant company’s group.
- (3) For the purposes of this paragraph assets of any member of the relevant company’s group that consist in rights against, or in shares in or securities of, another member of the group shall be disregarded.
- (4) In this paragraph references, in relation to any time, to the relevant company’s group are references to the relevant company and its qualifying subsidiaries at that time.
### Requirements as to the subsidiaries etc. of the relevant company
##### 9
- (1) The requirements of this paragraph are that . . . the relevant company must not be—
- (a) a company which controls (whether on its own or together with any person connected with it) any company that is not a qualifying subsidiary of the relevant company; or
- (b) a company which is under the control of another company (or of another company and a person connected with the other company);
and arrangements must not be in existence by virtue of which the relevant company could fall within paragraph (a) or (b) above.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Meaning of “qualifying subsidiary”
##### 10
- (1) Subject to the following provisions of this paragraph, a company is a qualifying subsidiary of the relevant company for the purposes of this Schedule if—
- (a) the company in question (“the subsidiary”), and
- (b) where the relevant company has more than one subsidiary, every other subsidiary of the relevant company,
is a company falling within sub-paragraph (3) below.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The subsidiary falls within this sub-paragraph if—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ca) the subsidiary is a 51 per cent. subsidiary of the relevant company;
- (d) no person other than the relevant company or another of its subsidiaries has control of the subsidiary within the meaning of section 840; and
- (e) no arrangements are in existence by virtue of which either of the conditions in paragraphs (ca) and (d) above would cease to be met.
- (4) The subsidiary shall not be regarded, at a time when it or any other company is being wound up, as having ceased on that account to be a company falling within sub-paragraph (3) above if . . . —
- (a) . . . it would fall within that sub-paragraph apart from the winding up; and
- (b) . . . the winding up is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
- (4A) Sub-paragraph (4B) below applies at a time when the subsidiary or any other company is in administration or receivership.
- (4B) The subsidiary shall not be regarded, by reason only of anything done as a consequence of the company concerned being in administration or receivership, as having ceased to be a company falling within sub-paragraph (3) above if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company concerned being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.
- (4C) Sub-paragraph (2) of paragraph 11A below applies for the purposes of sub-paragraphs (4A) and (4B) above as it applies for the purpose of that paragraph.
- (5) The subsidiary shall not be regarded, at any time when arrangements are in existence for the disposal by the relevant company, or (as the case may be) by another subsidiary of that company, of all its interest in the subsidiary in question, as having ceased on that account to be a company falling within sub-paragraph (3) above if . . . the disposal is to be for bona fide commercial reasons and is not to be part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Requirement as to property managing subsidiaries
##### 10ZA
- (1) The requirement of this paragraph is that the relevant company must not have a property managing subsidiary which is not a relevant qualifying subsidiary of the relevant company.
- (2) “*Property managing subsidiary*” means a qualifying subsidiary of the relevant company whose business consists wholly or mainly in the holding or managing of land or any property deriving its value from land.
- (3) In sub-paragraph (2) above, “*land*” and “*property deriving its value from land*” have the same meaning as in section 776.
### Requirement that securities should not relate to a guaranteed loan
##### 10A
- (1) The requirement of this paragraph is that there are no securities relating to a guaranteed loan in the relevant holding.
- (2) For the purposes of this paragraph a security relates to a guaranteed loan if (and only if) there are arrangements for the trust company to be or become entitled, in the event of a failure by any person to comply with—
- (a) the terms of the loan to which the security relates, or
- (b) the terms of the security,
to receive anything (whether directly or indirectly) from a third party.
- (3) For the purposes of sub-paragraph (2) above it shall be immaterial whether the arrangements apply in all cases of a failure to comply or only in certain such cases.
- (4) For the purposes of this paragraph “*third party*” means any person except—
- (a) the relevant company; and
- (b) if the relevant company is the parent company of a trading group for the purposes of paragraph 3 above, the subsidiaries of the relevant company.
### Requirement that a proportion of the holding in each company must be eligible shares
##### 10B
- (1) The requirement of this paragraph is that eligible shares represent at least 10 per cent. by value of the totality of the shares in or securities of the relevant company (including the relevant holding) which are held by the trust company.
- (2) For the purposes of this paragraph the value at any time of any shares in or securities of a company shall be taken (subject to sub-paragraph (4) below) to be their value immediately after—
- (a) any relevant event occurring at that time; or
- (b) where no relevant event occurs at that time, the last relevant event to occur before that time.
- (3) In sub-paragraph (2) above “*relevant event*”, in relation to any shares in or securities of the relevant company, means—
- (a) the acquisition by the trust company of those shares or securities;
- (b) the acquisition by the trust company of any other shares in or securities of the relevant company which—
- (i) are of the same description as those shares or securities, and
- (ii) are acquired otherwise than by virtue of being allotted to the trust company without that company’s becoming liable to give any consideration;
or
- (c) the making of any such payment in discharge, in whole or in part, of any obligation attached to any shares in or securities of the relevant company held by the trust company as (by discharging that obligation) increases the value of any such shares or securities.
- (4) If at any time the value of any shares or securities held by the trust company is less than the amount of the consideration given by the trust company for those shares or securities, it shall be assumed for the purposes of this paragraph that the value of those shares or securities at that time is equal to the amount of that consideration.
- (5) In this paragraph “*eligible shares*” has the same meaning as in section 842AA.
### Acquisitions for restructuring purposes
##### 10C
- (1) This paragraph applies where—
- (a) arrangements are made for a company (“*the new company*”) to acquire all the shares (“*old shares*”) in another company (“*the old company*”);
- (b) the acquisition provided for by the arrangements falls within sub-paragraph (2) below; and
- (c) the Board have, before any exchange of shares takes place under the arrangements, given an approval notification.
- (2) An acquisition of shares falls within this sub-paragraph if—
- (a) the consideration for the old shares consists wholly of the issue of shares (“*new shares*”) in the new company;
- (b) new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than subscriber shares and new shares previously issued in consideration of old shares;
- (c) the consideration for new shares of each description consists wholly of old shares of the corresponding description; and
- (d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of, and in proportion to, their holdings.
- (3) For the purposes of sub-paragraph (1)(c) above an approval notification is one which, on an application by either the old company or the new company, is given to the applicant company and states that the Board are satisfied that the exchange of shares under the arrangements—
- (a) will be effected for bona fide commercial reasons; and
- (b) will not form part of any such scheme or arrangements as are mentioned in section 137(1) of the 1992 Act.
- (4) If the requirements of paragraph 3 above were satisfied in relation to the old company and any old shares immediately before the beginning of the period for giving effect to the arrangements, then (to the extent that it would not otherwise be the case) those requirements shall be deemed to be satisfied in relation to the new company and the matching new shares at all times which—
- (a) fall in that period; and
- (b) do not fall after a time when (apart from the arrangements) those requirements would have ceased by virtue of—
- (i) sub-paragraph (4) or (5) of that paragraph, or
- (ii) any cessation of a trade by any company,
to be satisfied in relation to the old company and the matching old shares.
- (5) For the purposes of paragraph 3 above the period of two years mentioned in sub-paragraph (4) of that paragraph shall be deemed, in the case of any new shares, to expire at the same time as it would have expired (or by virtue of this sub-paragraph would have been deemed to expire) in the case of the matching old shares.
- (6) Subject to sub-paragraph (7) below, where—
- (a) there is an exchange under the arrangements of any new shares for any old shares, and
- (b) those old shares are shares in relation to which the requirements of paragraphs 6 and 8 above were (or were deemed to be) satisfied to any extent immediately before the exchange,
those requirements shall be deemed, at all times after that time, to be satisfied to the same extent in relation to the matching new shares.
- (7) Where there is a time following any exchange under the arrangements of any new shares for any old shares when (apart from the arrangements) the requirements of paragraph 6 above would have ceased under—
- (a) sub-paragraph (2) of that paragraph, or
- (b) this sub-paragraph,
to be satisfied in relation to those old shares, those requirements shall cease at that time to be satisfied in relation to the matching new shares.
- (8) For the purposes of paragraph 7 above any new shares acquired under the arrangements shall be deemed to represent an investment which—
- (a) raised the same amount of money as was raised (or, by virtue of this sub-paragraph, is deemed to have been raised) by the issue of the matching old shares, and
- (b) raised that amount by an issue of shares in the new company made at the time when the issue of the matching old shares took place (or, as the case may be, is deemed to have taken place).
- (9) In determining whether the requirements of paragraph 9 above are satisfied in relation to the old company or the new company at a time in the period for giving effect to the arrangements, both—
- (a) the arrangements themselves, and
- (b) any exchange of new shares for old shares that has already taken place under the arrangements,
shall be disregarded.
- (10) For the purposes of paragraph 10B above the value of the new shares, both immediately after the time of their acquisition and immediately after the time of any subsequent relevant event occurring by virtue of the arrangements, shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the old shares for which they are exchanged.
- (11) Nothing in this paragraph shall deem any of the requirements of this Schedule to be satisfied in relation to any new shares unless the matching old shares were first issued to the trust company and have been held by that company from the time when they were issued until they are acquired by the new company.
- (12) References in this paragraph to the period for giving effect to the arrangements are references to the period which—
- (a) begins with the time when those arrangements first came into existence; and
- (b) ends with the time when the new company completes its acquisition under the arrangements of all the old shares.
- (13) If, at any time after the arrangements first came into existence and before the new company has acquired all the old shares, the arrangements—
- (a) cease to be arrangements for the acquisition of all the old shares by the new company, or
- (b) cease to be arrangements for an acquisition falling within sub-paragraph (2) above,
this paragraph shall not deem any requirement of this Schedule to be satisfied, and sub-paragraph (10) above shall not apply, in the case of any new shares at any time after the arrangements have so ceased.
- (14) Subject to sub-paragraph (15) below, references in this paragraph, except in the expression “subscriber shares”, to shares in a company include references to any securities of that company.
- (15) For the purposes of this paragraph, a relevant security of the old company shall not be treated as a security of that company if—
- (a) the arrangements do not provide for the acquisition of the security by the new company; or
- (b) such treatment prevents sub-paragraph (1)(b) above from being satisfied in connection with the arrangements.
- (16) In sub-paragraph (15) above “*relevant security*” means an instrument which is a security for the purposes of this Schedule by reason only of section 842AA(12).
- (17) For the purposes of this paragraph—
- (a) old shares and new shares are of a corresponding description if, were they shares in the same company, they would be of the same description; and
- (b) old shares and new shares are matching shares in relation to each other if the old shares are the shares for which those new shares are exchanged under the arrangements.
### Conversion of convertible shares and securities
##### 10D
- (1) This paragraph applies where—
- (a) shares have been issued to the trust company by virtue of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“*the convertibles*”);
- (b) the shares so issued are in the same company as the convertibles to which the right was attached;
- (c) the convertibles to which the right was attached were first issued to the trust company and were held by that company from the time they were issued until converted; and
- (d) the right was attached to the convertibles when they were first so issued and was not varied before it was exercised.
- (2) Sub-paragraphs (5) to (8) of paragraph 10C above shall apply in relation to the exchange of convertibles for shares by virtue of the exercise of the right of conversion as if—
- (a) that exchange were an exchange under any such arrangements as are mentioned in that paragraph of new shares for old shares; and
- (b) the references in those sub-paragraphs and sub-paragraph (17)(b) of that paragraph to the arrangements were references to the provision conferring the right of conversion.
- (3) For the purposes of paragraph 10B above the value of the new shares immediately after the time of their acquisition by the trust company shall be taken to be the same as the value, when last valued in accordance with that paragraph, of the convertibles for which they are exchanged.
### Winding up of the relevant company
##### 11
None of the requirements of this Schedule shall be regarded, at a time when the relevant company is being wound up, as being, on that account, a requirement that is not satisfied in relation to that company if . . . —
- (a) . . . the requirements of this Schedule would be satisfied in relation to that company apart from the winding up; and
- (b) . . . the winding up is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
### Company in administration or receivership
##### 11A
- (1) A company which is in administration or receivership shall not be regarded as ceasing to comply with paragraph 3(2) or (3) by reason only of anything done as a consequence of its being in administration or receivership.
- (2) For this purpose—
- (a) a company is “in administration” if it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986, or there is in force in relation to it—
- (i) an administration order under Part III of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom; and
- (b) a company is “in receivership" if there is in force in relation to it—
- (i) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter I or II of Part III of the Insolvency Act 1986 or Part IV of the Insolvency (Northern Ireland) Order 1989, or
- (ii) any corresponding order under the law of a country or territory outside the United Kingdom.
- (3) This paragraph applies only if—
- (a) the entry into administration or receivership, and
- (b) everything done as a consequence of the company being in administration or receivership,
is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
### Company reorganisations etc. involving exchange of shares
##### 11B
- (1) The Treasury may by regulations make provision for cases where—
- (a) a holding of shares or securities that meets the requirements of this Schedule is exchanged for other shares or securities,
- (b) the exchange is made for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is the avoidance of tax, and
- (c) the new shares or securities do not meet some or all of the requirements of this Schedule,
providing that the new shares or securities shall be treated as meeting those requirements.
- (2) The references in sub-paragraph (1) to an exchange of shares or securities include any form of company reorganisation or other arrangement which involves a holder of shares or securities in a company receiving other shares or securities—
- (a) whether the original shares or securities are transferred, cancelled or retained, and
- (b) whether the new shares or securities are in the same or another company.
- (3) The regulations shall specify—
- (a) the cases in which, and conditions subject to which, they apply,
- (b) which requirements of this Schedule are to be treated as met, and
- (c) the period for which those requirements are to be treated as met.
- (4) The regulations may contain such administrative provisions (including provision for advance clearances) as appear to the Treasury to be necessary or expedient.
- (5) The regulations may authorise the Board to give notice to any person requiring him to provide such information, specified in the notice, as they may reasonably require in order to determine whether any conditions imposed by the regulations are met.
- (6) Regulations under this paragraph—
- (a) may make different provision for different cases,
- (b) may include such supplementary, incidental and transitional provisions as appear to the Treasury to be appropriate, and
- (c) may include provision having retrospective effect.
### Power to amend Schedule
##### 12
The Treasury may by order amend this Schedule for any or all of the following purposes, that is to say—
- (a) to make such modifications of paragraphs 3 to 5 above as they may consider expedient;
- (b) to substitute different sums for the sums of money for the time being specified in paragraphs 7(2) and 8(1) above.
### General interpretation
##### 13
- (1) Subject to paragraph 10C(15) above, in this Schedule—
- “*debenture*” has the meaning given by section 744 of the Companies Act 1985; and
- “*securities*” has the same meaning as in section 842AA;
and references in this Schedule to the issue of any securities, in relation to any security consisting in a liability in respect of an unsecured loan, shall have effect as references to the making of the loan.
- (2) For the purposes of paragraphs 5(2) and 9 above, the question whether a person controls a company shall be determined in accordance with subsections (2) to (6) of section 416 with the modification given by sub-paragraph (3) below.
- (3) The modification is that, in determining whether a person controls a company, there shall be disregarded—
- (a) his or any other person’s possession of, or entitlement to acquire, relevant fixed-rate preference shares of the company; and
- (b) his or any other person’s possession of, or entitlement to acquire, rights as a loan creditor of the company.
- (4) Section 839 shall apply for the purposes of this Schedule, but as if the reference in subsection (8) to section 416 were a reference to subsections (2) to (6) of section 416 with the modification given by sub-paragraph (3) above.
- (5) For the purposes of sub-paragraph (3) above—
- (a) relevant fixed-rate preference shares are fixed-rate preference shares that do not for the time being carry voting rights; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In this paragraph “*fixed-rate preference shares*” means shares which—
- (a) were issued wholly for new consideration;
@@ -56204,8 +49466,20 @@
[^c23376091]: Act amended by [Finance Act 2012 (c. 14)](https://www.legislation.gov.uk/ukpga/2012/14), [Sch. 15 para. 17(4)(5)](https://www.legislation.gov.uk/ukpga/2012/14/schedule/15/paragraph/17/4/5)
[^c23339751]: [S. 1](https://www.legislation.gov.uk/ukpga/1988/1/section/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23341451]: [S. 1A](https://www.legislation.gov.uk/ukpga/1988/1/section/1A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23333701]: Words in [s. 1B](https://www.legislation.gov.uk/ukpga/1988/1/section/1B) sidenote substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 4(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/4/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23346411]: [S. 1B](https://www.legislation.gov.uk/ukpga/1988/1/section/1B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23346511]: [S. 2](https://www.legislation.gov.uk/ukpga/1988/1/section/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23346521]: [S. 3](https://www.legislation.gov.uk/ukpga/1988/1/section/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 3](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23346531]: [S. 4](https://www.legislation.gov.uk/ukpga/1988/1/section/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 4](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21819211]: [S. 5](https://www.legislation.gov.uk/ukpga/1988/1/section/5) repealed (with effect in accordance with s. 199(2) and Sch. 26 Pt. 5(23) Note 2 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 258](https://www.legislation.gov.uk/ukpga/1994/9/section/258), [Sch. 26 Pt. 5(23)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/23); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c21825951]: [S. 1A](https://www.legislation.gov.uk/ukpga/1988/1/section/1A) inserted (with effect in accordance with [s. 73(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/73/3) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 73(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/73/1)
@@ -56320,6 +49594,8 @@
[^c23350231]: [S. 42](https://www.legislation.gov.uk/ukpga/1988/1/section/42): words in sidenote inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 24(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/24/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23351681]: [S. 42A](https://www.legislation.gov.uk/ukpga/1988/1/section/42A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 7](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/7), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23367571]: [S. 43](https://www.legislation.gov.uk/ukpga/1988/1/section/43) repealed (with effect in accordance with s. 40(3) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 40(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/40/3), [Sch. 29 Pt. 8(16)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/16), Note 1
[^c22720821]: Cross-heading before s. 40 substituted (with effect as mentioned in [s. 38(2)(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 38(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/1), [Sch. 5 para. 19](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/19), (with Sch. 5 para. 73)
@@ -56360,6 +49636,12 @@
[^c23353481]: [S. 49(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/49/4) inserted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(2)(c)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/2/c) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353821]: [S. 50](https://www.legislation.gov.uk/ukpga/1988/1/section/50) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 8](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23353851]: [S. 51](https://www.legislation.gov.uk/ukpga/1988/1/section/51) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 8](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23353861]: [S. 51AA](https://www.legislation.gov.uk/ukpga/1988/1/section/51AA) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 8](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21821591]: [S. 51A](https://www.legislation.gov.uk/ukpga/1988/1/section/51A) repealed (with effect in accordance with s. 37(8) and Sch. 8 Pt. 2(13) Note of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [ss. 37(5)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/5), [52](https://www.legislation.gov.uk/ukpga/1997/58/section/52), [Sch. 8 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/13)
[^c22720841]: [S. 51B](https://www.legislation.gov.uk/ukpga/1988/1/section/51B) repealed (with effect in accordance with s. 37(3) of the repealing Act and [S.I. 1999/619](https://www.legislation.gov.uk/uksi/1999/619)) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [ss. 37(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/37/1), [165](https://www.legislation.gov.uk/ukpga/1998/36/section/165), [Sch. 27 Pt. 3(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/3), Note
@@ -56512,6 +49794,8 @@
[^c23359081]: [S. 109](https://www.legislation.gov.uk/ukpga/1988/1/section/109) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 88](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/88), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23376901]: [S. 109A](https://www.legislation.gov.uk/ukpga/1988/1/section/109A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 11](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/11), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23359171]: [S. 110A](https://www.legislation.gov.uk/ukpga/1988/1/section/110A) and preceding cross-heading repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 91](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/91), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23423311]: [S. 110A](https://www.legislation.gov.uk/ukpga/1988/1/section/110A) and preceding cross-heading repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 91](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/91), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -56530,6 +49814,30 @@
[^c23359331]: [S. 113](https://www.legislation.gov.uk/ukpga/1988/1/section/113) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 94](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/94), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23376911]: [S. 117](https://www.legislation.gov.uk/ukpga/1988/1/section/117) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 13](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/13), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376741]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376761]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376771]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376781]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376791]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376801]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376811]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 18](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/18), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376821]: [Ss. 118ZL](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL), [118ZM](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZM) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 19](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/19), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376831]: [Ss. 118ZL](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL), [118ZM](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZM) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 19](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/19), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376841]: [Ss. 118ZN](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZN), [118ZO](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZO) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 20](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/20), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376851]: [Ss. 118ZN](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZN), [118ZO](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZO) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 20](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/20), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21860551]: [Ss. 118ZA-118ZD](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZA) and preceding cross-heading inserted (6.4.2001) by [Limited Liability Partnerships Act 2000 (c. 12)](https://www.legislation.gov.uk/ukpga/2000/12), [ss. 10(1)](https://www.legislation.gov.uk/ukpga/2000/12/section/10/1), [19(1)](https://www.legislation.gov.uk/ukpga/2000/12/section/19/1); [S.I. 2000/3316](https://www.legislation.gov.uk/uksi/2000/3316), [art. 2](https://www.legislation.gov.uk/uksi/2000/3316/article/2)
[^c23356701]: [Ss. 118ZE-118ZK](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE) and preceding cross-heading inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 124(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/124/1)
@@ -57264,6 +50572,8 @@
[^c21584511]: [Ss. 257BA](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA), [257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB) substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras.2](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/2), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c23415291]: Words in [s. 257C](https://www.legislation.gov.uk/ukpga/1988/1/section/257C) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 34(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/34/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23411261]: Words in [s. 257C](https://www.legislation.gov.uk/ukpga/1988/1/section/257C) sidenote substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [55(d)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/55/d)
[^c22733721]: [Ss. 257D-257F](https://www.legislation.gov.uk/ukpga/1988/1/section/257D) repealed (with effect in accordance with s. 32(4), Sch. 20 Pt. 3(3) Note of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 32(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/2), [Sch. 20 Pt. 3(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/3)
@@ -57306,14 +50616,20 @@
[^c21585731]: Source-1984 s.72(1)
[^c23414441]: Words in [s. 266(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/3/c) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585741]: Source-1970 s.19(3)(b)
[^c21585751]: Source-1976 Sch.4 4(1) 5; 1978 Sch.3 2; 1980 s.29(2)(b)
[^c21585761]: Words in [s. 266(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/5/a) substituted (from 6.4.1989) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 29](https://www.legislation.gov.uk/ukpga/1988/39/section/29)
[^c23414461]: [S. 266(6)(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/6/6A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585811]: Source-1976 Sch.4 4(2)
[^c23414491]: Words in [s. 266(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/8) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/6/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585821]: Source-1976 Sch.4 5A; 1978 Sch.3 5
[^c21585831]: Words in [s. 266(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/9) substituted (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 35](https://www.legislation.gov.uk/ukpga/1988/39/section/35), [Sch. 3 para. 9(a)](https://www.legislation.gov.uk/ukpga/1988/39/schedule/3/paragraph/9/a)
@@ -57334,6 +50650,8 @@
[^c21585881]: [S. 266(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/13) inserted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 paras. 2(3)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/2/3); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
[^c23487291]: Words in [s. 266(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/13) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/7), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22749861]: [S. 266(14)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/14) added (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 18(3)](https://www.legislation.gov.uk/uksi/2001/3629/article/18/3)
[^c22749881]: [1982 c. xiv](https://www.legislation.gov.uk/ukla/1982/14).
@@ -57360,6 +50678,10 @@
[^c21586011]: [S. 275](https://www.legislation.gov.uk/ukpga/1988/1/section/275) repealed (1988-89 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 148](https://www.legislation.gov.uk/ukpga/1988/39/section/148), [Sch. 14 Part IV](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
[^c23414161]: [S. 276](https://www.legislation.gov.uk/ukpga/1988/1/section/276) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 38](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/38), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414181]: [S. 277](https://www.legislation.gov.uk/ukpga/1988/1/section/277) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 39](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/39), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21586191]: [S. 279](https://www.legislation.gov.uk/ukpga/1988/1/section/279) repealed (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [ss. 32](https://www.legislation.gov.uk/ukpga/1988/39/section/32), [148](https://www.legislation.gov.uk/ukpga/1988/39/section/148), [Sch. 14 Part VIII](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
[^c21586221]: [S. 280](https://www.legislation.gov.uk/ukpga/1988/1/section/280) repealed (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 148](https://www.legislation.gov.uk/ukpga/1988/39/section/148), [Sch. 14 Part VIII](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
@@ -57368,8 +50690,14 @@
[^c23411661]: Words in [s. 282](https://www.legislation.gov.uk/ukpga/1988/1/section/282) heading substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [62(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/62/b)
[^c23414191]: [S. 282](https://www.legislation.gov.uk/ukpga/1988/1/section/282) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 41](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/41), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21586291]: [Ss. 282A](https://www.legislation.gov.uk/ukpga/1988/1/section/282A), [282B](https://www.legislation.gov.uk/ukpga/1988/1/section/282B) inserted (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 34](https://www.legislation.gov.uk/ukpga/1988/39/section/34)
[^c23414201]: [Ss. 282A](https://www.legislation.gov.uk/ukpga/1988/1/section/282A), [282B](https://www.legislation.gov.uk/ukpga/1988/1/section/282B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 42](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/42), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414211]: [Ss. 282A](https://www.legislation.gov.uk/ukpga/1988/1/section/282A), [282B](https://www.legislation.gov.uk/ukpga/1988/1/section/282B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 42](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/42), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21586341]: [Ss. 283-288](https://www.legislation.gov.uk/ukpga/1988/1/section/283) repealed (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 148](https://www.legislation.gov.uk/ukpga/1988/39/section/148), [Sch. 14 Part VIII](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
[^c23488151]: [Ss. 283-288](https://www.legislation.gov.uk/ukpga/1988/1/section/283) repealed (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 148](https://www.legislation.gov.uk/ukpga/1988/39/section/148), [Sch. 14 Part VIII](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
@@ -57384,17 +50712,87 @@
[^c23408611]: Words in [Pt. 7 Ch. 2](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/2) heading inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [61](https://www.legislation.gov.uk/uksi/2005/3229/regulation/61)
[^c23415751]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 289(9) amended (as saved) (retrospective to 6.4.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 16 paras. 16(1)(a)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/16/1/a), [18](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/18); and s. 289 further amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(2)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/2)
[^c23415771]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415781]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415791]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21587501]: [S. 290A](https://www.legislation.gov.uk/ukpga/1988/1/section/290A) inserted (retrospectively) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39) s. 51(1)(b)
[^c22754161]: [S. 290A](https://www.legislation.gov.uk/ukpga/1988/1/section/290A) repealed (with effect in accordance with s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/5), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c23415811]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415821]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415831]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 291B amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(2)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/2)
[^c23415841]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415851]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 293 amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(2)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/2)
[^c23415861]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415871]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415881]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415891]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 297 amended (as saved) (retrospective to 6.4.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 16 paras. 11(1)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/11/1), [13](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/13), [Sch. 27 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/27/part/2/16), Note
[^c23415901]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 298 amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(3)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/3)
[^c23415911]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 299 (as saved) applied (with modifications) by s. 149(1)(a) of that repealing Act
[^c21588241]: [S. 299A](https://www.legislation.gov.uk/ukpga/1988/1/section/299A) inserted (27.7.1993 with application in relation to any case in which the claim for relief is made on or after 16.3.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 111(1)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/111/1/4)
[^c23415921]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415931]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415941]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415951]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415961]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415971]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415981]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415991]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416001]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416011]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23411881]: [S. 304](https://www.legislation.gov.uk/ukpga/1988/1/section/304) heading substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [65(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/65/c)
[^c23416021]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416031]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 304A amended (as saved) (retrospective to 6.4.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 16 paras. 11(2)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/11/2), [13](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/13)
[^c23416041]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414221]: [S. 305A](https://www.legislation.gov.uk/ukpga/1988/1/section/305A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 43](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/43), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416051]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416061]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416071]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 308 amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(2)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/2)
[^c22219051]: [S. 309](https://www.legislation.gov.uk/ukpga/1988/1/section/309) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 24](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/24), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22753131]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) heading substituted (with effect in accordance with [s. 137(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 137(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1), [Sch. 15 para. 2](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/2)
[^c23416091]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416101]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416111]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 312 amended (as saved) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 44](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/44) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 312 further amended (as saved) (retrospective to 6.4.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 16 paras. 16(1)(b)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/16/1/b), [18](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/18), [Sch. 27 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/27/part/2/16), Note; and s. 312 further amended (as saved) (17.7.2007 with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2007 (S.I. 2007/1820)](https://www.legislation.gov.uk/uksi/2007/1820), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2007/1820/article/1/1), [2(4)(5)](https://www.legislation.gov.uk/uksi/2007/1820/article/2/4/5); and s. 312 further amended (as saved) (19.7.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 26 para. 7(3)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/26/paragraph/7/3)
[^c23488341]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) (ss. 289-312), except s. 305A, repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 627](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/627), [Sch. 3 Pt. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/2) (with savings in [s. 1034(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/3), [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22753141]: [Ss. 289-289B](https://www.legislation.gov.uk/ukpga/1988/1/section/289) substituted for s. 289 (with effect in accordance with [s. 137(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 137(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1), [Sch. 15 para. 2](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/2)
@@ -57432,10 +50830,14 @@
[^c23398091]: [S. 319](https://www.legislation.gov.uk/ukpga/1988/1/section/319) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 42](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/42), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23414231]: [S. 320](https://www.legislation.gov.uk/ukpga/1988/1/section/320) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 45](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/45), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23398101]: [S. 321](https://www.legislation.gov.uk/ukpga/1988/1/section/321) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 43](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/43), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23407891]: [S. 322](https://www.legislation.gov.uk/ukpga/1988/1/section/322) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 129](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/129), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23414241]: [S. 323](https://www.legislation.gov.uk/ukpga/1988/1/section/323) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 46](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/46), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23407901]: [S. 324](https://www.legislation.gov.uk/ukpga/1988/1/section/324) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 130](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/130), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23407911]: [S. 325](https://www.legislation.gov.uk/ukpga/1988/1/section/325) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 131](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/131), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -57490,6 +50892,8 @@
[^c23398241]: [S. 332(3A)(3B)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/332/3A/3B/4) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 47(4)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/47/4), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23414291]: [S. 332A](https://www.legislation.gov.uk/ukpga/1988/1/section/332A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 47](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/47), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23408391]: [S. 333](https://www.legislation.gov.uk/ukpga/1988/1/section/333) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 141](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/141) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23408091]: [S. 333A](https://www.legislation.gov.uk/ukpga/1988/1/section/333A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 142](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/142), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -57514,6 +50918,12 @@
[^c22790951]: [S. 333B](https://www.legislation.gov.uk/ukpga/1988/1/section/333B) inserted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 77(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/77/1)
[^c23414251]: [S. 334](https://www.legislation.gov.uk/ukpga/1988/1/section/334) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 48](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/48), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414271]: [S. 335](https://www.legislation.gov.uk/ukpga/1988/1/section/335) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 49](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/49), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414281]: [S. 336](https://www.legislation.gov.uk/ukpga/1988/1/section/336) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 50](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/50), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23426611]: [S. 338B](https://www.legislation.gov.uk/ukpga/1988/1/section/338B) repealed (with effect in accordance with s. 38(7) of the repealing Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/11/part/2/7), Note
[^c23499091]: [S. 339A](https://www.legislation.gov.uk/ukpga/1988/1/section/339A) inserted (in relation to accounting periods ending on or after 1 October 1990) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 27(3)(4)](https://www.legislation.gov.uk/ukpga/1990/29/section/27/3/4)
@@ -57538,8 +50948,36 @@
[^c21591631]: [S. 347](https://www.legislation.gov.uk/ukpga/1988/1/section/347) repealed (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch.12](https://www.legislation.gov.uk/ukpga/1992/12/schedule/12) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3), [Sch. 11 paras. 20](https://www.legislation.gov.uk/ukpga/1992/12/schedule/11/paragraph/20), [22](https://www.legislation.gov.uk/ukpga/1992/12/schedule/11/paragraph/22), [26(2)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/11/paragraph/26/2), [27](https://www.legislation.gov.uk/ukpga/1992/12/schedule/11/paragraph/27)).
[^c23510671]: [Ss. 347A](https://www.legislation.gov.uk/ukpga/1988/1/section/347A), [347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) inserted by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 36(1)(3)-(5)](https://www.legislation.gov.uk/ukpga/1988/39/section/36/1/3)
[^c23510571]: [Ss. 347A](https://www.legislation.gov.uk/ukpga/1988/1/section/347A), [347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) inserted by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 36(1)(3)-(5)](https://www.legislation.gov.uk/ukpga/1988/39/section/36/1/3)
[^c23437281]: [S. 347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 53](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/53), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437301]: [S. 348](https://www.legislation.gov.uk/ukpga/1988/1/section/348) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 54](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/54), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 348 amended (6.4.2007) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 10 paras. 62](https://www.legislation.gov.uk/ukpga/2005/7/schedule/10/paragraph/62), [64(2)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/10/paragraph/64/2), [Sch. 11 Pt. 4](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/4), Note 1
[^c23437311]: [S. 349](https://www.legislation.gov.uk/ukpga/1988/1/section/349) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 55](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/55), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)); and s. 349 amended (6.4.2007) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 10 paras. 62](https://www.legislation.gov.uk/ukpga/2005/7/schedule/10/paragraph/62), [64(2)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/10/paragraph/64/2), [Sch. 11 Pt. 4](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/4), Note 1
[^c23437321]: [S. 349ZA](https://www.legislation.gov.uk/ukpga/1988/1/section/349ZA) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 56](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/56), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437331]: [Ss. 349A-349D](https://www.legislation.gov.uk/ukpga/1988/1/section/349A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 57](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/57), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437341]: [Ss. 349A-349D](https://www.legislation.gov.uk/ukpga/1988/1/section/349A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 57](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/57), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437351]: [Ss. 349A-349D](https://www.legislation.gov.uk/ukpga/1988/1/section/349A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 57](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/57), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437361]: [Ss. 349A-349D](https://www.legislation.gov.uk/ukpga/1988/1/section/349A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 57](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/57), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437371]: [S. 349E](https://www.legislation.gov.uk/ukpga/1988/1/section/349E) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 58](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/58), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437381]: [S. 350](https://www.legislation.gov.uk/ukpga/1988/1/section/350) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 59](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/59), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437391]: [S. 350A](https://www.legislation.gov.uk/ukpga/1988/1/section/350A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 60](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/60), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23513371]: [S. 351](https://www.legislation.gov.uk/ukpga/1988/1/section/351) repealed by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39) s. 36(6), Sch.14 Part IV, Note 5 (with s. 36(3))
[^c23437401]: [S. 352](https://www.legislation.gov.uk/ukpga/1988/1/section/352) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 61](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/61), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23428261]: [S. 349ZA](https://www.legislation.gov.uk/ukpga/1988/1/section/349ZA) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/149) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22742051]: [Ss. 349A-349D](https://www.legislation.gov.uk/ukpga/1988/1/section/349A) inserted (with application in accordance with [s. 85(4)](https://www.legislation.gov.uk/ukpga/2001/9/section/85/4) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 85(1)](https://www.legislation.gov.uk/ukpga/2001/9/section/85/1)
@@ -57554,16 +50992,34 @@
[^c22737861]: [S. 353(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1) substituted (with effect in accordance with [s. 81(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/81/6) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 81(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/81/1)
[^c23437491]: Words in [s. 353(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/2/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23428351]: Words in [s. 353(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 152](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/152) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23437591]: Words in [s. 353(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22737881]: [S. 353(1A)-(1H)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1A) inserted (with effect in accordance with [s. 81(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/81/6) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 81(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/81/2)
[^c23437691]: [S. 353(1A)-(1AB)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1A) substituted for s. 353(1A) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437511]: [S. 353(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22738621]: [S. 353(1C)(1D)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1C/1D) repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c23437531]: Words in [s. 353(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/5/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437631]: Words in [s. 353(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437651]: Words in [s. 353(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(5)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/5/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22766321]: Words in [s. 353(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E) repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c22738681]: [S. 353(1E)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E/b) and preceding word repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c23437671]: Words in [s. 353(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1E) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(5)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/5/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437551]: [S. 353(1F)-(1H)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1F) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 62(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/62/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21593131]: Source-1986 s.26(1)
[^c21593141]: Source-1972 s.75(1A), (2); 1974 s.19(1)(b)
@@ -57608,8 +51064,22 @@
[^c22740661]: [Ss. 354-358](https://www.legislation.gov.uk/ukpga/1988/1/section/354) repealed (with effect in accordance with Sch. 4 para. 18(5), Sch. 20 Pt. 3(7) Note 4 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 2](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/2), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7)
[^c23437411]: [S. 359](https://www.legislation.gov.uk/ukpga/1988/1/section/359) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 63](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/63), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437421]: [S. 360](https://www.legislation.gov.uk/ukpga/1988/1/section/360) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 64](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/64), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21594191]: [S. 360A](https://www.legislation.gov.uk/ukpga/1988/1/section/360A) inserted by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [s. 48(2)](https://www.legislation.gov.uk/ukpga/1989/26/section/48/2)
[^c23437431]: [S. 360A](https://www.legislation.gov.uk/ukpga/1988/1/section/360A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 65](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/65), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437441]: [S. 361](https://www.legislation.gov.uk/ukpga/1988/1/section/361) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 66](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/66), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437451]: [S. 362](https://www.legislation.gov.uk/ukpga/1988/1/section/362) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 67](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/67), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437461]: [S. 363](https://www.legislation.gov.uk/ukpga/1988/1/section/363) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 68](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/68), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437471]: [S. 364](https://www.legislation.gov.uk/ukpga/1988/1/section/364) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 69](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/69), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21594501]: Source-1974 Sch.1 24; 1984 s.22(3)
[^c22740671]: [S. 365(1)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/365/1/aa) inserted (with effect in accordance with [s. 39(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/39/3) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 39(1)](https://www.legislation.gov.uk/ukpga/1999/16/section/39/1)
@@ -57630,16 +51100,22 @@
[^c21594531]: Source-1972 Sch.10 7; 1974 Sch.1 25(1)
[^c23437701]: Words in [s. 366(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/366/1/c) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 70](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/70), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21594541]: Source-1972 Sch.10 8, 9
[^c22740771]: [S. 367(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/1) repealed (with effect in accordance with Sch. 4 para. 18(5), Sch. 20 Pt. 3(7) Note 4 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 3(2)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/3/2), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7)
[^c23437721]: [S. 367(2)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 71](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/71), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21594731]: [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1988-89) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 41](https://www.legislation.gov.uk/ukpga/1988/39/section/41) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1989-90) by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [s. 46](https://www.legislation.gov.uk/ukpga/1989/26/section/46) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1990-91) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 71](https://www.legislation.gov.uk/ukpga/1990/29/section/71) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1991-92) by [Finance Act 1991 (c. 31)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 26](https://www.legislation.gov.uk/ukpga/1991/31/section/26) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1992-93) by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 10(4)](https://www.legislation.gov.uk/ukpga/1992/20/section/10/4) (with [s. 10(5)](https://www.legislation.gov.uk/ukpga/1992/20/section/10/5)) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1993-94) by [Finance Act 1993 (c. 34)](https://www.legislation.gov.uk/ukpga/1993/34), [s. 55](https://www.legislation.gov.uk/ukpga/1993/34/section/55) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1994-95, 1995-96) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 80](https://www.legislation.gov.uk/ukpga/1994/9/section/80) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1996-97) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 76](https://www.legislation.gov.uk/ukpga/1996/8/section/76) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1997-98) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 57](https://www.legislation.gov.uk/ukpga/1997/16/section/57) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1998-99) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 16](https://www.legislation.gov.uk/ukpga/1997/58/section/16) [S. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5): £30,000 specified (1999-2000) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 37](https://www.legislation.gov.uk/ukpga/1999/16/section/37)
[^c21594751]: Source-1972 Sch.9 5(1A); 1984 s.22(1)(c)
[^c22740841]: Words in [s. 367(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/5) substituted (with effect in accordance with [Sch. 4 para. 18(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/5) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 3(4)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/3/4)
[^c23437481]: [S. 368](https://www.legislation.gov.uk/ukpga/1988/1/section/368) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 72](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/72), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23438171]: [S. 367A](https://www.legislation.gov.uk/ukpga/1988/1/section/367A) inserted (1.4.2010 with effect in accordance with [s. 381(1)](https://www.legislation.gov.uk/ukpga/2010/8/section/381/1) of the amending Act) by [Taxation (International and Other Provisions) Act 2010 (c. 8)](https://www.legislation.gov.uk/ukpga/2010/8), [Sch. 2 para. 47](https://www.legislation.gov.uk/ukpga/2010/8/schedule/2/paragraph/47) (with [Sch. 9](https://www.legislation.gov.uk/ukpga/2010/8/schedule/9))
[^c22740881]: [S. 369(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/369/1) excluded (27.7.1999) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 38(2)-(7)](https://www.legislation.gov.uk/ukpga/1999/16/section/38/2)
@@ -57814,16 +51290,48 @@
[^c23428671]: [S. 379A](https://www.legislation.gov.uk/ukpga/1988/1/section/379A) sidenote substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by virtue of [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(7)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23531921]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23531941]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22747921]: [S. 379A](https://www.legislation.gov.uk/ukpga/1988/1/section/379A) cross-heading substituted (with effect in accordance with [s. 38(2)(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 5 para. 26](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/26) (with [Sch. 5 para. 73](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/73))
[^c23428521]: Words in cross-heading preceding s. 379A substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(8)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22747971]: [S. 379B](https://www.legislation.gov.uk/ukpga/1988/1/section/379B) inserted (with effect in accordance with [s. 38(2)(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 5 para. 27](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/27) (with [Sch. 5 para. 73](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/73))
[^c23531951]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23531961]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23531971]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22743591]: [S. 383](https://www.legislation.gov.uk/ukpga/1988/1/section/383) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/b), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5
[^c23531981]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23531991]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532001]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532011]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532021]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532031]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532041]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532051]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532061]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22751071]: [S. 384A](https://www.legislation.gov.uk/ukpga/1988/1/section/384A) inserted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 30](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/30) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c23532071]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23532131]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) (ss. 379A-392) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 73](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/73), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22744461]: [S. 379A](https://www.legislation.gov.uk/ukpga/1988/1/section/379A) and preceding cross-heading inserted (with effect in accordance with [s. 39(4)(5)](https://www.legislation.gov.uk/ukpga/1995/4/section/39/4/5) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 6 para. 19(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/6/paragraph/19/1)
[^c21597491]: [S. 394](https://www.legislation.gov.uk/ukpga/1988/1/section/394) repealed by [Finance Act 1991 (c. 31)](https://www.legislation.gov.uk/ukpga/1991/31), [ss. 73(2)(4)(5)](https://www.legislation.gov.uk/ukpga/1991/31/section/73/2/4/5), [123](https://www.legislation.gov.uk/ukpga/1991/31/section/123), [Sch. 19 Pt. V](https://www.legislation.gov.uk/ukpga/1991/31/schedule/19/part/V)
@@ -57832,6 +51340,18 @@
[^c21597681]: Source—1973 s.26(2); 1974 s.30(2)
[^c23442991]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442951]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23443011]: Words in [s. 398(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/398/a) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442971]: Words in [s. 398(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/398/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/4/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23443031]: Words in [s. 398(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/398/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23443051]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 75(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/75/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442201]: [S. 403D](https://www.legislation.gov.uk/ukpga/1988/1/section/403D) title substituted (with effect in accordance with [Sch. 1 para. 9](https://www.legislation.gov.uk/ukpga/2006/25/schedule/1/paragraph/9) of the amending Act) by virtue of [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 1 para. 3(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/1/paragraph/3/4)
[^c22747531]: [Ss. 408](https://www.legislation.gov.uk/ukpga/1988/1/section/408), [409](https://www.legislation.gov.uk/ukpga/1988/1/section/409) repealed (with effect in accordance with Sch. 7 para. 9, Sch. Pt. 2(14) Note of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 7 para. 6](https://www.legislation.gov.uk/ukpga/1997/58/schedule/7/paragraph/6), [Sch. 8 Pt. 2(14)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/14)
@@ -58156,6 +51676,8 @@
[^c23724611]: [S. 477](https://www.legislation.gov.uk/ukpga/1988/1/section/477) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 3](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/3), [Sch. 19 Pt. 4](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19/part/4), Note 8
[^c23722361]: Words in [s. 477A](https://www.legislation.gov.uk/ukpga/1988/1/section/477A) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21608281]: [S. 477A](https://www.legislation.gov.uk/ukpga/1988/1/section/477A) inserted (with effect in accordance with [Sch. 5 para. 4(2)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/4/2) of the amending Act) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 4(1)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/4/1)
[^c23724891]: [S. 478](https://www.legislation.gov.uk/ukpga/1988/1/section/478) repealed (with effect in accordance with s. 199(2) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 26 Pt. 5(23)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/23), Note 4; [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
@@ -58166,12 +51688,20 @@
[^c21608511]: [Ss. 480A-480C](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) inserted (with effect in accordance with [Sch. 5 para. 7(2)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/2) of the amending Act) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 7(1)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/1)
[^c23724751]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 89](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/89), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21608531]: [Ss. 480A-480C](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) inserted (with effect in accordance with [Sch. 5 para. 7(2)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/2) of the amending Act) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 7(1)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/1)
[^c23724771]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 89](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/89), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21608541]: [Ss. 480A-480C](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) inserted (with effect in accordance with [Sch. 5 para. 7(2)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/2) of the amending Act) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 7(1)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/7/1)
[^c23724731]: [S. 480C](https://www.legislation.gov.uk/ukpga/1988/1/section/480C) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 185](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/185), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23724791]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 89](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/89), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23724811]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 89](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/89), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23723831]: [S. 483(1)-(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/483/1)(5) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 12](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/12), [Sch. 19 Part IV](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19), Note 8
[^c22792181]: [S. 484](https://www.legislation.gov.uk/ukpga/1988/1/section/484) repealed (with effect in accordance with s. 105(1) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para 29](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/29), [Sch. 41 Pt. 5(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/3), Note (with Sch. 15)
@@ -58220,6 +51750,10 @@
[^c22802741]: [S. 503](https://www.legislation.gov.uk/ukpga/1988/1/section/503) substituted (with effect in accordance with [s. 38(2)(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 5 para. 42](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/42) (with [Sch. 5 para. 73](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/73))
[^c23733051]: [S. 504A](https://www.legislation.gov.uk/ukpga/1988/1/section/504A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 93](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/93), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730861]: Words in [s. 505](https://www.legislation.gov.uk/ukpga/1988/1/section/505) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(10)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731411]: [S. 506(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/3) heading substituted (with effect in accordance with [s. 55(5)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/5) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 55(2)(g)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/2/g)
[^c23732981]: [Ss. 508A](https://www.legislation.gov.uk/ukpga/1988/1/section/508A), [508B](https://www.legislation.gov.uk/ukpga/1988/1/section/508B) repealed (with effect in accordance with s. 145(2) of the repealing Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 143(a)](https://www.legislation.gov.uk/ukpga/2006/25/section/143/a), [Sch. 26 Pt. 4](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/4)
@@ -58236,6 +51770,10 @@
[^c23732941]: [S. 514](https://www.legislation.gov.uk/ukpga/1988/1/section/514) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 200](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/200), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23733071]: [S. 515](https://www.legislation.gov.uk/ukpga/1988/1/section/515) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 102](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/102), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23733091]: [S. 516](https://www.legislation.gov.uk/ukpga/1988/1/section/516) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 103](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/103), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21611041]: [S. 519A](https://www.legislation.gov.uk/ukpga/1988/1/section/519A) inserted (17.9.1990) by [National Health Service and Community Care Act 1990 (c. 19)](https://www.legislation.gov.uk/ukpga/1990/19), [ss. 61(1)](https://www.legislation.gov.uk/ukpga/1990/19/section/61/1), [67(2)](https://www.legislation.gov.uk/ukpga/1990/19/section/67/2); [S.I. 1990/1329](https://www.legislation.gov.uk/uksi/1990/1329), [art. 2(5)(a)](https://www.legislation.gov.uk/uksi/1990/1329/article/2/5/a), [Sch. 2](https://www.legislation.gov.uk/uksi/1990/1329/schedule/2)
[^c23729671]: [S. 504A](https://www.legislation.gov.uk/ukpga/1988/1/section/504A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 197](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/197) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -58258,8 +51796,12 @@
[^c21611301]: Source - 1970 s.384
[^c23734261]: [S. 527(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/527/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 108(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/108/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22771341]: [S. 527(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/527/3) repealed (with effect in accordance with Sch. 14 Pt. 8 Note 5 of the repealing Act) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [Sch. 14 Pt. 8](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14/part/8)
[^c23734281]: [S. 527(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/527/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 108(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/108/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23734951]: [S. 529](https://www.legislation.gov.uk/ukpga/1988/1/section/529) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 206](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/206), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22781231]: [S. 530](https://www.legislation.gov.uk/ukpga/1988/1/section/530) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 47](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/47), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4)
@@ -58268,8 +51810,14 @@
[^c22781751]: [S. 535](https://www.legislation.gov.uk/ukpga/1988/1/section/535) repealed (with effect in accordance with s. 71(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/6)
[^c23734971]: [Ss. 536](https://www.legislation.gov.uk/ukpga/1988/1/section/536), [537](https://www.legislation.gov.uk/ukpga/1988/1/section/537), [537B](https://www.legislation.gov.uk/ukpga/1988/1/section/537B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 110](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/110), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23734991]: [Ss. 536](https://www.legislation.gov.uk/ukpga/1988/1/section/536), [537](https://www.legislation.gov.uk/ukpga/1988/1/section/537), [537B](https://www.legislation.gov.uk/ukpga/1988/1/section/537B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 110](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/110), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22781771]: [S. 537A](https://www.legislation.gov.uk/ukpga/1988/1/section/537A) repealed (with effect in accordance with s. 71(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/6)
[^c23735011]: [Ss. 536](https://www.legislation.gov.uk/ukpga/1988/1/section/536), [537](https://www.legislation.gov.uk/ukpga/1988/1/section/537), [537B](https://www.legislation.gov.uk/ukpga/1988/1/section/537B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 110](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/110), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21611651]: [Ss. 537A](https://www.legislation.gov.uk/ukpga/1988/1/section/537A), [537B](https://www.legislation.gov.uk/ukpga/1988/1/section/537B) and preceding cross-heading inserted (1.8.1989) by [Intellectual Property Act 1988 (c. 48)](https://www.legislation.gov.uk/ukpga/1988/48), [Sch. 7 para. 36(6)](https://www.legislation.gov.uk/ukpga/1988/48/schedule/7/paragraph/36/6); [S.I. 1989/816](https://www.legislation.gov.uk/uksi/1989/816), [art. 2](https://www.legislation.gov.uk/uksi/1989/816/article/2)
[^c22781791]: [S. 538](https://www.legislation.gov.uk/ukpga/1988/1/section/538) repealed (with effect in accordance with s. 71(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/6)
@@ -58370,12 +51918,34 @@
[^c22779241]: [S. 553C](https://www.legislation.gov.uk/ukpga/1988/1/section/553C) inserted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 89](https://www.legislation.gov.uk/ukpga/1998/36/section/89)
[^c23749241]: [S. 555](https://www.legislation.gov.uk/ukpga/1988/1/section/555) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 113](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/113), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22779781]: Word in [s. 557](https://www.legislation.gov.uk/ukpga/1988/1/section/557) sidenote substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23749261]: [S. 557](https://www.legislation.gov.uk/ukpga/1988/1/section/557) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 231](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/231), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23749191]: [S. 558(1)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/558/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 115](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/115), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23749451]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749471]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749481]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749491]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749501]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c22775021]: [S. 563](https://www.legislation.gov.uk/ukpga/1988/1/section/563) repealed (with effect in accordance with Sch. 27 para. 8(1), Sch. 29 Pt. 8(21) Note 3 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 5](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/5), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c23749521]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749531]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749541]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c23749551]: [Pt. 13 Ch. 4](https://www.legislation.gov.uk/ukpga/1988/1/part/13/chapter/4) (ss. 559-567) repealed (with effect in accordance with s. 77 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 9(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/9/2), [Sch. 42 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/7), Note; [S.I. 2006/3240](https://www.legislation.gov.uk/uksi/2006/3240), [art. 2](https://www.legislation.gov.uk/uksi/2006/3240/article/2)
[^c22783081]: [S. 559A](https://www.legislation.gov.uk/ukpga/1988/1/section/559A) inserted (with effect in accordance with [s. 40(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/40/4) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 40(1)](https://www.legislation.gov.uk/ukpga/2002/23/section/40/1)
[^c21614031]: Source-1970 s.406
@@ -58400,8 +51970,20 @@
[^c21614061]: Source-1970 s.409
[^c23749721]: [S. 571(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/571/1A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 116](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/116) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21614071]: Source-1970 s.410
[^c23753491]: [S. 573](https://www.legislation.gov.uk/ukpga/1988/1/section/573) transposed from Pt. 13 Ch. 6 to Pt. 13 Ch. 5A (6.4.2007 with effect in accordance with s. 1034(1) of the affecting Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 117(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/117/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753871]: Words in [s. 575](https://www.legislation.gov.uk/ukpga/1988/1/section/575) sidenote repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753961]: [S. 575](https://www.legislation.gov.uk/ukpga/1988/1/section/575) transposed from Pt. 13 Ch. 6 to Pt. 13 Ch. 5A (6.4.2007 with effect in accordance with s. 1034(1) of the affecting Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754011]: Words in [s. 576](https://www.legislation.gov.uk/ukpga/1988/1/section/576) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754301]: [S. 576](https://www.legislation.gov.uk/ukpga/1988/1/section/576) transposed from Pt. 13 Ch. 6 to Pt. 13 Ch. 5A (6.4.2007 with effect in accordance with s. 1034(1) of the affecting Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754361]: [S. 576A](https://www.legislation.gov.uk/ukpga/1988/1/section/576A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 121](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/121) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754401]: [S. 576C](https://www.legislation.gov.uk/ukpga/1988/1/section/576C) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 123](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/123) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
@@ -58426,6 +52008,8 @@
[^c23754561]: [S. 576L](https://www.legislation.gov.uk/ukpga/1988/1/section/576L) and preceding cross-heading inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 132](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/132) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754331]: [S. 574](https://www.legislation.gov.uk/ukpga/1988/1/section/574) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 118](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/118), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21614481]: [S. 577A](https://www.legislation.gov.uk/ukpga/1988/1/section/577A) inserted (with application in accordance with [s. 123(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/123/2) of the amending Act) by [Finance Act 1993 (c. 34)](https://www.legislation.gov.uk/ukpga/1993/34), [s. 123(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/123/1/2)
[^c23762911]: [Ss. 580A-580C](https://www.legislation.gov.uk/ukpga/1988/1/section/580A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 240](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/240), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -58436,14 +52020,20 @@
[^c23762971]: [S. 581](https://www.legislation.gov.uk/ukpga/1988/1/section/581) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 241](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/241), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23763031]: [S. 581A](https://www.legislation.gov.uk/ukpga/1988/1/section/581A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 133](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/133), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21614611]: [S. 582A](https://www.legislation.gov.uk/ukpga/1988/1/section/582A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 118(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/118/1)
[^c23763051]: [S. 582A](https://www.legislation.gov.uk/ukpga/1988/1/section/582A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 135](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/135), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23762991]: [S. 583](https://www.legislation.gov.uk/ukpga/1988/1/section/583) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 244](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/244), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23763011]: [S. 585](https://www.legislation.gov.uk/ukpga/1988/1/section/585) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 246](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/246), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21614811]: [S. 587A](https://www.legislation.gov.uk/ukpga/1988/1/section/587A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 54](https://www.legislation.gov.uk/ukpga/1991/31/section/54), [Sch. 12 para. 1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/12/paragraph/1) (with application as referred to in Sch. 12 para. 5 of that Act)
[^c23763071]: [S. 587A](https://www.legislation.gov.uk/ukpga/1988/1/section/587A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 136](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/136), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22783241]: [S. 587B](https://www.legislation.gov.uk/ukpga/1988/1/section/587B) sidenote substituted (with effect in accordance with [s. 97(6)](https://www.legislation.gov.uk/ukpga/2002/23/section/97/6) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 97(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/97/4)
[^c23762891]: [S. 589](https://www.legislation.gov.uk/ukpga/1988/1/section/589) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 68](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/68), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
@@ -58622,6 +52212,8 @@
[^c21616951]: Source-1970 s.218(3)
[^c23486431]: Words in [s. 615(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/615/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 140](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/140) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21616991]: Source-1970 s.218(4)
[^c22893881]: Words in [s. 615(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/615/6/b) inserted (27.7.1999) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 10 para. 11](https://www.legislation.gov.uk/ukpga/1999/16/schedule/10/paragraph/11)
@@ -58808,6 +52400,8 @@
[^c23486121]: [Ss. 659B-659D](https://www.legislation.gov.uk/ukpga/1988/1/section/659B) repealed (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 42 Pt. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/3), Note (with Sch. 36)
[^c23486491]: Words in [s. 659E(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/659E/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 143](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/143) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23568791]: [S. 659E(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/659E/2): entries repealed (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 42 Pt. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/3), Note (with Sch. 36)
[^c22901211]: [S. 658A](https://www.legislation.gov.uk/ukpga/1988/1/section/658A) inserted (retrospectively) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 98(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/98/1)
@@ -58826,6 +52420,8 @@
[^c23312361]: [S. 660C(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/1A) inserted (with effect in accordance with [Sch. 4 para. 14(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/14/4) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 14(3)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/14/3)
[^c23763551]: [S. 660C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 144](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/144), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23763471]: [S. 660C(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 272(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/272/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23763611]: [Ss. 660D-660G](https://www.legislation.gov.uk/ukpga/1988/1/section/660D) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 273](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/273), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -58866,8 +52462,38 @@
[^c22900991]: [Ss. 683-685](https://www.legislation.gov.uk/ukpga/1988/1/section/683) repealed (with effect in accordance with Sch. 29 Pt. 8(8) Note of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(8)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/8)
[^c23766891]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766911]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766931]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766951]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766971]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766991]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767011]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23313571]: [S. 686](https://www.legislation.gov.uk/ukpga/1988/1/section/686) sidenote substituted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(8)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/8)
[^c23767031]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767051]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2)) (subject to an amendment to s. 686A(2)(a) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [s. 55(1)(3)](https://www.legislation.gov.uk/ukpga/2007/11/section/55/1/3))
[^c23767071]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767091]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767111]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767131]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767151]: [Ss. 685A-687](https://www.legislation.gov.uk/ukpga/1988/1/section/685A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 145](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/145), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766871]: Words in [s. 687A](https://www.legislation.gov.uk/ukpga/1988/1/section/687A) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 146(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/146/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767191]: [S. 688](https://www.legislation.gov.uk/ukpga/1988/1/section/688) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 279](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/279), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23313831]: [S. 689](https://www.legislation.gov.uk/ukpga/1988/1/section/689) repealed (with effect in accordance with s. 74(2), Sch. 29 Pt. 8(8) Note of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 15](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/15), [Sch. 29 Pt. 8(8)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/8)
@@ -58890,8 +52516,20 @@
[^c23765221]: [Pt. 15 Ch. 1C](https://www.legislation.gov.uk/ukpga/1988/1/part/15/chapter/1C) modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [s. 457(1)(3)](https://www.legislation.gov.uk/ukpga/2005/5/section/457/1/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23767811]: [S. 689A](https://www.legislation.gov.uk/ukpga/1988/1/section/689A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 147](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/147), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767951]: [Ss. 690-694](https://www.legislation.gov.uk/ukpga/1988/1/section/690) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/149), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767971]: [Ss. 690-694](https://www.legislation.gov.uk/ukpga/1988/1/section/690) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/149), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767981]: [Ss. 690-694](https://www.legislation.gov.uk/ukpga/1988/1/section/690) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/149), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767991]: [Ss. 690-694](https://www.legislation.gov.uk/ukpga/1988/1/section/690) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/149), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767891]: [S. 694](https://www.legislation.gov.uk/ukpga/1988/1/section/694) sidenote substituted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 4 para. 2](https://www.legislation.gov.uk/ukpga/2004/12/schedule/4/paragraph/2)
[^c23768001]: [Ss. 690-694](https://www.legislation.gov.uk/ukpga/1988/1/section/690) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 149](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/149), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23288561]: [Pt. 15](https://www.legislation.gov.uk/ukpga/1988/1/part/15) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 6(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/6/1) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c22900921]: [Pt. 15 Ch. 1A](https://www.legislation.gov.uk/ukpga/1988/1/part/15/chapter/1A) inserted (in place of ss. 660-676, 683-685) (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 1](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/1)
@@ -58902,12 +52540,50 @@
[^c21621991]: [S. 698A](https://www.legislation.gov.uk/ukpga/1988/1/section/698A) inserted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 11(2)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/11/2), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c23770881]: [S. 698A](https://www.legislation.gov.uk/ukpga/1988/1/section/698A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 150](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/150), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23770801]: [S. 699](https://www.legislation.gov.uk/ukpga/1988/1/section/699) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 289](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/289), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22901551]: [S. 699A](https://www.legislation.gov.uk/ukpga/1988/1/section/699A) inserted (with effect in accordance with [s. 76(6)](https://www.legislation.gov.uk/ukpga/1995/4/section/76/6) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 76(4)](https://www.legislation.gov.uk/ukpga/1995/4/section/76/4)
[^c23771371]: Words in [s. 703](https://www.legislation.gov.uk/ukpga/1988/1/section/703) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(10)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772691]: Words in [s. 709](https://www.legislation.gov.uk/ukpga/1988/1/section/709) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 161(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/161/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772771]: Words in [Pt. 17 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/17/chapter/1) heading substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 153](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/153) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23314131]: [Ss. 705A](https://www.legislation.gov.uk/ukpga/1988/1/section/705A), [705B](https://www.legislation.gov.uk/ukpga/1988/1/section/705B) inserted (1.1.1994) by [The General and Special Commissioners (Amendment of Enactments) Regulations 1994 (S.I. 1994/1813)](https://www.legislation.gov.uk/uksi/1994/1813), [reg. 1(1)](https://www.legislation.gov.uk/uksi/1994/1813/regulation/1/1), [Sch. 1 para. 24](https://www.legislation.gov.uk/uksi/1994/1813/schedule/1/paragraph/24)
[^c23781621]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781641]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781651]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781661]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781671]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781681]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781691]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781701]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781711]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781721]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781731]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781741]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781751]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781761]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781771]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22992681]: [S. 724](https://www.legislation.gov.uk/ukpga/1988/1/section/724) repealed (with effect in accordance with s. 105(1) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/3), Note
[^c21624971]: [S. 725](https://www.legislation.gov.uk/ukpga/1988/1/section/725) repealed (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt. III(12)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/12) Note 5
@@ -58916,6 +52592,12 @@
[^c21625011]: [S. 726A](https://www.legislation.gov.uk/ukpga/1988/1/section/726A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 54](https://www.legislation.gov.uk/ukpga/1991/31/section/54), [Sch. 12 paras. 2](https://www.legislation.gov.uk/ukpga/1991/31/schedule/12/paragraph/2), [5](https://www.legislation.gov.uk/ukpga/1991/31/schedule/12/paragraph/5)
[^c23781781]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781801]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781791]: [Ss. 710-727A](https://www.legislation.gov.uk/ukpga/1988/1/section/710) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/162), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23006161]: [S. 722A](https://www.legislation.gov.uk/ukpga/1988/1/section/722A) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 40 para. 6](https://www.legislation.gov.uk/ukpga/1996/8/schedule/40/paragraph/6)
[^c22903261]: [S. 727A](https://www.legislation.gov.uk/ukpga/1988/1/section/727A) inserted (with effect in accordance with [s. 79(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 79(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/1) (with [s. 79(4)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/4))
@@ -58946,12 +52628,38 @@
[^c23781481]: [S. 737E](https://www.legislation.gov.uk/ukpga/1988/1/section/737E) sidenote substituted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by virtue of [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 13(4)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/13/4)
[^c23781601]: Words in [s. 737E](https://www.legislation.gov.uk/ukpga/1988/1/section/737E) sidenote repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 176(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/176/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22903631]: [Ss. 737D](https://www.legislation.gov.uk/ukpga/1988/1/section/737D), [737E](https://www.legislation.gov.uk/ukpga/1988/1/section/737E) inserted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 83(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/83/1)
[^c23782901]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782921]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782541]: [S. 741](https://www.legislation.gov.uk/ukpga/1988/1/section/741) sidenote substituted (5.12.2005) by virtue of [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 2(4)(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/2/4/5)
[^c23782931]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782941]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782951]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782961]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782971]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782681]: [S. 742](https://www.legislation.gov.uk/ukpga/1988/1/section/742) sidenote substituted (5.12.2005) by virtue of [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 6(5)(6)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/6/5/6)
[^c23782981]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782991]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23783001]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23783011]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23783021]: [Ss. 739-746](https://www.legislation.gov.uk/ukpga/1988/1/section/739) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 177](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/177), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23782561]: [S. 741A](https://www.legislation.gov.uk/ukpga/1988/1/section/741A) inserted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 3](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/3)
[^c23782581]: [Ss. 741B](https://www.legislation.gov.uk/ukpga/1988/1/section/741B), [741C](https://www.legislation.gov.uk/ukpga/1988/1/section/741C) inserted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 4](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/4)
@@ -59026,6 +52734,10 @@
[^c23229641]: [S. 770A](https://www.legislation.gov.uk/ukpga/1988/1/section/770A) substituted for ss. 770-773 (with effect in accordance with [s. 108(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/108/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 108(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/108/1); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c23798811]: [S. 775](https://www.legislation.gov.uk/ukpga/1988/1/section/775) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 182](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/182), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796661]: Words in [s. 777](https://www.legislation.gov.uk/ukpga/1988/1/section/777) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(13)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/13) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790671]: [S. 775A](https://www.legislation.gov.uk/ukpga/1988/1/section/775A) inserted (with effect in accordance with [Sch. 7 para. 4(2)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/4/2) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 7 para. 4(1)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/4/1)
[^c23790691]: [Ss. 785ZA](https://www.legislation.gov.uk/ukpga/1988/1/section/785ZA), [785ZB](https://www.legislation.gov.uk/ukpga/1988/1/section/785ZB) inserted (with effect in accordance with [s. 83(4)-(6)](https://www.legislation.gov.uk/ukpga/2006/25/section/83/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 83(2)](https://www.legislation.gov.uk/ukpga/2006/25/section/83/2)
@@ -59142,6 +52854,10 @@
[^c23798981]: [Pt. 18](https://www.legislation.gov.uk/ukpga/1988/1/part/18) modified (with effect in accordance with s. 56(3) of the modifying Act) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [s. 56(1)](https://www.legislation.gov.uk/ukpga/2009/10/section/56/1)
[^c23816441]: [S. 818](https://www.legislation.gov.uk/ukpga/1988/1/section/818) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 203](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/203), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23816461]: [S. 819](https://www.legislation.gov.uk/ukpga/1988/1/section/819) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 204](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/204), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23812421]: [S. 820](https://www.legislation.gov.uk/ukpga/1988/1/section/820) applied (6.4.2005) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [s. 883(1)(2)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1/2), [Sch. 2 para. 160](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2/paragraph/160)
[^c21628511]: Source—1970 s.520
@@ -59162,14 +52878,20 @@
[^c23812541]: Words in [s. 821(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/821/1/a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 330(f)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/330/f), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23812561]: [S. 821(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/821/3/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 205(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/205/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21628531]: [S. 821(3)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/821/3/aa) inserted (1.8.1989) by [Copyright, Designs and Patents Act 1988 (c. 48)](https://www.legislation.gov.uk/ukpga/1988/48), [Sch. 7 para. 36(7)](https://www.legislation.gov.uk/ukpga/1988/48/schedule/7/paragraph/36/7); [S.I. 1989/816](https://www.legislation.gov.uk/uksi/1989/816) art. 2
[^c23812581]: [S. 821(3)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/821/3/aa) and word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 205(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/205/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22800561]: [S. 821(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/821/3/c) and preceding word repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/2)
[^c21628541]: Source—1970 s.522; 1971 Sch.6 76; 1972 Sch.24 30
[^c22800621]: Words in [s. 822(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/822/1) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 23](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/23)
[^c23816481]: [S. 823](https://www.legislation.gov.uk/ukpga/1988/1/section/823) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 206](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/206), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21628821]: [S. 824](https://www.legislation.gov.uk/ukpga/1988/1/section/824) excluded (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [Finance Act 1993 (c. 34)](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 173](https://www.legislation.gov.uk/ukpga/1993/34/section/173), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3), [Sch. 19 Pt. III para. 13(4)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/19/part/III/paragraph/13/4)
[^c22800861]: [S. 824](https://www.legislation.gov.uk/ukpga/1988/1/section/824) excluded (2.1.1996) by [The Lloyd's Underwriters (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995 (S.I. 1995/3225)](https://www.legislation.gov.uk/uksi/1995/3225), [reg. 12(2)](https://www.legislation.gov.uk/uksi/1995/3225/regulation/12/2) (with [reg. 13](https://www.legislation.gov.uk/uksi/1995/3225/regulation/13))
@@ -59364,6 +53086,8 @@
[^c22800361]: [1994 c. 9](https://www.legislation.gov.uk/ukpga/1994/9).
[^c23816501]: [S. 827A](https://www.legislation.gov.uk/ukpga/1988/1/section/827A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 207](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/207), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21629661]: Source—1970 ss.65(5), 204, 231(3), 343 (1A); 1970(F) s.29(6), Sch.5 2(3), 10; 1972 ss.91(3), 108(4); 1973 Sch.16 17(2); 1975 (No.2) ss.47(10), 48(6), 69(9), 70(8), 70A(3); 1976 ss.64(4), 64A, (4) Sch.4 16(2); 1980 s.24(9); [Sch.10](https://www.legislation.gov.uk/ukpga/1988/1/schedule/10) 13(3); 1982 ss.28(5), 29(1), (3), Sch.7 14(2); 1984 ss.26(1), 88(8), 126(1), Sch.8 2(1)(f), 3A; 1983 Sch.5 5A(9), 6(8); 1986 s.28, 61, Sch.11 11, Sch.12 3, Sch.17 6(7).
[^c23815221]: [S. 828(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/3) excluded by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 22 para. 22C(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/22/paragraph/22C/3) (as inserted (1.7.2005) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 7 paras. 8](https://www.legislation.gov.uk/ukpga/2005/7/schedule/7/paragraph/8), [18(1)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/7/paragraph/18/1) (with [Sch. 7 paras. 19-21](https://www.legislation.gov.uk/ukpga/2005/7/schedule/7/paragraph/19)))
@@ -59372,8 +53096,12 @@
[^c23815251]: [S. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) modified (20.3.2007) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [ss. 1030(4)](https://www.legislation.gov.uk/ukpga/2007/3/section/1030/4), [1034(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/4/b)
[^c23815351]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/5/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815121]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) inserted (10.7.2003) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 180(2)](https://www.legislation.gov.uk/ukpga/2003/14/section/180/2)
[^c23815371]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/5/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815201]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 334(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/334/2), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22803711]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) repealed (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 26 Pt. 5(19)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/19)
@@ -59388,10 +53116,14 @@
[^c21629721]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) inserted by [Capital Allowances Act 1990 (c. 1)](https://www.legislation.gov.uk/ukpga/1990/1), [Sch. 1 para. 8(34)](https://www.legislation.gov.uk/ukpga/1990/1/schedule/1/paragraph/8/34)
[^c23815401]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(5)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/5/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815101]: [S. 828(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5) added (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 105(4)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/105/4) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23815231]: [S. 828(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/6) inserted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 34](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/34) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23816521]: [S. 829](https://www.legislation.gov.uk/ukpga/1988/1/section/829) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 209](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/209), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23816161]: [S. 830(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/830/5) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 106](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/106), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c22800331]: [S. 826A](https://www.legislation.gov.uk/ukpga/1988/1/section/826A) inserted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 4 para. 1(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/4/paragraph/1/2)
@@ -59404,6 +53136,8 @@
[^c23816561]: [S. 831(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/831/3): definition of "ITTOIA 2005" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 336](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/336) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23816581]: [S. 831(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/831/3): definition of "ITA 2007" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 211](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/211) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21629871]: [S. 831(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/831/3): definition of "the 1990 Act" inserted by [Capital Allowances Act 1990 (c. 1)](https://www.legislation.gov.uk/ukpga/1990/1), [Sch. 1 para. 8(35)](https://www.legislation.gov.uk/ukpga/1990/1/schedule/1/paragraph/8/35); and that amendment continued by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [s. 579](https://www.legislation.gov.uk/ukpga/2001/2/section/579), [Sch. 2 para. 59](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/59)
[^c21629881]: [S. 831(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/831/3): definition of "the 1992 Act" inserted (with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(53)(a)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/53/a) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
@@ -59420,12 +53154,28 @@
[^c21629931]: Words in [s. 831(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/831/5) substituted (with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(53)(b)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/53/b) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23817041]: Words in [s. 832](https://www.legislation.gov.uk/ukpga/1988/1/section/832) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820211]: [S. 833](https://www.legislation.gov.uk/ukpga/1988/1/section/833) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 213](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/213), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820231]: [S. 835](https://www.legislation.gov.uk/ukpga/1988/1/section/835) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 215](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/215), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820251]: [S. 836](https://www.legislation.gov.uk/ukpga/1988/1/section/836) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 216](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/216), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820331]: [S. 836A](https://www.legislation.gov.uk/ukpga/1988/1/section/836A) repealed (with effect in accordance with s. 80(4) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 4 para. 25](https://www.legislation.gov.uk/ukpga/2005/7/schedule/4/paragraph/25), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/7), Note 2
[^c23820271]: [S. 836B](https://www.legislation.gov.uk/ukpga/1988/1/section/836B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 217](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/217), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820291]: [S. 837](https://www.legislation.gov.uk/ukpga/1988/1/section/837) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 218](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/218), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22806921]: [S. 841A](https://www.legislation.gov.uk/ukpga/1988/1/section/841A) repealed (28.7.2000) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17)
[^c23820311]: [S. 842AA](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 229](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/229), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21631481]: [S. 842A](https://www.legislation.gov.uk/ukpga/1988/1/section/842A) inserted (1.4.1990) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s.127(1)(4)](https://www.legislation.gov.uk/ukpga/1990/29/section/127/1/4)
[^c23819851]: Words in [s. 842B](https://www.legislation.gov.uk/ukpga/1988/1/section/842B) sidenote repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 231(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/231/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23812171]: [S. 834A](https://www.legislation.gov.uk/ukpga/1988/1/section/834A) inserted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 274](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/274) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23812191]: [S. 834B](https://www.legislation.gov.uk/ukpga/1988/1/section/834B) inserted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 275](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/275) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
@@ -59702,6 +53452,8 @@
[^c21636211]: Words in [Sch. 14 para. 2(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/2/1/b) substituted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 para. 18(2)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/18/2); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
[^c23403151]: [Sch. 14 para. 2(1A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/2/1A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 232(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/232/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21636281]: Source—1976 Sch.4 13; 1978 Sch.3 7; 1980 s.29(2)(c); 1987 Sch.15 9
[^c21636291]: Words in [Sch. 14 para. 3(1)(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/3/1/3/a) substituted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 para. 18(2)(3)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/18/2/3); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
@@ -59740,6 +53492,8 @@
[^c21636421]: Source—1984 s.72(2)-(4), (6), (7)
[^c23403191]: [Sch. 14 para. 8(3A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/8/3A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 232(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/232/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22224031]: Words in [Sch. 14 para. 8(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/8/4) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 167(5)](https://www.legislation.gov.uk/ukpga/1996/8/section/167/5)
[^c22224051]: [Sch. 14 para. 8(8)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/8/8) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 167(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/167/6)
@@ -59852,6 +53606,8 @@
[^c23821011]: [Sch. 15 paras. B1-B3](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15/paragraph/B1), cross-headings and preceding heading inserted (17.7.2013) by [Finance Act 2013 (c. 29)](https://www.legislation.gov.uk/ukpga/2013/29), [Sch. 9 para. 3](https://www.legislation.gov.uk/ukpga/2013/29/schedule/9/paragraph/3)
[^c23820951]: [Sch. 15 para. 20A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15/paragraph/20A) and preceding cross-heading inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 233](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/233) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23820741]: [Sch. 15 para. 21](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15/paragraph/21) repealed (with effect in accordance with s. 55(1)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(7)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/7), Note (as s. 55 of that repealing Act is amended (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 162(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/162/1)); [S.I. 2013/759](https://www.legislation.gov.uk/uksi/2013/759), [art. 2](https://www.legislation.gov.uk/uksi/2013/759/article/2)
[^c23820721]: [Sch. 15 para. 22](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15/paragraph/22) repealed (with effect in accordance with s. 55(1)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 55(4)(9)](https://www.legislation.gov.uk/ukpga/1995/4/section/55/4/9), [Sch. 29 Pt. 8(7)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/7), Note (as s. 55 of that repealing Act is amended (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 162(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/162/1)); [S.I. 2013/759](https://www.legislation.gov.uk/uksi/2013/759), [art. 2](https://www.legislation.gov.uk/uksi/2013/759/article/2)
@@ -59886,6 +53642,8 @@
[^c23821411]: [Sch. 15A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 345](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/345), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23821671]: [Sch. 15B Pt. 1](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15B/part/1) (paras. 1-6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 234](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/234), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23821711]: [Sch. 15B paras. 7-9](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15B/paragraph/7) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 346(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/346/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23821731]: [Sch. 15B paras. 7-9](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15B/paragraph/7) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 346(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/346/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -59894,6 +53652,8 @@
[^c22784011]: [Sch. 15B Pt. 2](https://www.legislation.gov.uk/ukpga/1988/1/schedule/15B/part/2) applied (1.5.1995) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [s. 151A(6)](https://www.legislation.gov.uk/ukpga/1992/12/section/151A/6) (as inserted by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 72(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/72/3))
[^c23821751]: [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 235](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/235), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23838611]: [Sch. 17A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/17A) repealed and replaced (with effect in accordance with Sch. 27 Pt. 3(28) Note of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 117(1)(c)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/1/c), [Sch. 18](https://www.legislation.gov.uk/ukpga/1998/36/schedule/18), [Sch. 27 Pt. 3(28)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/28)
[^c23822181]: [Sch. 19](https://www.legislation.gov.uk/ukpga/1988/1/schedule/19) repealed by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [ss. 103](https://www.legislation.gov.uk/ukpga/1989/26/section/103), [187](https://www.legislation.gov.uk/ukpga/1989/26/section/187), [Sch. 17 Pt. V](https://www.legislation.gov.uk/ukpga/1989/26/schedule/17/part/V), Notes 1, 3
@@ -59916,6 +53676,8 @@
[^c23823011]: Words in [Sch. 19B para. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/19B/paragraph/1/2) inserted (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 154(4)(b)](https://www.legislation.gov.uk/ukpga/2006/25/section/154/4/b)
[^c23823631]: Words in [Sch. 19B para. 2(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/19B/paragraph/2/b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 236](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/236) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23823031]: Words in [Sch. 19B para. 3(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/19B/paragraph/3/1) inserted (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 154(5)(a)](https://www.legislation.gov.uk/ukpga/2006/25/section/154/5/a)
[^c23823051]: Words in [Sch. 19B para. 3(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/19B/paragraph/3/1) inserted (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 154(5)(b)](https://www.legislation.gov.uk/ukpga/2006/25/section/154/5/b)
@@ -60212,6 +53974,8 @@
[^c23831011]: [Sch. 28A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A) heading substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 39(11)
[^c23835841]: [Sch. 28B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 240](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/240), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23838041]: [Sch. 29 paras. 1](https://www.legislation.gov.uk/ukpga/1988/1/schedule/29/paragraph/1), [2](https://www.legislation.gov.uk/ukpga/1988/1/schedule/29/paragraph/2) repealed by [Capital Allowances Act 1990 (c. 1)](https://www.legislation.gov.uk/ukpga/1990/1), [s. 164](https://www.legislation.gov.uk/ukpga/1990/1/section/164), [Sch. 2](https://www.legislation.gov.uk/ukpga/1990/1/schedule/2)
[^c23838141]: [Sch. 29 para. 4](https://www.legislation.gov.uk/ukpga/1988/1/schedule/29/paragraph/4) repealed (with effect in accordance with s. 90 of the repealing Act) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 19 Pt. 5](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19/part/5), Note 2
@@ -60324,159 +54088,7 @@
[^c22747271]: [Sch. 23ZA](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23ZA) inserted (28.7.2000) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 61](https://www.legislation.gov.uk/ukpga/2000/17/section/61), [Sch. 13 para. 27](https://www.legislation.gov.uk/ukpga/2000/17/schedule/13/paragraph/27) (with [Sch. 13 paras. 28](https://www.legislation.gov.uk/ukpga/2000/17/schedule/13/paragraph/28), [29](https://www.legislation.gov.uk/ukpga/2000/17/schedule/13/paragraph/29))
[^c21567841]: *See* s.686—*income of trustees chargeable at higher rate.*
[^c21567851]: [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1991-92) by [S.I. 1991/732](https://www.legislation.gov.uk/uksi/1991/732), [art. 2(2)](https://www.legislation.gov.uk/uksi/1991/732/article/2/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1992-93) by [1992 c. 20](https://www.legislation.gov.uk/ukpga/1992/20), [s. 10(2)(b)](https://www.legislation.gov.uk/ukpga/1992/20/section/10/2/b) (in place of [S.I. 1992/622](https://www.legislation.gov.uk/uksi/1992/622), [art. 2(2)](https://www.legislation.gov.uk/uksi/1992/622/article/2/2)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1993-94) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 51(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/51/2) (in place of [S.I. 1993/755](https://www.legislation.gov.uk/uksi/1993/755), [art. 2(2)](https://www.legislation.gov.uk/uksi/1993/755/article/2/2)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1994-95) by [1994 c. 9](https://www.legislation.gov.uk/ukpga/1994/9), [s. 75(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/75/2) (in place of [S.I. 1993/2948](https://www.legislation.gov.uk/uksi/1993/2948), [art. 2(2)](https://www.legislation.gov.uk/uksi/1993/2948/article/2/2)) [S. 1(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/b) amended (1995-96) by [S.I. 1994/3012](https://www.legislation.gov.uk/uksi/1994/3012), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/1994/3012/article/2/2/b) [S. 1(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/aa) amended (1995-96) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 35(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/35/2) (in place of [S.I. 1994/3012](https://www.legislation.gov.uk/uksi/1994/3012), [art. 2(2)(a)](https://www.legislation.gov.uk/uksi/1994/3012/article/2/2/a)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1996-97) by [1996 c. 8](https://www.legislation.gov.uk/ukpga/1996/8), [s. 72(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/72/2) (in place of [S.I. 1995/3031](https://www.legislation.gov.uk/uksi/1995/3031), [art. 2(2)](https://www.legislation.gov.uk/uksi/1995/3031/article/2/2)) [S. 1(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/b) amended (1997-98) by [S.I. 1996/2952](https://www.legislation.gov.uk/uksi/1996/2952), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/1996/2952/article/2/2/b) [S. 1(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/aa) amended (1997-98) by [1997 c. 16](https://www.legislation.gov.uk/ukpga/1997/16), [s. 54(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/54/2) (in place of [S.I. 1996/2952](https://www.legislation.gov.uk/uksi/1996/2952), [art. 2(2)(a)](https://www.legislation.gov.uk/uksi/1996/2952/article/2/2/a)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (1998-99) by [S.I. 1998/755](https://www.legislation.gov.uk/uksi/1998/755), [art. 2(2)](https://www.legislation.gov.uk/uksi/1998/755/article/2/2) [S. 1(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/b) amended (1999-00) by [S.I. 1999/597](https://www.legislation.gov.uk/uksi/1999/597), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/1999/597/article/2/2/b) (the effect of art. 2(2)(a) being superseded by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(1)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/1) which substitutes s. 1(2)(aa)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2000-01) by [S.I. 2000/806](https://www.legislation.gov.uk/uksi/2000/806), [art. 2(2)](https://www.legislation.gov.uk/uksi/2000/806/article/2/2) [S. 1(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/b) amended (2001-02) by [S.I. 2001/638](https://www.legislation.gov.uk/uksi/2001/638), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/2001/638/article/2/2/b) [S. 1(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/aa) amended (2001-02) by [2001 c. 9](https://www.legislation.gov.uk/ukpga/2001/9), [s. 51(1)](https://www.legislation.gov.uk/ukpga/2001/9/section/51/1) (in place of [S.I. 2001/638](https://www.legislation.gov.uk/uksi/2001/638), [art. 2(2)(a)](https://www.legislation.gov.uk/uksi/2001/638/article/2/2/a)) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2002-03) by [S.I. 2002/707](https://www.legislation.gov.uk/uksi/2002/707), [art. 2(2)](https://www.legislation.gov.uk/uksi/2002/707/article/2/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2003-04) by [S.I. 2003/840](https://www.legislation.gov.uk/uksi/2003/840), [art. 2](https://www.legislation.gov.uk/uksi/2003/840/article/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2004-05) by [S.I. 2004/772](https://www.legislation.gov.uk/uksi/2004/772), [art. 2](https://www.legislation.gov.uk/uksi/2004/772/article/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2005-06) by [S.I. 2005/716](https://www.legislation.gov.uk/uksi/2005/716), [art. 2](https://www.legislation.gov.uk/uksi/2005/716/article/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2006-07) by [S.I. 2006/872](https://www.legislation.gov.uk/uksi/2006/872), [art. 2](https://www.legislation.gov.uk/uksi/2006/872/article/2) [S. 1(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2) amended (2007-08) by [S.I. 2007/943](https://www.legislation.gov.uk/uksi/2007/943), [art. 2](https://www.legislation.gov.uk/uksi/2007/943/article/2)
[^c21567861]: Source—1970 s.1; 1971 s.32(1); 1980 s.24(2); 1987 s.20(1)
[^c21567891]: *See* 1990 s.17(1)—*basic rate* 25%*and higher rate* 40%*for* 1990-91.
[^c21567901]: *For earlier years see* Table C Vol.1.
[^c21567911]: Words in [s. 1(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/a) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(3)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/3/10/11).
[^c21567921]: 1988(F) s.24(2)(a)*for* 1988-89.*Previously* “(b) in respect of so much of an individual's total income as exceeds £17,900, at such higher rates respectively as Parliament may determine in relation to the first £2,500, the next £5,000, the next £7,900, the next £7,900 and the remainder;”.
[^c21567961]: 1990 s.17(1)(b)*for* 1990-91. (Art. 2(2)*of* S.I. [1990 No.677](https://www.legislation.gov.uk/ukcm/1990/677) (*in* Part III Vol.5)*was not operated.*)
[^c21567981]: Source‐1980 s.24(3); 1984 Sch.7 3(5)
[^c21567991]: Words in [s. 1(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/3) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(5)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/5/10/11).
[^c21568001]: Repealed by 1988(F) s. 148 and Sch. 14 Part IV for 1988-89 and subsequent years
[^c21568011]: *See*—1988(F) s.24(2)—*indexation not to apply for* 1988-89.1990 s.17(1)—*indexation not to apply for* 1990-91.
[^c21568021]: [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1991-92 by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 21(2)](https://www.legislation.gov.uk/ukpga/1991/31/section/21/2) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1992-93 by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 10(2)(a)(5)](https://www.legislation.gov.uk/ukpga/1992/20/section/10/2/a/5). [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1993-94 by [Finance Act 1993 (c. 34)](https://www.legislation.gov.uk/ukpga/1993/34), [s. 51(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/51/2) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1994-95 by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 75(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/75/2) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1995-96 by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 35(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/35/2) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1996-97 by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 72(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/72/2) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 1999-00 by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(5)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/5) [S. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) excluded for the year 2001-02 by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 51(2)](https://www.legislation.gov.uk/ukpga/2001/9/section/51/2)
[^c21568031]: Source—1980 s.24(4), (7), (9)
[^c21568041]: Words in [s. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) substituted (27.7.1993 with effect for year 1994-95 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 107(2)(a)(8)](https://www.legislation.gov.uk/ukpga/1993/34/section/107/2/a/8)
[^c21568061]: Words in [s. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) substituted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by virtue of [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(6)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/6/10/11).
[^c21568071]: [S. 1(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/5) repealed (27.7.1993 with effect for the year 1994-95 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 107(2)(b)(8)](https://www.legislation.gov.uk/ukpga/1993/34/section/107/2/b/8), [213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23), [Pt.III](https://www.legislation.gov.uk/ukpga/1993/34/part/III)
[^c21568091]: *See* S.I. [1989 No. 467](https://www.legislation.gov.uk/ukcm/1989/467) in Part III Vol.5.
[^c21568101]: Word in [s. 1(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/6) substituted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by virtue of [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(7)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/7/10/11).
[^c21568111]: [S. 1(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/6A) inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(8)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/8/10/11).
[^c21833131]: [S. 1(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2/aa) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(1)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/1)
[^c21833171]: [S. 1(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/2A) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/2)
[^c21833861]: Words in [s. 1(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/3) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/3)
[^c21834131]: Words in [s. 1(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/4) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(4)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/4)
[^c21834201]: [S. 1(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/5A) inserted (27.7.1999 with effect for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 25(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/25/2)
[^c21834731]: [S. 1(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/5A) modified for the year 2002-03 by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 27(a)](https://www.legislation.gov.uk/ukpga/2002/23/section/27/a) [S. 1(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/5A) modified for the year 2003-04 by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 132](https://www.legislation.gov.uk/ukpga/2003/14/section/132)
[^c21834181]: Words in [s. 1(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/6A) substituted (27.7.1999 with application for the year 1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(6)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/6)
[^c23330151]: [S. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [s. 723](https://www.legislation.gov.uk/ukpga/2003/1/section/723), [Sch. 6 para. 2(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/2/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23330171]: Words in [s. 1(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/5A) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [s. 723](https://www.legislation.gov.uk/ukpga/2003/1/section/723), [Sch. 6 para. 2(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/2/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23333811]: [S. 1(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/1/a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 2(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/2/a), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23355861]: Word at the end of s. 1(1)(b) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 2(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/2/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333831]: [S. 1(1)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/1/1/ba) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 2(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21568121]: Source—1970 s.2
[^c21568131]: Source—1970 s.3; 1971 Sch.6 2
[^c21819141]: [S. 3(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/3/c) and preceding word repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 113](https://www.legislation.gov.uk/ukpga/1997/16/section/113) {Sch. 18}
[^c21568141]: Source—1971 s.36; 1975(No. 2) s.44(6)
[^c21819171]: [S. 4(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/4/1A) inserted (with effect in accordance with [s. 73(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/73/3) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 73(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/73/2)
[^c21819191]: Words in [s. 4(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/4/2) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 73](https://www.legislation.gov.uk/ukpga/1996/8/section/73), [Sch. 6 para. 2](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/2)
[^c23332711]: Words in [s. 4(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/4/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [s. 723](https://www.legislation.gov.uk/ukpga/2003/1/section/723), [Sch. 6 para. 3](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23333721]: [S. 4(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/4/1B) inserted (retrospective, and with effect in accordance with [s. 33(2)](https://www.legislation.gov.uk/ukpga/2000/17/section/33/2) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 33(1)](https://www.legislation.gov.uk/ukpga/2000/17/section/33/1)
[^c23333741]: [S. 4(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/4/1B) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para 5](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/5), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21826471]: Words in [s. 1A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1) substituted (with effect in accordance with [s. 31(6)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 31(2)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/2)
[^c21826511]: [S. 1A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1A) inserted (with effect in accordance with [s. 31(6)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 31(3)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/3)
[^c21826531]: [S. 1A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/5) substituted (with effect in accordance with [s. 31(6)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 31(4)](https://www.legislation.gov.uk/ukpga/1997/58/section/31/4)
[^c21826691]: Words in [s. 1A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1) substituted (with effect in accordance with [s. 100(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/100/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 100(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/100/1)
[^c21826731]: [S. 1A(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/aa) inserted (with effect in accordance with [s. 100(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/100/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 100(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/100/2)
[^c21826911]: [S. 1A](https://www.legislation.gov.uk/ukpga/1988/1/section/1A) extended (27.7.1999) [Commonwealth Development Corporation Act 1999 (c. 20)](https://www.legislation.gov.uk/ukpga/1999/20), [s. 20](https://www.legislation.gov.uk/ukpga/1999/20/section/20), [Sch. 3 para. 6(4)](https://www.legislation.gov.uk/ukpga/1999/20/schedule/3/paragraph/6/4) (with [Sch. 3 para. 1](https://www.legislation.gov.uk/ukpga/1999/20/schedule/3/paragraph/1))
[^c21826771]: [S. 1A(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1B) inserted (with application in accordance with [s. 22(12)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/12) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(7)(a)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/7/a)
[^c21826851]: [S. 1A(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/6A) inserted (with application in accordance with [s. 22(12)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/12) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(7)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/7/b)
[^c21826931]: Words in [s. 1A(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1/b) inserted (with effect in accordance with [s. 32(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/32/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 32(2)](https://www.legislation.gov.uk/ukpga/2000/17/section/32/2)
[^c21827091]: [S. 1A(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1AA) inserted (with effect in accordance with [s. 32(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/32/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 32(3)](https://www.legislation.gov.uk/ukpga/2000/17/section/32/3)
[^c23332651]: Word preceding s. 1A(2)(c) repealed (with effect in accordance with s. 173(2) of the repealing Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 35 para. 1(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/35/paragraph/1/2), [Sch. 43 Pt. 3(13)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/43/part/3/13), Note 1
[^c23332671]: [S. 1A(2)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/d) and preceding word inserted (with effect in accordance with [s. 173(2)](https://www.legislation.gov.uk/ukpga/2003/14/section/173/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 35 para. 1(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/35/paragraph/1/2)
[^c23332691]: Words in [s. 1A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/5) inserted (with effect in accordance with [s. 173(2)](https://www.legislation.gov.uk/ukpga/2003/14/section/173/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 35 para. 1(3)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/35/paragraph/1/3)
[^c23333201]: Words in [s. 1A(1AA)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1AA/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333221]: [S. 1A(1AA)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1AA/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333241]: Words in [s. 1A(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1A/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(3)(a)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/3/a/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333261]: Word in [s. 1A(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1A/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(3)(a)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/3/a/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333281]: [S. 1A(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/1A/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333301]: Words in [s. 1A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333321]: Words in [s. 1A(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/aa) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/4/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333391]: Words in [s. 1A(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(4)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/4/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333411]: Words in [s. 1A(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/c) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(4)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/4/d), [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2)
[^c23333431]: Words in [s. 1A(2)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/2/d) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(4)(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/4/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333451]: [S. 1A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333471]: Words in [s. 1A(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/4/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(6)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23355871]: [S. 1A(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/4/b) and preceding word repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(6)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/6/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333491]: Words in [s. 1A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(7)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/7/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333511]: Words in [s. 1A(5)(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/5/b/i) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch 1 para. 3(7)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/7/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333531]: [S. 1A(5)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/5/b/ii) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(7)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/7/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333551]: Words in [s. 1A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(8)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333371]: [S. 1A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/7) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 3(9)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/3/9), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333571]: [S. 1A(8)(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/1A/8/9) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/4/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 4)](https://www.legislation.gov.uk/ukpga/2005/4), [Sch. 1 para. 3(10)](https://www.legislation.gov.uk/ukpga/2005/4/schedule/1/paragraph/3/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/4/schedule/2))
[^c23333621]: [S. 1B(1)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/1B/1/a/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 4(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/4/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333631]: Word in [s. 1B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/1B/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 4(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/4/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333651]: Words in [s. 1B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/1B/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 4(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/4/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333681]: [S. 1B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/1B/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 4(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/4/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22746361]: [Sch. 28B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B) inserted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 70(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/70/2), [Sch. 14](https://www.legislation.gov.uk/ukpga/1995/4/schedule/14)
[^c21568171]: [S. 6](https://www.legislation.gov.uk/ukpga/1988/1/section/6) applied (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 1(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/1/2), [289](https://www.legislation.gov.uk/ukpga/1992/12/section/289) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
@@ -60490,8 +54102,6 @@
[^c21819261]: Words in [s. 6(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/6/4) repealed (with application in accordance with Sch. 33 Pt. 2(10) Note of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 110](https://www.legislation.gov.uk/ukpga/2001/9/section/110), [Sch. 33](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33)
[^c21568211]: Source—1970 s.240(4), (5)
[^c21568221]: *See*—1970(M) s.94—*set off to be disregarded in computing penalty for failure to deliver a return.*1990 ss.98*and* 132*and* Sch.19 Part V*for changes in relation to income tax falling to be set off against corporation tax for accounting periods ending after the appointed day* (*see* 1988 s.10).
[^c21819281]: [S. 7(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/7/2) applied (with modifications) (with effect in accordance with s. 105(1) of the applying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 91(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/91/2) (with [Schs. 10](https://www.legislation.gov.uk/ukpga/1996/8/schedule/10), [11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/11), [15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
@@ -60504,6 +54114,10 @@
[^c22720351]: [S. 7(5)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/7/5) repealed (with effect as mentioned in Sch. 27 Pt. 3(28) Note of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 165](https://www.legislation.gov.uk/ukpga/1998/36/section/165), [Sch. 27 Pt. 3(28)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/28)
[^c23346541]: [S. 7(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/7/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 5](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23347941]: [S. 7(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/7/2) excluded (1.9.2009) by [The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)](https://www.legislation.gov.uk/uksi/2006/964), [reg. 69Z57](https://www.legislation.gov.uk/uksi/2006/964/regulation/69Z57) (as inserted by [The Authorised Investment Funds (Tax) (Amendment) Regulations 2009 (S.I. 2009/2036)](https://www.legislation.gov.uk/uksi/2009/2036), [regs. 1](https://www.legislation.gov.uk/uksi/2009/2036/regulation/1), [24](https://www.legislation.gov.uk/uksi/2009/2036/regulation/24))
[^c21568301]: Source—1970 s.243 (1)-(3), (5)-(7); 1974 s.36; 1987(No. 2) s.90(1)(a)
[^c21568311]: [S. 8(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/8/3): the day appointed for the purposes of s. 8(3) is 30.9.1993 by [S.I. 1992/3066](https://www.legislation.gov.uk/uksi/1992/3066), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/1992/3066/article/2/2/b).
@@ -60524,7 +54138,13 @@
[^c23333971]: Words in [s. 9(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 7(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/7/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23333891]: Words in [s. 9(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/6) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 7(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/7/5), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23346571]: Words in [s. 9(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/2) renumbered as s. 9(2)(a) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by virtue of [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 6(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/6/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23346711]: [S. 9(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/2/b) and preceding word inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 6(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/6/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23347211]: Words in [s. 9(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/4) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 6(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/6/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23347231]: Words in [s. 9(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/9/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 6(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/6/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21568511]: *See*—1970(M) s.94(2)—*set off to be disregarded in computing penalty for failure to make a return.*1990 ss.98*and* 132*and* Sch.19 Part V*for changes in relation to income tax falling to be set off against corporation tax for accounting periods ending after the appointed day* (*see* 1988 s.10).
@@ -61010,14 +54630,6 @@
[^c23350211]: [S. 42(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/42/1/b) and preceding word inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 24(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/24/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21853731]: [1978 c. 30](https://www.legislation.gov.uk/ukpga/1978/30).
[^c21853741]: [S. 42A(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/42A/8) repealed (with effect in accordance with s. 38(2)(3) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [ss. 38(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/38/1), [165](https://www.legislation.gov.uk/ukpga/1998/36/section/165), [Sch. 5 para 22](https://www.legislation.gov.uk/ukpga/1998/36/schedule/5/paragraph/22), [Sch. 27 Pt. 3(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/4), Note (with Sch. 5 para. 73)
[^c23350251]: Words in [s. 42A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/42A/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 25(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/25/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23367561]: Words in [s. 42A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/42A/2/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 25(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/25/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21570411]: *And see, as regards Ulster Savings Certificates,* Part III Vol.5.
[^c21570421]: SOURCE-1981 S. 34(1)
@@ -61042,52 +54654,6 @@
[^c23353801]: [S. 46(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/46/7) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 31(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/31/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21570531]: SOURCE-1970 s. 101(1)
[^c21570551]: [1939 c. 117](https://www.legislation.gov.uk/ukpga/1939/117).
[^c21570561]: [1968 c. 13](https://www.legislation.gov.uk/ukpga/1968/13).
[^c21570631]: SOURCE-1970 s. 101(2)
[^c21570641]: SOURCE-1970 s. 101(3)–(6)
[^c21812981]: Words in [s. 50(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/1) repealed (with effect in accordance with Sch. 7 para. 32 of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [ss. 79](https://www.legislation.gov.uk/ukpga/1996/8/section/79), [205](https://www.legislation.gov.uk/ukpga/1996/8/section/205), [Sch. 7 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/11), [Sch. 41 Pt. 5(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/2), Note (with Sch. 7 paras. 33-35)
[^c21812991]: [S. 50(A1)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/A1) inserted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(2)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/2)
[^c21813011]: Words in [s. 50(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/1) inserted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(3)(a)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/3/a)
[^c21818131]: [S. 50(1)(a)(c)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/1/a/c/d) repealed (with effect in accordance with Sch. 8 Pt. 2(13) Note of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 52](https://www.legislation.gov.uk/ukpga/1997/58/section/52), [Sch. 8 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/13)
[^c21813031]: Words in [s. 50(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/2) inserted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(3)(b)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/3/b)
[^c21813051]: Words in [s. 50(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/3) substituted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(3)(c)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/3/c)
[^c21813071]: Words in [s. 50(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/4/5) substituted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(3)(d)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/3/d)
[^c21813101]: [S. 50(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/7): definition of "gilt-edged securities" inserted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(4)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/4)
[^c21818201]: Words in [s. 50(A1)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/A1) substituted (with application in accordance with [s. 112(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 112(1)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/1)
[^c23353501]: Words in [s. 50](https://www.legislation.gov.uk/ukpga/1988/1/section/50) substituted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(a)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/a) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353571]: Words in [s. 50(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/5) substituted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(b)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/b) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353591]: [S. 50(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/7): definition of "the Bank" omitted (15.11.2004) by virtue of [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(c)(i)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/c/i) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353611]: [S. 50(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/7): word at the end of definition of "gilt-edged securities" omitted (15.11.2004) by virtue of [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(c)(ii)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/c/ii) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353631]: [S. 50(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/7): word in definition of "registered" substituted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(c)(iii)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/c/iii) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c23353681]: [S. 50(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/50/7): definition of "the Registrar" inserted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(3)(c)(iv)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/3/c/iv) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c21570651]: SOURCE-1970 s. 102
[^c21570661]: [1950 c. 3 (N.I.)](https://www.legislation.gov.uk/apni/1950/3)
[^c23353701]: Words in [s. 51(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/51/1/b) substituted (15.11.2004) by [The Government Stock (Consequential and Transitional Provision) (No. 3) Order 2004 (S.I. 2004/2744)](https://www.legislation.gov.uk/uksi/2004/2744), [art. 1](https://www.legislation.gov.uk/uksi/2004/2744/article/1), [Sch. para. 2(4)](https://www.legislation.gov.uk/uksi/2004/2744/schedule/paragraph/2/4) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2744/article/3))
[^c21570681]: SOURCE-1970 s. 110(1), (2)
[^c21570691]: SOURCE-1970 s. 110(3)
@@ -61118,6 +54684,8 @@
[^c23358091]: Words in [s. 56(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/56/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 34(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/34/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23376721]: Words in [s. 56(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/56/3/c) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 9](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/9) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23359501]: Words in [s. 59(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/59/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 35(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/35/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23358241]: Words in [s. 59(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/59/3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 35(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/35/3/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -62000,8 +55568,6 @@
[^c21835011]: [S. 105](https://www.legislation.gov.uk/ukpga/1988/1/section/105) modified by [Capital Allowances Act 1990 (c. 1)](https://www.legislation.gov.uk/ukpga/1990/1), [s. 15A](https://www.legislation.gov.uk/ukpga/1990/1/section/15A) (as inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 201](https://www.legislation.gov.uk/ukpga/1996/8/section/201), [Sch. 39 para. 1(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/39/paragraph/1/2))
[^c21829331]: Words in [s. 105(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/105/2) inserted (with effect in accordance with [s. 90(7)](https://www.legislation.gov.uk/ukpga/1995/4/section/90/7) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 90(6)](https://www.legislation.gov.uk/ukpga/1995/4/section/90/6)
[^c21852921]: Words in [s. 105(1)(a)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/105/1/a/4) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a/b), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c21853881]: [S. 105(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/105/4) repealed (with application in accordance with Sch. 27 Pt. 3(6) Note of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/6)
@@ -62014,6 +55580,8 @@
[^c23365371]: Words in [s. 105(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/105/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 84(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/84/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23376861]: Words in [s. 105(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/105/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 10](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/10), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21573231]: Source—1970 s.147
[^c21852931]: Word in [s. 106(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/106/2) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a/b), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
@@ -62032,29 +55600,11 @@
[^c21573291]: Source—1970 s.151(2)-(5)
[^c21829441]: Words in [s. 110(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/110/1) substituted (with effect in accordance with [s. 90(7)](https://www.legislation.gov.uk/ukpga/1995/4/section/90/7) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 90(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/90/3)
[^c21852991]: Words in [s. 110(3)(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/110/3/4/5) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a/b), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23365571]: [S. 110(1A)-(1D)](https://www.legislation.gov.uk/ukpga/1988/1/section/110/1A) subsituted for s. 110(2) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 90](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/90) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21829371]: [S. 109A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/1) modified (with application as stated in s. 90(7) of the modifying Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 90(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/90/2)
[^c21835111]: Words in [s. 109A(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/4) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 5(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/5/1)
[^c21835131]: [S. 109A(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/4A) inserted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 5(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/5/2)
[^c21852961]: Words in [s. 109A(2)(d)(4)(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/2/d/4/4A) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a/b), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23359091]: [S. 109A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 89(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/89/2), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23359111]: Words in [s. 109A(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 89(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/89/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23359131]: Words in [s. 109A(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/4A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 89(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/89/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365531]: Words in [s. 109A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 89(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/89/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365551]: [S. 109A(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/109A/6A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 89(6)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/89/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23377191]: Words in [s. 110(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/110/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 12](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/12) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22730011]: [S. 111](https://www.legislation.gov.uk/ukpga/1988/1/section/111) modified (1.5.1995) by Finance Act [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)
@@ -62098,48 +55648,6 @@
[^c23365631]: Word in [s. 116(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/116/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 96](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/96) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21573491]: Source—1985 Sch.12 2(1)-(3).
[^c21573511]: 1985 Sch.12 1, 2(4)
[^c21573521]: [1907 c. 24](https://www.legislation.gov.uk/ukpga/1907/24).
[^c21573541]: Source—1985 Sch.12 4
[^c21573551]: Source—1985 Sch.12 2(5)
[^c21853271]: Words in [s. 117(1)(3)(b)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1/3/b/4) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a/b) Sch. 7 para. 1
[^c21859821]: Words in [s. 117(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(1)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/1/a), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4)
[^c21859841]: Words in [s. 117(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(1)(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/1/b), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4)
[^c21859861]: [S. 117(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1/b) and preceding word repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(1)(c)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/1/c), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4)
[^c21859871]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(2)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/2/a), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 2 para. 22(3)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/3))
[^c21859881]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(2)(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/2/b), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 2 para. 22(3)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/3))
[^c21859901]: [S. 117(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2/b) and preceding word repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 22(2)(c)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/2/c), [Sch 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 2 para. 22(3)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/22/3))
[^c23356631]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 124(2)](https://www.legislation.gov.uk/ukpga/2004/12/section/124/2)
[^c23357291]: Words in [s. 117(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(1)(a)(i)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/1/a/i/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357311]: Words in [s. 117(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/1/a) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(1)(a)(ii)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/1/a/ii/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357331]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(1)(b)(i)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/1/b/i/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23426891]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(1)(b)(ii)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/1/b/ii/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357381]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) inserted (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 78(1)(a)(4)](https://www.legislation.gov.uk/ukpga/2005/7/section/78/1/a/4)
[^c23357401]: [S. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2): definition of "the amount of any reclaimed relief" inserted (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 78(1)(b)(4)](https://www.legislation.gov.uk/ukpga/2005/7/section/78/1/b/4)
[^c23357361]: Words in [s. 117(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/2) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(1)(c)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/1/c/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357421]: [S. 117(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/117/5) added (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 73(2)(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/73/2/5)
[^c21573601]: Source—1985 Sch.12 3(1)-(3)
[^c21573611]: Words in [s. 118(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/1) substituted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 73(3)-(5)](https://www.legislation.gov.uk/ukpga/1991/31/section/73/3), [Sch. 15 para. 4(a)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/15/paragraph/4/a)(in relation to losses incurred in accounting periods ending on or after 1.4.1991)
@@ -62164,63 +55672,65 @@
[^c21860091]: [S. 118(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/2/b) and preceding word repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 23(2)(c)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/23/2/c), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 2 para. 23(3)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/23/3))
[^c23377231]: [S. 118(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/2): definition of "limited partner" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 14(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/14/2) (with Sch.. 2)
[^c23376931]: Words in [s. 118(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 14(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/14/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376951]: Words in [s. 118(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 14(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/14/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377251]: [S. 118(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118/3) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 14(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/14/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21860751]: [S. 118ZA](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZA) substituted (retrospective to 6.4.2001) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 75(1)(6)](https://www.legislation.gov.uk/ukpga/2001/9/section/75/1/6)
[^c23365651]: Words in [s. 118ZA(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZA/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 97(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/97/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365671]: Words in [s. 118ZA(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZA/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 97(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/97/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427041]: [S. 118ZB](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZB) renumbered as s. 118ZB(1) (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 124(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/124/3)
[^c23356671]: [S. 118ZB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZB/2) added (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 124(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/124/3)
[^c23357451]: Words in [s. 118ZB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZB/2) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(2)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/2/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23377281]: [S. 118ZB](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZB) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 15](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/15) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23357671]: [S. 118ZC(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/5) inserted (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 73(3)(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/73/3/5)
[^c23356681]: Words in [s. 118ZD(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/2) substituted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 124(4)](https://www.legislation.gov.uk/ukpga/2004/12/section/124/4)
[^c23357471]: Words in [s. 118ZE(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE/1) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(3)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/3/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23365691]: Words in [s. 118ZE(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 98(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/98/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365711]: Words in [s. 118ZE(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 98(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/98/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365731]: Words in [s. 118ZE(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZE/6) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 98(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/98/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23357501]: Words in [s. 118ZF(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZF/1) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(4)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/4/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357691]: Words in [s. 118ZF(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZF/1) inserted (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 78(2)(a)(4)](https://www.legislation.gov.uk/ukpga/2005/7/section/78/2/a/4)
[^c23357701]: [S. 118ZF(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZF/1A) inserted (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 78(2)(b)(4)](https://www.legislation.gov.uk/ukpga/2005/7/section/78/2/b/4)
[^c23357531]: Words in [s. 118ZG(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZG/2/b/ii) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(5)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/5/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357711]: [S. 118ZG(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZG/7) added (retrospective to 2.12.2004) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 73(4)(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/73/4/5)
[^c23365751]: Words in [s. 118ZH(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZH/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 99](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/99) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23357561]: Words in [s. 118ZJ(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZJ/3) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(6)(a)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/6/a/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357591]: Words in [s. 118ZJ(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZJ/4) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(6)(b)(i)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/6/b/i/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357631]: [S. 118ZJ(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZJ/4/b) and preceding word repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(6)(b)(ii)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/6/b/ii/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23357661]: [S. 118ZJ(5)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZJ/5/b) and preceding word repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 72(6)(c)(12)](https://www.legislation.gov.uk/ukpga/2005/7/section/72/6/c/12), [Sch. 11 Pt. 2(4)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/4), Note
[^c23365771]: Words in [s. 118ZK(2)(b)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZK/2/b/5) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 100](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/100) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365801]: Words in [s. 118ZL(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL/6/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 101(a)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/101/a/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365821]: Words in [s. 118ZL(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL/6/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 101(a)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/101/a/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365841]: Words in [s. 118ZL(6)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL/6/c) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 101(b)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/101/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23365861]: Words in [s. 118ZL(6)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZL/6/c) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 101(b)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/101/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23357931]: [S. 118ZM](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZM) modified (retrospective to 2.12.2004) by [Finance Act 2005 (c.7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 3 paras. 17](https://www.legislation.gov.uk/ukpga/2005/7/schedule/3/paragraph/17), [31(3)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/3/paragraph/31/3)
[^c23365881]: Words in [s. 118ZM(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZM/4) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 102](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/102) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23377301]: Words in [s. 118ZC(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376971]: Words in [s. 118ZC(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/3/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377321]: Word in [s. 118ZC(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377341]: Word in [s. 118ZC(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377361]: Words in [s. 118ZC(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377441]: Word in [s. 118ZC(3)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/3/d) substituted (with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377451]: Words in [s. 118ZC(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377481]: Words in [s. 118ZC(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/4/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377501]: Words in [s. 118ZC(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(5)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/5/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23376991]: [S. 118ZC(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZC/5) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 16(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/16/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377521]: Words in [s. 118ZD(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377011]: Words in [s. 118ZD(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377541]: Words in [s. 118ZD(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377571]: Words in [s. 118ZD(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(2)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377591]: Words in [s. 118ZD(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/1/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(2)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/2/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377611]: Words in [s. 118ZD(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377651]: Words in [s. 118ZD(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377661]: Words in [s. 118ZD(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377701]: Words in [s. 118ZD(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377711]: Words in [s. 118ZD(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377751]: Words in [s. 118ZD(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/118ZD/3/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 17(4)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/17/4/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21573671]: Source—1970 s.156
@@ -62304,10 +55814,18 @@
[^c23366071]: Words in [s. 125(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/3/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 107(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/107/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23369631]: Words in [s. 125(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/1) substituted (with effect in accordance with [s. 38(7)(13)](https://www.legislation.gov.uk/ukpga/2005/22/section/38/7/13) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 38(3)](https://www.legislation.gov.uk/ukpga/2005/22/section/38/3)
[^c23369651]: Words in [s. 125(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/1) repealed (with effect in accordance with s. 38(7)(13) of the repealing Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/11/part/2/7), Note
[^c23377031]: Words in [s. 125(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 21(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/21/2/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377771]: Words in [s. 125(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 21(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/21/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377051]: Words in [s. 125(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/2/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 21(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/21/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377791]: Word in [s. 125(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/3) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 21(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/21/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23377091]: [S. 125(3)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/125/3/d) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 21(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/21/4/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21574281]: Source—1985 s.72(1), (2); 1987 (No.2) s.81(1)
[^c21574291]: Words in [s. 128](https://www.legislation.gov.uk/ukpga/1988/1/section/128) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(7)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/7) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
@@ -62482,6 +56000,8 @@
[^c23397511]: [Pt. 6 Chs. 1-3](https://www.legislation.gov.uk/ukpga/1988/1/part/6/chapter/1): power to amend conferred (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 533(2)(3)(d)](https://www.legislation.gov.uk/ukpga/2009/4/section/533/2/3/d)
[^c23396221]: Words in [s. 209A(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/209A/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 22](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/22) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23394681]: Words in [s. 209B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/209B/4) substituted (10.7.2003 subject to Sch. 19 to the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 18 para. 3(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/18/paragraph/3/2)
[^c21581431]: Source—1982 s.60(1)-(4)
@@ -62514,6 +56034,8 @@
[^c23395611]: [S. 214(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/214/1A/1B) inserted (with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 111(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/111/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23396241]: [S. 214(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/214/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 23](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/23), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21581501]: Source—1980 Sch.18 17
[^c21581511]: Source—1980 Sch.18 18
@@ -62534,10 +56056,12 @@
[^c21581591]: Source—1982 Sch.9 1, 2
[^c21581601]: Words in [s. 220(2)(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/220/2/9) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(14)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/14) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c23396021]: Words in [s. 220(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/220/6) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [49](https://www.legislation.gov.uk/uksi/2005/3229/regulation/49)
[^c23396371]: [S. 220(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/220/2) repealed (6.4.2007) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 8](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/8), [27(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/2), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15), Note
[^c21581611]: Words in [s. 220(2)(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/220/2/9) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(14)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/14) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c21581621]: Source—1982 Sch.9 3(1)
[^c21581631]: Source—1982 Sch.9 4
@@ -62664,29 +56188,19 @@
[^c23395801]: Words in [s. 231B(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/231B/4/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 116](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/116) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23396351]: [S. 231B(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/231B/12): definition of "tax advantage" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 26](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/26)
[^c23395171]: [S. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) inserted (with effect in accordance with [Sch. 24 para. 1(4)(5)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/1/4/5) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 1(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/1/1)
[^c23395721]: Words in [s. 231AA(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 114(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/114/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395741]: Words in [s. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 114(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/114/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395761]: Words in [s. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 114(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/114/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395781]: Words in [s. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 114(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/114/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395281]: Words in [s. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 114(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/114/3/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23396261]: Words in [s. 231AA(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 24(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/24/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23396281]: [S. 231AA(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AA/1A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 24(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/24/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23395191]: [S. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) inserted (with effect in accordance with [Sch. 24 para. 1(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/1/6) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 1(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/1/2)
[^c23395941]: Words in [s. 231AB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 115(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/115/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395961]: Words in [s. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 115(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/115/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395981]: Words in [s. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 115(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/115/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23396001]: Words in [s. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 115(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/115/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23395301]: Words in [s. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 115(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/115/3/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23396301]: Words in [s. 231AB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 25(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/25/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23396321]: [S. 231AB(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/231AB/1A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 25(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/25/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21583561]: *See* Sch.10 para.5—*profit sharing schemes.*
@@ -62782,15 +56296,13 @@
[^c21866351]: [S. 256(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/2/3) inserted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by Finance Act [1994 c. 9](https://www.legislation.gov.uk/ukpga/1994/9), [s. 77(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/2)
[^c22732211]: Words in [s. 256(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/2/a) substituted (1999-2000 and subsequent years of assessment) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 27(1)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/27/1/a)
[^c22732251]: [S. 256(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/3) modified (2000-2001) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 35(4)](https://www.legislation.gov.uk/ukpga/1999/16/section/35/4)
[^c22732221]: Words in [s. 256(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/3/a) substituted (with effect in accordance with [s. 35(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/35/2) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 35(1)(a)](https://www.legislation.gov.uk/ukpga/1999/16/section/35/1/a)
[^c22732231]: [S. 256(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/3/b) repealed (with effect in accordance with s. 35(2) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 35(1)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/35/1/b), [Sch. 20 Pt. 3(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/5), Note 2
[^c22732241]: [S. 256(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/3): words after para. (c) repealed (with effect in accordance with s. 35(3) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 35(1)(c)](https://www.legislation.gov.uk/ukpga/1999/16/section/35/1/c), [Sch. 20 Pt. 3(4)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/4), Note
[^c23414651]: Words in [s. 256(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 27(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/27/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414671]: Words in [s. 256(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 27(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/27/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414691]: Words in [s. 256(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 27(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/27/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414311]: [S. 256(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/256/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 27(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/27/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21584101]: [Ss. 257-257F](https://www.legislation.gov.uk/ukpga/1988/1/section/257) substituted for s. 257 (1990-91 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 33](https://www.legislation.gov.uk/ukpga/1988/39/section/33)
@@ -62804,6 +56316,20 @@
[^c23411951]: [S. 257(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/5) modified (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [ss. 192(5)](https://www.legislation.gov.uk/ukpga/2004/12/section/192/5), [284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23414711]: Words in [s. 257(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414731]: Words in [s. 257(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414751]: Words in [s. 257(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414771]: Words in [s. 257(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414791]: Words in [s. 257(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414811]: Words in [s. 257(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414831]: [S. 257(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257/6) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 29(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/29/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21584381]: [S. 257A(2)(3)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5) amended (1991-92) by [S.I. 1991/732](https://www.legislation.gov.uk/uksi/1991/732), [art. 2(4)(b)-(d)](https://www.legislation.gov.uk/uksi/1991/732/article/2/4/b) [S. 257A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/1) amended (1991-92) by [1991 c. 31](https://www.legislation.gov.uk/ukpga/1991/31), [s. 22(2)](https://www.legislation.gov.uk/ukpga/1991/31/section/22/2) (in place of [S.I. 1991/732](https://www.legislation.gov.uk/uksi/1991/732), [art. 2(4)(a)](https://www.legislation.gov.uk/uksi/1991/732/article/2/4/a)) [S. 257A(2)(3)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5) amended (1992-93) by [S.I. 1992/622](https://www.legislation.gov.uk/uksi/1992/622), [art. 2(4)(b)-(d)](https://www.legislation.gov.uk/uksi/1992/622/article/2/4/b) [S. 257A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/1) amended (1992-93) by [1992 c. 20](https://www.legislation.gov.uk/ukpga/1992/20), [s. 10(3)(5)](https://www.legislation.gov.uk/ukpga/1992/20/section/10/3/5) (in place of [S.I. 1992/622](https://www.legislation.gov.uk/uksi/1992/622), [art. 2(4)(a)](https://www.legislation.gov.uk/uksi/1992/622/article/2/4/a)) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amounts specified (1993-94) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 52](https://www.legislation.gov.uk/ukpga/1993/34/section/52) (in place of [S.I. 1993/755](https://www.legislation.gov.uk/uksi/1993/755), [art. 2(4)](https://www.legislation.gov.uk/uksi/1993/755/article/2/4)) [S. 257A(1)(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/1/2/3) amended (1994-95) by [S.I. 1993/2948](https://www.legislation.gov.uk/uksi/1993/2948), [art. 2(4)(a)-(c)](https://www.legislation.gov.uk/uksi/1993/2948/article/2/4/a) [S. 257A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/5) amount specified (1994-95) [1994 c. 9](https://www.legislation.gov.uk/ukpga/1994/9), [s. 78](https://www.legislation.gov.uk/ukpga/1994/9/section/78) (in place of [S.I. 1993/2948](https://www.legislation.gov.uk/uksi/1993/2948), [art. 2(4)(d)](https://www.legislation.gov.uk/uksi/1993/2948/article/2/4/d)) [S. 257A(1)(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/1/2/3) amended (1995-96) by [1994 c. 9](https://www.legislation.gov.uk/ukpga/1994/9), [s. 77(9)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/9) [S. 257A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/5) amended (1995-96) by [S.I. 1994/3012](https://www.legislation.gov.uk/uksi/1994/3012), [art. 2(4)](https://www.legislation.gov.uk/uksi/1994/3012/article/2/4) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (1996-97) by [S.I. 1995/3031](https://www.legislation.gov.uk/uksi/1995/3031), [art. 2(4)](https://www.legislation.gov.uk/uksi/1995/3031/article/2/4) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (1997-98) by [S.I. 1996/2952](https://www.legislation.gov.uk/uksi/1996/2952), [art. 2(4)](https://www.legislation.gov.uk/uksi/1996/2952/article/2/4) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (1998-99) by [S.I. 1998/755](https://www.legislation.gov.uk/uksi/1998/755), [art. 2(4)](https://www.legislation.gov.uk/uksi/1998/755/article/2/4) [S. 257A(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3) amended (1999-00) by [1998 c. 36](https://www.legislation.gov.uk/ukpga/1998/36), [s. 27(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/27/2) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (1999-00) by [S.I. 1999/597](https://www.legislation.gov.uk/uksi/1999/597), [art. 2(4)](https://www.legislation.gov.uk/uksi/1999/597/article/2/4) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (2000-01) by [S.I. 2000/806](https://www.legislation.gov.uk/uksi/2000/806), [art. 2(4)](https://www.legislation.gov.uk/uksi/2000/806/article/2/4) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (2001-02) by [S.I. 2000/2996](https://www.legislation.gov.uk/uksi/2000/2996), [art. 2(3)](https://www.legislation.gov.uk/uksi/2000/2996/article/2/3) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (2002-03) by [S.I. 2001/3773](https://www.legislation.gov.uk/uksi/2001/3773), [art. 2(3)](https://www.legislation.gov.uk/uksi/2001/3773/article/2/3) [S. 257A](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) amended (2003-04) by [S.I. 2002/2930](https://www.legislation.gov.uk/uksi/2002/2930), [art. 2(3)](https://www.legislation.gov.uk/uksi/2002/2930/article/2/3) [S. 257A(2)(3)(5)(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5/5A) amended (2004-05) by [S.I. 2003/3215](https://www.legislation.gov.uk/uksi/2003/3215), [art. 2(3)](https://www.legislation.gov.uk/uksi/2003/3215/article/2/3) [S. 257A(2)(3)(5)(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5/5A) amended (2005-06) by [S.I. 2004/3161](https://www.legislation.gov.uk/uksi/2004/3161), [art. 2(3)](https://www.legislation.gov.uk/uksi/2004/3161/article/2/3) [S. 257A(2)(3)(5)(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5/5A) amended (2006-07) by [S.I. 2005/3327](https://www.legislation.gov.uk/uksi/2005/3327), [art. 2(3)](https://www.legislation.gov.uk/uksi/2005/3327/article/2/3) [S. 257A(2)(3)(5)(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5/5A) amended (2007-08) by [S.I. 2006/3241](https://www.legislation.gov.uk/uksi/2006/3241), [art. 2(3)](https://www.legislation.gov.uk/uksi/2006/3241/article/2/3) [S. 257A(2)(3)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5) amended (2008-09) by [S.I. 2008/673](https://www.legislation.gov.uk/uksi/2008/673), [art. 2(4)](https://www.legislation.gov.uk/uksi/2008/673/article/2/4) [S. 257A(2)(3)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3/5) amended (2009-10) by [S.I. 2008/3024](https://www.legislation.gov.uk/uksi/2008/3024), [art. 2(c)](https://www.legislation.gov.uk/uksi/2008/3024/article/2/c)
[^c21584451]: 1989 s.33 for 1990-91*and subsequent years.*
@@ -62816,8 +56342,6 @@
[^c21584481]: [S.I](https://www.legislation.gov.uk/ukpga/1988/1/section/I). [1990 No.677](https://www.legislation.gov.uk/ukcm/1990/677), [arts.2(1)(4)](https://www.legislation.gov.uk/ukcm/1990/677/article/2/1/4) (*in* Part III Vol.5)*for* 1990-91.
[^c21866311]: Words in [s. 257A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/6) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 1](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/1)
[^c22226371]: Words in [s. 257A(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3) substituted (with effect in as mentioned in [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 14(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/14/3)
[^c22299371]: [S. 257A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/1) repealed (with effect as mentioned in s. 31(10), Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 31(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/31/2), [Sch. 20 Pt. 3(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/3)
@@ -62856,6 +56380,16 @@
[^c23411971]: [S. 257A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/5) modified (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [ss. 192(5)](https://www.legislation.gov.uk/ukpga/2004/12/section/192/5), [284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23414851]: Words in [s. 257A(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/2/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 30(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/30/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414881]: Words in [s. 257A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 30(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/30/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414901]: Words in [s. 257A(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/5A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by the [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 30(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/30/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414921]: Words in [s. 257A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 30(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/30/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414941]: [S. 257A(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257A/6A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 30(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/30/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21584551]: [S. 257BA](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA), [257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB) substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras.2](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/2), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c21584561]: 1989 s.33(10).
@@ -62880,12 +56414,8 @@
[^c21584741]: *Repealed by* 1990 s.132*and* Sch.19 Part IV.
[^c22732601]: Words in [s. 257C(1)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/1/3) substituted (2002-03 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 30(3)(6)](https://www.legislation.gov.uk/ukpga/1999/16/section/30/3/6)
[^c22732551]: [S. 257C(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/2A) inserted (1999-00 and subsequent years of assessment) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 25(3)(4)](https://www.legislation.gov.uk/ukpga/1999/16/section/25/3/4)
[^c22732631]: Words in [s. 257C(1)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/1/3) substituted (2003-04 and subsequent years of assessment in accordance with [s. 53(7)](https://www.legislation.gov.uk/ukpga/2001/9/section/53/7) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 53(4)](https://www.legislation.gov.uk/ukpga/2001/9/section/53/4)
[^c22732661]: [S. 257C(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/2A) modified (2002-03) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 27(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/27/b)
[^c23398351]: Words in [s. 257C(1)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/1/3) repealed (6.4.2003) by [Tax Credits Act 2002 (c. 21)](https://www.legislation.gov.uk/ukpga/2002/21), [s. 61](https://www.legislation.gov.uk/ukpga/2002/21/section/61), [Sch. 6](https://www.legislation.gov.uk/ukpga/2002/21/schedule/6); [S.I. 2003/962](https://www.legislation.gov.uk/uksi/2003/962), [art. 2(3)(e)](https://www.legislation.gov.uk/uksi/2003/962/article/2/3/e), [Sch. 1](https://www.legislation.gov.uk/uksi/2003/962/schedule/1) (with [arts. 3](https://www.legislation.gov.uk/uksi/2003/962/article/3), [5](https://www.legislation.gov.uk/uksi/2003/962/article/5))
@@ -62898,26 +56428,16 @@
[^c23411221]: Words in [s. 257C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [55(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/55/c)
[^c23415311]: Words in [s. 257C(1)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257C/1/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 34(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/34/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585391]: 1988(F) s.35*and* Sch.3 para.8*for* 1990-91*and subsequent years. Previously* “Relief for blind persons.**265.**—(1) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and that one of them was, and the other was not, a registered blind person for the whole or part of the year; or (b) that, not being such a married man, he was a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £540 from his total income. (2) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and (b) that he was a registered blind person for the whole or part of the year and his wife was also a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £1,080 from his total income. (3)*Unless a claimant who is entitled to relief for the year of assessment under section* 264*in respect of the services of a son or daughter relinquishes his claim to that relief, he shall not be allowed relief under this section for that year* (*Repealed by* 1988(F) ss.25(3), 148*and* Sch.14 Part IV*for* 1988-89*and subsequent years.*). (4) In this section “registered blind person” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or in Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.”.*And see* Table E Vol.1*for previous years.*
[^c21585421]: 1989 s.33(10).
[^c21585431]: 1989 s.57(4)
[^c21585441]: [S. 265(3)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/e) and ' ,or' preceding it inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 33(4)](https://www.legislation.gov.uk/ukpga/1991/31/section/33/4)
[^c21585461]: [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1990-91) by [The Lloyd's Underwriters (Tax) (1990-91) Regulations 1993 (S.I. 1993/415)](https://www.legislation.gov.uk/uksi/1993/415), [regs. 1](https://www.legislation.gov.uk/uksi/1993/415/regulation/1), [9](https://www.legislation.gov.uk/uksi/1993/415/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1993/415/schedule/2)
[^c22219201]: [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2) [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c21585471]: Words in [s. 265(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/6) substituted (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras. 8(4)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/8/4), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c22734691]: [S. 265(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/a) repealed (with effect in accordance with s. 81(6) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 26 Pt. 5(2)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/2), Note
[^c22217551]: Words in [s. 265(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/b) repealed (with effect as mentioned in s. 77(7) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 10](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/10), [Sch. 26 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/1), Note
[^c22217771]: [S. 265(3)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/d) repealed (with effect as mentioned in Sch. 10 para. 3(2) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 10 para. 3(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/10/paragraph/3/1), [Sch. 26 Pt. 5(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/3), Note 1
[^c22225601]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) repealed (with effect as mentioned in s. 134(2) of the repealing Act) by Finance Act 1996, Sch. 20 para. 19, Sch. 41 Pt. 5(10), Note
[^c22749141]: Words in [s. 265(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5/a) substituted (with effect as mentioned in [s. 135(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/135/2) of the amending Act) by Finance Act 1996, Sch. 21 para. 6
@@ -62928,33 +56448,47 @@
[^c22749171]: [S. 265(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1A) inserted (19.3.1997) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 56(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/56/2)
[^c22749251]: [S. 265(3)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/e) and preceding word repealed (with effect in accordance with s. 59(3)(b) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 139](https://www.legislation.gov.uk/ukpga/1999/16/section/139), [Sch. 20 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/15), Note; [S.I. 2000/2004](https://www.legislation.gov.uk/uksi/2000/2004), [art. 2](https://www.legislation.gov.uk/uksi/2000/2004/article/2)
[^c23411281]: Words in [s. 265(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/a) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(2)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/2)
[^c23411301]: Words in [s. 265(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/b) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(3)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/3/a)
[^c23411321]: Word in [s. 265(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/b) omitted (5.12.2005) by virtue of [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(3)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/3/b)
[^c23411341]: [S. 265(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/4) omitted (5.12.2005) by virtue of [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(4)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/4)
[^c23411361]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(5)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/5)
[^c23411381]: Words in [s. 265(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/6) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(6)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/6)
[^c23411981]: Words in [s. 265(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3/c) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 8](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/8) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c21585771]: Source-1978 Sch.3 11
[^c23415341]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/2/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23414401]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415361]: Words in [s. 265(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415381]: [S. 265(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/b) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415401]: Words in [s. 265(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/c) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415421]: [S. 265(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/4) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23414421]: [S. 265(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415441]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415461]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/b) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415481]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/c) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415501]: [S. 265(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/8) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/7) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c21585791]: Source-1978 Sch.3 12; 1981 s.33
[^c21585801]: [1974 c. 52](https://www.legislation.gov.uk/ukpga/1974/52).
[^c22749801]: [S. 266(6)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/6/c) and preceding word inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 171(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/171/3)
[^c22749821]: [S. 266(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/6A) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 171(4)](https://www.legislation.gov.uk/ukpga/1996/8/section/171/4)
[^c21585781]: Words in [s. 266(2)(a)(iii)(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/2/a/iii/6/a) substituted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 paras. 2(2)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/2/2); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
[^c23415521]: Words in [s. 266(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415541]: Words in [s. 266(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/7/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415561]: Words in [s. 266(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415581]: Words in [s. 266(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/266/8) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 36(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/36/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585891]: Source-1975 s.7; 1976 Sch.4 19(1); 1984 s.72(5)
@@ -62988,142 +56522,74 @@
[^c23412081]: Words in [s. 273](https://www.legislation.gov.uk/ukpga/1988/1/section/273) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 12](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/12) (as amended by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 655](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/655), [Sch. 2 para. 161](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2/paragraph/161) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))) (with Sch. 36)
[^c23415601]: Words in [s. 273(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/273/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 37(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/37/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415621]: Words in [s. 273(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/273/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 37(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/37/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415641]: [S. 273(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/273/3) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 37(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/37/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21585971]: Source-1970 s.21(4); 1975 Sch.2 6; 1980 s.29; 1976 Sch.4 21; 1987 Sch.15 2(5)
[^c21585981]: 1988(F) s.29—*from* 6*April* 1989.*Previously* “15 per cent.”.
[^c22219331]: [S. 257B-262](https://www.legislation.gov.uk/ukpga/1988/1/section/257B) restricted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 4(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/4/1)
[^c22181111]: Words in [s. 257BA(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/2) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 2(1)(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/1/a) (with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/3))
[^c22181141]: Words in [s. 257BA(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/2) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 2(1)(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/1/b) (with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/3))
[^c22181171]: Words in [s. 257BA(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 2(2)(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/2/a) (with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/3))
[^c22181191]: Words in [s. 257BA(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 2(2)(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/2/b) (with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/3))
[^c22181211]: Words in [s. 257BA(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3) substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 2(2)(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/2/c) (with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/2/3))
[^c22300751]: Words in [s. 257BA(1)(a)(2)(a)(3)(a)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/a/2/a/3/a/6) substituted (with effect as mentioned in [s. 32(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/3) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 32(1)(a)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/1/a)
[^c22300831]: Words in [s. 257BA(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2) repealed (with effect as mentioned in s. 32(4), Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 32(1)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/1/b), [Sch. 20 Pt. 3(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/3)
[^c22300811]: Words in [s. 257BA(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/9) substituted (with effect as mentioned in [s. 32(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/3) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 32(1)(c)](https://www.legislation.gov.uk/ukpga/1999/16/section/32/1/c)
[^c23408791]: Words in [s. 257BA(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(2)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/2/a)
[^c23409311]: Words in [s. 257BA(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(2)(b)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/2/b/i)
[^c23409971]: Words in [s. 257BA(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/a) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(2)(b)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/2/b/ii)
[^c23409991]: Words in [s. 257BA(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(2)(c)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/2/c/i)
[^c23410011]: Words in [s. 257BA(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1/b) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(2)(c)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/2/c/ii)
[^c23410031]: Words in [s. 257BA(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(3)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/3/a)
[^c23410051]: Words in [s. 257BA(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2/a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(3)(b)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/3/b/i)
[^c23410071]: Words in [s. 257BA(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2/a) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(3)(b)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/3/b/ii)
[^c23410091]: Words in [s. 257BA(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(3)(c)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/3/c/i)
[^c23410111]: Words in [s. 257BA(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/2/b) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(3)(c)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/3/c/ii)
[^c23410131]: Words in [s. 257BA(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(4)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/4/a)
[^c23410151]: Words in [s. 257BA(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3/a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(4)(b)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/4/b/i)
[^c23410181]: Words in [s. 257BA(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3/a) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(4)(b)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/4/b/ii)
[^c23410201]: Words in [s. 257BA(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3/a) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(4)(b)(iii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/4/b/iii)
[^c23410221]: Words in [s. 257BA(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(4)(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/4/c)
[^c23410241]: Words in [s. 257BA(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/4/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(5)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/5/a)
[^c23410261]: Words in [s. 257BA(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/4/b) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(5)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/5/b)
[^c23410281]: Words in [s. 257BA(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/5) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(6)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/6)
[^c23410301]: Words in [s. 257BA(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/6) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(7)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/7/a)
[^c23410321]: Words in [s. 257BA(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/6) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(7)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/7/b)
[^c23410341]: Words in [s. 257BA(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/9) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(8)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/8)
[^c23415111]: [S. 257BA(1)-(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 32(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/32/2) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/4), [17(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/1/5))
[^c23415141]: [S. 257BA(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/3A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 32(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/32/3) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/4), [17(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/1/5))
[^c23414331]: [S. 257BA(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 32(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/32/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/4), [17(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/1/5))
[^c23415151]: Words in [s. 257BA(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 32(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/32/5) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/4), [17(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/1/5))
[^c23415171]: [S. 257BA(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA/10) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 32(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/32/6) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/4), [17(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/1/5))
[^c22219341]: [S. 257B-262](https://www.legislation.gov.uk/ukpga/1988/1/section/257B) restricted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 4(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/4/1)
[^c22181241]: [S. 257BB(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/b) and words substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 3(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/3/1)
[^c22181331]: [S. 257BB(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3/b) and words substituted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 3(2)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/3/2)
[^c22181351]: [S. 257BB(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3A) inserted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 3(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/3/3)
[^c22219501]: [S. 257BB(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c22181391]: [S. 257BB(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/6) repealed (with effect as mentioned in s. 77(7) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 3(4)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/3/4), [Sch. 26 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/1), Note
[^c22732481]: Words in [s. 257BB(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5/a) substituted (with effect in accordance with [s. 135(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/135/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 21 para. 4](https://www.legislation.gov.uk/ukpga/1996/8/schedule/21/paragraph/4)
[^c22732501]: Words in [s. 257BB(1)(b)(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/b/3/b) inserted (with effect in accordance with [s. 39(10)](https://www.legislation.gov.uk/ukpga/2000/17/section/39/10) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 39(8)](https://www.legislation.gov.uk/ukpga/2000/17/section/39/8)
[^c22732531]: [1990 c. 29](https://www.legislation.gov.uk/ukpga/1990/29).
[^c23410721]: Words in [s. 257BB(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(a)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/a/i)
[^c23410741]: Words in [s. 257BB(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/a) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(a)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/a/ii)
[^c23410781]: Words in [s. 257BB(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(b)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/b/i)
[^c23410801]: Words in [s. 257BB(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(b)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/b/ii)
[^c23410841]: Words in [s. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(c)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/c/i)
[^c23410861]: Words in [s. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(c)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/c/ii)
[^c23410921]: Words in [s. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(c)(iii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/c/iii)
[^c23410941]: Words in [s. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(2)(c)(iv)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/2/c/iv)
[^c23410961]: Words in [s. 257BB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/2) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(3)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/3)
[^c23410981]: Words in [s. 257BB(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3/a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/a)
[^c23411001]: Words in [s. 257BB(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(b)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/b/i)
[^c23411021]: Words in [s. 257BB(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3/b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(b)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/b/ii)
[^c23411061]: Words in [s. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(c)(i)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/c/i)
[^c23411081]: Words in [s. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(c)(ii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/c/ii)
[^c23411101]: Words in [s. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(c)(iii)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/c/iii)
[^c23411121]: Words in [s. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(4)(c)(iv)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/4/c/iv)
[^c23411141]: Words in [s. 257BB(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/4) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(5)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/5)
[^c23415191]: [S. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/2) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415211]: [S. 257BB(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1A/1B) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/3) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415231]: [S. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/4) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415251]: [S. 257BB(3AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3AA) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/5) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23414351]: [S. 257BB(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415271]: [S. 257BB(5A)-(5E)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/7) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23411921]: [S. 257AB(2)(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4/5) amended (2006-07) by [S.I. 2005/3327](https://www.legislation.gov.uk/uksi/2005/3327), [art. 2(4)](https://www.legislation.gov.uk/uksi/2005/3327/article/2/4) [S. 257AB(2)(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4/5) amended (2007-08) by [S.I. 2006/3241](https://www.legislation.gov.uk/uksi/2006/3241), [art. 2(4)](https://www.legislation.gov.uk/uksi/2006/3241/article/2/4) [S. 257AB(2)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4) amended (2008-09) by [S.I. 2008/673](https://www.legislation.gov.uk/uksi/2008/673), [art. 2(5)](https://www.legislation.gov.uk/uksi/2008/673/article/2/5) [S. 257AB(2)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4) amended (2009-10) by [S.I. 2008/3024](https://www.legislation.gov.uk/uksi/2008/3024), [art. 2(d)](https://www.legislation.gov.uk/uksi/2008/3024/article/2/d)
[^c23414961]: Words in [s. 257AB(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/1/d) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414991]: Words in [s. 257AB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415011]: Words in [s. 257AB(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415031]: Words in [s. 257AB(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415051]: Words in [s. 257AB(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415071]: [S. 257AB(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/10) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23416691]: [S. 256B](https://www.legislation.gov.uk/ukpga/1988/1/section/256B) amended (2008-09) by [S.I. 2008/673](https://www.legislation.gov.uk/uksi/2008/673), [art. 2(2)](https://www.legislation.gov.uk/uksi/2008/673/article/2/2) [S. 256B](https://www.legislation.gov.uk/ukpga/1988/1/section/256B) amended (2009-10) by [S.I. 2008/3024](https://www.legislation.gov.uk/uksi/2008/3024), [art. 2(a)](https://www.legislation.gov.uk/uksi/2008/3024/article/2/a)
[^c21586021]: Source-1970 s.25; 1971 s.33(5)
[^c22217671]: [S. 276(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/276/1A) inserted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 11](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/11)
[^c21586031]: Source-1970 s.26
[^c22219231]: Words in [s. 277(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/277/1) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 215(3)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/215/3/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22219241]: [S. 277(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/277/1/c) and preceding word repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 215(3)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/215/3/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22219261]: [S. 277(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/277/2) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 215(3)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/215/3/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c21586041]: Source-1970 s.27(1), (2)
[^c21586051]: *Repealed by* 1988(F) s.148*and* Sch.14 Part IV*for* 1990-91*and subsequent years.*
[^c21586061]: *See* British Nationality Act 1981 ss.37*and* 51(1)*for definition.*
[^c21586091]: *Repealed by* 1988(F) ss.31, 148*and* Sch.14 Part IV*for* 1990-91*and subsequent years.*
@@ -63140,839 +56606,17 @@
[^c22753111]: [S. 278(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2A) repealed (with effect in accordance with Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 20 Pt. 3(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/3)
[^c23411621]: Words in [s. 278(2)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2/e) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [60(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/60/1)
[^c21586081]: 1988(F) s.31*for* 1990-91*and subsequent years.*
[^c21586261]: 1988(F) s.35*and* Sch.3 para.11*for* 1990-91*and subsequent years. Previously* “Construction of references to married women living with their husbands.**282.**—(1) A married woman shall be treated for income tax purposes as living with her husband unless—(a) they are separated under an order of a court of competent jurisdiction, or by deed of separation, or (b) they are in fact separated in such circumstances that the separation is likely to be permanent (*See* 1988(F) s.40(3)—*application of* s.282(1)*to certain maintenance payments.*). (2) Where a married woman is living with her husband and either—(a) one of them is, and the other is not, resident in the United Kingdom for a year of assessment, or (b) both of them are resident in the United Kingdom for a year of assessment, but one of them is, and the other is not, absent from the United Kingdom throughout that year, the same consequences shall follow for income tax purposes as would have followed if, throughout that year of assessment, they had been in fact separated in such circumstances that the separation was likely to be permanent. (3) Where subsection (2) above applies and the net aggregate amount of income tax falling to be borne by the husband and the wife for the year is greater than it would have been but for that subsection, the Board shall cause such relief to be given (by the reduction of such assessments on the husband or the wife or the repayment of such tax paid, by deduction or otherwise, by the husband or the wife, as the Board may direct) as will reduce that net aggregate amount by the amount of the excess.”.
[^c21586271]: *See* 1979(C) s.155(2)—*capital gains*—*references to a married woman living with her husband to be construed in accordance with* s.282.
[^c21586281]: [S. 282](https://www.legislation.gov.uk/ukpga/1988/1/section/282) applied (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 288(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/288/3), [289](https://www.legislation.gov.uk/ukpga/1992/12/section/289) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c23411641]: Words in [s. 282](https://www.legislation.gov.uk/ukpga/1988/1/section/282) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [62(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/62/a)
[^c23408311]: Words in [s. 282A(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/4/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 125](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/125) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23411741]: [S. 282A(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/4A) inserted (with effect in accordance with [s. 91(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/91/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 91(2)](https://www.legislation.gov.uk/ukpga/2004/12/section/91/2)
[^c23411681]: Words in [s. 282A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/1) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(2)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/2)
[^c23411701]: Words in [s. 282A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/2) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(3)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/3)
[^c23411721]: Words in [s. 282A(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/3/a) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(4)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/4)
[^c23411761]: Words in [s. 282A(4A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/4A/a) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(5)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/5)
[^c23411781]: Words in [s. 282A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/5) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(6)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/6)
[^c23411801]: Words in [s. 282A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/282A/6) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [63(7)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/63/7)
[^c23411821]: Words in [s. 282B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/282B/1) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [64(2)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/64/2)
[^c23411841]: Words in [s. 282B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/282B/4) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [64(3)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/64/3)
[^c23411861]: Words in [s. 282B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/282B/5) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [64(4)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/64/4)
[^c22753501]: [S. 289](https://www.legislation.gov.uk/ukpga/1988/1/section/289) amended (as it has effect in relation to shares issued before 1st January 1994) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 68(1)(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/68/1/2)
[^c22753121]: [Ss. 289-289B](https://www.legislation.gov.uk/ukpga/1988/1/section/289) substituted for s. 289 (with effect in accordance with [s. 137(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 137(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1), [Sch. 15 para. 2](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/2)
[^c22753511]: [S. 289(1)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/ba) inserted (with effect in accordance with [Sch. 8 para. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 8 para. 2(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/2/1)
[^c22753541]: [S. 289(1)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/aa) inserted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 1(1)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/1/1/b)
[^c22753591]: Word in [s. 289(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/6) inserted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 1(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/1/3)
[^c22753601]: Word in [s. 289(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/7) repealed (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 1(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/1/4), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14), Note 4
[^c22753671]: Words in [s. 289(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/7) substituted (with effect in accordance with [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 1](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/1)
[^c22753821]: Word at the end of s. 289(1)(ba) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22753831]: [S. 289(1)(c)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/c/d) substituted for s. 289(1)(c) (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 6(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/6/a)
[^c22753741]: Word at the end of s. 289(2)(a) inserted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 2(b)(i)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/2/b/i)
[^c22753781]: Word preceding s. 289(2)(c) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22753761]: [S. 289(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/c) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 2(b)(ii)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/2/b/ii), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22753851]: Words in [s. 289(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/3) substituted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 6(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/6/b)
[^c22753791]: [S. 289(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/4/5) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 2(c)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/2/c), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c23404811]: Words in [s. 289(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/a) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/2/a), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23405701]: [S. 289(1)(aza)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/aza) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/2/b)
[^c23405721]: Words in [s. 289(1)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/aa) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(2)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/2/c)
[^c23405751]: Words in [s. 289(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(2)(d)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/2/d)
[^c23405781]: [S. 289(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1/c) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(2)(e)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/2/e)
[^c23405811]: [S. 289(1A)-(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/1A) substituted for s. 289(1A)-(1D) (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para 1(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/3)
[^c23405831]: Words in [s. 289(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/a)
[^c23405851]: Words in [s. 289(2)(a)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a/i) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/b)
[^c23405871]: Words in [s. 289(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a/ii) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(c)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/c/i)
[^c23405891]: Words in [s. 289(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a/ii) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(c)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/c/ii)
[^c23405911]: Words in [s. 289(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a/ii) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(c)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/c/iii)
[^c23405931]: Words in [s. 289(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(d)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/d)
[^c23405951]: Words in [s. 289(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(e)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/e/i)
[^c23406061]: Words in [s. 289(2)(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/b/i) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(e)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/e/ii)
[^c23406101]: Words in [s. 289(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/2/b/ii) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(4)(e)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/4/e/iii)
[^c23406121]: Words in [s. 289(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/3/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(5)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/5)
[^c23406141]: [S. 289(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/3A) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/6)
[^c23406161]: [S. 289(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/8A) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(7)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/7)
[^c23406181]: [S. 289(9)-(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/289/9) substituted for s. 289(9) (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 1(8)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/1/8)
[^c21587471]: Source-1983 Sch.5 3; 1987 s.42(3)
[^c21587481]: *See* 1988(F) s.35*and* Sch.3 para.12(3)(b)*for application to husband and wife where amounts are subscribed in* 1990-91.
[^c22217801]: [S. 290(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/290/2) substituted (with effect as mentioned in s. 137(2), [Sch. 15 para. 3(2)-(4)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/3/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 3(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/3/1)
[^c23412161]: Words in [s. 290(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/290/2) substituted (with effect in accordance with [Sch. 14 para. 6(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/6/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 14 para. 6(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/6/1)
[^c22754191]: [Ss. 291-291B](https://www.legislation.gov.uk/ukpga/1988/1/section/291) substituted for s. 291 (with effect in accordance with [s. 137(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 137(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1), [Sch. 15 para. 5](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/5)
[^c22777181]: Words in [s. 291(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/2) repealed (with effect in accordance with s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 6(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/6/2), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22777191]: [S. 291(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/3) substituted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 6(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/6/3)
[^c22777211]: [S. 291(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/6) inserted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 6(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/6/4)
[^c22777251]: [S. 291(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/6) substituted (with effect in accordance with [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 2(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/2/b)
[^c22777271]: [S. 291(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/1/b) substituted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 10](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/10)
[^c22777291]: [S. 291(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/291/6) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c21587661]: [S.292](https://www.legislation.gov.uk/ukpga/1988/1/section/292)*omitted by* 1988(F) Sch.4 para.5*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587671]: Source-1983 Sch.5 10A; 1986 Sch.9 12
[^c22211401]: Words in [s. 292(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/292/1) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 6(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/6/a)
[^c22211421]: Words in [s. 292(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/292/4/a) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 6(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/6/b)
[^c22211441]: [S. 292(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/292/5) inserted (1.5.1995) by Finance Act [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 66(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/66/2)
[^c21587721]: [S.293(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4)*omitted by* 1988(F) Sch.4 para.6(2)*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587741]: *See* Insolvency (Northern Ireland) Order 1989 art.381(2)*and* Sch.9 para.59 (S.I.[1989 No.2405](https://www.legislation.gov.uk/ukcm/1989/2405)—*not reproduced*)*for change from a day to be appointed.*
[^c21587751]: Source-1983 Sch.5(4)-(7)
[^c21587761]: [1986 c. 45](https://www.legislation.gov.uk/ukpga/1986/45).
[^c21587771]: [S.I. 1986/1032 (N.I. 6)](https://www.legislation.gov.uk/nisi/1986/1032).
[^c21587781]: Subss.(9)-(11)*omitted by* 1988(F) Sch.4 para.6(2)*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c22245341]: [S. 293](https://www.legislation.gov.uk/ukpga/1988/1/section/293) applied (with effect in accordance with Sch. 13 para. 4(4) of the 1995 amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [Sch. 5B para. 3(2)(c)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/5B/paragraph/3/2/c) (as inserted by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 13 para. 4(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/13/paragraph/4/3))
[^c22205231]: [S. 293(1)-(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/1) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 4(7)(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/4/7/a)
[^c22205301]: [S. 293(4)(9)-(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4/9) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 7(b)(e)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/7/b/e), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22205271]: [S. 293(8)(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/8/8A) substituted for s. 293(8) (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 4(7)(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/4/7/d)
[^c22246131]: [S. 292(8B)](https://www.legislation.gov.uk/ukpga/1988/1/section/292/8B) inserted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 66(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/66/3)
[^c22247311]: [S. 293(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/2/aa) substituted for s. 293(2)(b) (with effect as mentioned in [Sch. 8 para. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 8 para. 4(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/4/1)
[^c22247391]: [S. 293(3A)-(3F)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/3A) inserted (with effect as mentioned in [Sch. 8 para. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 8 para. 4(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/4/2)
[^c22784391]: Words in [s. 293(3C)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/3C) subsituted for specified purposes (retrospectively) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 14](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/14)
[^c22247411]: Words in [s. 293(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/3/b) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 9(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/9/1)
[^c22247471]: Words in [s. 293(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6/a) repealed (with effect as mentioned in Sch. 13 para. 9(6), Sch. 27 Pt. 3(14) Note 1 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 9(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/9/2), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22247431]: [S. 293(6A)-(6D)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6A) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 9(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/9/3)
[^c22247481]: [S. 293(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/7) repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 9(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/9/4), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22784261]: [S. 293(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/8) excluded (with effect as mentioned in s. 74(3) of the 1998 amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [Sch. 5B para. 8(7)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/5B/paragraph/8/7) (as inserted by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 34](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/34))
[^c22784271]: [S. 293(4A)(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4A/4B) inserted (with effect in accordance with [Sch. 17 para. 12](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/12) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 9(1)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/9/1)
[^c22784291]: [S. 293(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6/b) and preceding word repealed (with effect in accordance with Sch. 17 para. 12 of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 10](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/10), [Sch. 40 Pt. 2(5)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/5), Note 1
[^c22784311]: [S. 293(8)(8AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/8/8AA) substituted for s. 293(8) (with effect in accordance with [Sch. 17 para. 12](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/12) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 11](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/11)
[^c22784351]: [S. 293(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/1A/1B) inserted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 12(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/12/1)
[^c22784371]: Words in [s. 293(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/2) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 12(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/12/2), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22784411]: Words in [s. 293(3B)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/3B/b) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 4](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/4), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c23404501]: Words in [s. 293(4B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4B/a) substituted (15.9.2003) by [The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096)](https://www.legislation.gov.uk/uksi/2003/2096), [art. 1(1)](https://www.legislation.gov.uk/uksi/2003/2096/article/1/1), [Sch. para. 17](https://www.legislation.gov.uk/uksi/2003/2096/schedule/paragraph/17) (with [art. 6](https://www.legislation.gov.uk/uksi/2003/2096/article/6))
[^c23406501]: Words in [s. 293(3C)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/3C/b) substituted (with effect in accordance with [Sch. 27 para. 4(5)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/5) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 27 para. 4(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/2) (with [Sch. 27 para. 4(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/6))
[^c23406521]: Words in [s. 293(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4A) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/2/a), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23406541]: Word in [s. 293(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4A) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/2/b)
[^c23406561]: Words in [s. 293(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4A) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(2)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/2/c)
[^c23406581]: Word in [s. 293(4B)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/4B/b) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/3)
[^c23406601]: Words in [s. 293(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/5) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(4)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/4/a)
[^c23406621]: Words in [s. 293(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/5) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(4)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/4/b)
[^c23406641]: Words in [s. 293(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(5)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/5/a)
[^c23406661]: Words in [s. 293(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(5)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/5/b)
[^c23406681]: [S. 293(6ZA)-(6ZC)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6ZA) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 5(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/5/6)
[^c23413521]: Words in [s. 293(6A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6A/a) substituted (with effect in accordance with [Sch. 14 para. 1(2)-(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/1/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 14 para. 1(1)(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/1/1/a)
[^c23413781]: Words in [s. 293(6A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/293/6A/b) substituted (with effect in accordance with [Sch. 14 para. 1(2)-(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/1/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 14 para. 1(1)(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/1/1/b)
[^c21587831]: [Ss.294-296](https://www.legislation.gov.uk/ukpga/1988/1/section/294)*omitted by* 1988(F) Sch.4 para. 70*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587841]: Source-1983 Sch.5 5A(1)-(9), 5B, 5C; 1986 Sch.9 1(2), (7)
[^c21587851]: 1988(F) s.52*in respect of valuations falling to be made on or after* 29*July* 1988.
[^c22217821]: Words in [s. 294(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/294/1) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 8](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/8)
[^c21587861]: [Ss.294-296](https://www.legislation.gov.uk/ukpga/1988/1/section/294)*omitted by* 1988(F) Sch.4 para.8*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587871]: Source-1983 Sch.5 5A(1)-(9), 5B, 5C; 1986 Sch.9 1(2), 7
[^c21587881]: [Ss.294-296](https://www.legislation.gov.uk/ukpga/1988/1/section/294)*omitted by* 1988(F) Sch.4 para.8*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587891]: Source-1983 Sch.5 5A(1)-(9), 5B, 5C; 1986 Sch.9 1(2), 7
[^c22217841]: [S. 296(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/296/6) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 9](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/9), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c21587901]: [Ss.297-298](https://www.legislation.gov.uk/ukpga/1988/1/section/297)*omitted by* 1988(F) Sch.4 para.8*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21587911]: Source-1983 Sch.5 6(1)
[^c21587921]: Source-1983 Sch.5 6(2); 1986 Sch.9 8(2)
[^c21587951]: Source-1983 Sch.5 6(4); 1986 Sch.9 8(4); 1981 s.56(3), Sch.11
[^c21587981]: Source-1983 Sch.5 6(2B), (2C); 1984 s.37(2); 1986 Sch.9 8(3)
[^c21587991]: Source-1983 Sch.5 6(3)
[^c21868831]: Words in [s. 297(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/a) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 10(b)(i)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/10/b/i)
[^c21868871]: Words in [s. 297(2)(g)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/g) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 10(b)(ii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/10/b/ii)
[^c21868811]: [S. 297(2)(h)(j)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/h/j) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 10(b)(iii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/10/b/iii), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22557361]: Words in [s. 297(3)(c)(i)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/3/c/i/6) substituted (with effect as mentioned in [Sch. 8 para. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/5)
[^c22557561]: Words in [s. 297(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/1) repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para 10](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/10), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22557391]: [S. 297(2)(fa)-(fe)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/fa) inserted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 1(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/1/1)
[^c22557501]: Word in [s. 297(2)(g)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/g) substituted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 1(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/1/2)
[^c22557481]: [S. 297(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/3A) inserted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 1(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/1/3)
[^c22557751]: [S. 297(4)-(5C)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/4) substituted for s. 297(4)(5) (with effect as mentioned in [Sch. 17 para. 13(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/13/2) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 13(1)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/13/1)
[^c22557791]: [S. 297(2)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/2/d) repealed (with effect as mentioned in Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 5(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/5/a), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22557801]: [S. 297(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/9) repealed (with effect as mentioned in Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 5(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/5/b), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22784421]: Words in [s. 297(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/5B) substituted (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 103(4)(a)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/4/a)
[^c22784431]: Words in [s. 297(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/5B) repealed (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(16)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/16)
[^c23406701]: Words in [s. 297(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/297/6) substituted (with effect in accordance with [Sch. 27 para. 4(5)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/5) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 27 para. 4(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/3) (with [Sch. 27 para. 4(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/6))
[^c21588011]: [Ss.297-298](https://www.legislation.gov.uk/ukpga/1988/1/section/297)*omitted by* 1988(F) Sch.4 para.8*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c21588021]: Source-1981 s.56(8)-(10); 1983 Sch.5 5(9), 6(2), (3), 6(5)-(7); 1986 Sch.9 1(2), 8(4)
[^c21588041]: Source-1983 Sch.5 6(2B), (10); 1984 s.37(2); 1985 s.44(5); 1986 Sch.9 4
[^c22205351]: [S. 298(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/4) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 11(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/11/a)
[^c22205391]: [S. 298(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5): definition of "property development" repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 11(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/11/b), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22205371]: Words in [s. 298(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 11(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/11/c)
[^c22205401]: [S. 298(6)-(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/6) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 11(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/11/d), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22557981]: Words in [s. 298(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/1) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/11)
[^c22557831]: Words in [s. 298(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/4) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 70(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/70/2) (with [s. 70(4)](https://www.legislation.gov.uk/ukpga/1998/36/section/70/4))
[^c22557921]: [S. 298(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5): definition of "nursing home" inserted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 2(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/2/1)
[^c22557941]: [S. 298(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5): definitions of "property development" and "residential care home" inserted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 2(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/2/2)
[^c22557961]: [S. 298(5A)-(5C)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5A) inserted (with effect as mentioned in [Sch. 12 para. 5(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/5/1) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 12 para. 2(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/12/paragraph/2/3)
[^c23406721]: [S. 298(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/298/5): definition of "oil rig" repealed (with effect in accordance with Sch. 27 para. 4(5) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 27 para. 4(4)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/27/paragraph/4/4), [Sch. 42 Pt. 2(19)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/19), Note 1 (with Sch. 27 para. 4(6))
[^c21588151]: [S. 299](https://www.legislation.gov.uk/ukpga/1988/1/section/299) applied (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 150(4)](https://www.legislation.gov.uk/ukpga/1992/12/section/150/4), [289](https://www.legislation.gov.uk/ukpga/1992/12/section/289) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c22219061]: [S. 299](https://www.legislation.gov.uk/ukpga/1988/1/section/299) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 12](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/12)
[^c22784451]: [S. 299](https://www.legislation.gov.uk/ukpga/1988/1/section/299) (as it has effect in relation to shares issued before 1st January 1994) amended (with effect as mentioned in [Sch. 13 para. 39(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/39/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 39(1)(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/39/1/2); and s. 299 (as it applies to shares issued before 1st January 1994) further amended (with effect as mentioned in Sch. 9 paras. 7, 8(1) of the further amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 9 para. 4(2)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/4/2)
[^c22267681]: Words in [s. 299(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/1) substituted (with effect as mentioned in s. 74(3), [Sch. 13 para. 12(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/8) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(1)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/1/a)
[^c22267701]: Words in [s. 299(1)(a)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/1/a/b/ii) substituted (with effect as mentioned in s. 74(3), [Sch. 13 para. 12(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/8) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(1)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/1/b)
[^c22267741]: Words in [s. 299(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/3) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/2/a)
[^c22267761]: Words in [s. 299(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/3) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(2)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/2/b)
[^c22267791]: Word in [s. 299(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/4) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(3)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/3/a)
[^c22267821]: Words in [s. 299(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/4) inserted (with effect as mentioned in s. 74(3), [Sch. 13 para. 12(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/8) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(3)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/3/b)
[^c22267851]: [S. 299(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/5A) inserted (with effect as mentioned in s. 74(3), [Sch. 13 para. 12(9)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/9) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/4)
[^c22267871]: [S. 299(6)-(6D)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/6) substituted for s. 299(6) (with effect as mentioned in s. 74(3), [Sch. 13 para. 12(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/8) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/5)
[^c22267891]: [S. 299(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/7) repealed (with effect as mentioned in s. 74(3), Sch. 13 para. 12(8), Sch. 27 Pt. 3(14) Note 2 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/6), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22267911]: [S. 299(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/8/a) repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 12(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/12/6), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22784491]: Words in [s. 299(6D)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/6D) (as s.299 applies to shares issued after 31.12.1993) substituted (with effect as mentioned in Sch. 9 paras. 7, 8(1) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 9 para. 4(2)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/4/2)
[^c22784511]: Words in [s. 299(6D)](https://www.legislation.gov.uk/ukpga/1988/1/section/299/6D) (as s.299 applies to shares issued after 31.12.1993) substituted (with effect as mentioned in Sch. 9 paras. 7, 8(1) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 9 para. 4(2)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/4/2)
[^c21588261]: Source-1983 Sch.5 8(2); 1981 s.58(2)-(4); 1986 Sch.9 10(3)
[^c21588271]: Source-1983 Sch.5 8(3); 1983 (No.2) Sch.1 5
[^c22194741]: [S. 300(1)-(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1) substituted for s. 300(1) (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 14(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/14/a)
[^c22194761]: Words in [s. 300(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/2/c) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 14(b)(i)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/14/b/i)
[^c22194781]: Words in [s. 300(2)(h)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/2/h) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 14(b)(ii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/14/b/ii)
[^c22301341]: [S. 300(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 13(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/13/1)
[^c22301361]: [S. 300(1C)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1C) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 13(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/13/2)
[^c22301381]: [S. 300(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/6) inserted (with effect as mentioned in s. 74(3), [Sch. 13 para. 13(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/13/4) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 13(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/13/3)
[^c22784831]: Words in [s. 300(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/1)
[^c22784851]: Words in [s. 300(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/2)
[^c22784871]: [S. 300(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1A) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/3)
[^c22784891]: [S. 300(1BA)-(1BC)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1BA) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(4)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/4)
[^c22784911]: Words in [s. 300(1C)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/1C) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/5)
[^c22784931]: Words in [s. 300(4)(a)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/4/a/5) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 15(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/15/6)
[^c23406741]: [S. 300(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/2/b) substituted (with effect in accordance with [Sch. 18 para. 6(2)(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/6/2/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 6(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/6/1)
[^c21588301]: Source-1981 s.58(6)-(9); 1983 Sch.5 8(2); 1986 Sch.9 10(3); 1987 Sch.15 14(2)
[^c22205451]: [S. 301(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/1/2) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 15(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/15/a), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22205431]: [S. 301(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/6A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 15(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/15/b)
[^c22205471]: [S. 301(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/7) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 15(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/15/c), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22301401]: [S. 301(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/4A) inserted (with effect as mentioned in s. 74(3), [Sch. 13 para. 14(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/14/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 14(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/14/1)
[^c22301421]: Words in [s. 301(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/5) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 14(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/14/2)
[^c22784961]: Words in [s. 301(4A)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/301/4A/5) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 17](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/17)
[^c21588321]: Source-1983 Sch.5 9; 1983 (No.2) Sch.1 6
[^c21588361]: *See* 1988(F) s.50*and* Sch.4 para.9(3)*for changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing.*
[^c21588371]: *Definition of* “trade” *omitted by* 1988(F) Sch.4 para.9(4)*where* s.50 (*changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing*)*applies.*
[^c22194701]: [S. 302(01)](https://www.legislation.gov.uk/ukpga/1988/1/section/302/01) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 16(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/16/a)
[^c21588341]: *See* 1988(F) s.50*and* Sch.4 para.9(1), (2)*for changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing.*
[^c22194621]: Words in [s. 302(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/302/3) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 16(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/16/b)
[^c22194641]: [S. 302(4A)(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/302/4A/4B) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 16(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/16/c)
[^c22194661]: [S. 302(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/302/5): definition of "subsidiary" substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 16(d)(i)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/16/d/i)
[^c22194681]: Words in [s. 302(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/302/5) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 16(d)(ii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/16/d/ii)
[^c21588411]: [1985 c. 6](https://www.legislation.gov.uk/ukpga/1985/6).
[^c21588421]: [S.I. 1986/1032 (N.I. 6)](https://www.legislation.gov.uk/nisi/1986/1032)
[^c21871481]: [S. 303(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/6A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 17(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/17/c)
[^c21871521]: [S. 303(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/8) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 17(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/17/d), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c21871501]: [S. 303(9A)(9B)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/9A/9B) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 17(e)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/17/e)
[^c21871531]: [S. 303(10)(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/10/11) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 17(f)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/17/f), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22301441]: [S. 303(1)(1A)-(1D)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1/1A)(2) substituted for s. 303(1)-(2) (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 15(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/15/1)
[^c22301481]: [S. 303(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/9A) substituted) (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 15(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/15/3)
[^c22785491]: [S. 303(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1AA) inserted (with effect in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 2(2)(a)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/2/2/a)
[^c22785521]: [S. 303(1B)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1B/c) and preceding word inserted (with effect in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 2(2)(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/2/2/b)
[^c22301541]: Words in [s. 303(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/2) substituted (with effect as mentioned in [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 5(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/5/3)
[^c22301561]: [S. 300(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/300/2A) inserted (with effect as mentioned in [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 64](https://www.legislation.gov.uk/ukpga/2000/17/section/64), [Sch. 17 para. 5(4)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/5/4)
[^c22785541]: Words in [s. 303(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/1)
[^c22785561]: Words in [s. 303(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1AA) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/2)
[^c22785581]: Words in [s. 303(1B)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1B/c) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(3)(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/3/a)
[^c22785601]: Words in [s. 303(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1B) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(3)(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/3/b)
[^c22785621]: Word in [s. 303(1C)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/1C/a) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(4)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/4)
[^c22785641]: [S. 303(2A)(b)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/2A/b/c) substituted for s. 303(2A)(b) (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/5)
[^c22785681]: [S. 303(3)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/3) repealed (with effect in accordance with Sch. 15 para. 40(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/6), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 2
[^c22785661]: Words in [s. 303(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/9A) inserted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 19(7)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/19/7)
[^c22785751]: Words in [s. 303(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/9A) repealed (with effect in accordance with Sch. 15 para. 40(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 2
[^c23406761]: Words in [s. 303(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/303/9A) substituted (with effect in accordance with [Sch. 18 para. 7(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/7/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 7(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/7/1)
[^c22218981]: [S. 304](https://www.legislation.gov.uk/ukpga/1988/1/section/304) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 18](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/18)
[^c22785821]: [S. 304(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/304/4) inserted (with effect in accordance with s. 74(3), [Sch. 13 para. 16(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/16/2) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 16(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/16/1); and see also the s. 304(7) inserted (with effect in accordance with s. 74(3), [Sch. 13 para. 40(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/40/2) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 paras. 37](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/37), [40(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/40/1)
[^c23411941]: Words in [s. 304(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/304/1) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [65(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/65/b); and that same substitution of words is made in s. 304(5) (as s. 304 applies to shares issued on or before 31.12.1993) (5.12.2005) by reg. 65(a) of that amending S.I.
[^c22219001]: [S. 305](https://www.legislation.gov.uk/ukpga/1988/1/section/305) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 19](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/19)
[^c22785841]: [S. 305(5)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/305/5/6) inserted (with effect in accordance with ss. 66(1), 68(1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [ss. 66(4)](https://www.legislation.gov.uk/ukpga/1995/4/section/66/4), [68(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/68/3)
[^c21588581]: Source-1983 Sch.5 13(1)-(9); 1981 s.61(6)
[^c21588601]: *See* 1988(F) s.50*and* Sch.4 para.10*for changes applicable in respect of shares issued on or after* 29*July* 1988*and before the end of* 1993*in respect of private rented housing.*
[^c21588621]: 1989 s.170(3)*in relation to things done or omitted on or after* 27*July* 1989.*Previously* “£250 or, in the case of fraud, £500.”.
[^c21588631]: Source-1983 Sch.5 13(10); 1986 Sch.9 1(2), 13
[^c22786741]: [S. 306(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/1/b) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2)
[^c22219511]: [S. 306(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/1/b) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c21871621]: [S. 306(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/3A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 21(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/21/b)
[^c21871641]: Words in [s. 306(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/8) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 21(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/21/c)
[^c21871691]: Words in [s. 306(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/10) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 21(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/21/d), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c21871671]: [S. 306(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/11) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 21(e)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/21/e)
[^c22786751]: [S. 306(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/1/b) substituted (with effect in as mentioned in [s. 135(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/135/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 21 para. 7](https://www.legislation.gov.uk/ukpga/1996/8/schedule/21/paragraph/7)
[^c22300841]: Words in [s. 306(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/2) substituted (with effect in as mentioned in [s. 134(2)(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2/3) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 22](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/22)
[^c22300951]: [S. 306](https://www.legislation.gov.uk/ukpga/1988/1/section/306) applied (with effect as mentioned in s. 74(3) of the 1998 amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [Sch. 5B para. 6](https://www.legislation.gov.uk/ukpga/1992/12/schedule/5B/paragraph/6) (as substituted by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 33](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/33))
[^c22300861]: Words in [s. 306(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/1) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 19(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/19/1)
[^c22300881]: Words in [s. 306(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/2) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 19(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/19/2)
[^c22300901]: [S. 306(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/3) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 19(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/19/3)
[^c22300941]: Words in [s. 306(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/3A) repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 19(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/19/4), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22300921]: [S. 306(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/4/5) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 19(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/19/5)
[^c22786761]: [S. 306(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/1/a) substituted (with effect in accordance with [Sch. 15 para. 22(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/22/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 22(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/22/1)
[^c23404061]: Words in [s. 306(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/306/7) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 37](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/37) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c21588711]: Source-1983 Sch.5 14(1), (1A); 1987 s.42(5)
[^c21588731]: 1989 s.149(4)(b)*but does not affect the making of assessments for years before* 1983-84*or for accounting periods ending before* 1*April* 1983.*Previously* “fraud and wilful default) and section 37 of that Act (neglect.”.
[^c21588741]: Source-1981 s.62(6)(d); 1983 Sch.5 14(2)
[^c21588751]: Source-1981 s.62(6)(a)-(c); 1983 Sch.5 14(2); 1983 Sch.1 8; 1986 Sch.9 14
[^c21588761]: [S. 307(6)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/ca) inserted (27.7.1993 with application in relation to any case in which the claim for relief is made on or after 16.3.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 111(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/111/3/4)
[^c21588771]: Source-1981 s.62(7)
[^c21588781]: Source-1983 Sch.5 5A(10); 1986 Sch.9 7
[^c22181841]: Words in [s. 307(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/a), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22181741]: [S. 307(1A)(1B)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1A/1B/2) substituted for s. 307(2) (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/b)
[^c22181761]: Words in [s. 307(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/a) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(c)(i)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/c/i)
[^c22181781]: [S. 307(6)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/aa) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(c)(ii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/c/ii)
[^c22181801]: [S. 307(6)(cca)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/cca) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(c)(iii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/c/iii)
[^c22181821]: [S. 307(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/8A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/d)
[^c22184531]: [S. 307(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/9) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 22(e)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/22/e), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22300961]: Words in [s. 307(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6) substituted (with effect as mentioned in [Sch. 18 para. 17(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/18/paragraph/17/3) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 18 para. 5](https://www.legislation.gov.uk/ukpga/1996/8/schedule/18/paragraph/5)
[^c22301001]: Words in [s. 307(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1A) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 20(1)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/20/1/b)
[^c22301021]: [S. 307(1C)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1C) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 20(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/20/2)
[^c22301101]: Words in [s. 307(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/4) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 20(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/20/3)
[^c22786781]: Words in [s. 307(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/a) inserted (with effect as mentioned in [s. 71(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 71(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/2)
[^c22301121]: Words in [s. 307(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/b) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 20(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/20/4)
[^c22301181]: Words in [s. 307(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1A) substituted (with effect as mentioned in [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 7(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/7/a)
[^c22301201]: Words in [s. 307(6)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/aa) substituted (with effect as mentioned in [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 7(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/7/b)
[^c23404081]: Words in [s. 307(6)(a)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/6/a/i) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 38](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/38) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23408371]: Words in [s. 307(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/307/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 127](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/127) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21588791]: Source-1983 Sch.5 17(1)-(10); 1986 Sch.9 18; 1987 Sch.15 15(2)
[^c22219021]: [S. 308(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/5A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 23(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/23/a)
[^c22219041]: [S. 308(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/6) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 23(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/23/b), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22301221]: [S. 308(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/1/b) and preceding word repealed (with effect as mentioned in Sch. 8 para. 1 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 8 para. 6(a)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/8/paragraph/6/a), [Sch. 18 Pt. 6](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6), Note
[^c23406881]: Words in [s. 308(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/1) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/a), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23406901]: [S. 308(2)(a)-(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/2/a) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(b)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/b/i), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23407041]: [S. 308(2)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/2/ca) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(b)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/b/ii)
[^c23407061]: Words in [s. 308(2)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/2/e) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(b)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/b/iii)
[^c23407081]: Words in [s. 308(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/3) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/c)
[^c23406941]: Words in [s. 308(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/3/a) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(d)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/d/i), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23407101]: Words in [s. 308(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/3/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(d)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/d/ii)
[^c23406981]: [S. 308(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/3/b) and preceding word repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(e)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/e), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23407121]: [S. 308(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/3A) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(f)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/f)
[^c23407141]: Words in [s. 308(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/4) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(g)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/g/i)
[^c23406991]: Words in [s. 308(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/4) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(g)(ii)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/g/ii/iii), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23407161]: Words in [s. 308(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/4) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(g)(iv)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/g/iv)
[^c23407181]: Words in [s. 308(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/4) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(g)(v)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/g/v)
[^c23407021]: [S. 308(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/5) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(h)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/h), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23407201]: [S. 308(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/308/5B) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 9(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/9/i)
[^c21588931]: Source-1983 Sch.5 15(1), (2)
[^c21588951]: Source-1983 Sch.5 15A(1); 1986 Sch.9 15
[^c21588961]: Source-1983 Sch.5 15(3), 15A(2); 1986 Sch.9 15
[^c21588971]: Source-1983 Sch.5 15(4), (5), 18(4); 1986 Sch.9 19(2)
[^c21588981]: Source-1981 s.63(7)-(9); 1983 Sch.5 15(6)
[^c22787451]: [S. 310(10)(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/10/11) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 25(e)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/25/e), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22787461]: Words in [s. 310(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/1) substituted (with effect in accordance with s. 74(3), [Sch. 13 para. 22(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 22(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/1)
[^c22787481]: Words in [s. 310(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/2) substituted (with effect in accordance with s. 74(3), [Sch. 13 para. 22(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 22(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/2/a)
[^c22787541]: Words in [s. 310(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/2) repealed (with effect in accordance with s. 74(3), Sch. 13 para. 22(5), Sch. 27 Pt. 14 Note 1 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 22(2)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/2/b), [Sch. 27 Pt. 14](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/14)
[^c22787561]: Words in [s. 310(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/5) inserted (with effect in accordance with [s. 71(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 71(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/3)
[^c22787581]: [S. 310(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/6) substituted (with effect in accordance with [s. 71(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 71(4)](https://www.legislation.gov.uk/ukpga/1998/36/section/71/4)
[^c22787501]: Words in [s. 310(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/7) substituted (with effect in accordance with s. 74(3), [Sch. 13 para. 22(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 22(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/3)
[^c22787521]: [S. 310(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/9A) inserted (with effect in accordance with s. 74(3), [Sch. 13 para. 22(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 22(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/22/4)
[^c22787601]: Words in [s. 310(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/1) inserted (with effect in accordance with [Sch. 15 para. 23(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/5) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 23(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/1)
[^c22787701]: Words in [s. 310(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/2) substituted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 8](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/8)
[^c22787621]: Words in [s. 310(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/2) inserted (with effect in accordance with [Sch. 15 para. 23(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/5) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 23(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/2)
[^c22787641]: [S. 310(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/2A) inserted (with effect in accordance with [Sch. 15 para. 23(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/5) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 23(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/3)
[^c22787661]: Word in [s. 310(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/4) inserted (with effect in accordance with [Sch. 15 para. 23(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/5) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 23(4)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/4)
[^c22787681]: [S. 310(4)(b)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/4/b/c) and words substituted for words in s. 310(4) (with effect in accordance with [Sch. 15 para. 23(5)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/5) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 23(4)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/23/4)
[^c23488331]: Words in [s. 310(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/5) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 25(c)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/25/c)
[^c23407251]: Words in [s. 310(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/5) substituted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(a)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/a/i)
[^c23407271]: Words in [s. 310(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/5) substituted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(a)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/a/ii)
[^c23407291]: Words in [s. 310(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/5) substituted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(a)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/a/iii)
[^c23407311]: Words in [s. 310(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/6/a) inserted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(b)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/b/i)
[^c23407331]: [S. 310(6)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/6/aa) inserted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(b)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/b/ii)
[^c23407371]: Words in [s. 310(6)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/6/c) inserted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(b)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/b/iii)
[^c23407351]: [S. 310(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/310/6A) inserted (with effect in accordance with [Sch. 18 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 10(1)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/10/1/c)
[^c21589011]: Source-1983 Sch.5 19(1)
[^c21589021]: Source-1983 Sch.5 19A; 1986 Sch.9 20
[^c21589031]: 1988(F) s.53*in respect of funds closing after* 15*March* 1988.
[^c22219271]: Words in [s. 311(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/311/2) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 26(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/26/a)
[^c22219291]: Words in [s. 311(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/311/2B) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 26(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/26/b)
[^c22787781]: Words in [s. 311(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/311/4) substituted (with effect in accordance with [s. 134(2)(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2/3) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 23](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/23)
[^c21589141]: Source-1981 s.67; 1983 Sch.5 20(1), (2); 1985 s.44(6); 1986 Sch.9 21(1), (2)
[^c21589151]: [1985 c. 6](https://www.legislation.gov.uk/ukpga/1985/6).
[^c21589201]: Source-1981 s.67(2)-(4); 1983 Sch.5 20(1)
[^c21589211]: Words in [s. 312(3)(5)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/3/5/b) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(18)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/18) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c22184741]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in definition of "control" substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(a)(i)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/a/i)
[^c22184791]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definitions of "eligible for relief" and "eligible shares" inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(a)(ii)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/a/ii)
[^c22194591]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definitions of "fixed-rate preference share capital" and "the relevant period" repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(a)(iii)(iv)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/a/iii/iv), [Sch. 26 Pt. 5(17)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/17)
[^c22194441]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definitions of "relief", "subsidiary" and "51 per cent. subsidiary" substituted for "the relief" and "relief" (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(a)(v)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/a/v)
[^c22194461]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "unquoted company" substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(a)(vi)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/a/vi)
[^c22194481]: [S. 312(1A)-(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1A) inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/b)
[^c22194521]: [S. 312(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/4/5) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 27(d)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/27/d)
[^c22299681]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "new consideration" repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 23(1)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/23/1/a), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22299571]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definitions of "relief", "research and development" and "the seven year period" substituted for definitions of "research and development" and "relief" (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 23(1)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/23/1/b)
[^c22299701]: Words in [s. 312(1B)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1B/c) repealed (with effect as mentioned in s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 23(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/23/3), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22299591]: Words in [s. 312(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/2) substituted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 23(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/23/4)
[^c22299631]: [S. 312(4A)(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/4A/4B) inserted (with effect as mentioned in [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 23(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/23/5)
[^c22300451]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "arrangements" inserted (with effect as mentioned in [Sch. 17 para. 14(2)(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/14/2/3) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 14(1)(a)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/14/1/a)
[^c22300471]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in definition of "control" inserted (with effect as mentioned in [Sch. 17 para. 14(2)(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/14/2/3) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 14(1)(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/14/1/b)
[^c22299711]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "the designated period" inserted (with effect as mentioned in [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 6(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/6/2)
[^c22788461]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "research and development" substituted (with effect as mentioned in [Sch. 17 para. 15(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/15/2) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 15(1)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/15/1) (with [Sch. 15 para. 15(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/15/paragraph/15/3))
[^c22300531]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "the seven year period" repealed (with effect as mentioned in Sch. 17 para. 8 of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(5)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/5), Note 4
[^c22299731]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "termination date" substituted for word (with effect as mentioned in [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 6(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/6/3)
[^c22299751]: [S. 312(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1A) substituted (with effect as mentioned in [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 6(4)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/6/4)
[^c22300431]: [S. 312(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/2A) inserted (with effect as mentioned in [Sch. 17 para. 12](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/12) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 9(4)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/9/4)
[^c22300511]: [1986 c. 45](https://www.legislation.gov.uk/ukpga/1986/45).
[^c22300521]: [S.I. 1989/2405 (N.I. 19)](https://www.legislation.gov.uk/nisi/1989/2405).
[^c22788551]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definitions repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22788531]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "the period of restriction" inserted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 24](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/24)
[^c22788491]: Words in [s. 312(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1E) inserted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 13(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/13/a)
[^c22788511]: Words in [s. 312(1E)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1E) substituted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 13(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/13/b)
[^c22788671]: [S. 312(7)(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/7/8) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22788681]: Words in [s. 312(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/3) substituted (with effect in accordance with Sch. 9 paras. 7, 8(1) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 9 para. 4(3)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/4/3)
[^c23404521]: [S. 312(2A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/2A/a) substituted (15.9.2003) by [The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096)](https://www.legislation.gov.uk/uksi/2003/2096), [art. 1(1)](https://www.legislation.gov.uk/uksi/2003/2096/article/1/1), [Sch. para. 18](https://www.legislation.gov.uk/uksi/2003/2096/schedule/paragraph/18) (with [art. 6](https://www.legislation.gov.uk/uksi/2003/2096/article/6))
[^c23407391]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "bonus shares" inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/a)
[^c23407411]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in definition of "control" inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/b)
[^c23407451]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): definition of "qualifying 90% subsidiary" inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/c)
[^c23407471]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in para. (a) of definition of "termination date" substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(d)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/d/i)
[^c23407491]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in para. (a) of definition of "termination date" substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(d)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/d/ii)
[^c23407511]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in para. (b) of definition of "termination date" substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(d)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/d/iii)
[^c23407531]: [S. 312(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1): words in definition of "termination date" substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(2)(d)(iv)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/2/d/iv)
[^c23407551]: [S. 312(1ZA)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/1ZA) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 11(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/11/3)
[^c23407571]: [S. 312(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/312/2A) applied by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 5 para. 11(10)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/5/paragraph/11/10) (as inserted (with effect in accordance with s. 96(6) of the 2004 amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 96(4)(f)](https://www.legislation.gov.uk/ukpga/2004/12/section/96/4/f))
[^c22219111]: Words in [s. 299A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/299A/1) substituted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 13(a)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/13/a)
[^c22219131]: [S. 299A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/299A/3) Inserted (with effect as mentioned in [s. 137(1)(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/137/1/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 15 para. 13(b)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/15/paragraph/13/b)
[^c22754231]: [Pt. 7 Ch. 3](https://www.legislation.gov.uk/ukpga/1988/1/part/7/chapter/3) applied (with effect in accordance with Sch. 13 para. 4(4) of the 1995 amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [Sch. 5B para. 6(4)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/5B/paragraph/6/4) (as inserted by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 13 para. 4(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/13/paragraph/4/3))
[^c22753891]: [S. 289A(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8A) inserted (with effect in accordance with [Sch. 17 para. 12](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/12) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 9(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/9/3)
[^c22753911]: Word after s. 289A(7)(a) inserted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 3(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/3/a)
[^c22753951]: Word preceding s. 289A(7)(c) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22753931]: [S. 289A(7)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/7/c) repealed (with effect in accordance with Sch. 15 para. 40(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 3(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/3/b), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 6
[^c22753961]: [S. 289A(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/9) repealed (with effect in accordance with Sch. 15 para. 9(2) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 9(1)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/9/1), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 1
[^c23398011]: [S. 289A(5)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/5/ca) inserted (with effect in accordance with [s. 57(4)(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/57/4/b) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 57(3)](https://www.legislation.gov.uk/ukpga/2002/23/section/57/3), [Sch. 17 para. 2](https://www.legislation.gov.uk/ukpga/2002/23/schedule/17/paragraph/2); [S.I. 2003/88](https://www.legislation.gov.uk/uksi/2003/88), [art. 2](https://www.legislation.gov.uk/uksi/2003/88/article/2)
[^c23404481]: Words in [s. 289A(8A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8A/a) substituted (15.9.2003) by [The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096)](https://www.legislation.gov.uk/uksi/2003/2096), [art. 1(1)](https://www.legislation.gov.uk/uksi/2003/2096/article/1/1), [Sch. para. 16](https://www.legislation.gov.uk/uksi/2003/2096/schedule/paragraph/16) (with [art. 6](https://www.legislation.gov.uk/uksi/2003/2096/article/6))
[^c23406201]: Words in [s. 289A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/6) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/2)
[^c23406221]: Words in [s. 289A(7)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/7/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(3)(a)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/3/a/i)
[^c23406241]: Words in [s. 289A(7)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/7/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(3)(a)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/3/a/ii)
[^c23406261]: Words in [s. 289A(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/7/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(3)(b)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/3/b/i)
[^c23406281]: Words in [s. 289A(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/7/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(3)(b)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/3/b/ii)
[^c23406301]: [S. 289A(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8/a) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/a)
[^c23406321]: Words in [s. 289A(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8/b) repealed (with effect in accordance with Sch. 18 para. 21 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(b)(i)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/b/i), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 6
[^c23406341]: Words in [s. 289A(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(b)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/b/ii)
[^c23406361]: Words in [s. 289A(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(b)(iii)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/b/iii)
[^c23406381]: Words in [s. 289A(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8/b) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(b)(iv)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/b/iv)
[^c23406401]: Words in [s. 289A(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(4)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/4/c)
[^c23406421]: Words in [s. 289A(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8A) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(5)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/5/a)
[^c23406441]: Word in [s. 289A(8A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/8A/b) inserted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 2(5)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/2/5/b)
[^c23412181]: Words in [s. 289A(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/289A/4) substituted (with effect in accordance with [Sch. 14 para. 5(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/5/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 14 para. 5(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/5/1)
[^c22753971]: Words in [s. 289B(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/289B/3/b) substituted (with effect in accordance with [Sch. 13 para. 3(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 3(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/1)
[^c22753991]: [S. 289B(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/289B/3A) inserted (with effect in accordance with [Sch. 13 para. 3(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/2)
[^c22754011]: [S. 289B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/289B/4) substituted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 3(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/3)
[^c22754031]: Words in [s. 289B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/289B/5) substituted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 3(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/3/4)
[^c23488201]: Words in [s. 289B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/289B/4) substituted (with effect in accordance with [Sch. 18 para. 21](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/21) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/3)
[^c22784061]: [S. 291A(5)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/5/b/ii) substituted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 7(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/7/2/a)
[^c22784081]: Words in [s. 291A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/5) repealed (with effect in accordance with s. 74(3), Sch. 27 Pt. 3(14) Note 4 of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 7(2)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/7/2/b), [Sch. 27 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/14)
[^c22784161]: Word in [s. 291A(5)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/5/c) substituted (with effect in accordance with [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 3(3)(a)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/3/3/a)
[^c22784121]: [S. 291A(5)(c)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/5/c/ii) and preceding word inserted (with effect in accordance with [Sch. 17 para. 8](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/8) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 17 para. 3(3)(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/17/paragraph/3/3/b)
[^c22784201]: Words in [s. 291A(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/1/a) substituted (with effect in accordance with [Sch. 15 para. 40(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 11](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/11)
[^c23408331]: Words in [s. 291A(3)(f)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/3/f/i) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 126(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/126/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23408351]: Words in [s. 291A(3)(f)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/291A/3/f/ii) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 126(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/126/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22784221]: [S. 291B(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/291B/5A) inserted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 8(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/8/1)
[^c22784241]: [S. 291B(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/291B/6) substituted (with effect in accordance with [s. 74(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/74/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 8(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/8/2)
[^c22785861]: Words in [s. 305A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/305A/2) substituted (with effect in accordance with s. 74(3), [Sch. 13 para. 18(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/18/2) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 13 para. 18(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/13/paragraph/18/1)
[^c22784821]: [S. 299B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/299B/7) repealed (with effect in accordance with Sch. 17 para. 14(2)(3) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(5)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/5), Note 3
[^c22785761]: [S. 303A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/303A/2) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 21(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/21/a)
[^c22785801]: [S. 303A(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/303A/8) repealed (with effect in accordance with Sch. 15 para. 40(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 21(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/21/b), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 2
[^c22785781]: Words in [s. 303A(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/303A/9/a) substituted (with effect in accordance with [Sch. 15 para. 40(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/40/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 21(c)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/21/c)
[^c23406781]: [S. 303A(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/303A/6/a) repealed (with effect in accordance with Sch. 18 para. 8(2) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 18 para. 8(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/18/paragraph/8/1), [Sch. 42 Pt. 2(13)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/13), Note 1
[^c21589401]: Source-1970 s.372
[^c21589411]: [1964 c. 81](https://www.legislation.gov.uk/ukpga/1964/81).
[^c21589421]: *The countries mentioned in the* British Nationality Act 1981 Sch.3 (*as amended*)*are*—*Countries whose citizens are Commonwealth citizens*Antigua and Barbuda, Australia, The Bahamas, Bangladesh, Barbados, Belize, Botswana, Brunei, Canada, Republic of Cyprus, Dominica, Fiji, The Gambia, Ghana, Grenada, Guyana, India, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Maldives, Malta, Mauritius, Nauru, New Zealand, Nigeria, Papua New Guinea, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu, Western Samoa, Zambia, Zimbabwe.
[^c21589431]: [1981 c. 81](https://www.legislation.gov.uk/ukpga/1981/81).
[^c21589491]: Source-1970 s.367
[^c21589511]: [1952 c. 67](https://www.legislation.gov.uk/ukpga/1952/67).
[^c21589531]: *For orders see* Part III Vol.5*under* “Securities”.
[^c23398281]: [S. 323(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/1) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/2), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404161]: Words in [s. 323(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/2) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404181]: Words in [s. 323(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/4) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(4)(a)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/4/a) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404201]: Words in [s. 323(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/4) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(4)(b)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/4/b) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404221]: Words in [s. 323(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/4) inserted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(4)(c)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/4/c) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404241]: Words in [s. 323(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/5) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(5)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/5) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23398161]: [S. 323(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/6/b) and preceding word repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(6)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/6), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23398171]: [S. 323(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/323/7) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 45(7)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/45/7), [Sch. 8 Pt. 1](https://www.legislation.gov.uk/ukpga/2003/1/schedule/8/part/1) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23408071]: Words in [s. 332A](https://www.legislation.gov.uk/ukpga/1988/1/section/332A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 140](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/140), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23414531]: [S. 278(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 40(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/40/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415661]: Words in [s. 278(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 40(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/40/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415681]: [S. 278(2)(za)(zb)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2/za/zb) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 40(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/40/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414601]: [S. 278(2)(b)-(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2/b) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 40(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/40/3/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415721]: [S. 278(2ZA)](https://www.legislation.gov.uk/ukpga/1988/1/section/278/2ZA) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 40(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/40/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22790971]: [1997 c. 58](https://www.legislation.gov.uk/ukpga/1997/58).
@@ -63996,32 +56640,6 @@
[^c23408111]: [S. 333B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/333B/9): definition of "section 333 business" repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 143(6)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/143/6/b), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21590051]: Source-1970 s.50
[^c21590081]: Source-1970 s.51
[^c21590091]: *See* 1979(C) s.18(3)—*corresponding provision for capital gains.*
[^c21590101]: [S. 336(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/3) inserted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 208(1)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/208/1/4)
[^c23404331]: Words in [s. 336(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 48(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/48/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23404351]: [S. 336(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A) inserted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 48(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/48/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23407591]: Words in [s. 336(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/2) substituted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 17 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/17/paragraph/10/2)
[^c23408591]: [S. 336(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 144](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/144) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23412101]: Words in [s. 336(1A)(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/b/i) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 13(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/13/a) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23412121]: [S. 336(1A)(b)(ia)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/b/ia) inserted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 13(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/13/b) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23412141]: [S. 336(1A)(b)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/b/iii) and preceding word repealed (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 13(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/13/c), [Sch. 42 Pt. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/3), Note (with Sch. 36)
[^c23414121]: Words in [s. 336(1A)(b)(ia)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/b/ia) omitted (11.8.2006) by virtue of [The Taxation of Pension Schemes (Consequential Amendments) (No. 2) Order 2006 (S.I. 2006/1963)](https://www.legislation.gov.uk/uksi/2006/1963), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2006/1963/article/1/1), [4(2)](https://www.legislation.gov.uk/uksi/2006/1963/article/4/2)
[^c23414141]: Words in [s. 336(1A)(b)(ia)](https://www.legislation.gov.uk/ukpga/1988/1/section/336/1A/b/ia) inserted (11.8.2006) by [The Taxation of Pension Schemes (Consequential Amendments) (No. 2) Order 2006 (S.I. 2006/1963)](https://www.legislation.gov.uk/uksi/2006/1963), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2006/1963/article/1/1), [4(2)](https://www.legislation.gov.uk/uksi/2006/1963/article/4/2)
[^c21590871]: Source-1986 s.29(1), (2)
[^c21590921]: 1990 s.26(4)*in relation to payments made on or after* 1*October* 1990.
@@ -64046,8 +56664,6 @@
[^c22737181]: [S. 339(3DA)-(3DD)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/3DA) inserted (with effect in accordance with [s. 40(11)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/11) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 40(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/5)
[^c22737221]: [S. 339(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/4) substituted (with effect in accordance with [s. 40(11)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/11) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 40(6)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/6)
[^c22737201]: [S. 339(7AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/7AA) substituted (with effect in accordance with [s. 40(11)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/11) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 40(7)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/7)
[^c22737141]: Words in [s. 339(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/9) repealed (with effect in accordance with s. 40(11) of the repealing Act) by [Finance Act 2000 (c.17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 40(8)](https://www.legislation.gov.uk/ukpga/2000/17/section/40/8), [Sch. 40 Pt. 2(1)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/1), Note 2
@@ -64060,6 +56676,10 @@
[^c23426711]: Words in [s. 339(3E)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/3E) substituted (with effect in accordance with [s. 58(4)](https://www.legislation.gov.uk/ukpga/2006/25/section/58/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 58(3)](https://www.legislation.gov.uk/ukpga/2006/25/section/58/3)
[^c23426731]: [S. 339(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 51(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/51/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23426751]: [S. 339(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/339/10) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 51(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/51/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21591081]: Source-1970 s.245(1)
[^c21591091]: Source-1970 s.245(2), (3); 1974 s.37(1)
@@ -64150,712 +56770,20 @@
[^c22749961]: [S. 347A(7)(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/7/8) repealed (with effect in accordance with s. 41(9) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 41(2)](https://www.legislation.gov.uk/ukpga/2000/17/section/41/2), [Sch. 40 Pt. 2(1)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/1), Note 3
[^c23510621]: [Ss. 347A](https://www.legislation.gov.uk/ukpga/1988/1/section/347A), [347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) inserted by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 36(1)(3)-(5)](https://www.legislation.gov.uk/ukpga/1988/39/section/36/1/3)
[^c23427811]: Words in [s. 347A(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/1/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427831]: Words in [s. 347A(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/1/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427851]: Words in [s. 347A(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/1/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427871]: [S. 347A(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/2A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427891]: [S. 347A(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/4/5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427921]: Words in [s. 347A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/6) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 146(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/146/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21591791]: Words in [s. 347B(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1/a) substituted (16.7.1992 with effect for the year 1992-93 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 61](https://www.legislation.gov.uk/ukpga/1992/48/section/61).
[^c21591801]: Words in [s. 347B(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1/a) substituted (1.4.1991) by [Contracts (Applicable Law) Act 1990 (c. 36, SIF 30)](https://www.legislation.gov.uk/ukpga/1990/36), [s. 5](https://www.legislation.gov.uk/ukpga/1990/36/section/5), [Sch. 4 para. 6](https://www.legislation.gov.uk/ukpga/1990/36/schedule/4/paragraph/6); [S.I. 1991/707](https://www.legislation.gov.uk/uksi/1991/707), [art. 2](https://www.legislation.gov.uk/uksi/1991/707/article/2)
[^c21591821]: 1988(F) s.35*and* Sch.3 para.13*for* 1990-91*and subsequent years. Previously* “of the difference between the higher (married person's) relief and the lower (single person's) relief under subsection (1) of section 257 as it applies for the year to a person not falling within subsection (2) or (3) of that section”.
[^c21591831]: *Repealed by* 1988(F) s.148*and* Sch.14 Part VIII*for* 1990-91*and subsequent years.*
[^c21591841]: [S. 347B(8)-(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/8) inserted (6.4.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 62(1)](https://www.legislation.gov.uk/ukpga/1992/48/section/62/1); [S.I. 1992/2642](https://www.legislation.gov.uk/uksi/1992/2642), [art.2](https://www.legislation.gov.uk/uksi/1992/2642/article/2).
[^c22747721]: Words in [s. 347B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/2) repealed (with effect in accordance with s. 79(1), Sch. 26 Pt. 5(1) Note of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 79(3)(a)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/3/a), [Sch. 26 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/1)
[^c22747741]: Words in [s. 347B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/2) substituted (with effect in accordance with [s. 79(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/1) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 79(3)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/3/b)
[^c22747761]: Words in [s. 347B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/3) substituted (with effect in accordance with [s. 79(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/1) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 79(4)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/4)
[^c22747801]: [S. 347B(5A)(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/5A/5B) inserted (with effect in accordance with [s. 79(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/1) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 79(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/6)
[^c22746201]: [S. 347B(12)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/12/b) substituted (7.10.1996) by [Jobseekers Act 1995 (c. 18)](https://www.legislation.gov.uk/ukpga/1995/18), [s. 41(2)](https://www.legislation.gov.uk/ukpga/1995/18/section/41/2), [Sch. 2 para. 15(2)](https://www.legislation.gov.uk/ukpga/1995/18/schedule/2/paragraph/15/2); SI 1996/2208, art. 2(b)
[^c22746231]: [S. 347B(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/13) inserted (7.10.1996) by [Jobseekers Act 1995 (c. 18)](https://www.legislation.gov.uk/ukpga/1995/18), [s. 41(2)](https://www.legislation.gov.uk/ukpga/1995/18/section/41/2), [Sch. 2 para. 15(3)](https://www.legislation.gov.uk/ukpga/1995/18/schedule/2/paragraph/15/3); SI 1996/2208, art. 2(b)
[^c22747861]: Words in [s. 347B(5A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/5A/a) substituted (with effect in accordance with s. 27(1 of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 27(1)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/27/1/b)
[^c22747841]: Words in [s. 347B(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/5A) repealed (with effect in accordance with Sch. 27 Pt. 3(1) Note of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/1)
[^c22749621]: [S. 347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) modified (with effect in accordance with [s. 79(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/1) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 79(3)-(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/79/3)
[^c22749501]: Words in [s. 347B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1) inserted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/8) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 36(1)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/1)
[^c22749521]: [S. 347B(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1A) inserted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/8) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 36(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/2)
[^c22749541]: Words in [s. 347B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/2) substituted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/8) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 36(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/3)
[^c22749561]: Words in [s. 347B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/3) substituted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/36/section/36/8) of the amending Act) by [Finance Act 1999 (c. 36)](https://www.legislation.gov.uk/ukpga/1999/36), [s. 36(4)](https://www.legislation.gov.uk/ukpga/1999/36/section/36/4)
[^c22749681]: [S. 347B(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/4/5) repealed (with effect in accordance with Sch. 20 Pt. 3(6) Note of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 20 Pt. 3(6)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/6)
[^c22749581]: Words in [s. 347B(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/5A) substituted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/8) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 36(5)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/5)
[^c22749601]: Words in [s. 347B(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/8) substituted (with effect in accordance with [s. 36(8)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/8) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 36(6)](https://www.legislation.gov.uk/ukpga/1999/16/section/36/6)
[^c23427461]: Words in [s. 347B(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/11) repealed (N.I.) (3.3.2003 for specified purposes) by [Child Support, Pensions and Social Security Act (Northern Ireland) 2000 (c. 4)](https://www.legislation.gov.uk/nia/2000/4), [ss. 67](https://www.legislation.gov.uk/nia/2000/4/section/67), [68(1)(2)](https://www.legislation.gov.uk/nia/2000/4/section/68/1/2), [Sch. 9 Pt. 1](https://www.legislation.gov.uk/nia/2000/4/schedule/9/part/1); [S.R. 2003/53](https://www.legislation.gov.uk/nisr/2003/53), [art. 3](https://www.legislation.gov.uk/nisr/2003/53/article/3), [Sch.](https://www.legislation.gov.uk/nisr/2003/53/schedule)
[^c23501461]: [Ss. 347A](https://www.legislation.gov.uk/ukpga/1988/1/section/347A), [347B](https://www.legislation.gov.uk/ukpga/1988/1/section/347B) inserted by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 36(1)(3)-(5)](https://www.legislation.gov.uk/ukpga/1988/39/section/36/1/3)
[^c23436671]: [S. 347B(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1/b) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(2)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/2/a)
[^c23436691]: [S. 347B(1)(c)(i)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1/c/i/ii) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(2)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/2/b)
[^c23436711]: [S. 347B(1A)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/1A/a/b) substituted for words in s. 347B(1A) (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(3)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/3)
[^c23436761]: [S. 347B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/7); definition of "child" inserted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(4)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/4/b)
[^c23436731]: [S. 347B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/7); definition of "child of the family" omitted (with effect in accordance with reg. 1(5) of the repealing S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(4)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/4/a)
[^c23436811]: [S. 347B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/7); definition of "relevant child" inserted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(4)(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/4/c)
[^c23436831]: Words in [s. 347B(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/9/a) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(5)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/5/a)
[^c23436851]: Words in [s. 347B(9)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/9/b) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(5)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/5/b)
[^c23436871]: Words in [s. 347B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/9) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(5)(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/5/c)
[^c23436901]: Words in [s. 347B(12)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/12/a) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(6)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/6/a)
[^c23436561]: Words in [s. 347B(12)(b)(i)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/12/b/i/ii) substituted (5.12.2005 with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(6)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/6/b)
[^c23436961]: Words in [s. 347B(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/347B/12) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [67(6)(c)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/67/6/c)
[^c21591851]: Source-1970 s.52; 1971 Sch.6 20(c); 1973 s.17(1)
[^c21591861]: *See also*1970(M) s.90—*interest on unpaid tax.*1970(M) s.106—*avoidance of agreements for payment without deduction of tax.*1989 s.94*and* Sch.11 para.18—*deep gain securities.*[S.I](https://www.legislation.gov.uk/ukpga/1988/1/section/I). [1970 No.448](https://www.legislation.gov.uk/ukcm/1970/448) (in Part III Vol.5) regns. 2-11—*procedure for payment without deduction of tax of income exempt under double taxation arrangements.*
[^c21591871]: Source-1970 s.65(2)
[^c21591881]: *Words repealed by* 1988(F) Sch.14 Part IV—*in respect of payments made on or after* 6*April* 1989.
[^c22740091]: [S. 348(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/2/b) and preceding word repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/2)
[^c22741511]: Words in [s. 348(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/3) repealed (with effect in accordance with s. 111(6)(a) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17), Note 1
[^c22741531]: Words in [s. 348(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/3) inserted (with effect in accordance with [s. 41(9)](https://www.legislation.gov.uk/ukpga/2000/17/section/41/9) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 41(3)](https://www.legislation.gov.uk/ukpga/2000/17/section/41/3)
[^c22741551]: [1990 c. 29](https://www.legislation.gov.uk/ukpga/1990/29).
[^c23427501]: Words in [s. 348(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 50(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/50/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427521]: [S. 348(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/1A) inserted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 50(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/50/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427941]: [S. 348(1A)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/1A/aa) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 147(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/147/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23427961]: [S. 348(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 147(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/147/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23436971]: Words in [s. 348(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/348/1A/b) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 14](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/14) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c22737841]: [S. 349](https://www.legislation.gov.uk/ukpga/1988/1/section/349) excluded (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 174](https://www.legislation.gov.uk/ukpga/1994/9/section/174)
[^c21592281]: *See* S.I. [1986 No.482](https://www.legislation.gov.uk/ukcm/1986/482) (in Part III Vol.5) regn. 2(2)—*application of* s.349(1)*for the purposes of* S.I. [1986 No.482](https://www.legislation.gov.uk/ukcm/1986/482) (*Building Society Regulations*).
[^c21592291]: Source-1970 s.53(1); 1973 s.17(1); 1971 Sch.6 21
[^c21592301]: *See* S.I. [1986 No.482](https://www.legislation.gov.uk/ukcm/1986/482) (in Part III Vol.5) regn. 2(2)—*application of* s.349(1)*for the purposes of* S.I. [1986 No.482](https://www.legislation.gov.uk/ukcm/1986/482) (*Building Society Regulations*).
[^c21592311]: Source-1970 s.54(1), (2); 1971 Sch.6 22; 1982 s.26(1); 1984 ss.27(2), 35(1); 1970 s.65(2)
[^c21592321]: Words in [s. 349(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/2/a) inserted (25.7.1991) by [Finance Act 1991 (c. 31)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 1(2)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/1/2)
[^c21592331]: *See*—1970(M) s.106—*avoidance of agreements for payment without deduction of tax, etc.*1989 s.94*and* Sch.11 para.18—*deep gain securities.*1989 s.116—*certain interest on Eurobonds to Netherlands Antilles subsidiaries made on or after* 1*April* 1989.
[^c21592341]: *Words* “or 479(1)” *repealed by* 1990 s.132*and* Sch.19 Part.IV.
[^c21592351]: [S. 349(3)(e)-(g)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/e) and the word "or" inserted (26.7.1990) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 30](https://www.legislation.gov.uk/ukpga/1990/29/section/30), [Sch. 5 para. 10(2)(4)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/10/2/4) (for payments made on or after 6th April 1991).
[^c21592361]: [S. 349(3)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/e) (which was inserted 26.7.1990 by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 30](https://www.legislation.gov.uk/ukpga/1990/29/section/30), [Sch. 5 para. 10(2)(4)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/10/2/4)) repealed (25.7.1991) by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [ss. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [123](https://www.legislation.gov.uk/ukpga/1991/31/section/123), [Sch. 11 para. 1(3)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/1/3), [Sch. 19 Pt. V](https://www.legislation.gov.uk/ukpga/1991/31/schedule/19/part/V)
[^c21592371]: Word in [s. 349(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3), at the end of para. (g), inserted (27.7.1993 ) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s.59](https://www.legislation.gov.uk/ukpga/1993/34/section/59)
[^c21592381]: [S. 349(3)(h)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/h) inserted (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 59](https://www.legislation.gov.uk/ukpga/1993/34/section/59)
[^c21592391]: *Words repealed by* 1988(F) s.148*and* Sch.14 Part IV*for payments made on or after* 6*April* 1989.
[^c21592401]: [S. 349(3A)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3A/3B) inserted (25.7.1991) by [Finance Act 1991 (c. 31)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 1(4)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/1/4).
[^c21592411]: Words in [s. 349(3A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3A/a) inserted (with application in relation to arrangements made after 16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 2(2)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/2/2), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6).
[^c21592421]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4) inserted (26.7.1990) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 30](https://www.legislation.gov.uk/ukpga/1990/29/section/30), [Sch. 5 para. 10(3)(4)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/10/3/4) (for payments made on or after 6th April 1991).
[^c21592431]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definitions of "qualifying certificate of deposit" and "security" substituted for words in s. 349(4) (25.7.1991) by [Finance Act 1991 (c. 31)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 1(5)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/1/5)
[^c21592451]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definition of "qualifying deposit right" inserted (with application in relation to arrangements made after 16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 2(3)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/2/3), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6)
[^c22739561]: Words in [s. 349](https://www.legislation.gov.uk/ukpga/1988/1/section/349) inserted (with effect in accordance with [s. 105(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/105/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para. 18](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/18) (with [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c22739691]: [S. 349(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/a) applied (with modifications) (29.4.1996) by [The European Investment Bank (Designated International Organisation) Order 1996 (S.I. 1996/1179)](https://www.legislation.gov.uk/uksi/1996/1179), [art. 4](https://www.legislation.gov.uk/uksi/1996/1179/article/4)
[^c22739581]: Words in [s. 349(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/a) substituted (with application in accordance with [Sch. 37 para. 8(1)-(6)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/8/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 3(a)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/3/a)
[^c22739651]: [S. 349(3)(b)(3AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/b/3AA) modified (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 8(8)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/8/8)
[^c22739601]: Words in [s. 349(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/b) substituted (with application in accordance with [Sch. 37 para. 8(7)(8)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/8/7/8) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 3(b)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/3/b)
[^c22739751]: [S. 349(3)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/e) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 29 para. 5(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/29/paragraph/5/2)
[^c22739621]: [S. 349(3AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3AA) inserted (with application in accordance with [Sch. 37 para. 8](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/8) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 2(1)(2)(b)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/2/1/2/b)
[^c22739631]: [S. 349(3AB)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3AB) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 4](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/4)
[^c22739671]: Word in [s. 349(3A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3A/b) substituted (with effect in accordance with [Sch. 38 para. 6(7)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/6/7) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 38 para. 6(1)(2)(e)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/6/1/2/e)
[^c22740121]: [S. 349(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1/c) and preceding word repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/2)
[^c22740131]: [S. 349(3)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/ba) inserted (with application in accordance with [s. 78(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/78/2) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 78(1)](https://www.legislation.gov.uk/ukpga/1997/16/section/78/1)
[^c22741561]: Words in [s. 349(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1) repealed (with effect in accordance with s. 111(6)(b) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17), Note 1
[^c22741601]: Words in [s. 349(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1) inserted (with effect in accordance with [s. 41(9)](https://www.legislation.gov.uk/ukpga/2000/17/section/41/9) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 41(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/41/4)
[^c22741711]: [1990 c. 29](https://www.legislation.gov.uk/ukpga/1990/29).
[^c22741621]: Words in [ss. 349(3)(c)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/c/3B) substituted (with effect in accordance with [s. 111(6)(b)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/6/b) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 111(2)(a)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/2/a)
[^c22741581]: [S. 349(3)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/e) repealed (with effect in accordance with s. 111(6)(b) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17), Note 1
[^c22741671]: [S. 349(3C)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3C) inserted (with application in accordance with [s. 112(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 112(2)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/2)
[^c22741651]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definition of "quoted Eurobond" inserted (with effect in accordance with [s. 111(6)(b)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/6/b) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 111(2)(b)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/2/b)
[^c22741691]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definition of "UK public revenue dividend" inserted (with application in accordance with [s. 112(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 112(3)](https://www.legislation.gov.uk/ukpga/2000/17/section/112/3)
[^c22742251]: [S. 349](https://www.legislation.gov.uk/ukpga/1988/1/section/349) excluded (with effect in accordance with s. 83(3) of the excluding Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 26 para. 51](https://www.legislation.gov.uk/ukpga/2002/23/schedule/26/paragraph/51) (with [Sch. 28](https://www.legislation.gov.uk/ukpga/2002/23/schedule/28))
[^c22742211]: [S. 349(3)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/i) and preceding word inserted (with application in accordance with [s. 95(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/95/4) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 95(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/95/2)
[^c22742231]: [S. 349(5)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/5/6) inserted (with application in accordance with [s. 95(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/95/4) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23) s. 95(3)
[^c23427541]: Words in [s. 349(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1/a) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 51(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/51/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427561]: [S. 349(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1A) inserted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 51(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/51/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427581]: Words in [s. 349(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1) renumbered as s. 349(1B) (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by virtue of [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 51(4)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/51/4) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427601]: Words in [s. 349(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1B) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 51(5)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/51/5) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23427751]: [S. 349(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1) modified by [The Income Tax (Manufactured Overseas Dividends) Regulations 1993 (S.I. 1993/2004)](https://www.legislation.gov.uk/uksi/1993/2004), [reg. 5(1A)](https://www.legislation.gov.uk/uksi/1993/2004/regulation/5/1A) (as inserted (1.11.2003) by [The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 2003 (S.I. 2003/2582)](https://www.legislation.gov.uk/uksi/2003/2582), [reg. 6(3)](https://www.legislation.gov.uk/uksi/2003/2582/regulation/6/3))
[^c23427641]: [S. 349(3)(j)(k)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/j/k) and preceding word inserted (with effect in accordance with [s. 202(4)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/4) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 202(2)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/2)
[^c23427691]: [S. 349(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/6): definition of "central counterparty clearing service" inserted (with effect in accordance with [s. 202(4)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/4) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 202(3)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/3)
[^c23427711]: [S. 349(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/6): definitions of "recognised clearing house" and "recognised investment exchange" inserted (with effect in accordance with [s. 202(4)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/4) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 202(3)](https://www.legislation.gov.uk/ukpga/2003/14/section/202/3)
[^c23427791]: [S. 349(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1) excluded (retrospective to 22.10.2004) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [ss. 65(3)](https://www.legislation.gov.uk/ukpga/2006/25/section/65/3), [66(6)](https://www.legislation.gov.uk/ukpga/2006/25/section/66/6)
[^c23428221]: [S. 349](https://www.legislation.gov.uk/ukpga/1988/1/section/349) applied (with effect in accordance with s. 56 of the affecting Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 3](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/3)
[^c23428021]: [S. 349(1A)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1A/aa) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428031]: Words in [s. 349(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428051]: [S. 349(3)(za)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/3/za) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428071]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definition of "certificate of deposit" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428111]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): words in definitions of "qualifying certificate of deposit" and "qualifying deposit right" repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(b)(i)(c)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/b/i/c/ii), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428141]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): words in definition of "qualifying certificate of deposit" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(b)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428161]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): words in definition of "qualifying deposit right" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(c)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/c/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428181]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): words in definition of "qualifying deposit right" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(c)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/c/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428091]: [S. 349(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/4): definition of "uncertificated eligible debt security units" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(5)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428201]: [S. 349(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 148(6)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/148/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23436991]: Words in [s. 349(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349/1A/b) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 15](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/15) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c21592661]: *See* 1970(M) s.98—*penalties for non-compliance.*
[^c21592671]: [S. 350(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/1) excluded (22.3.1992) by [S.I. 1992/569](https://www.legislation.gov.uk/uksi/1992/569), [reg. 13(2)(d)](https://www.legislation.gov.uk/uksi/1992/569/regulation/13/2/d).
[^c21592681]: Source-1970 ss.53(2), 54(3); 1971 Sch.6 21
[^c21592691]: Source-1970 s.56
[^c21592701]: *See* 1970(M) Parts IV-VI—*principal provisions as to assessment, appeals and collection.*
[^c21592711]: Source-1970 s.53(3), 54(3)
[^c21592721]: *See* 1988(F) s.130(7)(b)—*payment of outstanding tax by migrating companies.*
[^c21592731]: [S. 350(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/4) amended by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 3(1)(2)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/3/1/2)
[^c21592741]: [S. 350(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/4) extended by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 3(3)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/3/3)
[^c21592751]: Source-1970 s.53(4), 54(3); 1972 s.104, 108(1), Sch.24 16
[^c21592761]: (*See* 1970(M) Parts IV-VI—*principal provisions as to assessment, appeals and collection.*)*and also:*—1970(M) s.31(3)*appeals under* s.349(1)*and* 350*to go to Special Commissioners.*
[^c21592771]: Source-1972 s.108(2)-(4)
[^c21592781]: *See* 1989 s.94*and* Sch.11 para.18—*deep gain securities.*
[^c22739781]: Words in [s. 350(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/1) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 8](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/8)
[^c22739801]: [S. 350(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/1A) inserted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 8](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/8)
[^c22742591]: Words in [s. 350(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/350/1A) inserted (with application in accordance with [s. 96(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/96/4) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 96(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/96/2)
[^c21592931]: [S. 352](https://www.legislation.gov.uk/ukpga/1988/1/section/352) excluded (22.3.1992) by [S.I. 1992/569](https://www.legislation.gov.uk/uksi/1992/569), [reg.21](https://www.legislation.gov.uk/uksi/1992/569/regulation/21). [S. 352](https://www.legislation.gov.uk/ukpga/1988/1/section/352) modified (22.3.1992) by [S.I. 1992/569](https://www.legislation.gov.uk/uksi/1992/569), [reg.23](https://www.legislation.gov.uk/uksi/1992/569/regulation/23).
[^c21592941]: Source-1970 s.55; 1973 s.17(4), 1986 s.29(3)
[^c21592951]: *See* s.30*and* Sch.5 para.11—*words* “or 687” *replaced by* “, 480A or 687 or by virtue of regulations under section 477A(1)” *as regards a payment made on or after* 6*April* 1991.
[^c22742271]: Words in [s. 349A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349A/1) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(1)(a)(i)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/1/a/i)
[^c22742291]: Words in [s. 349A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349A/1) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(1)(a)(ii)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/1/a/ii)
[^c22742311]: Words in [s. 349A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/349A/6) renumbered as s. 349A(6)(a) (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by virtue of [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(1)(b)(i)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/1/b/i)
[^c22742331]: [S. 349A(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349A/6/b) and preceding word inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(1)(b)(ii)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/1/b/ii)
[^c23428241]: Words in [s. 349A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/349A/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 150](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/150), (with Sch. 2)
[^c22742351]: [S. 349B(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/1/b) and preceding word repealed (with effect in accordance with s. 94(7) of the repealing Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(14)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/14), Note
[^c22742381]: [S. 349B(3)-(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/3) inserted (with effect in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/2)
[^c22742611]: Words in [s. 349B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/3) inserted (1.12.2002) by The Income and Corporation Taxes Act 1988, Section 349B(3) Order 2002 ([S.I. 2002/2931](https://www.legislation.gov.uk/uksi/2002/2931)), art. 2
[^c23427731]: Words in [s. 349B(2)(b)(7)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/2/b/7/b/ii) substituted (with effect in accordance with [s. 153(4)](https://www.legislation.gov.uk/ukpga/2003/14/section/153/4) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 153(1)(a)](https://www.legislation.gov.uk/ukpga/2003/14/section/153/1/a)
[^c23428331]: [S. 349B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/4) applied (with modifications) (6.4.2005) by [The Child Trust Funds Regulations 2004 (S.I. 2004/1450)](https://www.legislation.gov.uk/uksi/2004/1450), [regs. 1](https://www.legislation.gov.uk/uksi/2004/1450/regulation/1), [24(c)](https://www.legislation.gov.uk/uksi/2004/1450/regulation/24/c) (as amended (27.12.2005) by [The Child Trust Funds (Amendment No. 3) Regulations 2005 (S.I. 2005/3349)](https://www.legislation.gov.uk/uksi/2005/3349), [regs. 1](https://www.legislation.gov.uk/uksi/2005/3349/regulation/1), [7(b)](https://www.legislation.gov.uk/uksi/2005/3349/regulation/7/b)); [S.I. 2004/3369](https://www.legislation.gov.uk/uksi/2004/3369), [art. 2(1)](https://www.legislation.gov.uk/uksi/2004/3369/article/2/1)
[^c23428311]: [S. 349B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 151(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/151/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23436491]: [S. 349B(3)(g)(h)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/3/g/h) repealed (with effect in accordance with s. 46(4)(a)(b) of the repealing Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 46(2)(a)(b)](https://www.legislation.gov.uk/ukpga/2005/22/section/46/2/a/b), [Sch. 11 Pt. 2(12)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/11/part/2/12), Note (with s. 46(6)(7))
[^c23436541]: Words in [s. 349B(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/4/a) inserted (with effect in accordance with [s. 22(4)](https://www.legislation.gov.uk/ukpga/2005/22/section/22/4) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 22(2)](https://www.legislation.gov.uk/ukpga/2005/22/section/22/2)
[^c23436521]: [S. 349B(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/4/b) repealed (with effect in accordance with ss. 19(1), 22(4) of the repealing Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 22(3)](https://www.legislation.gov.uk/ukpga/2005/22/section/22/3), [Sch. 11 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/11/part/2/3), Note 2; [S.I. 2006/982](https://www.legislation.gov.uk/uksi/2006/982), [art. 2](https://www.legislation.gov.uk/uksi/2006/982/article/2)
[^c23437011]: [S. 349B(3)(i)(ia)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/3/i/ia) substituted for s. 349B(3)(i) (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 16(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/16/2) (as amended by [The Registered Pension Schemes (Splitting of Schemes) Regulations 2006 (S.I. 2006/569)](https://www.legislation.gov.uk/uksi/2006/569), [regs 1(1)](https://www.legislation.gov.uk/uksi/2006/569/regulation/1/1), [5(4)(5)](https://www.legislation.gov.uk/uksi/2006/569/regulation/5/4/5)) (with Sch. 36)
[^c23437031]: Word after s. 349B(3)(j) inserted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 16(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/16/3) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23437051]: [S. 349B(3)(l)(m)](https://www.legislation.gov.uk/ukpga/1988/1/section/349B/3/l/m) repealed (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 16(4)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/16/4), [Sch. 42 Pt. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/3), Note (with Sch. 36)
[^c23436651]: Amendment to earlier affecting provision [S.I. 2004/1450](https://www.legislation.gov.uk/uksi/2004/1450) reg. 24(c) (27.12.2005) by [The Child Trust Funds (Amendment No. 3) Regulations 2005 (S.I. 2005/3349)](https://www.legislation.gov.uk/uksi/2005/3349), [regs. 1](https://www.legislation.gov.uk/uksi/2005/3349/regulation/1), [7(b)](https://www.legislation.gov.uk/uksi/2005/3349/regulation/7/b)
[^c22742401]: Words in [s. 349C(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349C/1) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(3)(a)(i)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/3/a/i)
[^c22742421]: Words in [s. 349C(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/349C/1) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(3)(a)(ii)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/3/a/ii)
[^c22742441]: Word in [s. 349C(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/349C/2) substituted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(3)(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/3/b)
[^c22742461]: [S. 349C(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/349C/4) substituted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(3)(c)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/3/c)
[^c22742481]: Words in [s. 349D(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/349D/1/a) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(4)(a)(i)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/4/a/i)
[^c22742501]: Words in [s. 349D(1)(b)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/349D/1/b/c) inserted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(4)(a)(ii)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/4/a/ii)
[^c22742531]: Word in [s. 349D(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/349D/1/d) substituted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(4)(a)(iii)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/4/a/iii)
[^c22742551]: [S. 349D(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/349D/2) substituted (with application in accordance with [s. 94(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 94(4)(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/94/4/b)
[^c21593111]: *See*—1988 s.117—*limited partners.*1988 s.280—*transfer of reliefs between spouses.*1988(F) Sch.6 para.3(3)—*disallowance of interest relief in respect of occupation of commercial woodlands.*
[^c22738581]: [S. 353(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1A/b) and preceding word repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c22738611]: [S. 353(1B)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1B/b) and preceding word repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c22738691]: Words in [s. 353(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1B) substituted (with effect in accordance with [s. 42(3)-(5)](https://www.legislation.gov.uk/ukpga/1995/4/section/42/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 42(2)(a)](https://www.legislation.gov.uk/ukpga/1995/4/section/42/2/a)
[^c22740451]: Words in [s. 353(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1) substituted (with effect in accordance with [Sch. 4 para. 18(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/5) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 1(2)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/1/2)
[^c22740421]: Words in [s. 353(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1A/1B) repealed (with effect in accordance with Sch. 4 para. 18(5), Sch. 20 Pt. 3(7) Note 4 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 1(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/1/3), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7)
[^c22740481]: [S. 353(1G)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1G) substituted (with effect in accordance with [Sch. 4 para. 18(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/5) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 1(4)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/1/4)
[^c22741741]: Words in [s. 353(1G)](https://www.legislation.gov.uk/ukpga/1988/1/section/353/1G) substituted (with effect in accordance with [s. 83(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/83/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 83(2)](https://www.legislation.gov.uk/ukpga/2000/17/section/83/2)
[^c21594051]: Source-1972 Sch.9 10; 1974 Sch.1 1
[^c21594061]: Source-1972 Sch.9 11; 1974 Sch.1 1
[^c21594071]: Source-1972 Sch.9 12; 1974 Sch. 1 1
[^c21594091]: Source-1972 Sch.9 13; 1974 Sch.1 1
[^c22741821]: Words in [s. 359(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/1) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(1)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/1/a) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741841]: Words in [s. 359(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/1) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(1)(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/1/b) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741861]: Words in [s. 359(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/1) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(1)(c)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/1/c) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741881]: Words in [s. 359(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/1) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(1)(d)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/1/d) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741901]: Words in [s. 359(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/1) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(1)(e)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/1/e) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741921]: Words in [s. 359(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/3/a) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(2)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/2/a) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741941]: Words in [s. 359(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/3/a) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(2)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/2/a) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22741961]: Words in [s. 359(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/359/3/b) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 27(2)(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/27/2/b) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c21594101]: *See* 1988(F) Sch.6 para.3(3)—*disallowance of interest relief in respect of occupation of commercial woodlands.*
[^c21594111]: Source-1974 Sch.1 9(1); 1982 s.49(2)
[^c21594121]: 1989 s.107*and* Sch.12 para.12—*in relation to interest paid on or after* 27*July* 1989. 1988 s.424(4)*continues to have effect for purposes of* s.360*in relation to interest paid before* 27*July* 1989.*Previously* “satisfying any of the conditions of section 424(4)” *in* subs.1(a)*and* “satisfy any of the conditions of section 424(4)” *in* subs.2(a).
[^c21594131]: Source-1974 Sch.1 10(1); 1980 s.28(1)(b), (c); 1982 s.49(3)
[^c21594151]: Source-1974 Sch.1 10(2); 1982 s.49(3)
[^c21594161]: 1989 s.107*and* Sch.12 para.12—*in relation to interest paid on or after* 27*July* 1989. 1988 s.424(4)*continues to have effect for purposes of* s.360*in relation to interest paid before* 27*July* 1989.*Previously* “satisfy any of the conditions of section 424(4)”.
[^c21594171]: 1989 s.47.
[^c21594181]: 1989 s.48(1).*Previously* “(4) In this section expressions to which a meaning is assigned by Part XI have that meaning, but—(a) in relation to any loan made after 5th April 1987, paragraph 39 of Schedule 9 shall have effect for determining whether the interest on the loan is eligible for relief under section 353 by virtue of this section; and (b) in relation to any loan made before 14th November 1986, section 417 shall have effect subject to the following modifications—(i) in subsection (3)(c) for the words following “deceased person” there shall be substituted the words “subject to subsection (3A) below, any other person interested therein”; and (ii) after subsection (3) there shall be added— “(3A) Subsection (3)(c) above shall not apply so as to make an individual an associate as being entitled or eligible to benefit under a trust—(a) if the trust relates exclusively to an exempt approved scheme as defined in section 592; or (b) if the trust is exclusively for the benefit of the employees, or the employees and directors, of the company or their dependants (and not wholly or mainly for the benefit of directors or their relatives), and the individual in question is not (and could not as a result of the operation of the trust become), either on his own or with his relatives, the beneficial owner of more than 5 per cent. of the ordinary share capital of the company; and in applying paragraph (b) above any charitable trusts which may arise on the failure or determination of other trusts shall be disregarded.””.
[^c22740321]: Words in [s. 360(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/360/3A) inserted (with effect in accordance with [s. 79(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/79/2) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 79(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/79/1)
[^c23436591]: Words in [s. 360(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/360/3A) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [68](https://www.legislation.gov.uk/uksi/2005/3229/regulation/68)
[^c21594201]: 1989 s.107*and* Sch.12 para.13(2)*in relation to accounting periods beginning after* 31*March* 1989.*For accounting periods beginning on or before* 31*March* 1989,*the following wording applies:* “in a company—(a) if he, either on his own or with one or more of his associates, or if any associate of his with or without other such associates, is the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 per cent. of the ordinary share capital of the company, or (b) if, on an amount equal to the whole distributable income of the company falling to be apportioned under Part XI for the purpose of computing total income, more than 5 per cent. of that amount could be apportioned to him together with his associates (if any), or to any associate of his, or any such associates taken together.”.
[^c21594211]: 27*July* 1989.
[^c21594221]: 27*July* 1989.
[^c21594241]: 1989 s.107*and* Sch.12 para.13(3)*in relation to accounting periods beginning after* 31*March* 1989.
[^c23436611]: Words in [s. 360A(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/360A/10) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [69](https://www.legislation.gov.uk/uksi/2005/3229/regulation/69)
[^c23437101]: Words in [s. 360A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/360A/2) repealed (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 11(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/11/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15), Note
[^c23437121]: Words in [s. 360A(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/360A/2/b) repealed (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 11(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/11/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15), Note
[^c23437141]: Words in [s. 360A(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/360A/8) repealed (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 11(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/11/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15), Note
[^c23437161]: Words in [s. 360A(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/360A/9/a) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 17](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/17) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c21594251]: Source-1974 Sch.1 10A(1); 1981 s.25(3)
[^c21594261]: Source-1974 Sch.1 10B; 1981 s.25(3), (6)
[^c21594271]: *See* 1988(F) Sch.6 para.3(3)—*disallowance of interest relief in respect of occupation of commercial woodlands.*
[^c21594281]: Source-1974 Sch.1 10C; 1983 s.24(1)
[^c21594291]: *See* 1988(F) s.35*and* Sch.3 para.15*for changes applicable in respect of payments of interest made on or after* 6*April* 1990.
[^c21594301]: Source-1974 Sch.1 10D(1)-(3); 1983 s.24(1); 1984 s.24(2), (3)
[^c21594321]: *See* 1988(F) s.35*and* Sch.3 para.15*for changes applicable in respect of payments of interest made on or after* 6*April* 1990.
[^c21594351]: Source-1974 Sch.1 10D(3A); 1983 s.24(1); 1984 s.24(4)
[^c21594361]: Source-1974 Sch.1 10D(4); 1983 s.24(1)
[^c21594371]: Source-1974 Sch.1 11(1)
[^c21594381]: *See* 1988(F) Sch.6 para.3(3)—*disallowance of interest relief in respect of occupation of commercial woodlands.*
[^c21594391]: Source-1974 Sch.1 12; 1981 s.25(2)
[^c22742031]: Words in [s. 362(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/362/2/a) substituted (retrospective to 6.4.2001) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 76](https://www.legislation.gov.uk/ukpga/2001/9/section/76), [Sch. 25 para. 9](https://www.legislation.gov.uk/ukpga/2001/9/schedule/25/paragraph/9)
[^c21594401]: Source-1974 Sch.1 13; 1981 s.25(4); 1983 s.24(2)(a)
[^c21594411]: Source-1974 Sch.1 14(1); 1981 s.25(4); 1983 s.24(2)(a)
[^c21594421]: Source-1974 Sch.1 14(2)
[^c21594431]: Source-1974 Sch.1 15; 1981 s.25(4); 1983 s.24(2)(b)
[^c21594441]: Source-1974 Sch.1 10A(2); 1981 s.25(3)
[^c21594451]: [1976 c.78](https://www.legislation.gov.uk/ukpga/1976/78).
[^c21594461]: Source-1974 Sch.1 17(1); 1975 Sch.12 19(2); 1986 s.100
[^c21594471]: Source-1974 Sch.1 18
[^c21594481]: Source-1974 Sch.1 20, 21; 1975 Sch.12 19(3), (4); 1986 s.100
[^c22739041]: Words in [s. 366(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/366/1/c) repealed (with effect in accordance with s. 42(3)-(5) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/2), Note
[^c21594691]: Source-1972 Sch.9 2; 1974 Sch.1 23
[^c21594701]: Source-1972 Sch.9 14; 1974 Sch.1 23
[^c21594711]: Source-1972 Sch.9 15; 1974 Sch.1 1, 23
[^c22740791]: Words in [s. 367(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/2) repealed (with effect in accordance with Sch. 4 para. 18(5), Sch. 20 Pt. 3(7) Note 4 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 3(2)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/3/2), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7)
[^c22740811]: Words in [s. 367(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/367/3/4) substituted (with effect in accordance with [Sch. 4 para. 18(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/5) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 3(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/3/3)
[^c21594771]: Source-1972 Sch.10 1-6
[^c22738231]: Words in [s. 368(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/1) substituted (with effect in accordance with [s. 81(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/81/6) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 9 para. 9](https://www.legislation.gov.uk/ukpga/1994/9/schedule/9/paragraph/9)
[^c22740341]: Words in [s. 368(3)(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/3/4/a) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3/a), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23428391]: Words in [s. 368(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 154(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/154/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428411]: [S. 368(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 154(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/154/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428431]: Words in [s. 368(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 154(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/154/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428451]: Words in [s. 368(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 154(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/154/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428471]: [S. 368(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/368/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 154(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/154/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23437241]: [S. 347A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 52(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/52/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437251]: [S. 347A(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 52(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/52/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23437261]: Words in [s. 347A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/347A/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 52(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/52/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21594971]: *See* S.I. [1988 No.1347](https://www.legislation.gov.uk/ukcm/1988/1347) (*in* Part III Vol.5)*in respect of housing associations.*
[^c21596041]: *See* S.I. [1983 No.368](https://www.legislation.gov.uk/ukcm/1983/368) (*in* Part III Vol.5)—*housing associations.*
[^c22743361]: [S. 380(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/380/1) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2)
[^c21596171]: [S. 380](https://www.legislation.gov.uk/ukpga/1988/1/section/380) amended (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 171](https://www.legislation.gov.uk/ukpga/1993/34/section/171) (3), 184(3)
[^c21596241]: *See* 1988(F) s.148*and* Sch.14 Part V*regarding repeal of* s.380(4)*from* 6*April* 1993.
[^c21596251]: *See*—1990(C) s.142—*restriction of set off of first-year allowances.*
[^c21596261]: Source—1970 s.168(8)
[^c21596271]: 1988(F) Sch.6 para.8*from* 15*March* 1988.*Previously* “section 54”.
[^c22743471]: [S. 380(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/380/1/2) substituted (with effect in accordance with [s. 218](https://www.legislation.gov.uk/ukpga/1994/9/section/218) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/1) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22743511]: [S. 380(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/380/1) modified (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 20 para. 8](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20/paragraph/8)
[^c22744341]: [S. 380(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/380/1) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c22743491]: [S. 380(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/380/3) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/b), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c21596351]: [S. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) modified for the year of assessment 1988-89 by [S.I. 1991/851](https://www.legislation.gov.uk/uksi/1991/851), [reg. 9](https://www.legislation.gov.uk/uksi/1991/851/regulation/9), [Sch.2](https://www.legislation.gov.uk/uksi/1991/851/schedule/2). [S. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) modified (for the year of assessment 1989-90 only) (28.3.1992) by [S.I. 1992/511](https://www.legislation.gov.uk/uksi/1992/511), [reg. 9](https://www.legislation.gov.uk/uksi/1992/511/regulation/9), [Sch.2](https://www.legislation.gov.uk/uksi/1992/511/schedule/2).
[^c21596361]: [S. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) applied with modification (23.3.1993) by [S.I. 1993/415](https://www.legislation.gov.uk/uksi/1993/415), [reg. 9](https://www.legislation.gov.uk/uksi/1993/415/regulation/9), [Sch.2](https://www.legislation.gov.uk/uksi/1993/415/schedule/2)
[^c21596371]: Source—1978 s.30(1)
[^c21596381]: *See* S.I. [1987 No.530](https://www.legislation.gov.uk/ukcm/1987/530) (in Part III Vol.5) regn. 15—*non-resident entertainers and sportsmen.*
[^c21596391]: Source—1978 s.30(2)
[^c21596401]: Source—1978 s.30(3)
[^c21596411]: Source—1978 s.30(4)-(6)
[^c21596421]: *See* 1990(C) s.142—*restriction of set-off of first-year allowances.*
[^c21596431]: Source—1978 s.30(10)
[^c22766431]: [S. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2)
[^c22744381]: [S. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c22743551]: Words in [s. 381(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/2) substituted (with effect in accordance with [s. 218](https://www.legislation.gov.uk/ukpga/1994/9/section/218) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/2) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22743571]: [S. 381(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/6) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22744831]: Words in [s. 381(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/1) substituted (with effect in accordance with [s. 135(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/135/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 21 para. 10](https://www.legislation.gov.uk/ukpga/1996/8/schedule/21/paragraph/10)
[^c22744851]: Words in [s. 381(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/4) repealed (with effect in accordance with s. 134(2) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 24](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/24), [Sch. 41 Pt. 5(10)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/10), Note
[^c23441231]: Words in [s. 381(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/381/5/a) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [70](https://www.legislation.gov.uk/uksi/2005/3229/regulation/70)
[^c21596481]: Source—1970 s.168(3); 1971 s.16(2)(a); 1978 s.30(7)(a)
[^c21596491]: Source—1970 s.168(4); 1978 s.30(7)(a)
[^c21596501]: *Repealed by* 1988(F) s.148*and* Sch.14 Part VIII*for* 1990-91*and subsequent years.*
[^c22743741]: [S. 382(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/382/3/4) substituted (with effect in accordance with ss. 209(7), 218 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/3) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22748231]: Words in [s. 382(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/382/3) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23438731]: Words in [s. 382(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/382/3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 158](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/158), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21596861]: Source—1970 s.170(1)
[^c21596871]: Source—1970 s.170(2)-(4)
[^c21596881]: Source—1980 s.70(1), (5)
[^c21596891]: Source—1980 s.70(2), (5)
[^c21596901]: Source—1980 s.70(4)
[^c22743611]: Words in [s. 384(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/1) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5
[^c22743631]: Words in [s. 384(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/2/a) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5
[^c22743671]: [S. 384(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/2/b) and preceding word repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(c)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/c), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5
[^c22743681]: [S. 384(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/5) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(d)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/d), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(b) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22743701]: Words in [s. 384(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/6) substituted (with effect in accordance with ss. 211(2), 218 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(2)(a)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/2/a)
[^c22743721]: Words in [s. 384(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/6/a) substituted (with effect in accordance with ss. 211(2), 218 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(2)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/2/b)
[^c22745411]: Words in [s. 384(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/1) repealed (with effect in accordance with s. 134(2) of the repealing Act) by Finance Act 1996 (c, 8), Sch. 20 para. 25(1), Sch. 41 Pt. 5(10), Note
[^c22745431]: [S. 384(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/9) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 25(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/25/2)
[^c22751011]: Words in [s. 384(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/6) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 29(1)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/29/1) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751041]: Words in [s. 384(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/10) repealed (with effect in accordance with s. 579(1) of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 29(2)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/29/2), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751061]: [S. 384(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/11) inserted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 29(2)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/29/2) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c23438751]: [S. 384(4)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/4/a/b) and words substituted for words in s. 384 (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 159(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/159/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23438771]: Words in [s. 384(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/384/8) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 159(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/159/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597001]: *See* 1988(F) Sch.14 Part V—*repeal of* subs. (6)*from* 6*April* 1993.
[^c21597011]: 1988(F) Sch.6 para.6(8)*from* 15*March* 1988.*Previously* “section 54”.
[^c22743771]: [S. 385(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/1) substituted (with effect in accordance with ss. 209(7), 218 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(4)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/4) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22743791]: [S. 385(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/2) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(e)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/e), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(c) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22743831]: [S. 385(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/3) repealed (with effect in accordance with ss. 209(7), 218 of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(5)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/5), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 6
[^c22743811]: [S. 385(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/5) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(e)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/e), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(c) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22743851]: [S. 385(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/8) repealed (with effect in accordance with ss. 209(7), 218 of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(5)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/5), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 6
[^c22748981]: [S. 385](https://www.legislation.gov.uk/ukpga/1988/1/section/385) modified (with effect in accordance with [s. 56(9)](https://www.legislation.gov.uk/ukpga/1998/36/section/56/9) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 56(4)](https://www.legislation.gov.uk/ukpga/1998/36/section/56/4)
[^c23438471]: [S. 385](https://www.legislation.gov.uk/ukpga/1988/1/section/385) modified by [Finance Act 1993 (c. 34)](https://www.legislation.gov.uk/ukpga/1993/34), [Sch. 20A paras. 6-8](https://www.legislation.gov.uk/ukpga/1993/34/schedule/20A/paragraph/6) (as inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 25 para. 3](https://www.legislation.gov.uk/ukpga/2004/12/schedule/25/paragraph/3))
[^c22748241]: Words in [s. 385(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/4) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23438811]: Words in [s. 385(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/385/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 161](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/161), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597021]: Source—1970 s.172
[^c22743871]: [S. 386(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/386/4) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(f)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/f), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22748291]: Words in [s. 386(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/386/1) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3), [Sch. 7 para 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23438891]: Words in [s. 386(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/386/1) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 162](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/162), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597031]: Source—1970 s.173(1), (2)
[^c21597041]: Source—1970 s.173(3)(aa); 1970(F) Sch.4 9(6)
[^c21597051]: Source—1970 s.173(3)(a)-(c)
[^c21597061]: [Sch.7 para.36(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/7/paragraph/36/4) [Copyright, Designs and Patents Act 1988 (c.48)](https://www.legislation.gov.uk/ukpga/1988/48)*from* 1*August* 1989. (*Commencement order*—S.I. [1989 No.816](https://www.legislation.gov.uk/ukcm/1989/816)—*not reproduced.*)
[^c22746401]: [S. 387(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/387/3/c) repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/2)
[^c22746441]: [S. 387(3)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/387/3/f) and preceding word repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 3 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23438921]: Words in [s. 387(3)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/387/3/d) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 163](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/163) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597071]: Source—1970 s.174(1)
[^c21597081]: Source—1970 s.174(2)-(6)
[^c21597091]: *See* 1990(C) ss.30-31*(ships*)—*carry forward does not include postponement under* 1990(C) ss.30-31.
[^c22747701]: [S. 388](https://www.legislation.gov.uk/ukpga/1988/1/section/388) modified (1.12.1997 with effect in accordance with reg. 1 of the affecting S.I.) by [The Lloyd's Underwriters (Scottish Limited Partnerships) (Tax) Regulations 1997 (S.I. 1997/2681)](https://www.legislation.gov.uk/uksi/1997/2681), [reg. 10](https://www.legislation.gov.uk/uksi/1997/2681/regulation/10)
[^c22748391]: [S. 388](https://www.legislation.gov.uk/ukpga/1988/1/section/388) restricted (9.3.1995 with effect in accordance with reg. 1 of the affecting S.I.) by [The Lloyd's Underwriters (Tax) Regulations 1995 (S.I. 1995/351)](https://www.legislation.gov.uk/uksi/1995/351), [reg. 14(3)](https://www.legislation.gov.uk/uksi/1995/351/regulation/14/3)
[^c22748371]: Words in [s. 388(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/1) substituted (with effect in accordance with [s. 218](https://www.legislation.gov.uk/ukpga/1994/9/section/218) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 209(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/209/6) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22743951]: [S. 388(6)(b)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/6/b/d) (and word preceding (d)) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(d)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/d), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5(a) (with Sch. 20)
[^c22743991]: Words in [s. 388(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/7) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(d)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/d), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5(a) (with Sch. 20)
[^c22748301]: Words in [s. 388(1)(4)(5)(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/1/4/5/7) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c23438941]: Words in [s. 388(1)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/1/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 164(2)(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/164/2/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23439001]: Words in [s. 388(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/388/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 164(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/164/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597101]: Source—1970 s.174(7)-(13); 1986 Sch.13 27; 1971 Sch.8 16
[^c21597161]: *See* 1988(F) Sch.14 Part V*for repeal of* subs. (8)*from* 6*April* 1993.
[^c22744111]: [S. 389(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/3) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 216(3)(g)](https://www.legislation.gov.uk/ukpga/1994/9/section/216/3/g), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 4(d) (as s. 215(5) of that Act is modified (1.5.1995) by [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4), [s. 125(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/125/1)) (with Sch. 20)
[^c22744131]: [S. 389(5)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/5) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(1)(e)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/1/e), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5(c) (with Sch. 20)
[^c22751091]: Words in [s. 389(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/2) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 31(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/31/a) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751111]: Words in [s. 389(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/2) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 31(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/31/b) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751131]: Words in [s. 389(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/2) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 31(c)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/31/c) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c23439021]: [S. 389(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/389/4) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 165](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/165) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597171]: Source—1970 s.175; 1972 Sch.11 3; 1974 Sch.1 28
[^c23439531]: Words in [s. 390(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/390/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 166](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/166) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23439621]: [S. 391](https://www.legislation.gov.uk/ukpga/1988/1/section/391) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 167](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/167) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23438791]: Words in [s. 384A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/384A/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 160](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/160) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440311]: [S. 392](https://www.legislation.gov.uk/ukpga/1988/1/section/392) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 168](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/168) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23532101]: [Pt. 10 Chs. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1), [2](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/2) extended (with effect in accordance with s. 44 of the extending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 6 para. 2](https://www.legislation.gov.uk/ukpga/1998/36/schedule/6/paragraph/2) (with [Sch. 6 para. 6](https://www.legislation.gov.uk/ukpga/1998/36/schedule/6/paragraph/6))
[^c23532111]: [Pt. 10 Chs. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1), [2](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/2) extended (with effect in accordance with s. 64, Sch. 22 paras. 16-18 of the extending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 22 para. 4(2)(d)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/22/paragraph/4/2/d)
[^c23532121]: [Pt. 10 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/10/chapter/1) modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [ss. 226](https://www.legislation.gov.uk/ukpga/2005/5/section/226), [227](https://www.legislation.gov.uk/ukpga/2005/5/section/227), [232(3)](https://www.legislation.gov.uk/ukpga/2005/5/section/232/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22744521]: [S. 379A](https://www.legislation.gov.uk/ukpga/1988/1/section/379A) restricted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 41(8)](https://www.legislation.gov.uk/ukpga/1995/4/section/41/8)
[^c22744481]: [S. 379A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/1) applied (with effect in accordance with s. 39(4)(5) of the affecting Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 6 para. 19(2)(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/6/paragraph/19/2/3)
[^c22744501]: [S. 379A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/3) applied (with effect in accordance with s. 39(4)(5) of the modifying Act) [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 6 para. 19(4)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/6/paragraph/19/4)
[^c22746371]: Word in [s. 379A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/2/a) repealed (with effect in accordance with Sch. 15 para 9(1) of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 15 para. 2(1)(a)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/15/paragraph/2/1/a), [Sch. 18 Pt. 6(11)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/11), Note
[^c22746381]: Words in [s. 379A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/2) repealed (with effect in accordance with Sch. 15 para 9(1) of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 15 para. 2(1)(b)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/15/paragraph/2/1/b), [Sch. 18 Pt. 6(11)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/11), Note
[^c22747941]: Words in [s. 379A(1)(a)(b)(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/1/a/b/7) substituted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 46(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/46/3), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/36/schedule/7/paragraph/1)
[^c22750991]: Words in [s. 379A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/2/a) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 28](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/28) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751921]: Words in [s. 379A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/3) substituted (with effect in accordance with [s. 88(3)](https://www.legislation.gov.uk/ukpga/2001/9/section/88/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 29 para 35(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/29/paragraph/35/2)
[^c23428541]: Words in [s. 379A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428561]: Words in [s. 379A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428591]: Words in [s. 379A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428611]: Words in [s. 379A(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/4/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428631]: Words in [s. 379A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(6)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428651]: Words in [s. 379A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/379A/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 156(6)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/156/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428691]: Words in [s. 379B](https://www.legislation.gov.uk/ukpga/1988/1/section/379B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 157(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/157/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23428711]: Words in [s. 379B](https://www.legislation.gov.uk/ukpga/1988/1/section/379B) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 157(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/157/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21597211]: *See* s.434A—*limitations on loss relief for life assurance company.*
[^c22750761]: [S. 393](https://www.legislation.gov.uk/ukpga/1988/1/section/393) modified (with effect in accordance with s. 69(1) of the modifying Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 20 para. 19](https://www.legislation.gov.uk/ukpga/2000/17/schedule/20/paragraph/19) (with [Sch. 20 para. 26](https://www.legislation.gov.uk/ukpga/2000/17/schedule/20/paragraph/26))
@@ -64960,28 +56888,16 @@
[^c23533021]: [S. 392B](https://www.legislation.gov.uk/ukpga/1988/1/section/392B) excluded by [The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)](https://www.legislation.gov.uk/uksi/2006/964), [reg. 69X(5)](https://www.legislation.gov.uk/uksi/2006/964/regulation/69X/5) (as inserted (6.4.2008) by [The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705)](https://www.legislation.gov.uk/uksi/2008/705), [regs. 1](https://www.legislation.gov.uk/uksi/2008/705/regulation/1), [5](https://www.legislation.gov.uk/uksi/2008/705/regulation/5))
[^c21597641]: Source—1970 s.180; 1986 s.56(7) Sch.13 2(5)
[^c22744171]: Words in [s. 397(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/1) inserted (with effect in accordance with ss. 211(2), 218 of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(3)(a)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/3/a) (with [Sch. 20](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20))
[^c22744191]: Words in [s. 397(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/1) repealed (with effect in accordance with ss. 211(2), 218(1)(b) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 214(3)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/214/3/b), [Sch. 26 Pt. 5(24)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/24), Note 5(a) (with Sch. 20)
[^c22745531]: Words in [s. 397(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/3) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 27(a)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/27/a)
[^c22745551]: Words in [s. 397(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/3/a/b) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 27(b)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/27/b)
[^c22751321]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): definition of "basis year" repealed (with effect in accordance with s. 579(1) of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para 34(1)(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/34/1/a), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751341]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): words in definition of "chargeable period" repealed (with effect in accordance with s. 579(1) of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para 34(1)(b)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/34/1/b), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751361]: [S. 397(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/6) repealed (with effect in accordance with s. 579(1) of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 34(2)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/34/2), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c22751401]: Words in [s. 397(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/7) substituted (with effect in accordance with [s. 579(1)](https://www.legislation.gov.uk/ukpga/2001/2/section/579/1) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 34(3)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/34/3) (with [Sch. 3](https://www.legislation.gov.uk/ukpga/2001/2/schedule/3))
[^c23440751]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): definitions of "farming" and "market gardening" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 169(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/169/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440761]: Words in [s. 397(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/7) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 169(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/169/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440781]: [S. 397(8)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/8/a/b) substituted for words in s. 397(8) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 169(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/169/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440801]: Words in [s. 397(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/10) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 169(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/169/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -64992,13 +56908,37 @@
[^c23441321]: [S. 397(10)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/10/c) and preceding word inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [71(2)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/71/2/b)
[^c21597691]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) substituted (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 120](https://www.legislation.gov.uk/ukpga/1993/34/section/120), [Sch. 14 para. 8(4)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/14/paragraph/8/4)
[^c23440861]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 170(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/170/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440881]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 170(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/170/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440901]: Words in [s. 398](https://www.legislation.gov.uk/ukpga/1988/1/section/398) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 170(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/170/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23442631]: [S. 397(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442751]: Words in [s. 397(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442771]: Words in [s. 397(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/3/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442791]: Words in [s. 397(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442651]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): definition of "chargeable period" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/5/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442811]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): definition of "prior five years" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442671]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): words in definition of "prior period of loss" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(5)(c)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/5/c/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442831]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): words in definition of "prior period of loss" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(5)(c)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/5/c/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442851]: [S. 397(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/5): definitions of "farming" and "market gardening" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(5)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/5/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442691]: Words in [s. 397(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/6/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442871]: Words in [s. 397(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/7) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442711]: Words in [s. 397(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/6/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442891]: Words in [s. 397(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(7)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/7/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442911]: Words in [s. 397(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/8/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(7)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/7/b)
[^c23442731]: Words in [s. 397(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/10) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(8)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/8/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23442931]: Words in [s. 397(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/397/10) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 74(8)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/74/8/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21597791]: Source—1978 s.31
@@ -65014,9 +56954,15 @@
[^c23440921]: [S. 399(1)(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/1/1A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 171(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/171/2), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440971]: Words in [s. 399(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 171(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/171/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23440951]: Words in [s. 399(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 171(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/171/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23450241]: Words in [s. 399(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 76(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/76/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23450251]: Words in [s. 399(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/2/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 76(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/76/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23450261]: Words in [s. 399(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 76(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/76/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23450271]: Words in [s. 399(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 76(2)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/76/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23545221]: Words in [s. 399(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/399/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 76(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/76/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22743341]: [S. 400](https://www.legislation.gov.uk/ukpga/1988/1/section/400) restricted (retrospective to 11.1.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 252(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/252/3), [Sch. 24 para. 16](https://www.legislation.gov.uk/ukpga/1994/9/schedule/24/paragraph/16)
@@ -65356,6 +57302,8 @@
[^c23481081]: Words in [s. 414(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/414/7) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para 18](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/18) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23481211]: Words in [s. 414(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/414/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 77](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/77) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21599061]: Source—1970 s.283(1)-(3)
[^c21599071]: Source—1970 s.283(4)(a)
@@ -66452,6 +58400,12 @@
[^c22812061]: [S. 458(3)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/458/3/a/b) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 31](https://www.legislation.gov.uk/uksi/2001/3629/article/31)
[^c23711171]: Words in [s. 458(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/458/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 78(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/78/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23711191]: Words in [s. 458(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/458/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 78(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/78/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23711211]: [S. 458(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/458/2/b) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 78(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/78/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22875571]: [S. 444BA](https://www.legislation.gov.uk/ukpga/1988/1/section/444BA) modified (23.12.1996 with effect in accordance with reg. 1 of the modifying S.I.) by [The Insurance Companies (Reserves) (Tax) Regulations 1996 (S.I. 1996/2991)](https://www.legislation.gov.uk/uksi/1996/2991), [regs. 4-12](https://www.legislation.gov.uk/uksi/1996/2991/regulation/4)
[^c22811681]: Words in [ss. 444BA-444BD](https://www.legislation.gov.uk/ukpga/1988/1/section/444BA) substituted (1.12.2001 with effect in accordance with arts. 1(2)(a), 30(9) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 30(1)](https://www.legislation.gov.uk/uksi/2001/3629/article/30/1)
@@ -66482,6 +58436,8 @@
[^c21604441]: Words in [s. 459](https://www.legislation.gov.uk/ukpga/1988/1/section/459) inserted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 para.4](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/4); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
[^c23711241]: Words in [s. 459](https://www.legislation.gov.uk/ukpga/1988/1/section/459) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 79](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/79), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23712981]: Words in [s. 460(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/460/3/b) inserted (retrospectively) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 172(5)(6)](https://www.legislation.gov.uk/ukpga/2003/14/section/172/5/6)
[^c23715871]: Words in [s. 460(10A)](https://www.legislation.gov.uk/ukpga/1988/1/section/460/10A) inserted (retrospectively for specified purposes, and otherwise with effect in accordance with [Sch. 12 para. 6(3)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/12/paragraph/6/3) of the amending Act) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 12 paras. 1(2)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/12/paragraph/1/2), [6(1)(3)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/12/paragraph/6/1/3)
@@ -66564,6 +58520,8 @@
[^c22812201]: Words in [s. 460(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/460/11) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 32(4)(b)](https://www.legislation.gov.uk/uksi/2001/3629/article/32/4/b)
[^c23715851]: Words in [s. 460(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/460/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 80](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/80), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21605651]: Source—1970 s.332(1); 1974 s.27(1)(a)
[^c21605661]: Source—1974 s.27(2)
@@ -66594,6 +58552,10 @@
[^c22812421]: [S. 461(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/461/11) added (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 33(6)](https://www.legislation.gov.uk/uksi/2001/3629/article/33/6)
[^c23717541]: Words in [s. 461(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/461/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 81(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/81/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23717561]: Words in [s. 461(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/461/4/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 81(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/81/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21605881]: Source—1970 s.336; 1985 Sch.10 Part II
[^c21605891]: Words in [s. 462(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/462/2/a) substituted (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9) par. 8(2) [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art.2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
@@ -66694,6 +58656,8 @@
[^c23718221]: [S. 466(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/466/2A/2B) inserted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 22(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/22/3) (as amended by [Finance Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 9 para. 18(5)-(7)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/9/paragraph/18/5)) (with Sch. 36)
[^c23718261]: [S. 466(2ZA)](https://www.legislation.gov.uk/ukpga/1988/1/section/466/2ZA) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 83](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/83) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21605931]: [S. 462A(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/462A/9) added (19.2.1993) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 56](https://www.legislation.gov.uk/ukpga/1992/48/section/56), [Sch. 9 para.9](https://www.legislation.gov.uk/ukpga/1992/48/schedule/9/paragraph/9); [S.I. 1993/236](https://www.legislation.gov.uk/uksi/1993/236), [art. 2](https://www.legislation.gov.uk/uksi/1993/236/article/2)
[^c23717941]: Word in [s. 462A(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/462A/8/b) substituted (retrospective to 1.1.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [s. 45(5)(6)](https://www.legislation.gov.uk/ukpga/2007/11/section/45/5/6)
@@ -66706,6 +58670,10 @@
[^c22812481]: Word in [s. 461B(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/461B/4/b) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 35](https://www.legislation.gov.uk/uksi/2001/3629/article/35)
[^c23717701]: Words in [s. 461B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/461B/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 82(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/82/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23717721]: Words in [s. 461B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/461B/5) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 82(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/82/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22811521]: Words in [s. 461C(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/461C/1) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 36(2)(a)](https://www.legislation.gov.uk/uksi/2001/3629/article/36/2/a)
[^c22811541]: Word in [s. 461C(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/461C/1) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 36(2)(b)](https://www.legislation.gov.uk/uksi/2001/3629/article/36/2/b)
@@ -66752,6 +58720,12 @@
[^c23718701]: Words in [s. 467(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/467/3) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 23](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/23) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23718721]: Words in [s. 467(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/467/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 84(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/84/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23718741]: Words in [s. 467(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/467/1/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 84(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/84/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23718761]: Words in [s. 467(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/467/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 84(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/84/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21607361]: Source—1970 ss.354, 358; 1980 s.60; 1987 s.38, 40(1); 1987 (No.2) s.40(1)
[^c21607371]: Words in [s. 468(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/468/3) substituted (16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 32(3)(4)](https://www.legislation.gov.uk/ukpga/1992/48/section/32/3/4)
@@ -66784,8 +58758,14 @@
[^c23718961]: Words in [s. 468(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/468/1A) substituted (with effect in accordance with [s. 26(8)-(11)](https://www.legislation.gov.uk/ukpga/2006/25/section/26/8) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 26(4)](https://www.legislation.gov.uk/ukpga/2006/25/section/26/4)
[^c23718981]: Words in [s. 468(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/468/1A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 85(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/85/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23719001]: [S. 468(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/468/6): definition of "unit trust scheme" and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 85(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/85/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23719081]: Words in [s. 468A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/468A/1) substituted (with effect in accordance with [s. 26(8)-(11)](https://www.legislation.gov.uk/ukpga/2006/25/section/26/8) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 26(5)](https://www.legislation.gov.uk/ukpga/2006/25/section/26/5)
[^c23719101]: Words in [s. 468A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/468A/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 86](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/86) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21607811]: Source—1977 s.46; 1979(C) Sch.7
[^c21607821]: Words in 473(2)(5) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/290/1), [Sch. 10 para. 14(27)(a)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/27/a) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
@@ -66838,37 +58818,27 @@
[^c22794161]: [S. 469(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/1/b) and preceding word repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/1)
[^c22794181]: Words in [s. 469(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2) inserted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 12](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/12)
[^c22794191]: Words in [s. 469(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/3) repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/1)
[^c22794201]: [S. 469(5A)-(5D)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/5A) inserted by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 71](https://www.legislation.gov.uk/ukpga/1988/39/section/71)
[^c22794211]: Words in [s. 469(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/6) substituted (with effect in accordance with [Sch. 14 para. 7](https://www.legislation.gov.uk/ukpga/1994/9/schedule/14/paragraph/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 14 para. 5](https://www.legislation.gov.uk/ukpga/1994/9/schedule/14/paragraph/5)
[^c22794221]: [S. 469(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/6A) inserted (with effect in accordance with s. [s. 113(4)-(11)](https://www.legislation.gov.uk/ukpga/1994/9/section/113/4) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 113(3)(b)](https://www.legislation.gov.uk/ukpga/1994/9/section/113/3/b)
[^c22794231]: For regulations see Part III Vol. 5
[^c22794251]: Words in [s. 469(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/9) inserted (with effect in accordance with [s. 80(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/80/6) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 80(5)](https://www.legislation.gov.uk/ukpga/1997/16/section/80/5)
[^c22801201]: Words in [s. 469(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2) substituted (with effect in accordance with [Sch. 4 para. 12(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 12(2)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/2)
[^c22801241]: [S. 469(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2A/2B) inserted (with effect in accordance with [Sch. 4 para. 12(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 12(3)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/3)
[^c22801261]: Words in [s. 469(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/9) inserted (with effect in accordance with [Sch. 4 para. 12(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 12(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/12/4)
[^c22809831]: Words in [s. 469(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/7) substituted (1.12.2001) by [Financial Services and Markets Act 2000 (c. 8)](https://www.legislation.gov.uk/ukpga/2000/8), [s. 431(2)](https://www.legislation.gov.uk/ukpga/2000/8/section/431/2), [Sch. 20 para. 4(4)](https://www.legislation.gov.uk/ukpga/2000/8/schedule/20/paragraph/4/4); [S.I. 2001/3538](https://www.legislation.gov.uk/uksi/2001/3538), [art. 2(1)](https://www.legislation.gov.uk/uksi/2001/3538/article/2/1)
[^c23721401]: Words in [s. 469(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 181(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/181/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23721421]: [S. 469(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2B) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 181(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/181/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23721461]: Words in [s. 469(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 181(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/181/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23721481]: Words in [s. 469(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 181(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/181/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23721441]: Words in [s. 469(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/9) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 181(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/181/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23721501]: Words in [s. 469(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23721571]: Words in [s. 469(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23721591]: [S. 469(2A)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23721521]: [S. 469(4A)-(4D)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/4A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23721541]: Words in [s. 469(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23721641]: [S. 469(5A)-(5D)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/5A)(7)-(10) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 87(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/87/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22803991]: [1982 c.53](https://www.legislation.gov.uk/ukpga/1982/53).
@@ -66880,20 +58850,14 @@
[^c23721381]: [S. 469A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/469A/3) repealed (with effect in accordance with Sch. 43 Pt. 3(17) Note of the repealing Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 43 Pt. 3(17)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/43/part/3/17)
[^c21608291]: *See* 1990 Sch.5 para.16(1), (2), (3)—*regulations may also require building societies to account for tax on transitional sums.*
[^c21608301]: [S. 477A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/1A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 2(2)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/2/2)
[^c21608311]: Words in [s. 477A(1A)(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/1A/3A) inserted (16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 3(2)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/3/2), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6)
[^c21608341]: [S. 477A(3A)-(3C)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/3A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(2)(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/2/3)
[^c21608361]: [S. 477A(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/10) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 52(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/52/1), [Sch. 11 para. 2(3)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/11/paragraph/2/3)
[^c21608371]: [S. 477A(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/10): definition of "qualifying deposit right" inserted (16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 3(3)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/3/3), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6)
[^c22792111]: Word in [s. 477A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/1A) substituted (with effect in accordance with [Sch. 38 para. 6(7)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/6/7) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 38 para. 6(1)(2)(g)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/6/1/2/g)
[^c22792121]: [S. 477A(3)(a)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/3/a/aa) substituted for s. 477A(3)(a) (with effect in accordance with [s. 105(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/105/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para. 28(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/28/1) (with [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c21608331]: *See* 1990 Sch.5 para.16(1), (4), (5)—*for the year* 1991-92,*the words from* “actual” *to the end of the paragraph are replaced by* “appropriate amount”;*and the following subs. is inserted after* subs.(3):— “(3A) In subsection (3)(a) above the reference to the appropriate amount is to the actual amount paid or credited in the accounting period of any such dividends or interest together with—(a) in the case of dividends or interest paid or credited in the year 1990-91, any amount accounted for and paid by the society in respect thereof as representing income tax, and (b) in the case of dividends or interest paid or credited in the year 1991-92, any amount of income tax accounted for and paid by the society in respect thereof.”
@@ -66916,129 +58880,19 @@
[^c23722281]: [S. 477A(5)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/5/6) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 184(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/184/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23722311]: Words in [s. 477A(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/9) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 184(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/184/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23722261]: [S. 477A(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/10): definition of "certified SAYE savings arrangement" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 184(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/184/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723841]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) modified (with effect in accordance with s. 56 of the modifying Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 6](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/6)
[^c21608521]: *See* S.I. [1990 No. 2232](https://www.legislation.gov.uk/ukcm/1990/2232).
[^c23723851]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) modified (with effect in accordance with s. 56 of the modifying Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 6](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/6)
[^c21608861]: 1990 s. 30 and Sch. 5 para. 8(2)
[^c21608881]: 1990 s. 30 and Sch. 5 para. 8(3) as regards interest paid or credited on or after 6 April 1991
[^c21608931]: Source—1984 Sch.8 3(1)-(3); 1985 s.38(3), (4)
[^c21608941]: [1985 c. 6](https://www.legislation.gov.uk/ukpga/1985/6).
[^c21608951]: Words in [s. 481(5)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/f) substituted (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 183(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/183/2), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21608961]: [S. 481(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5A) inserted (16.7.1992) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 4](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/4), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6)
[^c21608971]: Source—1984 Sch.8 3A(1); 1985 s.38(7)
[^c21608981]: 1990 s. 30 and Sch. 5 para. 8(4)
[^c22765401]: [S. 481(4)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/4/d) and word inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/1) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765441]: Words in [s. 481(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/4) substituted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/1) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765421]: [S. 481(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/4A) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/2) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765541]: Word in [s. 481(5)(k)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/k) repealed (with effect in accordance with s. 86(10) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(3)(a)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/3/a), [Sch. 29 Pt. 8(11)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/11), Note
[^c22765461]: Words in [s. 481(5)(k)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/k/i) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(3)(b)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/3/b) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765481]: Word in s. s. 481(5)(k)(ii) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(3)(c)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/3/c) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765501]: [S. 481(5)(k)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/k/iii) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(3)(d)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/3/d) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765521]: [S. 481(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5B) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(4)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/4) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22794261]: Words in [s. 481(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/4A) repealed (with effect in accordance with Sch. 7 para. 12(4) of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(7)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/7), Note 1
[^c22808611]: [S. 481(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/2/c) repealed (26.3.2001) by [The Postal Services Act 2000 (Consequential Modifications No. 1) Order 2001 (S.I. 2001/1149)](https://www.legislation.gov.uk/uksi/2001/1149), [art. 1(2)](https://www.legislation.gov.uk/uksi/2001/1149/article/1/2), [Sch. 2](https://www.legislation.gov.uk/uksi/2001/1149/schedule/2)
[^c22812771]: [S. 481(2)(b)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/2/b/ba) substituted for s. 481(2)(b) (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 39(2)](https://www.legislation.gov.uk/uksi/2001/3629/article/39/2)
[^c22812811]: [1985 c. 6](https://www.legislation.gov.uk/ukpga/1985/6).
[^c22812821]: [1979 c. 37](https://www.legislation.gov.uk/ukpga/1979/37); [section 48(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/48/3) was repealed, together with other sections, by section 108(2) of, and Part 1 of Schedule 7 to, the [Banking Act 1987 (c. 22)](https://www.legislation.gov.uk/ukpga/1987/22).
[^c22812791]: [S. 481(5)(g)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/g) omitted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by virtue of [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 39(3)](https://www.legislation.gov.uk/uksi/2001/3629/article/39/3)
[^c23723861]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) modified (with effect in accordance with s. 56 of the modifying Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 6](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/6)
[^c23723691]: Words in [s. 481(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/1) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 19 Part IV](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19), Note 8
[^c23723581]: Words in [s. 481(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/1A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 186(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/186/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723701]: [S. 481(2)(d)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/2/d/e) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 5 para. 8(3)(5)](https://www.legislation.gov.uk/ukpga/1990/29/schedule/5/paragraph/8/3/5), [Sch. 19 Part IV](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19), Note 8
[^c23723601]: Words in [s. 481(5A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5A/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 186(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/186/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723621]: Words in [s. 481(5A)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5A/c) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 186(3)(b)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/186/3/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723641]: Words in [s. 481(5A)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5A/c) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 186(3)(b)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/186/3/b/ii), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723661]: Words in [s. 481(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/6) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 186(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/186/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723891]: Words in [s. 481(4)(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/4/4A) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 14(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/14/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23723931]: Words in [s. 481(5)(k)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/481/5/k/iii) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 14(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/14/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c21609001]: Source—1984 Sch. 8 1(2)
[^c21609021]: Source—1984 Sch.8 3(4), (4A); 1985 s.38(5)
[^c21609031]: Source—1984 Sch.8 3(5)-(9); 1985 s.38(6); [1986 No.771](https://www.legislation.gov.uk/ukcm/1986/771)
[^c21609041]: See 1990 s. 30 and Sch. 5 para. 9(2)(6)— words "less than seven days" replaced by "more than 5 years" as regards interest paid or credited on or after 6 April 1991
[^c21609051]: See 1990 s. 30 and Sch. 5 para. 9(3)(6)— sub (a) replaced by the following as regards interest paid or credited on or after 6 April1991:— "(a) require repayment of the deposit at a specified time falling before the end of the period of five years beginning with the date on which the deposit is made;"
[^c21609071]: Source—1984 Sch.8 6(2)
[^c21609081]: Source—1984 Sch.8 6(3)
[^c21609091]: Source—1984 Sch.8 2(2); 1985 s.38(2)
[^c21609111]: 1990 s. 30 and Sch. 5 para. 9(4)
[^c21609121]: 1990 s. 30 and Sch.5 para.9(5)
[^c21609131]: Source—1984 Sch.8 3A(3); 1985 s.38(7)
[^c22765561]: [S. 482(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/2/a) substituted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(5)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/5) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765581]: [S. 482(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/5A) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(6)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/6) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765601]: Words in [s. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6) substituted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(7)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/7) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22765621]: [S. 482(11)(ab)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/11/ab) inserted (with effect in accordance with [s. 86(10)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/10) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 86(8)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/8) (with [s. 86(14)](https://www.legislation.gov.uk/ukpga/1995/4/section/86/14))
[^c22808001]: [S. 482(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/2A) inserted (with effect in accordance with [s. 111(6)(c)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/6/c) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 111(3)(a)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/3/a)
[^c22806041]: [S. 482(11)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/11/a) repealed (with effect in accordance with s. 111(6)(c) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 111(3)(b)](https://www.legislation.gov.uk/ukpga/2000/17/section/111/3/b), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17), Note 3
[^c23723871]: [Ss. 480A-482](https://www.legislation.gov.uk/ukpga/1988/1/section/480A) modified (with effect in accordance with s. 56 of the modifying Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 6](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/6)
[^c23723811]: Words in [s. 482(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/1) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 19 Part IV](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19), Note 8
[^c23723711]: Words in [s. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 187(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/187/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723731]: [S. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6): definition of "certificate of deposit" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 187(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/187/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723751]: [S. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6): words in definition of "qualifying certificate of deposit" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 187(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/187/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723771]: [S. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6): definition of "uncertificated eligible debt security units" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 187(2)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/187/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23723821]: Words in [s. 482(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/6) repealed by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [Sch. 19 Part IV](https://www.legislation.gov.uk/ukpga/1990/29/schedule/19), Note 8
[^c23723791]: Words in [s. 482(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/482/8) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 187(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/187/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23722381]: [S. 477A(1)-(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23722431]: Words in [s. 477A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/3/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23722451]: Words in [s. 477A(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/3/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/3/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23722471]: [S. 477A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23722341]: [S. 477A(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23722491]: [S. 477A(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/477A/10): definitions of "qualifying certificate of deposit", "qualifying deposit right" and "security" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 88(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/88/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21609341]: Source—1970 s.340, 345; CUA 1979 s.25(2)
@@ -67068,6 +58922,10 @@
[^c23724011]: [S. 486(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/486/5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 188(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/188/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23724051]: [S. 486(2)(3)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/486/2/3/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 90(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/90/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23724031]: Words in [s. 486(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/486/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 90(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/90/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21609381]: Source—1970 s.340A; CUA 1979 s.25(1)
[^c21609391]: [1965 c. 12](https://www.legislation.gov.uk/ukpga/1965/12).
@@ -67088,6 +58946,8 @@
[^c23724231]: Words in [s. 487(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/487/4) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 22
[^c23724251]: Words in [s. 487(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/487/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 91](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/91) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21609491]: Source—1970 s.341; 1972 Sch.11 6
[^c21609511]: *See reference to approved housing associations in* 1988(F) s.43(3)*and* 44.
@@ -67224,13 +59084,9 @@
[^c23726061]: Words in [s. 492(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 190(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/190/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23726081]: Words in [s. 492(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/4/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 190(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/190/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23726101]: Words in [s. 492(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/4/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 190(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/190/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23726121]: Words in [s. 492(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/4/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 190(3)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/190/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23726141]: Words in [s. 492(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 190(3)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/190/3/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23726181]: [S. 492(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 92(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/92/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23726161]: [S. 492(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/492/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 92(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/92/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22802721]: [S. 493(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/493/6) inserted (with effect in accordance with [s. 152(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/152/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 152(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/152/3)
@@ -67458,24 +59314,12 @@
[^c22813951]: [S. 505(1)(c)(iic)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iic) inserted (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 30 para. 3](https://www.legislation.gov.uk/ukpga/2002/23/schedule/30/paragraph/3)
[^c23730241]: Words in [s. 505(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730261]: Words in [s. 505(1)(c)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/ii) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730441]: Words in [s. 505(1)(c)(iia)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iia) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/c), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730281]: [S. 505(1)(c)(iiaa)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iiaa) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730301]: Words in [s. 505(1)(c)(iib)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iib) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730321]: Words in [s. 505(1)(c)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iii) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(f)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/f) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730341]: Words in [s. 505(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/d) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(g)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/g) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730361]: Words in [s. 505(1)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/e) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(h)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/h) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730381]: Words in [s. 505(1)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/f) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(2)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/2/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730401]: [S. 505(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1AA) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23730421]: Words in [s. 505(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/2) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 198(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/198/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -67484,6 +59328,50 @@
[^c23730461]: [S. 505(3)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/3) substituted for s. 505(3)-(8) (with effect in accordance with [s. 55(5)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/5) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 55(1)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/1)
[^c23730881]: Words in [s. 505(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730901]: Words in [s. 505(1)(c)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/ii) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(b)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/b/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730921]: [S. 505(1)(c)(iiaa)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c/iiaa/iii) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/b/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730501]: Words in [s. 505(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/c) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(b)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/b/iii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730951]: Words in [s. 505(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/d) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730971]: Words in [s. 505(1)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/e) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(d)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/d/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730521]: Words in [s. 505(1)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/e) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(d)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/d/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730991]: Words in [s. 505(1)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/f) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(e)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/e/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730571]: Words in [s. 505(1)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/f) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(e)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/e/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730591]: Words in [s. 505(1)(f)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1/f/ii) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(2)(e)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/2/e/iii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730611]: Words in [s. 505(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1AA) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730631]: Words in [s. 505(1B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/1B/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730651]: Words in [s. 505(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730671]: Words in [s. 505(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/2/c) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731011]: Words in [s. 505(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(5)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/5/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730691]: Words in [s. 505(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730711]: Words in [s. 505(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730731]: Words in [s. 505(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(7)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/7/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730751]: Words in [s. 505(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(7)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/7/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730771]: Words in [s. 505(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(8)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730801]: Words in [s. 505(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(9)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/9/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23730821]: Words in [s. 505(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/505/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 94(9)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/94/9/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610281]: *Definition employed for purposes of*:1990 s.25—*donation to charity by individuals.*1990 s.56*and* Sch.10 para.21—*exemption for convertible securities held by charities.*1990 s.94(1)—*inspection powers* (*definition extended to cover bodies mentioned in* sections 507*and* 508).
[^c21610291]: Source—1970 s.360(3); 1986 s.31(1)(a), (c), Sch.7 1(1)
@@ -67504,6 +59392,22 @@
[^c23731451]: [S. 506(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/6) repealed (with effect in accordance with s. 55(5) of the repealing Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 55(2)(f)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/2/f), [Sch. 26 Pt. 3(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/5)
[^c23731471]: [S. 506(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/1): definition of "charitable company" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731491]: Words in [s. 506(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731521]: Words in [s. 506(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731541]: Words in [s. 506(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731561]: Word in [s. 506(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731581]: Words in [s. 506(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731611]: Word in [s. 506(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731631]: Words in [s. 506(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/506/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 95(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/95/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610431]: *See*1989 s.59—*these bodies treated as established for charitable purposes for purposes of* s.59 (*covenanted subscriptions*).1990 s.25—*donations to charity by individuals.*
[^c21610441]: Source—1980 s.118(1); 1983 s.46(1)
@@ -67520,6 +59424,8 @@
[^c22804261]: [S. 507(1)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/507/1/e) omitted (19.4.1999) by virtue of The United Kingdom Ecolabelling Board (Abolition) Regulations 1999 (S.I 1999/931), regs. 1, 9
[^c23732291]: Words in [s. 507(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/507/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 99](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/99) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610501]: Source—1970 s.362
[^c23732311]: [S. 508(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/508/1/a) substituted (with effect in accordance with [s. 13(6)](https://www.legislation.gov.uk/ukpga/2005/22/section/13/6) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 13(2)](https://www.legislation.gov.uk/ukpga/2005/22/section/13/2)
@@ -67530,6 +59436,8 @@
[^c23732371]: [S. 508(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/508/3/4) substituted for s. 508(3) (with effect in accordance with [s. 13(6)](https://www.legislation.gov.uk/ukpga/2005/22/section/13/6) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [s. 13(5)](https://www.legislation.gov.uk/ukpga/2005/22/section/13/5)
[^c23732391]: Words in [s. 508(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/508/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 100](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/100) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610511]: [S. 509(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/509/1) extended (with modifications) (27.7.1993) by [1993 c. 37](https://www.legislation.gov.uk/ukpga/1993/37), [s. 12](https://www.legislation.gov.uk/ukpga/1993/37/section/12), [Sch. 2 Pt. I para. 23](https://www.legislation.gov.uk/ukpga/1993/37/schedule/2/part/I/paragraph/23)
[^c21610521]: Source—1970 s.348; 1971 s.28(1)
@@ -67544,12 +59452,16 @@
[^c22789311]: [S. 510A(7)(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/7/8) repealed (with effect in accordance with Sch. 29 Pt. 8(16) Note 3 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(16)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/16)
[^c22813971]: Words in [s. 510A(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/3/b) substituted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 49(2)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/49/2)
[^c22813991]: Words in [s. 510A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/3) inserted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 49(3)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/49/3)
[^c22814011]: [S. 510A(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/6A) inserted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 49(4)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/49/4)
[^c23732411]: Words in [s. 510A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 101(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/101/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732451]: [S. 510A(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/3/b) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 101(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/101/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732431]: Words in [s. 510A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/510A/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 101(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/101/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610681]: *See* ss.89*and* 90*and* Sch.11 Electricity Act 1989*in connection with electricity industry privatisation; and see* s.112*and* Sch.18 Electricity Act 1989*for changes to* s.511*from a day to be appointed.*
[^c21610691]: Source—1970 s.350(3)
@@ -67566,20 +59478,12 @@
[^c21610811]: Words in [s. 513(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/513/3) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/290/1), [Sch. 10 para. 14(32)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/32) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/171/1), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c21610841]: Source—1980 s.63
[^c21610851]: Source—1970 s.370
[^c21610861]: *For Orders in Council see* Part III Vol.5.
[^c22793821]: Words in [s. 516(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/516/1) substituted (with effect in accordance with [Sch. 7 para. 32](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/32) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 7 para. 21(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/21/1)
[^c22793841]: Words in [s. 516(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/516/2) substituted (with effect in accordance with [Sch. 7 para. 32](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/32) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 7 para. 21(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/21/2)
[^c21610871]: Source—1970 s.371
[^c21610881]: [1947 c. 30](https://www.legislation.gov.uk/ukpga/1947/30).
[^c23732591]: Word in [s. 517](https://www.legislation.gov.uk/ukpga/1988/1/section/517) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 104](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/104) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21610931]: Source—1970 s.352(1)-(6); 1971 Sch.8 16; 1986 s.56(7)(a), Sch.13 2(5)(a)
[^c21610941]: Words in [s. 518(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/518/3) substituted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 73(3)(4)(5)](https://www.legislation.gov.uk/ukpga/1991/31/section/73/3/4/5), [Sch. 15 para. 19(1)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/15/paragraph/19/1)
@@ -67596,12 +59500,12 @@
[^c22807771]: [S. 519](https://www.legislation.gov.uk/ukpga/1988/1/section/519) extended (12.1.2000) by [Greater London Authority Act 1999 (c. 29)](https://www.legislation.gov.uk/ukpga/1999/29), [ss. 419(1)(2)(a)](https://www.legislation.gov.uk/ukpga/1999/29/section/419/1/2/a), [425(2)](https://www.legislation.gov.uk/ukpga/1999/29/section/425/2) (with [s. 157(4)](https://www.legislation.gov.uk/ukpga/1999/29/section/157/4)); [S.I. 1999/3434](https://www.legislation.gov.uk/uksi/1999/3434), [art. 2](https://www.legislation.gov.uk/uksi/1999/3434/article/2)
[^c21610991]: Source—1970 s.353(1), (4)
[^c21611001]: Definition applied for purposes of—1979(C) s.149B(3)—*miscellaneous exemptions.*1988 s.832(1)—*interpretation of Tax Acts.*
[^c21611021]: Subs.(4)*repealed by* 1990 s.127*and* Sch.18 para.5(2)*and* 132*and* Sch.19 Part IV*on and after* 1*April* 1990.
[^c23732631]: [S. 519(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/519/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 105](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/105) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21611051]: Word in [s. 519A(2)(g)](https://www.legislation.gov.uk/ukpga/1988/1/section/519A/2/g) repealed by [S.I. 1991/195](https://www.legislation.gov.uk/uksi/1991/195), [art. 6](https://www.legislation.gov.uk/uksi/1991/195/article/6)
[^c21611061]: [S. 519A(2)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/519A/2/i) (j) (k) added by [S.I. 1991/195](https://www.legislation.gov.uk/uksi/1991/195), [art. 6](https://www.legislation.gov.uk/uksi/1991/195/article/6)
@@ -67638,6 +59542,40 @@
[^c23732871]: Words in [s. 519A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/519A/2/a) omitted (1.4.2007) by virtue of The References to [Health Authorities Order 2007 (S.I. 2007/961)](https://www.legislation.gov.uk/uksi/2007/961), [art. 1(1)](https://www.legislation.gov.uk/uksi/2007/961/article/1/1), [Sch. para. 19](https://www.legislation.gov.uk/uksi/2007/961/schedule/paragraph/19)
[^c23732891]: [S. 519A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/519A/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 106(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/106/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732911]: Words in [s. 519A(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/519A/3/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 106(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/106/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731651]: Words in [s. 506A](https://www.legislation.gov.uk/ukpga/1988/1/section/506A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 96(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/96/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731831]: Words in [s. 506A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/506A/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 96(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/96/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731861]: Words in [s. 506A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/506A/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 96(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/96/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731891]: Words in [s. 506A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/506A/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 96(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/96/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23731931]: Words in [s. 506B(1)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/1)(7)(9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732021]: Words in [s. 506B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732041]: Words in [s. 506B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732061]: Words in [s. 506B(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732191]: [S. 506C(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/506C/1/d) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/2/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732211]: Word at the end of s. 506C(1)(h) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732151]: Word at the end of s. 506C(1)(i) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732171]: [S. 506C(1)(j)](https://www.legislation.gov.uk/ukpga/1988/1/section/506C/1/j) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(2)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732081]: Words in [s. 506C(2)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/506C/2/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732111]: Words in [s. 506C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/506C/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732131]: Words in [s. 506C(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/506C/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 98(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/98/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23729261]: [S. 502B](https://www.legislation.gov.uk/ukpga/1988/1/section/502B) excluded (21.7.2008) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 20 para. 11(2)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/20/paragraph/11/2)
[^c23729281]: [S. 502B](https://www.legislation.gov.uk/ukpga/1988/1/section/502B) excluded (21.7.2009) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 33 para. 5](https://www.legislation.gov.uk/ukpga/2009/10/schedule/33/paragraph/5)
@@ -67650,8 +59588,6 @@
[^c21611191]: Source - 1970 s.380(2)
[^c21611201]: *See* S.I. [1970 No.488](https://www.legislation.gov.uk/ukcm/1970/488) (*under* “Double taxation relief: general” *in* Part III Vol.5) regns. 2-10—*payments exempt under double taxation agreements.*
[^c21611221]: Source - 1970 s.380(4)
[^c21611231]: Source - 1970 s.380(5)
@@ -67696,6 +59632,10 @@
[^c23733831]: Word in [s. 524(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/524/8) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 201(10)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/201/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23733951]: [S. 524(3)(b)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/524/3/b/c) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 107(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/107/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23733931]: [S. 524(9)(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/524/9/9A) substituted for s. 524(9) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 107(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/107/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21611251]: Source - 1970 s.381(2)
[^c22771321]: [S. 525(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/525/5) repealed (with effect in accordance with Sch. 14 Pt. 8 Note 4 of the repealing Act) by Finance Act [1988 c. 39](https://www.legislation.gov.uk/ukpga/1988/39), [Sch. 14 Pt. 8](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14/part/8)
@@ -67728,8 +59668,6 @@
[^c23734221]: [S. 526(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/526/2) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 203(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/203/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23734241]: Words in [s. 527(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/527/4) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 204](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/204) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21611321]: Source-1970 s.385; 1985 s.64(2)(d)-(f)
[^c22781201]: [S. 528(1)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/528/1/4) repealed (with effect in accordance with s. 579 of the repealing Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 46(1)(4)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/46/1/4), [Sch. 4](https://www.legislation.gov.uk/ukpga/2001/2/schedule/4)
@@ -67794,6 +59732,8 @@
[^c23734681]: Words in [s. 532](https://www.legislation.gov.uk/ukpga/1988/1/section/532) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 208](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/208) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23734701]: Words in [s. 532](https://www.legislation.gov.uk/ukpga/1988/1/section/532) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 109](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/109) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21611551]: Source-1970 s.388; 1985 s.64(2)(g)
[^c22771361]: Words in [s. 533(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/533/4) inserted (with retrospective effect) by Finance Act 1988, Sch. 13 Pt. 1 paras. 5, 1
@@ -67812,26 +59752,6 @@
[^c23734761]: Words in [s. 533(2)-(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/533/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 209(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/209/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21611611]: See—1988 s.387—*sums assessed under* s.350*by virtue of* s.536*not to be carried forward under* s.387*as trading losses.*1988 s.821—*under-deductions of tax from payments made before passing of annual Act.*[S.I](https://www.legislation.gov.uk/ukpga/1988/1/section/I). [1970 No.488](https://www.legislation.gov.uk/ukcm/1970/488) (*under* “*Double Taxation relief: general*” *in* Part III Vol.5) regns.2-10—*payments exempt under double taxation agreements.*
[^c21611621]: Source-1970 s.391
[^c22774341]: Words in [s. 536(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/536/2) substituted (1.8.1989) by [Copyright, Designs and Patents Act 1988 (c. 48)](https://www.legislation.gov.uk/ukpga/1988/48), [Sch. 7 para. 36(5)](https://www.legislation.gov.uk/ukpga/1988/48/schedule/7/paragraph/36/5); [S.I. 1989/816](https://www.legislation.gov.uk/uksi/1989/816), [art. 2](https://www.legislation.gov.uk/uksi/1989/816/article/2)
[^c22774941]: Words in [s. 536(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/536/2) repealed (with effect in accordance with s. 103(7) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 115(10)(a)](https://www.legislation.gov.uk/ukpga/1995/4/section/115/10/a), [Sch. 29 Pt. 8(14)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/14), Note 2
[^c22774961]: Words in [s. 536(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/536/4) repealed (with effect in accordance with s. 103(7) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 115(10)(b)](https://www.legislation.gov.uk/ukpga/1995/4/section/115/10/b), [Sch. 29 Pt. 8(14)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/14), Note 2
[^c21611641]: Source-1983 s.27(b)
[^c22781911]: Words in [s. 537](https://www.legislation.gov.uk/ukpga/1988/1/section/537) substituted (with application in accordance with [Sch. 24 para. 4(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/24/paragraph/4/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 24 para. 4(1)(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/24/paragraph/4/1/a)
[^c22781931]: Words in [s. 537](https://www.legislation.gov.uk/ukpga/1988/1/section/537) substituted (with application in accordance with [Sch. 24 para. 4(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/24/paragraph/4/2) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 24 para. 4(1)(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/24/paragraph/4/1/b)
[^c22774981]: Words in [s. 537B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/537B/2) repealed (with effect in accordance with s. 103(7) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 115(10)(a)](https://www.legislation.gov.uk/ukpga/1995/4/section/115/10/a), [Sch. 29 Pt. 8(14)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/14), Note 2
[^c22775001]: Words in [s. 537B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/537B/4) repealed (with effect in accordance with s. 103(7) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 115(10)(b)](https://www.legislation.gov.uk/ukpga/1995/4/section/115/10/b), [Sch. 29 Pt. 8(14)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/14), Note 2
[^c22774361]: Words in [s. 539(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/539/1) repealed (with effect in accordance with Sch. 17 Pt. 5 Note 6 of the repealing Act) by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [Sch. 17 Pt. 5](https://www.legislation.gov.uk/ukpga/1989/26/schedule/17/part/5)
[^c21611751]: [S. 539(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/539/9) inserted (with effect in accordance with [Sch. 9 para. 8](https://www.legislation.gov.uk/ukpga/1989/26/schedule/9/paragraph/8) of the amending Act) by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [Sch. 9 para. 2](https://www.legislation.gov.uk/ukpga/1989/26/schedule/9/paragraph/2)
@@ -68048,6 +59968,8 @@
[^c23747301]: Words in [s. 552(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/552/9/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 222(6)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/222/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23747381]: Words in [s. 552(5)(f)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/552/5/f/i) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 112](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/112) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21612761]: Source-1984 Sch.15 Part III; 1984 s.76(5); 1985 s.51
[^c22775181]: [S. 553](https://www.legislation.gov.uk/ukpga/1988/1/section/553): power to modify conferred (with effect in accordance with s. 56(4) of the affecting Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 56(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/56/3)
@@ -68138,25 +60060,7 @@
[^c23745511]: Words in [s. 546C(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/546C/8) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 215(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/215/e), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21612781]: *See* 1988(F) s.130(7)—*payment of outstanding tax by migrating companies.*
[^c21612791]: Source-1986 Sch.11 1
[^c21612801]: Source-1986 Sch.11 2(1)
[^c21612811]: Source-1986 Sch.11 2(3)
[^c21612821]: Source-1986 Sch.11 2(2), (4)
[^c21612831]: Source-1986 Sch.11 2(5), (6)
[^c21612841]: Source-1986 Sch.11 2(7)
[^c21612851]: *For regulations see* Part III Vol.5 (*under* “*Entertainers and sportsmen*”).
[^c21612861]: Source-1986 Sch.11 3(1)
[^c21612871]: Source-1986 Sch.11 4
[^c23745271]: [S. 539A(8)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/539A/8/ii) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 111](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/111) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21612901]: *For regulations see* Part III Vol.5 (*under* “*Entertainers and sportsmen*”).
@@ -68172,9 +60076,9 @@
[^c23749091]: Words in [s. 556(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/556/3/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 230(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/230/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21612951]: Source-1986 Sch.11 9
[^c21612961]: Source-1986 Sch.11 5
[^c23749151]: [S. 556(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/556/4A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 114(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/114/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23749171]: Words in [s. 556(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/556/5) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 114(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/114/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21612971]: Source-1986 Sch.11 10, 11(2)
@@ -68182,252 +60086,12 @@
[^c21612991]: Source-1986 Sch.11 11(1), (3)
[^c21613121]: *See*—1970(M) s.62(1A)—*priority of claim for tax.*1970(M) s.63(3)—*recovery of tax in Scotland.*1970(M) s.64(1A)—*priority in cases of poinding in Scotland.*
[^c21613131]: Source-1975 (No.2) s.69(1), 70A(2); 1982 Sch.8 5
[^c21613141]: *See* 1988(F) s.130(7)(d)—*payment of outstanding tax by migrating companies.*
[^c21613151]: Source-1975 (No.2) s.69(4), (5); 1987 s.23
[^c21613171]: *See* Insolvency (Northern Ireland) Order 1989, Art.381(2)*and* Sch.9 para.61*and* Art.382*and* Sch.10 (S.I. [1989 No.2405](https://www.legislation.gov.uk/ukcm/1989/2405)—*not reproduced*)
[^c21613181]: [S. 559(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/6) repealed (N.I.) (1.10.1991) by [S.I. 1989/2404](https://www.legislation.gov.uk/uksi/1989/2404), [art. 382](https://www.legislation.gov.uk/uksi/1989/2404/article/382), [Sch. 10](https://www.legislation.gov.uk/uksi/1989/2404/schedule/10); [S.R. 1991/411](https://www.legislation.gov.uk/nisr/1991/411), [art. 2](https://www.legislation.gov.uk/nisr/1991/411/article/2)
[^c21613191]: Source-1975 (No.2) Sch.12 Pt.I 2(2); 1980 Sch.8 4(3); 1982 Sch.8 8
[^c21613201]: Source-1972 s.71(5); 1982 Sch.8 6
[^c22775261]: [S. 559(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/3) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 1, 5 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 1(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/1/2), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775241]: [S. 559(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/3A) inserted (with effect in accordance with [Sch. 27 para. 1(4)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/1/4) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 1(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/1/3); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22777861]: [S. 559(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/4) modified (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 72(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/72/3)
[^c22778631]: [S. 559(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/4) modified (19.3.1997) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 54(5)](https://www.legislation.gov.uk/ukpga/1997/16/section/54/5)
[^c22775281]: Words in [s. 559(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/4) substituted (with effect in accordance with the amending provision) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 139(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/139/1); [S.I. 2000/922](https://www.legislation.gov.uk/uksi/2000/922), [art. 2](https://www.legislation.gov.uk/uksi/2000/922/article/2)
[^c22775301]: [S. 559(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/4A) inserted (with effect in accordance with the amending provision) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 139(1)](https://www.legislation.gov.uk/ukpga/1995/4/section/139/1); [S.I. 2000/922](https://www.legislation.gov.uk/uksi/2000/922), [art. 2](https://www.legislation.gov.uk/uksi/2000/922/article/2)
[^c22779841]: Words in [s. 559(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/1) substituted (with effect in accordance with [s. 55(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/55/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 55(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/55/2)
[^c22779861]: [S. 559(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/1A) inserted (with effect in accordance with [s. 55(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/55/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 55(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/55/2)
[^c22779321]: [S. 559(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/5A) inserted (with effect in accordance with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 2(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/1)
[^c22782971]: Words in [s. 559(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/4) repealed (with effect in accordance with s. 40(4) of the repealing Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(1)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/1), Note
[^c22783011]: [S. 559(5)(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/5/5A) repealed (with effect in accordance with s. 40(4) of the repealing Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(1)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/1), Note
[^c22783041]: [S. 559(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/8) repealed (with effect in accordance with s. 40(4) of the repealing Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(1)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/1), Note
[^c23749331]: Words in [s. 559(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/559/1A) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 58](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/58) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c21613241]: Source-1975 (No.2) s.69(2)
[^c21613251]: Source-1975 (No.2) s.69(3)
[^c21613271]: Source-1975 (No.2) s.69(3A); 1980 Sch.8 1
[^c21613281]: Source-1975 (No.2) s.69(3B), (3C); 1980 Sch.8 1
[^c21613291]: Source-1975 (No.2) s.71(3)
[^c21613301]: [1981 c. 64](https://www.legislation.gov.uk/ukpga/1981/64).
[^c21613311]: [1968 c. 16](https://www.legislation.gov.uk/ukpga/1968/16).
[^c21613321]: [1985 c. 69](https://www.legislation.gov.uk/ukpga/1985/69).
[^c21613331]: [S.I. 1981/156 (N.I. 3)](https://www.legislation.gov.uk/nisi/1981/156).
[^c21613341]: [1985 c. 69](https://www.legislation.gov.uk/ukpga/1985/69).
[^c21613351]: [1965 c. 13 (N.I.)](https://www.legislation.gov.uk/apni/1965/13).
[^c22775321]: [S. 560(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/aa) inserted (with application in accordance with [Sch. 27 para. 2(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/2/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 2(1)(a)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/2/1/a)
[^c22775341]: [S. 560(2)(ea)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/ea) inserted (with application in accordance with Sch. 27, [para. 2(3)](https://www.legislation.gov.uk/ukpga/1995/4/paragraph/2/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27), [para. 2(1)(b)](https://www.legislation.gov.uk/ukpga/1995/4/paragraph/2/1/b)
[^c22775361]: Words in [s. 560(2)(f)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/f/3) substituted (with application in accordance with [Sch. 27 para. 2(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/2/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27), [para. 2(2)](https://www.legislation.gov.uk/ukpga/1995/4/paragraph/2/2)
[^c22779341]: Words in [s. 560(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2) inserted (with effect in accordance with [Sch. 8 para. 2(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 2(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/2)
[^c22779361]: [S. 560(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2A/2B) inserted (with effect in accordance with [Sch. 8 para. 2(3)(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/3/4) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 2(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/2/2)
[^c22780211]: [S. 560(2)(da)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/da) inserted (1.11.1998) by [Government of Wales Act 1998 (c. 38)](https://www.legislation.gov.uk/ukpga/1998/38), [Sch. 16 para. 58(a)](https://www.legislation.gov.uk/ukpga/1998/38/schedule/16/paragraph/58/a); [S.I. 1998/2244](https://www.legislation.gov.uk/uksi/1998/2244), [art. 5](https://www.legislation.gov.uk/uksi/1998/2244/article/5)
[^c22780251]: [1985 c. 69](https://www.legislation.gov.uk/ukpga/1985/69).
[^c22780231]: Words in [s. 560(2)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/e) repealed (1.11.1998) by [Government of Wales Act 1998 (c. 38)](https://www.legislation.gov.uk/ukpga/1998/38), [Sch. 16 para. 58(b)](https://www.legislation.gov.uk/ukpga/1998/38/schedule/16/paragraph/58/b), [Sch. 18 Pt. 6](https://www.legislation.gov.uk/ukpga/1998/38/schedule/18/part/6); [S.I. 1998/2244](https://www.legislation.gov.uk/uksi/1998/2244), [art. 5](https://www.legislation.gov.uk/uksi/1998/2244/article/5)
[^c22780771]: Words in [s. 560(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2/aa) inserted (1.7.1999) by [The Scotland Act 1998 (Consequential Modifications) (No.2) Order 1999 (S.I. 1999/1820)](https://www.legislation.gov.uk/uksi/1999/1820), [art. 1(2)](https://www.legislation.gov.uk/uksi/1999/1820/article/1/2), [Sch. 2 para. 87(3)](https://www.legislation.gov.uk/uksi/1999/1820/schedule/2/paragraph/87/3)
[^c22783061]: Words in [s. 560(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/560/2) repealed (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(16)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/16)
[^c21613361]: Source-1975 (No.2) s.70(1)-(6), (9)-(11), 70A(1), (2), 71(4); 1982 Sch.8 3, 5; 1987 (No.2) s.93
[^c22771281]: Words in [s. 561(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/2/c) substituted (retrospectively) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 17 para. 5](https://www.legislation.gov.uk/ukpga/1994/9/schedule/17/paragraph/5)
[^c22775401]: Words in [s. 561(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/1) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 1, 5 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1999/2156](https://www.legislation.gov.uk/uksi/1999/2156), [art. 2(a)](https://www.legislation.gov.uk/uksi/1999/2156/article/2/a)
[^c22775511]: Words in [s. 561(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/2/b) substituted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 3(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/3/1); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775421]: Words in [s. 561(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/3) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 3, 5 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1999/2156](https://www.legislation.gov.uk/uksi/1999/2156), [art. 2(a)](https://www.legislation.gov.uk/uksi/1999/2156/article/2/a)
[^c22775441]: [S. 561(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/4/5) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 1, 5 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1999/2156](https://www.legislation.gov.uk/uksi/1999/2156), [art. 2(a)](https://www.legislation.gov.uk/uksi/1999/2156/article/2/a)
[^c22775471]: Words in [s. 561(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/6) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 3, 5 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1999/2156](https://www.legislation.gov.uk/uksi/1999/2156), [art. 2(a)](https://www.legislation.gov.uk/uksi/1999/2156/article/2/a)
[^c22775531]: Words in [s. 561(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/10) substituted (with effect in accordance with Sch, 27 [para. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/paragraph/8/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 3(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/3/2); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 2](https://www.legislation.gov.uk/uksi/1998/2620/article/2)
[^c22775551]: Words in [s. 561(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/11) inserted (with effect in accordance with [Sch. 27 para. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 3(3)(a)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/3/3/a)
[^c22775571]: Words in [s. 561(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/11) substituted (with effect in accordance with Sch, 27 [para. 8(2)](https://www.legislation.gov.uk/ukpga/1995/4/paragraph/8/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 3(3)(b)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/3/3/b); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 2](https://www.legislation.gov.uk/uksi/1998/2620/article/2)
[^c22775491]: [S. 561(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/12) repealed (with effect in accordance with Sch. 27 para. 8(2) of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21), Note 2; [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 2](https://www.legislation.gov.uk/uksi/1998/2620/article/2)
[^c23749351]: Words in [s. 561(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/561/6) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 59](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/59) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c21613371]: Source-1975 (No.2) Sch.12 Pt. I 1
[^c21613431]: Source-1975 (No.2) Sch.12 Pt.I 3(1); 1982 Sch.8 11
[^c21613441]: Source-1975 (No.2) Sch.12 Pt.I 3(1A); 1982 Sch.8 12
[^c21613451]: Source-1975 (No.2) Sch.12 Pt.I 3(2); 1980 Sch.8 7; 1982 Sch.8 13
[^c21613471]: Source-1975 (No.2) Sch.12 Pt.I 4.
[^c21613481]: [1975 c. 14](https://www.legislation.gov.uk/ukpga/1975/14).
[^c21613491]: [1975 c. 15](https://www.legislation.gov.uk/ukpga/1975/15).
[^c21613501]: Source-1975 (No.2) Sch.12 Pt.I 7
[^c22780831]: [Ss. 562-565](https://www.legislation.gov.uk/ukpga/1988/1/section/562) modified (retrospectively, with application in accordance with s. 53(3) of the modifying Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 53(1)(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/53/1/2)
[^c22775591]: Words in [s. 562(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/1) repealed (with effect in accordance with Sch. 27 para. 8(1), Sch. 29 Pt. 8(21) Note 3 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(2)(a)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/2/a), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775671]: Words in [s. 562(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/1) inserted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(2)(b)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/2/b); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775691]: [S. 562(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/2A/2B) inserted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/3); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775611]: [S. 562(3)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/3) repealed (with effect in accordance with Sch. 27 para. 8(1), Sch. 29 Pt. 8(21) Note 3 of the repealing Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(4)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/4), [Sch. 29 Pt. 8(21)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/29/part/8/21); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775711]: Words in [s. 562(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/9) substituted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(5)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/5); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775731]: Words in [s. 562(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/11) substituted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(6)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/6); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775751]: [S. 562(13A)(14)](https://www.legislation.gov.uk/ukpga/1988/1/section/562/13A/14) substituted for s. 562(14) (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 4(7)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/4/7); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c21613611]: Source-1975 (No.2) Sch.12 Pt.III 1, 2; 1980 Sch.8 7
[^c22775771]: [S. 564(2A)-(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/564/2A) substituted for s. 564(3)-(5) (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 6](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/6); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22780861]: [Ss. 562-565](https://www.legislation.gov.uk/ukpga/1988/1/section/562) modified (retrospectively, with application in accordance with s. 53(3) of the modifying Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 53(1)(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/53/1/2)
[^c22779401]: Words in [s. 564(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/564/2A) substituted (with effect in accordance with [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 3(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/3/1)
[^c22779421]: [S. 564(2AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/564/2AA) inserted (with effect in accordance with [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/3/2)
[^c22779441]: [S. 564(2C)](https://www.legislation.gov.uk/ukpga/1988/1/section/564/2C) inserted (with effect in accordance with [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 3(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/3/3)
[^c21613691]: Words in [s. 565(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/6/a) substituted (E.W.S.) (1.4.1990 with effect in accordance with [S.I. 1990/355](https://www.legislation.gov.uk/uksi/1990/355), [arts. 6-9](https://www.legislation.gov.uk/uksi/1990/355/article/6), [Sch. 1](https://www.legislation.gov.uk/uksi/1990/355/schedule/1)) by [Companies Act 1989 (c. 40)](https://www.legislation.gov.uk/ukpga/1989/40), [Sch. 10 para. 38(3)](https://www.legislation.gov.uk/ukpga/1989/40/schedule/10/paragraph/38/3); [S.I. 1990/355](https://www.legislation.gov.uk/uksi/1990/355), [arts. 3](https://www.legislation.gov.uk/uksi/1990/355/article/3), [8](https://www.legislation.gov.uk/uksi/1990/355/article/8), [Sch. 1](https://www.legislation.gov.uk/uksi/1990/355/schedule/1)
[^c21613711]: Words in [s. 565(6)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/6/d) substituted (E.W.S) (1.10.1990 with saving and transitional provisions in [S.I. 1990/1707](https://www.legislation.gov.uk/uksi/1990/1707), [arts. 4](https://www.legislation.gov.uk/uksi/1990/1707/article/4), [5](https://www.legislation.gov.uk/uksi/1990/1707/article/5)) by [Companies Act 1989 (c. 40)](https://www.legislation.gov.uk/ukpga/1989/40), [s. 139(5)](https://www.legislation.gov.uk/ukpga/1989/40/section/139/5)
[^c21613751]: Source-1975 (No.2) Sch.12 Pt.IV 1, 2(1), (2); 1980 Sch.8 7; 1982 Sch.8 15
[^c21613761]: Source-1975 (No.2) Sch.12 Pt.IV 3
[^c21613771]: [1975 c. 14](https://www.legislation.gov.uk/ukpga/1975/14).
[^c21613781]: [1975 c. 15](https://www.legislation.gov.uk/ukpga/1975/15).
[^c21613791]: Source-1975 (No.2) Sch.12 Pt.IV 6; 1987 Sch.15 8
[^c21613801]: [1985 c. 6](https://www.legislation.gov.uk/ukpga/1985/6)
[^c21613821]: [S. 565(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/6/b) repealed (1.10.1991) by [Companies Act 1989 (c. 40, SIF 27)](https://www.legislation.gov.uk/ukpga/1989/40), [ss. 212](https://www.legislation.gov.uk/ukpga/1989/40/section/212), [213](https://www.legislation.gov.uk/ukpga/1989/40/section/213), [Sch. 24](https://www.legislation.gov.uk/ukpga/1989/40/schedule/24); [S.I. 1991/1996](https://www.legislation.gov.uk/uksi/1991/1996), [art. 2(c)(iv)](https://www.legislation.gov.uk/uksi/1991/1996/article/2/c/iv)
[^c21613841]: [S.I. 1986/1032 (N.I. 6)](https://www.legislation.gov.uk/nisi/1986/1032).
[^c21613851]: Words in [s. 565(7)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/7/d) substituted (1.10.1991) by [S.I. 1990/1504](https://www.legislation.gov.uk/uksi/1990/1504), [art. 74(5)](https://www.legislation.gov.uk/uksi/1990/1504/article/74/5); [S.R. 1991/398](https://www.legislation.gov.uk/nisr/1991/398), [art. 2(a)](https://www.legislation.gov.uk/nisr/1991/398/article/2/a) (subject to the provisions set out in [S.R. 1991/398](https://www.legislation.gov.uk/nisr/1991/398), [arts. 3](https://www.legislation.gov.uk/nisr/1991/398/article/3), [4](https://www.legislation.gov.uk/nisr/1991/398/article/4))
[^c21613861]: Source-1975 (No.2) Sch.12 Pt.IV 7
[^c21613871]: Source-1975 (No.2) Sch.12 Pt.IV 2(3)
[^c22775791]: [S. 565(2A)-(2C)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/2A) inserted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 7(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/7/1); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22775811]: [S. 565(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/8A) inserted (with effect in accordance with [Sch. 27 para. 8(1)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/8/1) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 27 para. 7(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/27/paragraph/7/2); [S.I. 1998/2620](https://www.legislation.gov.uk/uksi/1998/2620), [art. 3](https://www.legislation.gov.uk/uksi/1998/2620/article/3)
[^c22780871]: [Ss. 562-565](https://www.legislation.gov.uk/ukpga/1988/1/section/562) modified (retrospectively, with application in accordance with s. 53(3) of the modifying Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 53(1)(2)](https://www.legislation.gov.uk/ukpga/1999/16/section/53/1/2)
[^c22779461]: [S. 565(2A)(2B)(2BB)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/2A/2B/2BB) substituted for s. 565(2A)(2B) (with effect in accordance with [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 4(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/4/1)
[^c22779481]: [S. 565(2D)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/2D) inserted (with effect in accordance with [Sch. 8 para. 5](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 4(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/4/2)
[^c23749371]: Words in [s. 565(2C)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/565/2C/a) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 60](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/60) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c21613921]: *For regulations see* Part III Vol.5.*And see* 1970(M) s.98A—*special penalties in the case of certain returns.*
[^c21613931]: Source-1975 (No.2) s.69(6)
[^c21613951]: Source-1975 (No.2) s.70(7); 1982 Sch.8 4; 1987 (No.2) s.93 (5), (6)
[^c22775831]: [S. 566(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/3) inserted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 7 para. 9](https://www.legislation.gov.uk/ukpga/1995/4/schedule/7/paragraph/9)
[^c22776111]: Words in [s. 566(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/2) repealed (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(32)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/32)
[^c22776451]: [S. 566(2A)-(2F)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/2A) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 178(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/178/1)
[^c22778761]: Words in [s. 566(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/2/c) repealed (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/8)
[^c22779881]: [S. 566(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/4/5) inserted (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 8 para. 6](https://www.legislation.gov.uk/ukpga/1998/36/schedule/8/paragraph/6)
[^c22797721]: [S. 566(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/5) repealed (prosp.) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 133(4)](https://www.legislation.gov.uk/ukpga/1999/16/section/133/4), [Sch. 20 Pt. 7](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/7), Notes 1 and 2
[^c23749391]: Words in [s. 566(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 61](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/61) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23749411]: [S. 566(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/566/1A) inserted (with effect in accordance with [s. 147(5)](https://www.legislation.gov.uk/ukpga/2003/14/section/147/5) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 147(1)](https://www.legislation.gov.uk/ukpga/2003/14/section/147/1)
[^c21613961]: Source-1975 (No.2) s.71(8)
[^c21613971]: *For regulations see* Part III Vol.5.
[^c21613981]: Source-1975 (No.2) Sch.13 Pt.I
[^c21613991]: Source-1975 (No.2) Sch.13 Pt.II; 1980/1171
[^c21614001]: Source-1975 (No.2) s.71(8), Sch.13, Pt.I
[^c21614011]: [1971 c. 61](https://www.legislation.gov.uk/ukpga/1971/61).
[^c21614021]: Source-1975 (No.2) s.71 (9) (10)
[^c23749431]: Words in [s. 567(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/567/2/b) substituted (25.7.2003 for specified purposes and 29.12.2003 otherwise) by [Communications Act 2003 (c. 21)](https://www.legislation.gov.uk/ukpga/2003/21), [s. 411(2)](https://www.legislation.gov.uk/ukpga/2003/21/section/411/2), [Sch. 17 para. 88](https://www.legislation.gov.uk/ukpga/2003/21/schedule/17/paragraph/88); [S.I. 2003/1900](https://www.legislation.gov.uk/uksi/2003/1900), [arts. 1(2)](https://www.legislation.gov.uk/uksi/2003/1900/article/1/2), [2(1)](https://www.legislation.gov.uk/uksi/2003/1900/article/2/1), [3](https://www.legislation.gov.uk/uksi/2003/1900/article/3), [Sch. 1](https://www.legislation.gov.uk/uksi/2003/1900/schedule/1); [S.I. 2003/3142](https://www.legislation.gov.uk/uksi/2003/3142), [arts. 1(3)](https://www.legislation.gov.uk/uksi/2003/3142/article/1/3), [3(2)](https://www.legislation.gov.uk/uksi/2003/3142/article/3/2) (with [art. 11](https://www.legislation.gov.uk/uksi/2003/3142/article/11))
[^c23749581]: Words in [s. 568(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/568/1) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 232(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/232/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23749661]: Words in [s. 570(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/570/4) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 233](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/233) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23749701]: Words in [s. 571(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/571/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 234](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/234) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22774821]: [Ss. 574-576](https://www.legislation.gov.uk/ukpga/1988/1/section/574) applied (with effect in accordance with s. 93(11) of the affecting Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 12 para. 3(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/12/paragraph/3/3)
[^c22774761]: [S. 574(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/574/1/2) substituted (with effect in accordance with [s. 210(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/210/2) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 210](https://www.legislation.gov.uk/ukpga/1994/9/section/210) (as amended (retrospectively) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 119](https://www.legislation.gov.uk/ukpga/1995/4/section/119)) (with Sch. 20)
[^c22774801]: [S. 574(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/574/1) modified (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 20 para. 8](https://www.legislation.gov.uk/ukpga/1994/9/schedule/20/paragraph/8)
[^c22774781]: [S. 574(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/574/1) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2)
[^c22797731]: [S. 574(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/574/1) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c23754311]: Words in [s. 574(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/574/3/b) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [77](https://www.legislation.gov.uk/uksi/2005/3229/regulation/77)
[^c21614411]: Source-1970 s.411(1)-(8); 1985 s.43; 1971 s.50(8)
[^c22774241]: [S. 577(2)(4)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/577/2/4/6) repealed (with effect in accordance with s. 72(1) of the repealing Act) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [Sch 14 Pt. 4](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14/part/4)
@@ -68562,14 +60226,6 @@
[^c21614601]: Source-1970 s.417; 1971 Sch.6 47
[^c22776561]: Word in [s. 582(a)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/a/i) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 14(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/14/1)
[^c22776151]: Words in [s. 582(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2/b) repealed (with effect in accordance with s. 134(2) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para 32(a)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/32/a), [Sch. 41 Pt. 5(10)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/10), Note
[^c22776601]: Words in [s. 582(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/b/i) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 32(b)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/32/b)
[^c22776581]: [S. 582(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2A) inserted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 14(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/14/2)
[^c22783181]: [S. 582(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/3A) inserted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 50](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/50)
[^c23755971]: [S. 582](https://www.legislation.gov.uk/ukpga/1988/1/section/582) modified (with effect in accordance with s. 56 of the modifying Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 2 para. 7](https://www.legislation.gov.uk/ukpga/2005/7/schedule/2/paragraph/7)
@@ -68578,11 +60234,9 @@
[^c23755891]: Words in [s. 582(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/1/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 243(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/243/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23755911]: Words in [s. 582(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 243(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/243/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23755931]: Words in [s. 582(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2/b/ii) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 243(3)(b)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/243/3/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23755951]: Words in [s. 582(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2/b/ii) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 243(3)(b)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/243/3/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23756001]: Words in [s. 582(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 134(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/134/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23755981]: [S. 582(2)(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/2/2A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 134(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/134/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21614631]: *See* 1979(C) s.13—*delayed remittances of capital gains.*
@@ -68672,16 +60326,6 @@
[^c23762221]: Word in [s. 588(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/588/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 250(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/250/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22776621]: Words in [s. 582A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/582A/1) substituted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 29 para. 6](https://www.legislation.gov.uk/ukpga/1996/8/schedule/29/paragraph/6)
[^c22776171]: [S. 582A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/582A/3) repealed (with effect in accordance with Sch. 7 para. 32, Sch. 41 Pt. 5(2) Note of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 7 para. 22](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/22), [Sch. 41 Pt. 5(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/2)
[^c22781061]: Words in [s. 582(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/582/1) repealed (with effect in accordance with s. 111(6)(a) of the repealing Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17), Note 1
[^c23756021]: Words in [s. 582A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/582A/6) substituted (with effect in accordance with [s. 77](https://www.legislation.gov.uk/ukpga/2004/12/section/77) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 10(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/10/2)
[^c22776801]: Words in [s. 587A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/587A/1) inserted (with effect in accordance with [s. 105(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/105/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para. 33](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/33) (with [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c22774861]: [S. 577A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/577A/1A) inserted (with application in accordance with [s. 141(4)](https://www.legislation.gov.uk/ukpga/1994/9/section/141/4) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 141(2)](https://www.legislation.gov.uk/ukpga/1994/9/section/141/2)
[^c22774881]: Words in [s. 577A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/577A/2) substituted (with application in accordance with s. 141(4)) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 141(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/141/3)
@@ -68754,7 +60398,51 @@
[^c23756711]: Words in [s. 587B(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 249(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/249/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23756731]: Words in [s. 587B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 249(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/249/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23756761]: Words in [s. 587B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756781]: Words in [s. 587B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757151]: [S. 587B(2)(a)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2/a/i) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/3/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757171]: Words in [s. 587B(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2/a/ii) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/3/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757191]: Words in [s. 587B(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/3/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757211]: Words in [s. 587B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(3)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/3/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757231]: [S. 587B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756801]: Words in [s. 587B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756821]: Word in [s. 587B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756841]: Word in [s. 587B(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756861]: Word in [s. 587B(7)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/7/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756881]: Words in [s. 587B(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/8/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(8)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756901]: Words in [s. 587B(8B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/8B/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(9)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/9/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756921]: Word in [s. 587B(8B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/8B/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(9)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/9/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757061]: [S. 587B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9): definition of "authorised unit trust" substituted for definition of "authorised unit trust" and "open-ended investment company" (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(10)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/10/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757081]: [S. 587B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9): words in definition of "charity" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(10)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/10/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757111]: [S. 587B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9): word in definition of "the incidental costs of making the disposal to the person making it" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(10)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/10/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757131]: [S. 587B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9): definition of "open-ended investment company" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(10)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/10/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756941]: Words in [s. 587B(9B)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9B) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(11)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/11/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23756971]: Words in [s. 587B(9B)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9B) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(11)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/11/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757001]: Words in [s. 587B(9C)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9C) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(12)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/12/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757021]: Words in [s. 587B(9C)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/9C) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(12)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/12/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23757041]: Words in [s. 587B(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/587B/12) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 137(13)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/137/13) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22782771]: Word at the end of s. 578A(1)(a) inserted (with effect in accordance with [s. 57(4)](https://www.legislation.gov.uk/ukpga/2001/9/section/57/4) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 12 Pt. 2 para. 11(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/12/part/2/paragraph/11/a)
@@ -68770,6 +60458,24 @@
[^c23755591]: Words in [s. 578A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/578A/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 238](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/238) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23761461]: [S. 587C(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/2/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761341]: Word in [s. 587C(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761361]: Word in [s. 587C(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761381]: Word in [s. 587C(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761421]: [S. 587C(6)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/6/a/b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761401]: Words in [s. 587C(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761441]: [S. 587C(8A)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/8A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761491]: [S. 587C(10)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/10/a) and word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(7)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/7/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23761511]: Words in [s. 587C(10)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/587C/10/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 139(7)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/139/7/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21614081]: Source-1981 s.36(1)-(5)
[^c21614091]: Source-1981 s.36(6); 1980 s.37(3)
@@ -68778,14 +60484,12 @@
[^c22780901]: Words in [s. 573(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4) substituted (with effect in accordance with [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/3/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(2)(a)(i)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/2/a/i)
[^c22780921]: Words in [s. 573(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4) substituted (with effect in accordance with [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/3/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/2/a/ii)
[^c22780941]: Words in [s. 573(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4) substituted (with effect in accordance with [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/3/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(2)(a)(iii)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/2/a/iii)
[^c22780961]: Words in [s. 573(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4) inserted (with effect in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(2)(a)(iv)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/2/a/iv)
[^c22780981]: [S. 573(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4A) inserted (with effect in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(2)(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/2/b)
[^c23753471]: Words in [s. 573(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/573/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 117(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/117/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22774841]: [Ss. 574-576](https://www.legislation.gov.uk/ukpga/1988/1/section/574) applied (with effect in accordance with s. 93(11) of the affecting Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 12 para. 3(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/12/paragraph/3/3)
[^c21614221]: Source-1980 s.37(6)-(8); 1981 s.36(6)
@@ -68798,51 +60502,43 @@
[^c22781001]: [S. 575(1)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/1/ba) inserted (with effect in accordance with [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/3/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(3)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/3)
[^c23753771]: Words in [s. 575(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753791]: Word in [s. 575(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753811]: Words in [s. 575(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753891]: Words in [s. 575(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(4)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/4/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753931]: Words in [s. 575(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23753851]: [S. 575(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/575/4) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 119(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/119/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22774851]: [Ss. 574-576](https://www.legislation.gov.uk/ukpga/1988/1/section/574) applied (with effect in accordance with s. 93(11) of the affecting Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 12 para. 3(3)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/12/paragraph/3/3)
[^c21614331]: Words in [s. 576(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/2) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation and Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/290/1), [Sch. 10 para. 14(35)(a)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/35/a) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c21614361]: Source-1980 s.37(12); 1981 s.36(6), (7); 1987 (No.2) s.71
[^c21614371]: Definition in s. 576(5) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/290/1), [Sch. 10 para. 14(35)(b)(i)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/35/b/i) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c21614381]: Words in [s. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/290/1), [Sch. 10 para. 14(35)(b)(ii)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/35/b/ii) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c22798611]: Words in [s. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5) inserted (retrospectively) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 17 para. 6](https://www.legislation.gov.uk/ukpga/1994/9/schedule/17/paragraph/6)
[^c21614401]: 1989 s.107*and* Sch.12 para.14*in relation to disposals made after* 31*March* 1989.*Previously* “(a) a trading company within the meaning of paragraph 7 of Schedule 19”.
[^c22779921]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) inserted (with effect in accordance with [s. 80(5)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/a) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(1)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/1)
[^c22779941]: [S. 576(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1A/1B) inserted (with effect in accordance with [s. 80(5)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/a) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(2)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/2)
[^c22779961]: [S. 576(4)-(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4) substituted for s. 576(4) (with effect in accordance with [s. 80(5)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/b) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/3)
[^c22779981]: Words in [s. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5) substituted (with effect in accordance with [s. 80(5)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/b) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(4)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/4/a)
[^c22780001]: Word in [s. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5) substituted (with effect in accordance with [s. 80(5)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/b) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(4)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/4/b)
[^c22780021]: [S. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5): definition of "shares" substituted (with effect in accordance with [s. 80(5)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/5/b) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(4)(c)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/4/c)
[^c22778781]: Words in [s. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5) repealed (with effect in accordance with s. 80(5)(b), Sch. 27 Pt. 3(16) Note of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 80(4)(d)](https://www.legislation.gov.uk/ukpga/1998/36/section/80/4/d), [Sch. 27 Pt. 3(16)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/16)
[^c22781021]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) substituted (with application in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(4)(a)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/4/a)
[^c22781041]: [S. 576(1C)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1C) inserted (with application in accordance with [s. 63(4)](https://www.legislation.gov.uk/ukpga/2000/17/section/63/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 16 para. 3(4)(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/16/paragraph/3/4/b)
[^c22781831]: Words in [s. 576(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4) repealed (with effect in accordance with Sch. 15 para. 38(5)(6) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 38(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/2), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 3
[^c22782621]: [S. 576(4A)(ab)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4A/ab) inserted (with effect in accordance with [Sch. 15 para. 38(5)(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/5/6) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 38(3)(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/3/a)
[^c22782671]: Words in [s. 576(4A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4A/b) substituted (with effect in accordance with [Sch. 15 para. 38(4)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/4) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 38(3)(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/3/b)
[^c22782691]: Words in [s. 576(4A)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4A/d) inserted (with effect in accordance with [Sch. 15 para. 38(5)(6)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/5/6) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 15 para. 38(3)(c)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/15/paragraph/38/3/c)
[^c22781851]: Words in [s. 576(4B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/4B/a) repealed (with effect in accordance with Sch. 15 para. 38(5)(6) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 33 Pt. 2(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/3), Note 3
[^c23753991]: [S. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5): definition of "civil partner" inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [78(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/78/b)
[^c23753971]: [S. 576(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/5): words in definition of "spouse" substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [78(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/78/a)
[^c23754031]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754051]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754071]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754091]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(3)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/3/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754181]: Words in [s. 576(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(2)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/2/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754201]: [S. 576(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1A/1B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754161]: [S. 576(1D)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/1D) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754231]: [S. 576(2)-(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/576/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 120(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/120/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23754601]: [S. 576B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/576B/9) inserted (6.4.2007) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 16 paras. 11(3)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/11/3), [13](https://www.legislation.gov.uk/ukpga/2007/11/schedule/16/paragraph/13)
@@ -68910,6 +60606,8 @@
[^c23486301]: [S. 657(2)(d)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/657/2/d/e) substituted for s. 657(2)(d)-(f) (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 27(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/27/3) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23486451]: Words in [s. 657(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/657/2/b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 141](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/141) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21619401]: Source-1970 s.231
[^c21619411]: *For regulations see* Part III Vol.5 (*under* “*Life annuities, purchased*”).
@@ -68922,253 +60620,19 @@
[^c23483461]: [S. 658(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/658/6) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 270(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/270/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23486471]: Words in [s. 658(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/658/4/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 142](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/142), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21620031]: 1989 s.109(1).
[^c21621191]: *See*—s.186(11)—*approved profit sharing schemes.*[s.454](https://www.legislation.gov.uk/ukpga/1988/1/section/454)—*underwriter's special reserve fund not to be treated as settlement.*[s.469(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/469/1)—*unit trusts.*[s.832](https://www.legislation.gov.uk/ukpga/1988/1/section/832)— “additional rate” *defined.*1990 s.56*and* Sch.10 para.19—*convertible securities.*Vol.1. Table D(2).
[^c21621201]: Source-1973 s.16(1)-(6); 1986 s.47(4)(a)
[^c21621211]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 8(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/8/1), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621221]: [S. 686(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A) inserted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 8(2)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/8/2), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621231]: 1988(F) s.55(3)—*from* 1*July* 1988.*Previously* “(c) is not income arising under a trust established for charitable purposes only or income from investments, deposits or other property held for the purposes of a fund or scheme established for the sole purpose of providing relevant benefits within the meaning of section 612; and”.
[^c21621241]: [S. 686(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2A) inserted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 8(3)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/8/3), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621251]: *Repealed by* 1989 s.187*and* Sch.17 Part V*in relation to accounting periods beginning after* 31*March* 1989.
[^c21621261]: *Repealed by* 1989 s.187*and* Sch.17 Part V*in relation to accounting periods beginning after* 31*March* 1989.
[^c21621271]: *See* 1990 s.30*and* Sch.5 para.13*and* s.132*and* Sch.19 Part IV—subs.(5)*repealed as regards a sum paid or credited on or after* 6*April* 1991.
[^c21621281]: Words in [s. 686(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6) substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 8(4)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/8/4), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c23313261]: [S. 686(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/b) substituted (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 13](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/13)
[^c23313301]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 13](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/13)
[^c23313281]: [S. 686(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2B) inserted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/15)
[^c23313321]: [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4).
[^c23313411]: [S. 686](https://www.legislation.gov.uk/ukpga/1988/1/section/686) extended (with effect in accordance with Sch. 7 para. 3(5) of the extending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 paras. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/1), [3(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/3/2)
[^c23313391]: [S. 686(2)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/d) and preceding word repealed (with effect in accordance with Sch. 7 para. 12(4) of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 paras. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/1), [12(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/12/1), [Sch. 18 Pt. 6(7)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/7), Note 1
[^c23313351]: [S. 686(2AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2AA) inserted (with effect in accordance with [Sch. 7 para. 12(4)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/12/4) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 paras. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/1), [12(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/12/1)
[^c23313371]: Words in [s. 686(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2A) substituted (with effect in accordance with [Sch. 7 para. 12(4)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/12/4) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 paras. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/1), [12(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/12/2)
[^c23313421]: [S. 686(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6) applied (with effect in accordance with Sch. 7 para. 3(5) of the affecting Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 paras. 1](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/1), [3(4)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/3/4)
[^c23313431]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) substituted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(2)(a)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/2/a)
[^c23313451]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) inserted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(2)(b)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/2/b)
[^c23313471]: [S. 686(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1AA) inserted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(3)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/3)
[^c23313491]: Words in [s. 686(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A) substituted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(4)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/4)
[^c23313511]: Words in [s. 686(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A) substituted (6.4.1999) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(5)(10)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/5/10)
[^c23313531]: Words in [s. 686(2AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2AA) inserted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(6)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/6)
[^c23313551]: [S. 686(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5A) inserted (with effect in accordance with [s. 32(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 32(7)](https://www.legislation.gov.uk/ukpga/1997/58/section/32/7)
[^c23313591]: Words in [s. 686(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/c) inserted (6.4.2001) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 76](https://www.legislation.gov.uk/ukpga/2001/9/section/76), [Sch. 25 para. 3(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/25/paragraph/3/2)
[^c23313611]: [S. 686(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6A) inserted (6.4.2001) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 76](https://www.legislation.gov.uk/ukpga/2001/9/section/76), [Sch. 25 para. 3(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/25/paragraph/3/3)
[^c23765311]: Words in [s. 686(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A/a) substituted (with effect in accordance with [s. 29(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/29/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 29(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/section/29/2/a)
[^c23765331]: Words in [s. 686(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A/b) substituted (with effect in accordance with [s. 29(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/29/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 29(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/section/29/2/b)
[^c23765351]: Word in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765371]: Word in [s. 686(1AA)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1AA/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765391]: Word in [s. 686(1AA)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1AA/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765411]: Word in [s. 686(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1A/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765431]: Word in [s. 686(2AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2AA) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765461]: Words in [s. 686(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5A) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(6)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765481]: [S. 686(5A)(a)-(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5A/a) substituted for s. 686(5A)(a)-(g) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(6)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765501]: [S. 686(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(7)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765521]: Words in [s. 686(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 277(8)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/277/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23765541]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) inserted (with effect in accordance with [s. 14(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/5) of the amending Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 14(2)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/2)
[^c23765621]: Words in [s. 686(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/1) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/2), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765631]: Words in [s. 686(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(3)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/3), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765851]: Word in [s. 686(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/b) repealed (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 para. 2(1)(a)(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/2/1/a/2), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15), Note
[^c23765831]: Words in [s. 686(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/b) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 para. 2(1)(b)(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/2/1/b/2)
[^c23765561]: Words in [s. 686(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/c) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 29(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/29/2) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23765651]: Words in [s. 686(2AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2AA) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(4)(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/4/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765671]: Words in [s. 686(2AA)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2AA/b) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(4)(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/4/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765691]: Words in [s. 686(2A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2A/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(5)(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/5/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765711]: Words in [s. 686(2A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2A/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(5)(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/5/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765731]: Words in [s. 686(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2B) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(6)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/6), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765751]: Words in [s. 686(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5A) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(7)(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/7/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765771]: Words in [s. 686(5A)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/5A/f) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(7)(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/7/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765801]: Words in [s. 686(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 15(8)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/15/8), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765581]: Word in [s. 686(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6A) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 29(3)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/29/3/a) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23765601]: Words in [s. 686(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6A) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 29(3)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/29/3/b) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23765871]: [S. 686(2)(ba)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/2/ba) inserted (with effect in accordance with [s. 90(4)](https://www.legislation.gov.uk/ukpga/2006/25/section/90/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 90(2)](https://www.legislation.gov.uk/ukpga/2006/25/section/90/2)
[^c23765891]: [S. 686(6ZA)(6ZB)](https://www.legislation.gov.uk/ukpga/1988/1/section/686/6ZA/6ZB) inserted (with effect in accordance with [s. 90(4)](https://www.legislation.gov.uk/ukpga/2006/25/section/90/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 90(3)](https://www.legislation.gov.uk/ukpga/2006/25/section/90/3)
[^c21621381]: Words in [s. 687(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/2) substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 9(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/9/1), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621391]: *See* 1990 s.30*and* Sch.5 para.14*and* s.132*and* Sch.19 Part IV—*words following* paragraph (i)*repealed as regards an amount paid or credited on or after* 6*April* 1991.
[^c21621401]: [S. 687(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3) amended (*retrospectively*) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/79/1/2), [Sch. 6 para. 9(2)(d)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/9/2/d)
[^c21621411]: Source-1973 s.17(3)(a)-(d), (f), (g); 1975 (No.2) s.34 (6); 1984 s.100(2); 1985 Sch.23 8(3); 1974 Sch.7 8
[^c21621471]: Words in [s. 687(3)(e)(f)(h)(i)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/e/f/h/i) and (j), as it so has effect, substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 9(2)(d)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/9/2/d), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621491]: 1989 s.96(2)*in relation to certain deep discount securities and certain deep gain securities from* 14*March* 1989.
[^c21621521]: [S. 687(3)(j)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/j) inserted (*retrospectively* s. 687(3) has effect, and is deemed always to have had effect, as if s. 687(3) included para. (j)) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/79/2)
[^c21621531]: [1990 c. 29](https://www.legislation.gov.uk/ukpga/1990/29).
[^c21621551]: Source-1973 s.17(5)
[^c22900411]: [S. 687(3)(aaa)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/aaa) inserted (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 16 para. 15](https://www.legislation.gov.uk/ukpga/1994/9/schedule/16/paragraph/15)
[^c23313671]: [S. 687(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/1) substituted (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 14(2)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/14/2)
[^c23313691]: Words in [s. 687(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/2/a) inserted (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 14(3)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/14/3)
[^c23313711]: [S. 687(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/5) added (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 14(4)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/14/4)
[^c23313731]: [S. 687(3)(k)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/k) inserted (with effect in accordance with [s. 105(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/105/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para. 35](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/35) (with [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23313751]: [S. 687(3)(a)(a1)(a2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a/a1/a2/aa) substituted for s. 687(3)(a)(aa) (with effect in accordance with [Sch. 4 para. 15(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 15(2)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/2)
[^c23313811]: [S. 687(3)(aaa)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/aaa) repealed (with effect in accordance with Sch. 6 para. 10(2) of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 6 para. 10(1)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/6/paragraph/10/1), [Sch. 8 Pt. 2(11)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/11), Note
[^c23313771]: [S. 687(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/b) substituted (with effect in accordance with [Sch. 4 para. 15(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 15(3)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/3)
[^c23313791]: [S. 687(3)(bb)(bc)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/bb/bc) inserted (with effect in accordance with [Sch. 4 para. 15(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 15(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/15/4)
[^c21621461]: *Repealed by* 1989 s.187*and* Sch.17 Part V*in relation to accounting periods beginning after* 31*March* 1989
[^c23765991]: Words in [s. 687(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/1/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766011]: Word in [s. 687(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766031]: Words in [s. 687(3)(a1)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766061]: Words in [s. 687(3)(a1)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766081]: Words in [s. 687(3)(a2)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(5)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766101]: Words in [s. 687(3)(a2)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/a2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(5)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766131]: Words in [s. 687(3)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/aa) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(6)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766491]: Words in [s. 687(3)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/aa) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(6)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766541]: Words in [s. 687(3)(b)(bb)(bc)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/b/bb/bc) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(7)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766611]: Words in [s. 687(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(8)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/8) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766631]: Words in [s. 687(3)(bb)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/bb) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by virtue of [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(9)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/9) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766651]: [S. 687(3)(l)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/l) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 278(10)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/278/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23766671]: [S. 687(3)(aa1)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/aa1) inserted (with effect in accordance with [s. 14(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/5) of the amending Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 14(3)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/3)
[^c23766711]: [S. 687(3)(l)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3/l) inserted (with effect in accordance with [s. 45](https://www.legislation.gov.uk/ukpga/2005/7/section/45) of the amending Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 44(1)](https://www.legislation.gov.uk/ukpga/2005/7/section/44/1)
[^c23766691]: [S. 687(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/3A) inserted (with effect in accordance with [s. 14(5)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/5) of the amending Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 14(4)](https://www.legislation.gov.uk/ukpga/2005/7/section/14/4)
[^c23766731]: Word in [s. 687(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/1/b) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [94](https://www.legislation.gov.uk/uksi/2005/3229/regulation/94)
[^c23766751]: Words in [s. 687(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/687/1) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 17](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/17), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765911]: [S. 686A](https://www.legislation.gov.uk/ukpga/1988/1/section/686A) substituted (with effect in accordance with [Sch. 13 para. 3(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/3/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 para. 3(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/3/1)
[^c23766771]: Words in [s. 687A(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/687A/1/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 18](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/18), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23765931]: Words in [s. 686D(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/686D/1) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 para. 4(1)(a)(3)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/4/1/a/3)
[^c23765951]: Words in [s. 686D(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/686D/3) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 para. 4(1)(b)(3)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/4/1/b/3)
[^c23765971]: Words in [s. 686D(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/686D/7/b) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 16](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/16), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c21621651]: *See* Inheritance Tax Acts.
[^c21621661]: [1984 c. 51](https://www.legislation.gov.uk/ukpga/1984/51).
[^c21621671]: Source-1977 s.38(1); 1982 Sch.10 1; ITA Sch.8 8
[^c21621681]: Source-1977 s.38(2); 1980 s.88(7); 1987 Sch.15 10
[^c21621691]: Source-1977 s.38(3), (4)
[^c21621701]: Source-1977 s.38(5); 1982 Sch.10 1(3); ITA Sch.8 8
[^c23314041]: Words in [s. 691(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/691/4) substituted (with effect in accordance with [s. 135(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/135/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 21 para. 19](https://www.legislation.gov.uk/ukpga/1996/8/schedule/21/paragraph/19)
[^c23767851]: Words in [s. 691(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/691/2/b/ii) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 281](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/281) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21621711]: Source-1982 s.61; ITA Sch.8 21
[^c23314061]: Words in [s. 692(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/692/1) substituted (with effect in accordance with [s. 39(4)(5)](https://www.legislation.gov.uk/ukpga/1995/4/section/39/4/5) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 6 para. 26](https://www.legislation.gov.uk/ukpga/1995/4/schedule/6/paragraph/26)
[^c23767871]: Words in [s. 692(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/692/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 282](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/282) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21621721]: Source-1982 s.62(1), (2); ITA Sch.8 22
[^c21621781]: Source-1980 s.52(1), (2); 1982 Sch.10 2(2) (3); ITA Sch.8 17
[^c21621791]: *Repealed by* 1988(F) s.24(3)*for* 1988-89*and subsequent years.*
[^c21621801]: 1988(F) s.24(3).
[^c21621811]: Words in [s. 694(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/694/2A) substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras.10](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/10), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c21621821]: Source-1980 s.52(3)-(6); ITA Sch.8 17
[^c21621831]: Source-1980 s.52(7); 1982 Sch.10 2(4); ITA Sch.8 17
[^c23767911]: Words in [s. 694(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/694/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 283](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/283) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23767931]: Word in [s. 694(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/694/3) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [95](https://www.legislation.gov.uk/uksi/2005/3229/regulation/95)
[^c23763431]: Words in [s. 660C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 272(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/272/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23763451]: Words in [s. 660C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 272(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/272/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23763531]: Words in [s. 660C(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/660C/3) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [93](https://www.legislation.gov.uk/uksi/2005/3229/regulation/93)
[^c23313871]: [1995 c. 4](https://www.legislation.gov.uk/ukpga/1995/4).
[^c23767711]: Words in [s. 689A(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/689A/1/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 19](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/19), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23766791]: [S. 687A(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/687A/1/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 146(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/146/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766811]: Words in [s. 687A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/687A/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 146(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/146/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766831]: Words in [s. 687A(3)(a)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/687A/3/a/iii) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 146(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/146/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23766851]: Words in [s. 687A(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/687A/3/c) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 146(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/146/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23313881]: Words in [s. 689B(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/1/a) inserted (with effect in accordance with [Sch. 4 para. 16(6)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 16(2)(a)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/2/a)
@@ -69178,8 +60642,6 @@
[^c23313981]: [S. 689B(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/2A) inserted (with effect in accordance with [Sch. 4 para. 16(6)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 16(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/4)
[^c23314001]: Words in [s. 689B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/3) inserted (with effect in accordance with [Sch. 4 para. 16(6)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/6) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 16(5)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/16/5)
[^c23767651]: [S. 689B(2)(a)-(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/2/a) substituted for s. 689(2)(za)-(c) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 280(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/280/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23767671]: [S. 689B(2A)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/2A/a/b) substituted for words in s. 689(2A) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 280(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/280/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -69188,6 +60650,12 @@
[^c23767731]: Words in [s. 689B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/1) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 20](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/20), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23767751]: Words in [s. 689B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 148(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/148/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767791]: [S. 689B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 148(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/148/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23767771]: [S. 689B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/689B/5) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 148(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/148/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21621881]: Source-1970 s.426; 1971 Sch.6 52
[^c21621891]: Words in [s. 695(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/695/4/a) substituted (27.7.1993 with effect for the year 1993-1994 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 11(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/11/1), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
@@ -69408,28 +60876,12 @@
[^c23770491]: Words in [s. 701(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/701/10) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 292(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/292/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23770551]: Words in [s. 701(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/701/3A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 152](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/152) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622221]: Source-1970 s.433; 1987 Sch.15 2(15)
[^c23770681]: Words in [s. 702(a)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/702/a/d) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [96](https://www.legislation.gov.uk/uksi/2005/3229/regulation/96)
[^c22901881]: [S. 698A](https://www.legislation.gov.uk/ukpga/1988/1/section/698A) substituted (with effect in accordance with [s. 33(11)](https://www.legislation.gov.uk/ukpga/1997/58/section/33/11) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 33(1)](https://www.legislation.gov.uk/ukpga/1997/58/section/33/1)
[^c23769271]: Words in [s. 698A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769291]: Word in [s. 698A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769311]: Words in [s. 698A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769331]: Words in [s. 698A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769351]: Word in [s. 698A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769371]: Words in [s. 698A(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/3/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(4)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/4/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769391]: Word in [s. 698A(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/3/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(4)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/4/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23769411]: Words in [s. 698A(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/698A/3/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 288(4)(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/288/4/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c22901691]: Words in [s. 699A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/699A/1) inserted (with effect in accordance with [s. 21(5)](https://www.legislation.gov.uk/ukpga/1997/58/section/21/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 21(2)](https://www.legislation.gov.uk/ukpga/1997/58/section/21/2)
[^c22901711]: [S. 699A(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/699A/1A/1B) inserted (with effect in accordance with [s. 21(5)](https://www.legislation.gov.uk/ukpga/1997/58/section/21/5) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 21(3)](https://www.legislation.gov.uk/ukpga/1997/58/section/21/3)
@@ -69458,7 +60910,7 @@
[^c23769621]: [S. 699A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/699A/6) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 290(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/290/5), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23314101]: [Pt. 17 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/17/chapter/1) modified (31.7.1997) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 35(5)](https://www.legislation.gov.uk/ukpga/1997/58/section/35/5)
[^c23769641]: Words in [s. 699A(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/699A/4/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 151](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/151) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622281]: Source—1970 s.460(1)-(3)
@@ -69472,7 +60924,47 @@
[^c23211481]: [S. 703(4)-(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/4) repealed (with effect in accordance with Sch. 3 para. 32(5) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 32(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/32/3), [Sch. 27 Pt. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/2), Note
[^c23770921]: Words in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 293](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/293) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23770941]: Word in [s. 703(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23770961]: Words in [s. 703(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23770991]: Word in [s. 703(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771011]: Word in [s. 703(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(2)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771031]: Words in [s. 703(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771051]: Word in [s. 703(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771071]: Word in [s. 703(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771121]: Word in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771091]: Words in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771141]: Words in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(4)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/4/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771391]: Words in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(4)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/4/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771171]: Words in [s. 703(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(4)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/4/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771411]: [S. 703(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771191]: Words in [s. 703(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771221]: Words in [s. 703(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771261]: Word in [s. 703(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/6/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771281]: Word in [s. 703(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/10) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771431]: [S. 703(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/11) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(8)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771301]: Words in [s. 703(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/12) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(9)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/9/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771331]: Words in [s. 703(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/12) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(9)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/9/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771351]: Words in [s. 703(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/703/12) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 154(9)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/154/9/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622341]: Source—1970 s.461; 1973 s.54, Sch.11 2(a), (b)
@@ -69484,12 +60976,54 @@
[^c23211521]: [S. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. A(d) repealed (with effect in accordance with Sch. 3 para. 33(3) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 33(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/33/2), [Sch. 27 Pt. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/2), Note
[^c23771491]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771511]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. A substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771531]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. A(a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771851]: [S. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. A(f)(g) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by virtue of [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/3/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771551]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. B(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771571]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. B(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771611]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. B(2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771631]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. C(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771661]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. C(1)(b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/6/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771681]: Word in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. C(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/6/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771701]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. D(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771721]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771741]: Word in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(b)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771761]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(b)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771791]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(b)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/b/iii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771811]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(c)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/c/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771831]: Words in [s. 704](https://www.legislation.gov.uk/ukpga/1988/1/section/704) para. E(3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 155(8)(c)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/155/8/c/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622351]: Source—1970 s.462
[^c23314111]: [S. 705(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/4) repealed (1.1.1994) by [The General and Special Commissioners (Amendment of Enactments) Regulations 1994 (S.I. 1994/1813)](https://www.legislation.gov.uk/uksi/1994/1813), [reg. 1(1)](https://www.legislation.gov.uk/uksi/1994/1813/regulation/1/1), [Sch. 1 para. 23](https://www.legislation.gov.uk/uksi/1994/1813/schedule/1/paragraph/23), [Sch. 2 Pt. 1](https://www.legislation.gov.uk/uksi/1994/1813/schedule/2/part/1)
[^c23211541]: [S. 705(6)-(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/6) repealed (with effect in accordance with Sch. 3 para. 34(3) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 34(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/34/2), [Sch. 27 Pt. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/2), Note
[^c23771951]: Words in [s. 705(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 156(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/156/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771971]: Word in [s. 705(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 156(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/156/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23771991]: Words in [s. 705(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 156(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/156/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772011]: Words in [s. 705(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/705/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 156(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/156/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622391]: *See*—1970(M) s.6(1)—*declaration to be made by member of tribunal on appointment.*1989 s.182—*disclosure of information* (*in* Part II Vol.5).
[^c21622401]: [S. 706](https://www.legislation.gov.uk/ukpga/1988/1/section/706) renumbered as s. 706(1) (31.3.1995) by [Judicial Pensions and Retirement Act 1993 (c. 8)](https://www.legislation.gov.uk/ukpga/1993/8), [ss. 26](https://www.legislation.gov.uk/ukpga/1993/8/section/26), [31(2)](https://www.legislation.gov.uk/ukpga/1993/8/section/31/2), [Sch. 6 para.44](https://www.legislation.gov.uk/ukpga/1993/8/schedule/6/paragraph/44) (with [Sch. 7 paras. 2(2)](https://www.legislation.gov.uk/ukpga/1993/8/schedule/7/paragraph/2/2), [3(2)](https://www.legislation.gov.uk/ukpga/1993/8/schedule/7/paragraph/3/2), [4](https://www.legislation.gov.uk/ukpga/1993/8/schedule/7/paragraph/4)); [S.I. 1995/631](https://www.legislation.gov.uk/uksi/1995/631), [art. 2](https://www.legislation.gov.uk/uksi/1995/631/article/2)
@@ -69500,8 +61034,22 @@
[^c21622431]: Source—1970 s.464
[^c23772341]: Words in [s. 707(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/707/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 159(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/159/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772381]: Words in [s. 707(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/707/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 159(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/159/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772421]: Word in [s. 707(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/707/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 159(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/159/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622441]: Source—1970 s.465
[^c23772441]: Words in [s. 708](https://www.legislation.gov.uk/ukpga/1988/1/section/708) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 160(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/160/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772471]: Word in [s. 708](https://www.legislation.gov.uk/ukpga/1988/1/section/708) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 160(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/160/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772491]: Words in [s. 708](https://www.legislation.gov.uk/ukpga/1988/1/section/708) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 160(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/160/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772531]: Word in [s. 708](https://www.legislation.gov.uk/ukpga/1988/1/section/708) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 160(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/160/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21622451]: *Definition applied for purposes of* 1990 Sch.10—*convertible securities.*
[^c21622461]: Source—1970 s.466(1); 1973 Sch.11 4
@@ -69512,333 +61060,25 @@
[^c23160851]: Words in [s. 709(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/709/2A) repealed (with effect in accordance with Sch. 4 para. 19(2), Sch. 8 Pt. 2(9) Note 2 of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 19(1)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/19/1), [Sch. 8 Pt. 2(9)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/9)
[^c23314151]: The definition of “the Taxes Act” in section 118(1) was amended by paragraph 32(d) of Schedule 8 to the [Development Land Tax Act 1976 (c.24)](https://www.legislation.gov.uk/ukpga/1976/24), [paragraph 8](https://www.legislation.gov.uk/ukpga/1976/24/paragraph/8) of Schedule 7 to the [Capital Gains Tax Act 1979 (c.14)](https://www.legislation.gov.uk/ukpga/1979/14), [Schedule 31](https://www.legislation.gov.uk/ukpga/1979/14/schedule/31) to the Income and Corporation Taxes Act 1988, and paragraph 2(11)(b) of Schedule 10 to the [Taxation of Chargeable Gains Act 1992 (c.12)](https://www.legislation.gov.uk/ukpga/1992/12).
[^c21623221]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623231]: Source—1985 Sch.23 1
[^c21623241]: Words in [s. 710(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/2) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 51](https://www.legislation.gov.uk/ukpga/1991/31/section/51), [Sch. 10 para. 2(2)(4)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/10/paragraph/2/2/4)
[^c21623251]: [S. 710(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/2A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 51](https://www.legislation.gov.uk/ukpga/1991/31/section/51), [Sch. 10 para. 2(3)(4)](https://www.legislation.gov.uk/ukpga/1991/31/schedule/10/paragraph/2/3/4)
[^c21623261]: Words in [s. 710(2A)(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/2A/13) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(36)(a)(b)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/36/a/b) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c21623271]: [S. 710(3)(da)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/da) inserted (16.7.1992 with effect as mentioned in [Sch. 8 para. 6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6) of the amending Act) by [Finance (No.2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 34](https://www.legislation.gov.uk/ukpga/1992/48/section/34), [Sch. 8 paras. 5](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/5), [6](https://www.legislation.gov.uk/ukpga/1992/48/schedule/8/paragraph/6).
[^c21623281]: Source—1985 Sch.23 2(2)
[^c21623291]: Source—1985 Sch.23 2(3), (4)
[^c21623301]: Source—1985 Sch.23 2(5), (6)
[^c21623311]: Source—1985 Sch.23 2(7)
[^c21623321]: Source—1985 Sch.23 2(8), (9)
[^c21623331]: Source—1985 Sch.23 2(10)
[^c21623341]: Source—1985 Sch.23 5
[^c21623351]: Source—1985 Sch.23 10(6), (7)
[^c21623361]: Source—1985 Sch.23 14(1), (3), (4)
[^c21623381]: [S. 710(14)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/14) repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt. III(12)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/12) Note 2
[^c23314161]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c22992881]: [S. 710(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/1A) inserted (with effect in accordance with [s. 105(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/105/1) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 14 para. 36](https://www.legislation.gov.uk/ukpga/1996/8/schedule/14/paragraph/36) (with [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c22992901]: [S. 710(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/5/a) and preceding word inserted (with effect in accordance with [s. 158(5)](https://www.legislation.gov.uk/ukpga/1996/8/section/158/5) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 158(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/158/1)
[^c22992921]: [S. 710(5)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/5/b) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 40 para. 3(1)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/40/paragraph/3/1)
[^c22992941]: [S. 710(13A)(13B)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/13A/13B) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 40 para. 3(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/40/paragraph/3/2)
[^c23772991]: [S. 710(3)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/f) inserted (with effect in accordance with [Sch. 39 para. 6(1)(b)(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/39/paragraph/6/1/b/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 39 para. 5(4)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/39/paragraph/5/4)
[^c23773011]: [S. 710(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/a) repealed (with effect in accordance with s. 37 of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 42 Pt. 2(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/2), Note
[^c23773031]: Words in [s. 710(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773051]: [S. 710(3)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/ca) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773071]: Words in [s. 710(3)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/d) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773091]: Words in [s. 710(3)(da)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/da) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(2)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773111]: [S. 710(3)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3/f) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(2)(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/2/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773131]: [S. 710(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/3A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773171]: Word at the end of s. 710(5)(a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/4/a), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773151]: [S. 710(5)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/710/5/c) and preceding word inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 294(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/294/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21623431]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623441]: Source—1985 Sch.23 3(1)-(5)
[^c21623451]: Source—1985 Sch.23 14(2), 31(2), 12(2), 13(3), 7(2)
[^c21623461]: 1990 s.41*and* Sch.6 para.9(2)*on and after* 24*May* 1990*subject to the commencement provisions of* paras.11*and* 12.*Previously* “or 722(1) or (2)”.
[^c21623471]: Source—1985 Sch.23 3(6)-(8)
[^c21623481]: Words in [s. 711(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/711/8) repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt.III(12)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/12) Note 2
[^c23314171]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314181]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22993061]: [S. 711(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/711/6A) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 40 para. 4](https://www.legislation.gov.uk/ukpga/1996/8/schedule/40/paragraph/4)
[^c21623511]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623521]: Source—1985 Sch.23 4; 1986 Sch.17 3(2)
[^c21623531]: 1990 s.41*and* Sch.6 para.9(3)*on and after* 24*May* 1990*subject to the commencement provisions of* paras.11*and* 12.*Previously* “and 722”.
[^c23314191]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314201]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22994481]: Words in [s. 712(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/712/4) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 40 para. 5](https://www.legislation.gov.uk/ukpga/1996/8/schedule/40/paragraph/5)
[^c21623541]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 ) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314211]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314221]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c21623551]: Source—1985 s.73
[^c23773191]: [S. 713(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/713/2/3) excluded (24.2.2003) by [Proceeds of Crime Act 2002 (c. 29)](https://www.legislation.gov.uk/ukpga/2002/29), [s. 458(1)](https://www.legislation.gov.uk/ukpga/2002/29/section/458/1), [Sch. 10 para. 4](https://www.legislation.gov.uk/ukpga/2002/29/schedule/10/paragraph/4); [S.I. 2003/120](https://www.legislation.gov.uk/uksi/2003/120), [art. 2](https://www.legislation.gov.uk/uksi/2003/120/article/2), [Sch.](https://www.legislation.gov.uk/uksi/2003/120/schedule) (with [arts. 3](https://www.legislation.gov.uk/uksi/2003/120/article/3), [4](https://www.legislation.gov.uk/uksi/2003/120/article/4) (as amended by [S.I. 2003/333](https://www.legislation.gov.uk/uksi/2003/333), [art. 14](https://www.legislation.gov.uk/uksi/2003/333/article/14)))
[^c21623561]: Source—1985 Sch.23 10(1)-(3)
[^c21623571]: 1985 Sch.23 10(7)
[^c21623581]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 ) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623591]: Source—1985 s.74
[^c23314231]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314241]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22992581]: [S. 714(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/6) repealed (with effect in accordance with s. 105(1) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/3), Note
[^c23773201]: Words in [s. 714(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 295(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/295/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773221]: Words in [s. 714(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 295(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/295/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773281]: Words in [s. 714(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/2) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 295(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/295/2/c), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773241]: Words in [s. 714(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 295(2)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/295/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773261]: [S. 714(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/714/2A/2B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 295(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/295/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21623721]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623731]: Source—1985 s.71(1) (a)-(c)
[^c21623741]: [S. 715(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/1/a) restricted (*retrospectively*) by [Finance (No.2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 65(2)(b)(5)(6)](https://www.legislation.gov.uk/ukpga/1992/48/section/65/2/b/5/6) [S. 715(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/2/a) restricted (*retrospectively*) by [Finance (No.2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 65(2)(c)(5)(6)](https://www.legislation.gov.uk/ukpga/1992/48/section/65/2/c/5/6)
[^c21623751]: Source—1985 Sch.23 30(1), (4)
[^c21623761]: Source—1985 s.75(1)(d)-(h)
[^c21623771]: Source—1985 Sch.23 32(1)
[^c21623781]: Source—1985 s.75(2), Sch.23 30(2), (5), 32(2)
[^c21623801]: Source—1985 Sch.23 31(1)
[^c21623811]: Source—1985 s.75(3), (4)
[^c21623821]: Source—1985 Sch.23 43; 1986 Sch.17 5
[^c21623841]: Source—1985 s.75(5), (6)
[^c21623851]: Words in [s. 715(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/8) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(37)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/37) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c22902461]: Words in [s. 715(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/6) inserted (with application in accordance with [s. 123(6)](https://www.legislation.gov.uk/ukpga/1994/9/section/123/6) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 123(1)](https://www.legislation.gov.uk/ukpga/1994/9/section/123/1)
[^c22992601]: [S. 715(1)(g)(h)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/1/g/h) repealed (with effect in accordance with s. 154(9) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(18)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/18), Note
[^c22992631]: [S. 715(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/8): definition of "FOTRA securities" repealed (with effect in accordance with s. 154(9) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(18)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/18), Note
[^c23314251]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314261]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23120811]: Words in [s. 715(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/6) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 1 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23773301]: Words in [s. 715(1)(j)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/1/j) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 296](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/296) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773321]: Words in [s. 715(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/8) substituted (with effect in accordance with [Sch. 4 para. 10(1)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/4/paragraph/10/1) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 4 para. 1(2)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/4/paragraph/1/2)
[^c23773341]: Words in [s. 715(1)(k)](https://www.legislation.gov.uk/ukpga/1988/1/section/715/1/k) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 30](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/30) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c21623901]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314281]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314291]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23773361]: [S. 716](https://www.legislation.gov.uk/ukpga/1988/1/section/716) excluded (24.2.2003) by [Proceeds of Crime Act 2002 (c. 29)](https://www.legislation.gov.uk/ukpga/2002/29), [s. 458(1)](https://www.legislation.gov.uk/ukpga/2002/29/section/458/1), [Sch. 10 para. 4](https://www.legislation.gov.uk/ukpga/2002/29/schedule/10/paragraph/4); [S.I. 2003/120](https://www.legislation.gov.uk/uksi/2003/120), [art. 2](https://www.legislation.gov.uk/uksi/2003/120/article/2), [Sch.](https://www.legislation.gov.uk/uksi/2003/120/schedule) (with [arts. 3](https://www.legislation.gov.uk/uksi/2003/120/article/3), [4](https://www.legislation.gov.uk/uksi/2003/120/article/4) (as amended by [S.I. 2003/333](https://www.legislation.gov.uk/uksi/2003/333), [art. 14](https://www.legislation.gov.uk/uksi/2003/333/article/14)))
[^c21623911]: Source—1985 Sch.23 15(1)-(4)
[^c21623921]: Source—1985 Sch.23 15(5); 1986 Sch.17 2(2)
[^c21623931]: Source—1985 Sch.23 15(8)
[^c23773371]: Word in [s. 716(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/716/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 297(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/297/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773391]: Words in [s. 716(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/716/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 297(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/297/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773451]: Words in [s. 716(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/716/3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 297(2)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/297/2/c), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773411]: Words in [s. 716(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/716/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 297(2)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/297/2/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773431]: [S. 716(3A)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/716/3A/3B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 297(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/297/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21623941]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21623951]: Source—1985 Sch.23 15A, 15B, 15C; 1986 Sch.17 3
[^c23314301]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23000971]: Words in [s. 717(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/717/9) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 35](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/35)
[^c23314311]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23288381]: [S. 717](https://www.legislation.gov.uk/ukpga/1988/1/section/717) excluded (1.1.1999) by [The European Single Currency (Taxes) Regulations 1998 (S.I. 1998/3177)](https://www.legislation.gov.uk/uksi/1998/3177), [regs. 1](https://www.legislation.gov.uk/uksi/1998/3177/regulation/1), [33(2)](https://www.legislation.gov.uk/uksi/1998/3177/regulation/33/2)
[^c23212371]: Words in [s. 717(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/717/1) repealed (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(22)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/22)
[^c23212391]: [S. 717(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/717/4/5) repealed (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(22)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/22)
[^c21623961]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314321]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314331]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c21623971]: Source—1985 Sch.23 15A, 15B, 15C; 1986 Sch.17 3
[^c21623981]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314341]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314351]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c21623991]: Source—1985 Sch.23 15A, 15B, 15C; 1986 Sch.17 3
[^c21624281]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21624291]: Source—1985 Sch.23 6(1), 15(6)
[^c21624301]: Source—1985 Sch.23 6(2)
[^c21624311]: [S. 720(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/3) repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt. III(12)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/12) Note 2
[^c21624321]: Source—1985 Sch.23 7(1)
[^c21624331]: Source—1985 Sch.23 8(1), (2), (4); 1986 Sch.17 1(1)
[^c21624341]: Words in [s. 720(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/5) substituted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras. 13](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/13), [25](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25)
[^c21624351]: Source—1985 Sch.23 9(1), (2)
[^c21624361]: Source—1985 Sch.23 9(3), (4)
[^c21624371]: Source—1985 Sch.23 9(5)
[^c23314361]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314371]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22903171]: Words in [s. 720(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6) substituted (with effect in accordance with [s. 74(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/74/2) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 17 para. 17(2)(b)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/17/paragraph/17/2/b)
[^c23288401]: Words in [s. 720(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/5) repealed (with effect in accordance with s. 68 of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 20 Pt. 3(17)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/17), Note
[^c23773471]: Word in [s. 720(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773491]: Words in [s. 720(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773511]: Word in [s. 720(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773531]: Words in [s. 720(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773551]: Words in [s. 720(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(3)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773571]: Words in [s. 720(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/7) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 298(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/298/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773611]: Words in [s. 720(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 21(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/21/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23773631]: Words in [s. 720(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6/b) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 21(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/21/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23773651]: Words in [s. 720(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/6) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 21(c)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/21/c), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23773671]: Words in [s. 720(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/7) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 21(d)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/21/d), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23773691]: [S. 720(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/720/8/a) repealed (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 21(e)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/21/e), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1), [Sch. 26 Pt. 3(15)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/15)
[^c21624481]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21624541]: [S. 721(5)(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/721/5/6) repealed (27.7.1993 with effect for the year 1994 and subsequent underwriting years) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt. III(12)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/12) Note 2
[^c23314381]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314391]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22992651]: [S. 721(1)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/721/1/4) repealed (with effect in accordance with s. 158(5) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 158(2)(4)](https://www.legislation.gov.uk/ukpga/1996/8/section/158/2/4), [Sch. 41 Pt. 5(20)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/20), Note
[^c21624521]: [S. 721(1)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/721/1) excluded (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(3)(a)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/3/a), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23001851]: [S. 721(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/721/2) substituted (with effect in accordance with [s. 158(5)](https://www.legislation.gov.uk/ukpga/1996/8/section/158/5) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 158(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/158/3)
[^c21624561]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314401]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314411]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c21624571]: Source—1985 Sch.23 (13) (1), (2)
[^c21624591]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314451]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314461]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c21624601]: Source—1985 Sch.23 11
[^c21624611]: Words in [s. 723(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/723/8) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(38)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/38) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23773711]: Words in [s. 723(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/723/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 299(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/299/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773731]: Words in [s. 723(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/723/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 299(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/299/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773751]: Words in [s. 723(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/723/4) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 299(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/299/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23773771]: Words in [s. 723(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/723/8) substituted (with effect in accordance with [Sch. 4 para. 10(1)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/4/paragraph/10/1) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 4 para. 2(2)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/4/paragraph/2/2)
[^c21625051]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c21625061]: Source—1985 Sch.23 32C; 1986 Sch.17 4
[^c23314491]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314501]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23127051]: [S. 727(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/727/1) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 1 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23128221]: Words in [s. 727(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/727/2) substituted (with effect in accordance with [Sch. 10 para. 7(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/7/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 5(3)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/5/3); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23772601]: Words in [s. 709(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/709/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 161(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/161/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772611]: Words in [s. 709(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/709/4/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 161(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/161/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772641]: Words in [s. 709(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/709/6/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 161(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/161/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772671]: Words in [s. 709(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/709/6/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 161(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/161/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772181]: Words in [s. 705A(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/705A/1/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 157(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/157/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772211]: Words in [s. 705A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/705A/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 157(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/157/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772231]: Words in [s. 705A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/705A/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 157(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/157/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772261]: Words in [s. 705A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/705A/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 157(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/157/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772281]: Words in [s. 705A(10)(11)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/705A/10/11/a/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 157(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/157/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23772321]: Words in [s. 705B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/705B/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 158](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/158) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625091]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
@@ -69848,33 +61088,15 @@
[^c23314551]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c22903281]: Words in [s. 728(1)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/1/5) substituted (with effect in accordance with [s. 79(3)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/3) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [s. 79(2)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/2) (with [s. 79(4)](https://www.legislation.gov.uk/ukpga/1995/4/section/79/4))
[^c23312501]: Words in [s. 728(7)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/7/a) substituted (1.12.2001) by [Financial Services and Markets Act 2000 (c. 8)](https://www.legislation.gov.uk/ukpga/2000/8). s. 431(2), Sch. 20 para. 4(5); [S.I. 2001/3538](https://www.legislation.gov.uk/uksi/2001/3538), [art. 2(1)](https://www.legislation.gov.uk/uksi/2001/3538/article/2/1)
[^c21625021]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(1)(2)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/1/2) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/3/4) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 63(8)(10)](https://www.legislation.gov.uk/ukpga/1993/34/section/63/8/10) [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 176(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/176/4), [184(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/184/3)
[^c23314471]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314481]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23314521]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314531]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23288421]: [S. 727A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/727A/1) modified (1.1.1999) by [The European Single Currency (Taxes) Regulations 1998 (S.I. 1998/3177)](https://www.legislation.gov.uk/uksi/1998/3177), [regs. 1](https://www.legislation.gov.uk/uksi/1998/3177/regulation/1), [14](https://www.legislation.gov.uk/uksi/1998/3177/regulation/14)
[^c23773791]: Words and paras. (a)(b) in s. 727A(1) substituted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 4](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/4)
[^c23773811]: Words in [s. 727A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/727A/1) inserted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 15](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/15)
[^c23006181]: [1942 c. 21](https://www.legislation.gov.uk/ukpga/1942/21).
[^c23314421]: [Ss. 710-728](https://www.legislation.gov.uk/ukpga/1988/1/section/710) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 11](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/11) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c23314431]: [Ss. 711-728](https://www.legislation.gov.uk/ukpga/1988/1/section/711) modified (31.7.1998) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 161(2)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/2/a) (with [s. 161(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/161/7))
[^c23160871]: Word in [s. 722A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/722A/5) substituted (with effect in accordance with [s. 37(8)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(7)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/7)
[^c23773831]: Words in [s. 728(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 163(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/163/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23773891]: Words in [s. 728(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 163(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/163/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23773851]: Words in [s. 728(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 163(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/163/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23773871]: [S. 728(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/728/9) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 163(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/163/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625181]: Source—1970 s.470; 1971 Sch.6 71
@@ -69954,7 +61176,15 @@
[^c23774891]: Words in [s. 730A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/730A/6) substituted (with effect in accordance with [s. 52(3)](https://www.legislation.gov.uk/ukpga/2005/7/section/52/3) of the amending Act (as amended (retrospectively) by [2005 c. 7](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 4 para. 50](https://www.legislation.gov.uk/ukpga/2005/7/schedule/4/paragraph/50), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/7)) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 10 para. 44(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/10/paragraph/44/b)
[^c23774911]: Words in [s. 730A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/730A/7) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 31](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/31) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23774931]: Words in [s. 730A(2)(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/730A/2/3/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 164(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/164/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23774971]: Words in [s. 730A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/730A/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 164(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/164/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23774991]: Words in [s. 730A(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/730A/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 164(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/164/3/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23775011]: Words in [s. 730B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/730B/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 165(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/165/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23775031]: [S. 730B(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/730B/3A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 165(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/165/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23775051]: Words in [s. 730BB(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/730BB/2/c) substituted (with effect in accordance with [s. 52(3)](https://www.legislation.gov.uk/ukpga/2005/7/section/52/3) of the amending Act (as amended (retrospectively) by [2005 c. 7](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 4 para. 50](https://www.legislation.gov.uk/ukpga/2005/7/schedule/4/paragraph/50), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/7)) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 10 para. 78(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/10/paragraph/78/2)
@@ -69968,6 +61198,10 @@
[^c23775161]: [S. 730BB(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/730BB/12) repealed (with effect in accordance with s. 52(3) of the repealing Act (as amended (retrospectively) by [2005 c. 7](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 4 para. 50](https://www.legislation.gov.uk/ukpga/2005/7/schedule/4/paragraph/50), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/7)) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 10 para. 78(5)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/10/paragraph/78/5), [Sch. 42 Pt. 2(6)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/6), Note 1
[^c23775181]: Words in [s. 730BB(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/730BB/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 166(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/166/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23775201]: [S. 730BB(7A)](https://www.legislation.gov.uk/ukpga/1988/1/section/730BB/7A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 166(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/166/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625261]: Source—1970 s.471(1)-(5)
[^c21625271]: [S. 731(4A)(4B)(4C)](https://www.legislation.gov.uk/ukpga/1988/1/section/731/4A/4B/4C) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 55(1)(2)](https://www.legislation.gov.uk/ukpga/1991/31/section/55/1/2)
@@ -70006,6 +61240,10 @@
[^c23775261]: [S. 731(7A)](https://www.legislation.gov.uk/ukpga/1988/1/section/731/7A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 302(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/302/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23775281]: Words in [s. 731(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/731/2A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 167(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/167/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23775301]: [S. 731(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/731/9): words in definition of "securities" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 167(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/167/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625331]: Source—1970 s.472; 1982 s.57; 1986 Sch.18 1, 3
[^c21625341]: [S. 732(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/732/2A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 56(1)](https://www.legislation.gov.uk/ukpga/1991/31/section/56/1)
@@ -70030,10 +61268,14 @@
[^c21625371]: Source—1970 s.473
[^c23775421]: [S. 733(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/733/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 168](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/168), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625391]: Source—1970 s.474; 1973 Sch.11 7; 1979(C) Sch.7; 1978 s.30(7)
[^c21625401]: Words in [s. 734(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/734/2) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(41)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/41) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23775401]: Words in [s. 734(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/734/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 169](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/169) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625411]: Source—1970 s.475; 1973 Sch.21 7
[^c23006311]: Words in [s. 735(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/735/3) inserted (with effect in accordance with [Sch. 38 para 9(4)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/9/4) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 38 para. 9(1)(a)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/9/1/a)
@@ -70052,6 +61294,8 @@
[^c21625431]: *See* s.237—*disallowance of reliefs in respect of bonus issues etc.*
[^c23776361]: Words in [s. 736(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/736/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 170](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/170) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22992781]: [S. 737A(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/2/b) repealed (with effect in accordance with s. 159(1), Sch. 41 Pt. 5(21) Note 1 of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/1), [Sch. 41 Pt. 5(21)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/21); [S.I. 1996/2646](https://www.legislation.gov.uk/uksi/1996/2646), [art. 2](https://www.legislation.gov.uk/uksi/1996/2646/article/2)
[^c23288451]: [S. 737A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/1) modified (1.1.1999) by [The European Single Currency (Taxes) Regulations 1998 (S.I. 1998/3177)](https://www.legislation.gov.uk/uksi/1998/3177), [regs. 1](https://www.legislation.gov.uk/uksi/1998/3177/regulation/1), [14](https://www.legislation.gov.uk/uksi/1998/3177/regulation/14)
@@ -70078,6 +61322,12 @@
[^c23781031]: Words in [s. 737A(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/6) substituted (with effect in accordance with [Sch. 6 para. 5(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/5/5) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 6 para. 5(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/5/4)
[^c23781071]: Words in [s. 737A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/5) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 173(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/173/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781091]: Words in [s. 737A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/5) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 173(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/173/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781111]: Words in [s. 737A(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/737A/5A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 173(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/173/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23314581]: [S. 737B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/737B/9) power exercised: 1.5.1995 appointed by [S.I. 1995/1007](https://www.legislation.gov.uk/uksi/1995/1007), [art. 2](https://www.legislation.gov.uk/uksi/1995/1007/article/2)
[^c23314591]: [S. 737B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/737B/9) power exercised: 6.11.1996 appointed by [S.I. 1996/2645](https://www.legislation.gov.uk/uksi/1996/2645), [art. 2](https://www.legislation.gov.uk/uksi/1996/2645/article/2)
@@ -70094,12 +61344,6 @@
[^c23149351]: Words in [s. 737C(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/7/b) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Notes 3, 4 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23151321]: [S. 737C(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/8/a) substituted (with effect in accordance with [Sch. 10 para. 16(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 11(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/11/2) (with [Sch. 10 para. 16(3)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16/3))
[^c23151341]: Words in [s. 737C(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/8/b) substituted (with effect in accordance with [Sch. 10 para. 16(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16/1) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 11(2)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/11/2) (with [Sch. 10 para. 16(3)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16/3))
[^c23151301]: Words in [s. 737C(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/9) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Notes 3, 4 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23141181]: [S. 737C(11B)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/11B) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 3 of the repealing Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 18 Pt. 6(10)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/18/part/6/10); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23781231]: [S. 737C](https://www.legislation.gov.uk/ukpga/1988/1/section/737C) modified (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 139(1)(5)](https://www.legislation.gov.uk/ukpga/2006/25/section/139/1/5)
@@ -70112,6 +61356,16 @@
[^c23781151]: Words in [s. 737C(11A)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/11A) inserted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 17](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/17)
[^c23781241]: Words in [s. 737C(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 174(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/174/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781261]: Words in [s. 737C(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/7/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 174(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/174/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781301]: Words in [s. 737C(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 174(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/174/2/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781321]: [S. 737C(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/8) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 174(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/174/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781281]: [S. 737C(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/737C/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 174(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/174/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23312521]: Words in [s. 736B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2) inserted (with application in accordance with [s. 84(4)](https://www.legislation.gov.uk/ukpga/2001/9/section/84/4) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 84(2)](https://www.legislation.gov.uk/ukpga/2001/9/section/84/2)
[^c23312541]: [S. 736B(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2A) inserted (with application in accordance with [s. 84(4)](https://www.legislation.gov.uk/ukpga/2001/9/section/84/4) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 84(3)](https://www.legislation.gov.uk/ukpga/2001/9/section/84/3)
@@ -70120,8 +61374,22 @@
[^c23776461]: [S. 736B(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/4) inserted (with effect in accordance with [Sch. 6 para. 4(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/4/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 6 para. 4(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/4/1)
[^c23776491]: Words in [s. 736B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 171(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/171/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776511]: Words in [s. 736B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 171(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/171/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776531]: Words in [s. 736B(2A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2A/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 171(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/171/3/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776551]: Words in [s. 736B(2A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/736B/2A/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 171(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/171/3/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776661]: [S. 736C(14)](https://www.legislation.gov.uk/ukpga/1988/1/section/736C/14) inserted (with effect in accordance with [Sch. 6 para. 4(4)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/4/4) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 6 para. 4(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/4/2)
[^c23776681]: Words in [s. 736C(2)(a)(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/736C/2/a/3/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 172(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/172/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776741]: [S. 736C(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/736C/8) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 172(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/172/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23776721]: [S. 736C(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/736C/11): words in definition of "tax advantage" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 172(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/172/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21625771]: Source—1986 Sch.18 4
[^c21625781]: [S. 738(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/738/2) repealed (with effect as mentioned in s. 58(3) of the repealing Act) by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [ss. 58(2)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/2), [123](https://www.legislation.gov.uk/ukpga/1991/31/section/123), [Sch. 13 para. 4](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/4), [Sch. 19 Pt. V](https://www.legislation.gov.uk/ukpga/1991/31/schedule/19/part/V), Note 9; [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [reg. 5](https://www.legislation.gov.uk/uksi/1992/1346/regulation/5)
@@ -70136,125 +61404,21 @@
[^c23217671]: Words in [s. 737D(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/737D/2) repealed (with effect in accordance with s. 102(10) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 102(3)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/3), [Sch. 27 Pt. 3(24)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/24), Note
[^c23781341]: Words in [s. 737D(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/737D/1) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 32](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/32) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23781361]: [S. 737D(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/737D/2) modified (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 139(1)(6)](https://www.legislation.gov.uk/ukpga/2006/25/section/139/1/6)
[^c23781371]: Word in [s. 737D(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/737D/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 175(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/175/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781391]: Words in [s. 737D(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/737D/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 175(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/175/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781431]: Words in [s. 737E(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/1/2) inserted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 13(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/13/2)
[^c23781461]: Words in [s. 737E(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/3) inserted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 13(3)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/13/3)
[^c23781411]: [S. 737E(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/8/b) substituted (with effect in accordance with [Sch. 38 para. 21(2)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/21/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 38 para. 8](https://www.legislation.gov.uk/ukpga/2003/14/schedule/38/paragraph/8)
[^c23781501]: Words in [s. 737E(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/4) inserted (with effect in accordance with [Sch. 24 para. 3(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/3/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 3(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/3/2/a)
[^c23781521]: Words in [s. 737E(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/6/b) inserted (with effect in accordance with [Sch. 24 para. 3(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/3/3) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 3(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/3/2/b)
[^c21625851]: *See* 1989 s.110—*residence of trustees; and* s.111—*residence of personal representatives.*
[^c23045681]: [Ss. 739](https://www.legislation.gov.uk/ukpga/1988/1/section/739), [740](https://www.legislation.gov.uk/ukpga/1988/1/section/740) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 12](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/12) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c21625861]: Source—1970 s.478(1), (2), (2A), (2B); 1981 s.46(3), (4)
[^c23782381]: [Ss. 739](https://www.legislation.gov.uk/ukpga/1988/1/section/739), [740](https://www.legislation.gov.uk/ukpga/1988/1/section/740) modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [ss. 459](https://www.legislation.gov.uk/ukpga/2005/5/section/459), [569](https://www.legislation.gov.uk/ukpga/2005/5/section/569) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23152251]: [S. 739(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/739/1A) inserted (with application in accordance with [s. 81(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/81/2) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 81(1)](https://www.legislation.gov.uk/ukpga/1997/16/section/81/1)
[^c21625901]: *See* 1989 s.110—*residence of trustees; and* s.111—*residence of personal representatives.*
[^c23049101]: [Ss. 739](https://www.legislation.gov.uk/ukpga/1988/1/section/739), [740](https://www.legislation.gov.uk/ukpga/1988/1/section/740) modified (with effect in accordance with s. 105(1) of the modifying Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 13 para. 12](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/12) (with [Sch. 13 para. 16](https://www.legislation.gov.uk/ukpga/1996/8/schedule/13/paragraph/16), [Sch. 15](https://www.legislation.gov.uk/ukpga/1996/8/schedule/15))
[^c21625911]: Source—1981 s.45(1)-(6), (9)
[^c21625921]: *See* 1981 s.83(3)—*treatment of capital sums for capital gains tax.*
[^c23290661]: Words in [s. 740(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/740/6/a) substituted (with effect in accordance with [s. 92(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/92/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 26 para. 6(a)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/26/paragraph/6/a)
[^c23291591]: Words in 740(6)(a) substituted (with effect in accordance with [s. 92(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/92/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 26 para. 6(b)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/26/paragraph/6/b)
[^c23292281]: Words in 740(6)(b) inserted (with effect in accordance with [s. 92(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/92/5) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 26 para. 6(c)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/26/paragraph/6/c)
[^c23782391]: [Ss. 739](https://www.legislation.gov.uk/ukpga/1988/1/section/739), [740](https://www.legislation.gov.uk/ukpga/1988/1/section/740) modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [ss. 459](https://www.legislation.gov.uk/ukpga/2005/5/section/459), [569](https://www.legislation.gov.uk/ukpga/2005/5/section/569) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782401]: [S. 740](https://www.legislation.gov.uk/ukpga/1988/1/section/740) applied (with modifications) (6.4.2005 with effect in accordance with s. 883(1) of the affecting Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [s. 468](https://www.legislation.gov.uk/ukpga/2005/5/section/468) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782411]: Words in [s. 740(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/740/2/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 304(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/304/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782431]: Words in [s. 740(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/740/2/b) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 304(2)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/304/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782471]: [S. 740(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/740/4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 304(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/304/3), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782451]: Words in [s. 740(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/740/5) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 304(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/304/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21625941]: Source—1970 s.478(3); 1981 s.45(7)
[^c23782501]: [S. 741](https://www.legislation.gov.uk/ukpga/1988/1/section/741) renumbered as s. 741(1) (5.12.2005) by virtue of [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 2(2)(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/2/2/5)
[^c23782521]: [S. 741(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/741/2) inserted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 2(3)(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/2/3/5)
[^c21625951]: Source—1970 s.478(4)-(6); 1981 ss.45(7), 46(5)
[^c21625961]: Source—1985 Sch. 23 39
[^c21625971]: Source—1970 s.478(7)-(9); 1972 Sch.24 27; 1981 s.46(6)
[^c21625991]: *Repealed by* 1989 s.187*and* Sch.17 Part V*in relation to accounting periods beginning after* 31*March* 1989.
[^c22902601]: Words in [s. 742(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/8) repealed (with effect in accordance with s. 251(3)(a) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 251(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/251/3), [Sch. 26 Pt. 8(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/8/1), Note
[^c23782621]: Words in [s. 742(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/1) substituted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 6(2)(6)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/6/2/6)
[^c23782641]: Words in [s. 742(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/1) inserted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 6(3)(6)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/6/3/6)
[^c23782661]: [S. 742(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/1A/1B) inserted (5.12.2005) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 7 para. 6(4)(6)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/7/paragraph/6/4/6)
[^c23782701]: Words in [s. 742(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/9/a) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [97](https://www.legislation.gov.uk/uksi/2005/3229/regulation/97)
[^c23782721]: [S. 742(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/742/9A) inserted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 22](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/22), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c21626011]: Source—1970 s.480; 1971 Sch.6 72; 1981 s.46(7)
[^c21626021]: *See* 1970(M) s.31(3)—*appeals to go to Special Commissioners.*
[^c23055431]: Words in [s. 743(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 20(b)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/20/b)
[^c23161121]: Words in [s. 743(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1) substituted (with effect in accordance with [Sch. 4 para. 20(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/20/4) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 20(2)(a)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/20/2/a)
[^c23161161]: [S. 743(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1A) inserted (with effect in accordance with [Sch. 4 para. 20(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/20/4) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 20(3)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/20/3)
[^c23782741]: Words in [s. 743(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 305(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/305/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782771]: [S. 743(1ZA)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1ZA) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 305(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/305/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782791]: [S. 743(1A)(a)-(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1A/a) substituted for s. 743(1A)(a)-(g) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 305(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/305/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782811]: [S. 743(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/743/1B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 305(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/305/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21626031]: Source—1981 s.46(1), (2)
[^c21626041]: *See*—1981 s.84—s.745*to have effect for* 1981 ss.80 to 82 (*capital gains of non-resident settlements*).1984 Sch.14 para.15(2)—s.745*to have effect for* 1984 Sch.14 para.15(1)*as for* s.745,*but references to* Part XVII Ch.III*to be construed as references to* 1984 s.70*and* Sch.14.
[^c21626051]: Source—1970 s.481; 1972 Sch.24 28; 1981 s.45(8)
[^c21626061]: [S. 745(2)-(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/745/2) applied (with modifications) (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 98(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/98/2), [289](https://www.legislation.gov.uk/ukpga/1992/12/section/289) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c21626071]: *See* S.I. [1989 No. 1343](https://www.legislation.gov.uk/ukcm/1989/1343) (N.I.14) Art.10(2)*and* Sch.1 para.38(3)*for construction in the case of a solicitor who is an officer or employee of a recognised body.*
[^c21626111]: 1989 s.107*and* Sch.12 para.17.*Previously* “trading companies (as defined in paragraph 7 of Schedule 19)”.
[^c22902621]: Words in [s. 745(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/745/4) repealed (partly retrospective to 30.11.1993 and otherwise with effect in accordance with s. 251(3)(a) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 251(1)(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/251/1/3), [Sch. 16 Pt. 8(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/16/part/8/1), Note
[^c23062951]: [S. 745(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/745/5A) inserted (with application in accordance with [Sch. 37 para. 9](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/9) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 2(1)(2)(c)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/2/1/2/c)
[^c23782831]: Words in [s. 745(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/745/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 306](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/306) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21626131]: Source—1970 s.479.
[^c23782891]: [S. 746](https://www.legislation.gov.uk/ukpga/1988/1/section/746) renumbered as s. 746(1) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 307(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/307/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782851]: Words in [s. 746(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/746/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 307(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/307/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23782871]: [S. 746(2)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/746/2/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 307(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/307/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23781541]: Words in [s. 737E(1)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/1/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 176(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/176/2), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23781571]: Words in [s. 737E(4)(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/737E/4/6/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 176(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/176/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21626141]: [Pt. XVII Ch. IV](https://www.legislation.gov.uk/ukpga/1988/1/part/XVII/chapter/IV) (ss. 747-756) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 119(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/119/3)
@@ -70288,6 +61452,10 @@
[^c23783141]: [S. 747(4A)(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/747/4A/4B) repealed (with effect in accordance with Sch. 4 para. 24(2) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 11 Pt. 2(6)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/6), Note
[^c23783171]: [S. 747(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/747/4/b) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 178](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/178), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23783201]: [S. 747(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/747/6) applied (6.4.2007 with effect in accordance with s. 1034(1) of the affecting Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [s. 725(3)](https://www.legislation.gov.uk/ukpga/2007/3/section/725/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21626161]: Source—1984 s.83
[^c22903731]: [S. 748(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/748/4/5) inserted (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 25 para. 4](https://www.legislation.gov.uk/ukpga/1995/4/schedule/25/paragraph/4)
@@ -70524,14 +61692,26 @@
[^c23790021]: [S. 761(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/761/7/b) substituted (with effect in accordance with [Sch. 12 para. 47(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/12/paragraph/47/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 12 para. 47(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/12/paragraph/47/1)
[^c23790041]: Words in [s. 761(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/761/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 179(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/179/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790061]: Words in [s. 761(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/761/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 179(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/179/2/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790101]: Words in [s. 761(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/761/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 179(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/179/2/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790081]: [S. 761(6A)-(6C)](https://www.legislation.gov.uk/ukpga/1988/1/section/761/6A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 179(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/179/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21626751]: Source—1984 s.97
[^c21626761]: Words in [s. 762(1)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/1) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(48)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/48) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23790211]: Word in [s. 762(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/6) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 309(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/309/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23790231]: Words in [s. 762(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/6) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 309(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/309/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23790251]: Words in [s. 762(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/5/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 180(a)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/180/a/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790271]: Words in [s. 762(5)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/5/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 180(a)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/180/a/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23790291]: Words in [s. 762(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/762/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 180(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/180/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21626851]: Source—1984 s.98
[^c21626861]: Words in [s. 763(1)-(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/763/1) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(49)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/49) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
@@ -70540,6 +61720,8 @@
[^c23790411]: [S. 763(6A)](https://www.legislation.gov.uk/ukpga/1988/1/section/763/6A) inserted (with effect in accordance with [s. 145(2)](https://www.legislation.gov.uk/ukpga/2004/12/section/145/2) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 26 para. 15(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/26/paragraph/15/2) (with [Sch. 26 para. 17](https://www.legislation.gov.uk/ukpga/2004/12/schedule/26/paragraph/17))
[^c23790451]: [S. 763(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/763/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 181](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/181) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23788291]: [Ss. 756A-756C](https://www.legislation.gov.uk/ukpga/1988/1/section/756A) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 489](https://www.legislation.gov.uk/ukpga/2009/4/section/489) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23788301]: [Ss. 756A-756C](https://www.legislation.gov.uk/ukpga/1988/1/section/756A) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 489](https://www.legislation.gov.uk/ukpga/2009/4/section/489) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
@@ -70730,16 +61912,8 @@
[^c23793521]: Words in [s. 774(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/774/1) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 310(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/310/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21627461]: Source—1970 s.487(1)-(7)
[^c23794971]: Words in [s. 775(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/775/2) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 311(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/311/2), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23794951]: [S. 775(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/775/2A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 311(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/311/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21627481]: Source—1970 s.488; 1979(C) Sch.7
[^c21627491]: Words in [s. 776(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/9) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(50)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/50) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23261011]: Words in [s. 776(6)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/a/b) substituted (31.7.1998) by [Finance Act 1998 (c. 6)](https://www.legislation.gov.uk/ukpga/1998/6), [s. 46(3)(a)](https://www.legislation.gov.uk/ukpga/1998/6/section/46/3/a), [Sch. 7 para. 1](https://www.legislation.gov.uk/ukpga/1998/6/schedule/7/paragraph/1)
[^c23795051]: Word in [s. 776(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6) substituted (S.) (28.11.2004) by [Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5)](https://www.legislation.gov.uk/asp/2000/5), [ss. 71](https://www.legislation.gov.uk/asp/2000/5/section/71), [77(2)](https://www.legislation.gov.uk/asp/2000/5/section/77/2), [Sch. 12 para. 50(4)](https://www.legislation.gov.uk/asp/2000/5/schedule/12/paragraph/50/4); [S.S.I. 2003/456](https://www.legislation.gov.uk/ssi/2003/456), [art. 2](https://www.legislation.gov.uk/ssi/2003/456/article/2)
@@ -70748,24 +61922,100 @@
[^c23795071]: [S. 776(3A)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/3A/3B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 312(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/312/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23795091]: Words in [s. 776(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 312(4)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/312/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23795111]: Words in [s. 776(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 312(4)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/312/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23795131]: Words in [s. 776(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/7) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 312(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/312/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23795171]: Word in [s. 776(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795191]: Words in [s. 776(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795211]: Words in [s. 776(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/3/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796031]: [S. 776(3A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/3A/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796051]: [S. 776(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/3B) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796071]: Words in [s. 776(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(6)(a)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/6/a/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795231]: Word in [s. 776(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(6)(a)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/6/a/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796091]: Words in [s. 776(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/6/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/6/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796111]: Words in [s. 776(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(7)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/7/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795251]: Words in [s. 776(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(7)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/7/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795271]: Words in [s. 776(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(8)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/8/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795291]: Words in [s. 776(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(8)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/8/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796161]: [S. 776(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/9) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(9)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/9), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795651]: Words in [s. 776(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/11) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(10)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/10/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795961]: Word in [s. 776(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/11) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(10)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/10/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23795981]: Words in [s. 776(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/11) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(10)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/10/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796011]: Word in [s. 776(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/776/11) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 184(10)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/184/10/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627521]: Source—1970 s.489; 1979(C) Sch.7
[^c21627531]: Words in [s. 777(11)(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/11/12) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(51)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/51) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23796281]: Words in [s. 777(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/9) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 313(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/313/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23796301]: Words in [s. 777(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/10) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 313(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/313/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23796321]: Words in [s. 777(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796341]: Words in [s. 777(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796361]: Words in [s. 777(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796381]: Words in [s. 777(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796401]: Words in [s. 777(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/5/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796421]: Words in [s. 777(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/6/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(5)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/5/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796441]: Words in [s. 777(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796461]: Words in [s. 777(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(7)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/7/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796481]: Words in [s. 777(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(7)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/7/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796501]: Words in [s. 777(8)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/8/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(7)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/7/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796531]: Words in [s. 777(8)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/8/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(7)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/7/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796681]: Words in [s. 777(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/8) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(7)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/7/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796701]: [S. 777(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/9) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(8)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796561]: Words in [s. 777(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/10) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(9)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/9) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796581]: Word in [s. 777(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/11) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(10)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/10) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796601]: [S. 777(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/12) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(11)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/11) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796621]: Words in [s. 777(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/13) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(12)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/12/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796741]: Words in [s. 777(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/13) inserted (retrospective to 6.4.2007 and with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859)](https://www.legislation.gov.uk/uksi/2009/2859), [arts. 1](https://www.legislation.gov.uk/uksi/2009/2859/article/1), [2(3)(a)](https://www.legislation.gov.uk/uksi/2009/2859/article/2/3/a)
[^c23796641]: [S. 777(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/13): definition of "capital" substituted for definition of "capital amount" (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by virtue of [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(12)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/12/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796761]: [S. 777(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/13): words in definition of "capital" substituted (retrospective to 6.4.2007 and with effect in accordance with art. 1(2) of the amending S.I.) by [The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859)](https://www.legislation.gov.uk/uksi/2009/2859), [arts. 1](https://www.legislation.gov.uk/uksi/2009/2859/article/1), [2(3)(b)](https://www.legislation.gov.uk/uksi/2009/2859/article/2/3/b)
[^c23796721]: Words in [s. 777(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/777/13) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 185(12)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/185/12/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627551]: Source—1970 s.490
[^c21627561]: *See* S.I.[1989 No.1343](https://www.legislation.gov.uk/ukcm/1989/1343) (N.I.14) Sch.1 para.38(3)*for construction in the case of a solicitor who is an officer or employee of a recognised body.*
[^c23796781]: Words in [s. 778(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/778/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 186(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/186/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796801]: Words in [s. 778(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/778/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 186(b)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/186/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23796821]: Words in [s. 778(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/778/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 186(b)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/186/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22902761]: [S. 779](https://www.legislation.gov.uk/ukpga/1988/1/section/779) restricted (11.1.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 252(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/252/3), [Sch. 24 para. 23](https://www.legislation.gov.uk/ukpga/1994/9/schedule/24/paragraph/23)
[^c21627571]: Source—1970 s.491
@@ -70802,6 +62052,10 @@
[^c23797041]: [S. 779(13)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/779/13/ca) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 314(3)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/314/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23797081]: Words in [s. 779(13)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/779/13/ca) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 187(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/187/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23797101]: Words in [s. 779(13)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/779/13/ca) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 187(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/187/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23082491]: [S. 780](https://www.legislation.gov.uk/ukpga/1988/1/section/780) excluded (24.7.1996) by [Broadcasting Act 1996 (c. 55)](https://www.legislation.gov.uk/ukpga/1996/55), [s. 149(1)(f)](https://www.legislation.gov.uk/ukpga/1996/55/section/149/1/f), [Sch. 7 para. 23](https://www.legislation.gov.uk/ukpga/1996/55/schedule/7/paragraph/23) (with [s. 43](https://www.legislation.gov.uk/ukpga/1996/55/section/43))
[^c21627581]: Source—1972 s.80
@@ -70812,6 +62066,8 @@
[^c23797241]: [S. 780(3A)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/780/3A/3B) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 315(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/315/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23797261]: [S. 780(3C)](https://www.legislation.gov.uk/ukpga/1988/1/section/780/3C) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 188](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/188) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22902841]: [S. 781](https://www.legislation.gov.uk/ukpga/1988/1/section/781) modified (11.1.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 252(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/252/3), [Sch. 24 para. 19(1)-(4)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/24/paragraph/19/1)
[^c22902861]: [S. 781](https://www.legislation.gov.uk/ukpga/1988/1/section/781) excluded (11.1.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 252(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/252/3), [Sch. 24 para. 19(6)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/24/paragraph/19/6)
@@ -70848,6 +62104,14 @@
[^c23797381]: Words in [s. 781(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/781/4/b) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 316(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/316/4), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23797471]: [S. 781](https://www.legislation.gov.uk/ukpga/1988/1/section/781) modified (22.7.2008) by [Crossrail Act 2008 (c. 18)](https://www.legislation.gov.uk/ukpga/2008/18), [Sch. 13 paras. 16](https://www.legislation.gov.uk/ukpga/2008/18/schedule/13/paragraph/16), [25](https://www.legislation.gov.uk/ukpga/2008/18/schedule/13/paragraph/25)
[^c23797451]: [S. 781(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/781/1A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 189(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/189/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23797411]: Words in [s. 781(4)(ab)](https://www.legislation.gov.uk/ukpga/1988/1/section/781/4/ab) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 189(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/189/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23797431]: Words in [s. 781(4)(ab)](https://www.legislation.gov.uk/ukpga/1988/1/section/781/4/ab) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 189(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/189/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22902941]: [S. 782](https://www.legislation.gov.uk/ukpga/1988/1/section/782) excluded (11.1.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 252(3)](https://www.legislation.gov.uk/ukpga/1994/9/section/252/3), [Sch. 24 para. 19(5)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/24/paragraph/19/5)
[^c22902961]: [S. 782](https://www.legislation.gov.uk/ukpga/1988/1/section/782) excluded (19.9.1994) by [Coal Industry Act 1994 (c. 21)](https://www.legislation.gov.uk/ukpga/1994/21), [s. 68(4)](https://www.legislation.gov.uk/ukpga/1994/21/section/68/4), [Sch. 4 para. 18(2)](https://www.legislation.gov.uk/ukpga/1994/21/schedule/4/paragraph/18/2) (with [s. 40(7)](https://www.legislation.gov.uk/ukpga/1994/21/section/40/7)); [S.I. 1994/2189](https://www.legislation.gov.uk/uksi/1994/2189), [art. 2](https://www.legislation.gov.uk/uksi/1994/2189/article/2), [Sch.](https://www.legislation.gov.uk/uksi/1994/2189/schedule)
@@ -70890,6 +62154,8 @@
[^c23797791]: [S. 785](https://www.legislation.gov.uk/ukpga/1988/1/section/785): words in definition of "capital sum" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 319](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/319) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23797811]: [S. 785](https://www.legislation.gov.uk/ukpga/1988/1/section/785): words in definition of "capital sum" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 190](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/190) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627681]: Source—1970 s.496
[^c22992861]: [S. 786(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/786/4) repealed (with effect in accordance with s. 159(1) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(1)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/1), [Sch. 41 Pt. 5(21)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/21), Note 1; [S.I. 1996/2646](https://www.legislation.gov.uk/uksi/1996/2646), [art. 2](https://www.legislation.gov.uk/uksi/1996/2646/article/2)
@@ -70914,6 +62180,8 @@
[^c23797851]: [S. 785A(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/785A/5A) inserted (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 6 para. 7(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/6/paragraph/7/2)
[^c23794991]: Words in [s. 775A(4)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/775A/4/c) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 183](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/183) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627721]: *See*—1970 ss.267, 273, 273A*and* 276(groups)—*disapplication of those provisions in the case of companies treated as resident outside the U.K. by virtue of* s.788.1989 s.115—*calculation of tax credit for non-resident on gross amount of distribution.*1990 s.32(8)—*application of* s.788*to assets held by employee share ownership trusts.* [S. 788](https://www.legislation.gov.uk/ukpga/1988/1/section/788) modified (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 194(1)](https://www.legislation.gov.uk/ukpga/1993/34/section/194/1)
[^c21627741]: Source—1970 s.497(1)-(8); 1972 ss.98(2), 100(1); 1976 s.50(2); 1987 s.70(1)
@@ -70944,6 +62212,10 @@
[^c22810331]: Words in [s. 789(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/789/2) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 21](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/21)
[^c23799101]: [S. 789(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/789/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 191(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/191/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23799121]: Words in [s. 789(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/789/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 191(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/191/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627781]: Source—1970 s.498(1); 1972 s.100(1)
[^c21627791]: Source—1970 s.498(2)
@@ -70986,6 +62258,8 @@
[^c21627881]: Source—1970 s.501; 1972 s.100 (1).
[^c23802261]: [S. 793(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/793/3) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 192](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/192) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627891]: Source—1970 s.502; 1982 s.67; 1972 s.100(1).
[^c22894511]: [S. 794(2)(bb)](https://www.legislation.gov.uk/ukpga/1988/1/section/794/2/bb) inserted (with effect in accordance with [Sch. 30 para. 4(14)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/14) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 30 para. 4(5)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/5)
@@ -71028,6 +62302,12 @@
[^c22894701]: Words in [s. 796(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/796/1) inserted (with effect in accordance with [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 12](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/12)
[^c23802541]: Words in [s. 796(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/796/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 193(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/193/2) (with [Sch. 1 para. 193(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/193/5) (as inserted by [S.I. 2007/3506](https://www.legislation.gov.uk/uksi/2007/3506), [arts. 1](https://www.legislation.gov.uk/uksi/2007/3506/article/1), [3(5)](https://www.legislation.gov.uk/uksi/2007/3506/article/3/5) and as amended by [S.I. 2009/2859](https://www.legislation.gov.uk/uksi/2009/2859), [arts. 1](https://www.legislation.gov.uk/uksi/2009/2859/article/1), [4(6)(b)](https://www.legislation.gov.uk/uksi/2009/2859/article/4/6/b)), Sch. 2)
[^c23802561]: [S. 796(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/796/2A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 193(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/193/3) (with [Sch. 1 para. 193(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/193/5) (as inserted by [S.I. 2007/3506](https://www.legislation.gov.uk/uksi/2007/3506), [arts. 1](https://www.legislation.gov.uk/uksi/2007/3506/article/1), [3(5)](https://www.legislation.gov.uk/uksi/2007/3506/article/3/5) and as amended by [S.I. 2009/2859](https://www.legislation.gov.uk/uksi/2009/2859), [arts. 1](https://www.legislation.gov.uk/uksi/2009/2859/article/1), [4(6)(b)](https://www.legislation.gov.uk/uksi/2009/2859/article/4/6/b)), Sch. 2)
[^c23802581]: Words in [s. 796(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/796/3) substituted (6.4.2007 with effect in accordance with [S.I. 2009/2859](https://www.legislation.gov.uk/uksi/2009/2859), [art. 1(2)](https://www.legislation.gov.uk/uksi/2009/2859/article/1/2)) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 193(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/193/4) (as substituted by [S.I. 2009/2859](https://www.legislation.gov.uk/uksi/2009/2859), [art. 4(6)(a)](https://www.legislation.gov.uk/uksi/2009/2859/article/4/6/a)) (with Sch. 2)
[^c21627921]: Source—1970 s.505; 1972 s.100(1), (3); 1984 s.53(1)
[^c21627931]: Source—1972 s.100(4)-(6A); 1984 s.53(1); 1986 s.49; 1987 (No.2) s.77
@@ -71106,6 +62386,8 @@
[^c23803151]: [Ss. 797-798C](https://www.legislation.gov.uk/ukpga/1988/1/section/797) applied (31.12.2006 with effect in accordance with reg. 1(2) of the amending S.I.) by [The Lloyd's Underwriters (Double Taxation Relief) (Corporate Members) Regulations 2006 (S.I. 2006/3262)](https://www.legislation.gov.uk/uksi/2006/3262), [reg. 4](https://www.legislation.gov.uk/uksi/2006/3262/regulation/4)
[^c23803281]: [S. 798C(2)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/798C/2) substituted for s. 798C(2) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 194](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/194) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21627961]: Source—1970 s.506; 1976 s.50(3)
[^c22895281]: Words in [s. 799(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/799/1) renumbered as s. 799(1)(a) (with effect in accordance with [Sch. 30 para. 8(5)(6)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/8/5/6) of the amending Act) by virtue of [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 30 para. 8(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/8/2)
@@ -71172,10 +62454,14 @@
[^c23803911]: [S. 803(4)-(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/803/4) repealed (with effect in accordance with s. 86(3)(4) of the repealing Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 86(2)(b)](https://www.legislation.gov.uk/ukpga/2005/7/section/86/2/b), [Sch. 11 Pt. 2(8)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/8), Note
[^c23803981]: Words in [s. 803(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/803/10) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 196](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/196) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22896071]: Words in [s. 801A(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/801A/1/a) substituted (with effect in accordance with [Sch. 30 para. 4(14)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/14) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 30 para. 4(11)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/11)
[^c22896091]: Words in [s. 801A(2)(7)(11)](https://www.legislation.gov.uk/ukpga/1988/1/section/801A/2/7/11) substituted (with effect in accordance with [Sch. 30 para. 4(14)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/14) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 30 para. 4(12)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/4/12)
[^c23803871]: [S. 801A(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/801A/9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 195](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/195) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23804001]: [S. 803A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/803A/1A) inserted (with effect in accordance with [s. 90(3)](https://www.legislation.gov.uk/ukpga/2005/7/section/90/3) of the amending Act) by [Finance Act 2005 (c. 7)](https://www.legislation.gov.uk/ukpga/2005/7), [s. 90(2)](https://www.legislation.gov.uk/ukpga/2005/7/section/90/2)
[^c21628021]: Source—1970 s.510; 1971 Sch.6 75
@@ -71194,14 +62480,16 @@
[^c23804191]: Words in [s. 804(5)(b)(5A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/5/b/5A/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 323(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/323/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23804221]: Words in [s. 804(5B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/5B/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 323(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/323/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23804241]: Words in [s. 804(5B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/5B/a) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 323(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/323/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23804261]: Words in [s. 804(5C)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/5C) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 323(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/323/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23804281]: [S. 804(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/8): words in definition of "overlap profit" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 323(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/323/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23804301]: Words in [s. 804(5B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/5B/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 197(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/197/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23804321]: [S. 804(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/804/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 197(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/197/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22897371]: Words in [s. 804A(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/804A/3) repealed (with effect in accordance with s. 105(1) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/3), Note
[^c22897391]: [S. 804A(1)-(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/804A/1) substituted for s. 804A(1) (with effect in accordance with [Sch. 30 para. 16(6)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/16/6) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 30 para. 16(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/30/paragraph/16/2)
@@ -71284,6 +62572,22 @@
[^c23806331]: Words in [s. 807(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/1/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 325](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/325) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23806351]: Words in [s. 807(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/1/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806371]: Words in [s. 807(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/1/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806391]: Words in [s. 807(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806491]: Words in [s. 807(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/4/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806421]: Words in [s. 807(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806451]: Words in [s. 807(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806471]: [S. 807(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806511]: [S. 807(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/807/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 198(8)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/198/8), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21628111]: Source—1976 s.50(1)
[^c21628121]: Words in [s. 808](https://www.legislation.gov.uk/ukpga/1988/1/section/808) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 73(3)(4)(5)](https://www.legislation.gov.uk/ukpga/1991/31/section/73/3/4/5), [Sch. 15 para.21](https://www.legislation.gov.uk/ukpga/1991/31/schedule/15/paragraph/21)
@@ -71296,10 +62600,10 @@
[^c21628141]: Source—1973 s.18
[^c23806821]: Words in [s. 809(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/809/1/a) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 24(a)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/24/a), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23806841]: Words in [s. 809(1)(a)(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/809/1/a/2) substituted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 24(b)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/24/b), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23806871]: Words in [s. 809(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/809/1/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 199](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/199) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21628191]: Source—1970 s.516; 1973 s.40(1); 1987 Sch.15 2(19)
[^c21628212]: [S. 811(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/811/2/c) and preceding word repealed (with effect as mentioned in [s. 103(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/103/3/4) of the amending Act) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [ss. 103(2)(g)(3)(4)](https://www.legislation.gov.uk/ukpga/1993/34/section/103/2/g/3/4), [213](https://www.legislation.gov.uk/ukpga/1993/34/section/213), [Sch. 23 Pt. III(9)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/23/part/III/9)
@@ -71314,8 +62618,6 @@
[^c22899681]: Word preceding s. 811(2)(b) repealed (with effect in accordance with Sch. 27 para. 6(3) of the repealing Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 27 para. 6(2)(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/27/paragraph/6/2/a), [Sch. 33 Pt. 2(8)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/33/part/2/8), Note
[^c22899701]: Word at the end of s. 811(2)(b) inserted (with effect in accordance with [Sch. 27 para. 6(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/27/paragraph/6/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 27 para. 6(2)(b)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/27/paragraph/6/2/b)
[^c22899721]: [S. 811(2)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/811/2/d) inserted (with effect in accordance with [Sch. 27 para. 6(3)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/27/paragraph/6/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 27 para. 6(2)(c)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/27/paragraph/6/2/c)
[^c22899761]: Words in [s. 811(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/811/3) renumbered as s. 811(3)(a) (24.7.2002) by virtue of [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 30 para. 5(5)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/30/paragraph/5/5)
@@ -71324,6 +62626,10 @@
[^c23806891]: Words in [s. 811(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/811/2) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [s. 115(2)](https://www.legislation.gov.uk/ukpga/2004/12/section/115/2)
[^c23806911]: Word at the end of s. 811(2)(a) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 200(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/200/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806951]: [S. 811(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/811/2/b) and word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 200(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/200/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21628221]: Source—1985 s.54(1),(3)
[^c21628231]: Source—1985 s.54(6) Sch.13 5
@@ -71392,6 +62698,10 @@
[^c23807471]: Words in [s. 816(2)(2ZA)(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/816/2/2ZA/2A) substituted (18.4.2005) by [Commissioners for Revenue and Customs Act 2005 (c. 11)](https://www.legislation.gov.uk/ukpga/2005/11), [s. 53(1)](https://www.legislation.gov.uk/ukpga/2005/11/section/53/1), [Sch. 4 para. 37(b)](https://www.legislation.gov.uk/ukpga/2005/11/schedule/4/paragraph/37/b); [S.I. 2005/1126](https://www.legislation.gov.uk/uksi/2005/1126), [art. 2(2)(h)](https://www.legislation.gov.uk/uksi/2005/1126/article/2/2/h)
[^c23810221]: Words in [s. 816(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/816/3) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 202(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/202/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23810731]: [S. 816(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/816/3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 202(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/202/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23806781]: [S. 808A(2)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/808A/2) applied (with effect in accordance with s. 97(5)(6) of the affecting Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 103](https://www.legislation.gov.uk/ukpga/2004/12/section/103) (with [s. 106](https://www.legislation.gov.uk/ukpga/2004/12/section/106))
[^c23806791]: [S. 808A(2)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/808A/2) applied (6.4.2005 with effect in accordance with s. 883(1) of the affecting Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [s. 764](https://www.legislation.gov.uk/ukpga/2005/5/section/764) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -71456,30 +62766,6 @@
[^c23812311]: Words in [s. 817(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/817/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 327(3)(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/327/3/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21628441]: Source—1970 s.425; 1971 Sch.6 51
[^c23812351]: Words in [s. 818(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/818/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 328(2)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/328/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23812371]: [S. 818(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/818/3) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 328(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/328/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21628481]: Source—1971 Sch.7 2-4; 1978 Sch.2 14
[^c21628491]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) inserted (16.7.1992 for the year 1992-93 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 19(3)(7)](https://www.legislation.gov.uk/ukpga/1992/48/section/19/3/7)
[^c21628501]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) substituted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 79](https://www.legislation.gov.uk/ukpga/1993/34/section/79), [Sch. 6 paras.1](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/1), [25(1)](https://www.legislation.gov.uk/ukpga/1993/34/schedule/6/paragraph/25/1)
[^c22800381]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) substituted (with effect in accordance with [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 13](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/13)
[^c22800391]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) inserted (with effect in accordance with [Sch. 4 para. 21(2)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/21/2) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 21(1)(a)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/21/1/a)
[^c22800411]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) substituted (with effect in accordance with [Sch. 4 para. 21(2)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/21/2) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 4 para. 21(1)(b)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/4/paragraph/21/1/b)
[^c22800461]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) substituted (with effect in accordance with [s. 22(12)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/12) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(9)(c)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/9/c)
[^c23812391]: Words in [s. 819(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/819/2) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 329](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/329) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21628561]: Source—1970 s.523
[^c21628891]: Source—1975 (No.2) s.47(3)(a)
[^c22801891]: Words in [s. 824(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/824/2) substituted (retrospectively) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39) s. 146, Sch.13 para.7(c)
@@ -71538,12 +62824,8 @@
[^c21629671]: 1989 s.178(6).
[^c21629691]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) substituted (1990-91 and subsequent years of assessment) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 17(3)](https://www.legislation.gov.uk/ukpga/1990/29/section/17/3)
[^c22803721]: Words in [s. 828(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/2) substituted (with effect in accordance with [Sch. 7 para. 32](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/32) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 7 para. 24](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/24)
[^c22803761]: Words in [s. 828(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/4) substituted (with effect in accordance with [s. 579](https://www.legislation.gov.uk/ukpga/2001/2/section/579) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 58](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/58)
[^c23815061]: Words in [s. 828(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/1) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 105(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/105/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23815081]: Words in [s. 828(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/3) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 105(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/105/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
@@ -71554,15 +62836,19 @@
[^c23815141]: Words in [s. 828(5)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 334(3)(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/334/3/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21629741]: Source—1970 ss.524, 525(1)
[^c21629751]: Words in [s. 829(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/829/2) inserted (27.7.1993 with effect in relation to the year 1993-94 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 122(1)(3)](https://www.legislation.gov.uk/ukpga/1993/34/section/122/1/3)
[^c22803771]: [S. 829(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/829/2A) inserted (with effect in accordance with [s. 40(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/40/4) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 40(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/40/2)
[^c23816121]: Words in [s. 829(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/829/2A) substituted (with effect in accordance with [s. 77](https://www.legislation.gov.uk/ukpga/2004/12/section/77) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 11(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/11/2/a)
[^c23816141]: Words in [s. 829(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/829/2A) substituted (with effect in accordance with [s. 77](https://www.legislation.gov.uk/ukpga/2004/12/section/77) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 12 para. 11(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/12/paragraph/11/2/b)
[^c23815261]: Words in [s. 828(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815331]: Words in [s. 828(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815281]: Words in [s. 828(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815301]: Words in [s. 828(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/6/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815421]: Words in [s. 828(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/6/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815321]: Words in [s. 828(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5/a) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/6/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23815431]: Words in [s. 828(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/828/5/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 208(6)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/208/6/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21629771]: Source—1973 s.38(1), (2)-(4), (6)
@@ -71574,18 +62860,14 @@
[^c23816191]: Words in [s. 830(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/830/3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 335](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/335), [Sch. 3](https://www.legislation.gov.uk/ukpga/2005/5/schedule/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23816211]: Words in [s. 830(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/830/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 210](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/210), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21630391]: 1970 s.526(5), 527(1); 1971 s.32(1), (1D), Sch.8 16(3); 1976 Sch.4 11; 1972 s.93(6); 1979(C), Sch.7; 1981 s.34(5); 1987 Sch.15 2(20)
[^c21630421]: [1986 c. 53](https://www.legislation.gov.uk/ukpga/1986/53).
[^c21630441]: Word in [s. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(54)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/54) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)).
[^c21630461]: *Repealed by* 1988(F) s.148*and* Sch.14 Part IV*for* 1988-89*and subsequent years.*
[^c21630471]: [1923 c. 8](https://www.legislation.gov.uk/ukpga/1923/8).
[^c21630481]: [S.I. 1979/1574 (N.I. 13)](https://www.legislation.gov.uk/nisi/1979/1574).
[^c21630491]: 1990 s.127*and* Sch.18 para.5(3)*on and after* 1*April* 1990.*Previously* “ “local authority” and “local authority association” have the meanings given by section 519;”.
[^c21630501]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "lower rate" inserted (16.3.1992 with application for the year 1992-93 and subsequent years of assessment) by [Finance Act 1992 (c. 20)](https://www.legislation.gov.uk/ukpga/1992/20), [s. 9(9)(10)(11)](https://www.legislation.gov.uk/ukpga/1992/20/section/9/9/10/11)
@@ -71596,8 +62878,6 @@
[^c21630541]: Source—1970 s.526(3), (4)
[^c21630551]: Source—1970 s.526(5A); 1987 Sch.15 2(21)
[^c22804321]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "recognised clearing system" repealed (with effect in accordance with Sch. 7 para. 32 of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 7 para. 25](https://www.legislation.gov.uk/ukpga/1996/8/schedule/7/paragraph/25), [Sch. 41 Pt. 5(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/2), Note (with Sch. 7 paras. 33-35)
[^c22804331]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "Schedule A business" inserted (with effect in accordance with [s. 39(4)(5)](https://www.legislation.gov.uk/ukpga/1995/4/section/39/4/5) of the amending Act) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1995/4/schedule/6/paragraph/28)
@@ -71622,8 +62902,6 @@
[^c22804451]: [S. 832(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/4A) inserted (with effect in accordance with [Sch. 3 para. 39(8)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/39/8) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 39(7)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/39/7)
[^c22804561]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "lower rate" substituted (with effect in accordance with [s. 22(12)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/12) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(10)(a)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/10/a)
[^c22804581]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "starting rate" and "starting rate limit" inserted after the definition of "Schedule A business" (with effect in accordance with [s. 22(12)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/12) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 22(10)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/22/10/b)
[^c22804601]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): words in definition of "capital allowance" substituted (with effect in accordance with [s. 579](https://www.legislation.gov.uk/ukpga/2001/2/section/579) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 60(a)](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/60/a)
@@ -71632,8 +62910,6 @@
[^c22804641]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "investment LLP" and "property investment LLP" inserted (6.4.2001 with effect in accordance with [s. 76(1)](https://www.legislation.gov.uk/ukpga/2001/9/section/76/1) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [s. 76(2)](https://www.legislation.gov.uk/ukpga/2001/9/section/76/2), [Sch. 25 para. 1(2)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/25/paragraph/1/2)
[^c22804661]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): words in definition of "industrial assurance business" substituted (1.12.2001) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 167(4)(11)](https://www.legislation.gov.uk/ukpga/1996/8/section/167/4/11); [S.I. 2001/3643](https://www.legislation.gov.uk/uksi/2001/3643), [art. 2(a)](https://www.legislation.gov.uk/uksi/2001/3643/article/2/a)
[^c22804701]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "for accounting purposes" inserted (with effect in accordance with [s. 103(6)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/6) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 103(1)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/1)
[^c22804681]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "generally accepted accounting practice" inserted (with effect in accordance with [s. 103(6)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/6) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 103(1)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/1)
@@ -71658,8 +62934,6 @@
[^c23816821]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): words in definition of "Schedule A business" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 337(c)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/337/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23816851]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): words in definitions of "the Schedule F ordinary rate", "the Schedule F trust rate" and "the Schedule F upper rate" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 337(d)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/337/d) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23816801]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "tax credit" substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 337(e)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/337/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23816891]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "UK property business" inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 337(f)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/337/f) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
@@ -71672,45 +62946,53 @@
[^c23816981]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "scheme administrator" inserted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 35(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/35/3) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c21630561]: Source—1979(C) s.155(5).
[^c21630571]: Source—1980 s.24(8)
[^c21630591]: Source—1970 s.529
[^c21630601]: *Repealed by* 1988(F) s.148*and* Sch.14 Part IV*for* 1988-89*and subsequent years.*
[^c21630621]: Source—1970 s.530(1)
[^c21630681]: *Repealed by* 1988(F) s.148*and* Sch.14 Part VIII*for* 1990-91*and subsequent years.*
[^c21630691]: Source—1970 s.530(2), 383; 1981 s.27(10); 1982 s.31(2); 1987 Sch.3 5
[^c21630731]: Source—1970 s.530(3).
[^c22805271]: Words in [s. 833(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/2) substituted (1.4.1996) by [The Transfer of Functions (Registration and Statistics) Order 1996 (S.I. 1996/273)](https://www.legislation.gov.uk/uksi/1996/273), [Sch. 2 para. 22(a)](https://www.legislation.gov.uk/uksi/1996/273/schedule/2/paragraph/22/a)
[^c22805291]: Words in [s. 833(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/2) substituted (1.4.1996) by [The Transfer of Functions (Registration and Statistics) Order 1996 (S.I. 1996/273)](https://www.legislation.gov.uk/uksi/1996/273), [Sch. 2 para. 22(b)](https://www.legislation.gov.uk/uksi/1996/273/schedule/2/paragraph/22/b)
[^c23817601]: [S. 833(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/3/a) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 108(2)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/108/2) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23817621]: [S. 833(4)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/4/a/b) substituted (6.4.2003 with effect in accordance with [s. 723(1)](https://www.legislation.gov.uk/ukpga/2003/1/section/723/1) of the amending Act) by [Income Tax (Earnings and Pensions) Act 2003 (c. 1)](https://www.legislation.gov.uk/ukpga/2003/1), [Sch. 6 para. 108(3)](https://www.legislation.gov.uk/ukpga/2003/1/schedule/6/paragraph/108/3) (with [Sch. 7](https://www.legislation.gov.uk/ukpga/2003/1/schedule/7))
[^c23817661]: Words in [s. 833(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/3/b) inserted (with effect in accordance with [s. 173(2)](https://www.legislation.gov.uk/ukpga/2003/14/section/173/2) of the amending Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 35 para. 5](https://www.legislation.gov.uk/ukpga/2003/14/schedule/35/paragraph/5)
[^c23817681]: Words in [s. 833(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/3) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(2)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817701]: Words in [s. 833(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/3/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(2)(b)(i)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/2/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817721]: Words in [s. 833(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/3/b) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(2)(b)(ii)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/2/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817741]: Word in [s. 833(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/4) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(3)(a)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817761]: Words in [s. 833(4)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/4/c) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(3)(b)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817781]: [S. 833(5)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/5/a/b) substituted for words in s. 833(5) (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(4)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817801]: [S. 833(5A)-(5E)](https://www.legislation.gov.uk/ukpga/1988/1/section/833/5A) inserted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 338(5)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/338/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23817001]: Words in [s. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817121]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "basic rate" and "basic rate limit" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817141]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "higher rate" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817161]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "industrial assurance business" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817181]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "interest" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817201]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "investment LLP" and "property investment LLP" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(f)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/f), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817221]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "lower rate" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(g)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/g), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817241]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): words in definition of "notice" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(h)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/h), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817261]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): in definition of "overseas property business", para. (a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817281]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): in definition of "overseas property business", words in para. (b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817301]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "preference dividend" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(j)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/j), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817081]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "property investment LLP" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(k)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/k) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817321]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "the rate applicable to trusts" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(l)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/l), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817341]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "relevant foreign income" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(m)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/m), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817361]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "starting rate" and "starting rate limit" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(n)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/n), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817441]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definitions of "the dividend ordinary rate", "the dividend trust rate" and "the dividend upper rate" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(q)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/q), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817381]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "step-child" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(o)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/o), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817401]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): in definition of "tax credit", words in para. (a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(p)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/p), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817421]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): in definition of "tax credit", para. (b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(p)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/p), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817481]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "UK property business" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(r)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/r), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817061]: [S. 832(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/1): definition of "unit trust scheme" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(2)(s)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/2/s) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817101]: [S. 832(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/2A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817021]: Words in [s. 832(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/4A) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23817501]: [S. 832(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/832/5) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 212(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/212/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21630741]: Source—1970 s.527.
@@ -71734,33 +63016,7 @@
[^c23817861]: [S. 834(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/834/1): words in definition of "allowable loss" inserted (with effect in accordance with [s. 69(5)](https://www.legislation.gov.uk/ukpga/2006/25/section/69/5) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 69(4)](https://www.legislation.gov.uk/ukpga/2006/25/section/69/4)
[^c21630841]: Source—1970 s.528(1), (2); 1971 Sch.6 78; 1972 Sch.24 32.
[^c21630851]: Source—1971 s.34; 1975 (No.2) s.31(4)
[^c21630861]: 1988(F) s.35 Sch.3 para.22*for* 1990-91*and subsequent years.*
[^c21630871]: *Repealed by* 1988(F) s.148*and* Sch.14 Part IV*for* 1988-89*and subsequent years.*
[^c21630881]: Source—1970 s.528(3)(5); 1972 Sch.11 8, Sch.24 32; 1971 Sch.6 78
[^c22805431]: Words in [s. 835(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/835/6/a) inserted (with effect in accordance with s. [Sch. 6 para. 28](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/28) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 6 para. 24](https://www.legislation.gov.uk/ukpga/1996/8/schedule/6/paragraph/24)
[^c22805441]: Words in [s. 835(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/835/6/a) substituted (with effect in accordance with [Sch. 3 para. 40(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/40/3) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 40(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/40/2)
[^c22805461]: [S. 835(8)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/835/8/c) substituted (with effect in accordance with [s. 579](https://www.legislation.gov.uk/ukpga/2001/2/section/579) of the amending Act) by [Capital Allowances Act 2001 (c. 2)](https://www.legislation.gov.uk/ukpga/2001/2), [Sch. 2 para. 62](https://www.legislation.gov.uk/ukpga/2001/2/schedule/2/paragraph/62)
[^c23818201]: Words in [s. 835(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/835/6/a) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 339](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/339) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c21630921]: Source—1970 Sch.13
[^c21630931]: Source—1970 s.531
[^c21630941]: *See*—s.26—*and managed as one estate.*[s.145](https://www.legislation.gov.uk/ukpga/1988/1/section/145)—*living accommodation provided for employee.*[s.156](https://www.legislation.gov.uk/ukpga/1988/1/section/156)—*valuation of benefits in kind.*
[^c21630951]: *Reproduced in* Part II Vol.5.
[^c21630961]: [1967 c. 9](https://www.legislation.gov.uk/ukpga/1967/9).
[^c23817881]: [S. 834(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/834/1): definition of "venture capital trust" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 214](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/214) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21630981]: [S. 838](https://www.legislation.gov.uk/ukpga/1988/1/section/838) applied (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 184(1)(a)](https://www.legislation.gov.uk/ukpga/1992/12/section/184/1/a), [289](https://www.legislation.gov.uk/ukpga/1992/12/section/289) (with [ss. 60(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/60/1), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3)) [S. 838](https://www.legislation.gov.uk/ukpga/1988/1/section/838) applied (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 189(6)](https://www.legislation.gov.uk/ukpga/1993/34/section/189/6)
@@ -71774,6 +63030,14 @@
[^c21631021]: [S. 838(4)-(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/838/4) applied (27.7.1993) by [1993 c. 37](https://www.legislation.gov.uk/ukpga/1993/37), [s. 12](https://www.legislation.gov.uk/ukpga/1993/37/section/12), [Sch. 2](https://www.legislation.gov.uk/ukpga/1993/37/schedule/2), [Pt. I para. 31(11)](https://www.legislation.gov.uk/ukpga/1993/37/part/I/paragraph/31/11)
[^c23818591]: [S. 838](https://www.legislation.gov.uk/ukpga/1988/1/section/838) applied (1.1.2008 with effect in accordance with reg. 1(2) of the affecting S.I.) by [The Scientific Research Organisations Regulations 2007 (S.I. 2007/3426)](https://www.legislation.gov.uk/uksi/2007/3426), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2007/3426/regulation/1/1), [2(3)](https://www.legislation.gov.uk/uksi/2007/3426/regulation/2/3)
[^c23818611]: [S. 838](https://www.legislation.gov.uk/ukpga/1988/1/section/838) applied (with effect in accordance with s. 93(2) of the affecting Act) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 46 para. 18(3)(4)](https://www.legislation.gov.uk/ukpga/2009/10/schedule/46/paragraph/18/3/4)
[^c23818581]: Words in [s. 838(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/838/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 222](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/222) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23818601]: [S. 838(2)-(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/838/2) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 768(9)](https://www.legislation.gov.uk/ukpga/2009/4/section/768/9) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c21631141]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [ss. 104(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/104/3), [112(7)(b)](https://www.legislation.gov.uk/ukpga/1991/31/section/112/7/b) [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [1983 c. 55](https://www.legislation.gov.uk/ukpga/1983/55), [Sch. 4A para. 1(5)](https://www.legislation.gov.uk/ukpga/1983/55/schedule/4A/paragraph/1/5) (as inserted (1.12.1992 for specified purposes and 1.1.1993 otherwise) by Finance No. 2 Act 1992 (c. 48), s. 14(2), Sch. 3 Pt. I para. 62; [S.I. 1992/2979](https://www.legislation.gov.uk/uksi/1992/2979), [art. 4](https://www.legislation.gov.uk/uksi/1992/2979/article/4), [Sch. Pt. II](https://www.legislation.gov.uk/uksi/1992/2979/schedule/part/II); [S.I. 1992/3261](https://www.legislation.gov.uk/uksi/1992/3261), [art. 3](https://www.legislation.gov.uk/uksi/1992/3261/article/3),Sch.) [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (27.7.1993) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 193(6)](https://www.legislation.gov.uk/ukpga/1993/34/section/193/6)
[^c21631151]: Source—1970 s.533.
@@ -71888,6 +63152,40 @@
[^c23818901]: [S. 839(3B)](https://www.legislation.gov.uk/ukpga/1988/1/section/839/3B) inserted (6.4.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 13 paras. 25(c)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/25/c), [27(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/13/paragraph/27/1)
[^c23819091]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (with modifications) (28.12.2007 with effect in accordance with reg. 1 of the affecting S.I.) by [The Taxation of Insurance Securitisation Companies Regulations 2007 (S.I. 2007/3402)](https://www.legislation.gov.uk/uksi/2007/3402), [reg. 2(2)](https://www.legislation.gov.uk/uksi/2007/3402/regulation/2/2)
[^c23819101]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (1.1.2008 with effect in accordance with reg. 1(2) of the affecting S.I.) by [The Scientific Research Organisations Regulations 2007 (S.I. 2007/3426)](https://www.legislation.gov.uk/uksi/2007/3426), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2007/3426/regulation/1/1), [14(4)](https://www.legislation.gov.uk/uksi/2007/3426/regulation/14/4)
[^c23819111]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)](https://www.legislation.gov.uk/uksi/2006/964), [reg. 69J(10)(b)](https://www.legislation.gov.uk/uksi/2006/964/regulation/69J/10/b) (as inserted (6.4.2008) by [The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705)](https://www.legislation.gov.uk/uksi/2008/705), [regs. 1](https://www.legislation.gov.uk/uksi/2008/705/regulation/1), [5](https://www.legislation.gov.uk/uksi/2008/705/regulation/5))
[^c23819121]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Oil Taxation Act 1975 (c. 22)](https://www.legislation.gov.uk/ukpga/1975/22), [Sch. 5 para. 2B(2)](https://www.legislation.gov.uk/ukpga/1975/22/schedule/5/paragraph/2B/2) (as substituted (with effect in accordance with [s. 103(2)](https://www.legislation.gov.uk/ukpga/2008/9/section/103/2) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 103(1)](https://www.legislation.gov.uk/ukpga/2008/9/section/103/1))
[^c23819131]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 9 para. 12(2E)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/9/paragraph/12/2E) (as inserted (with effect in accordance with [Sch. 22 para. 5(3)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/5/3) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 22 para. 5(1)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/5/1))
[^c23819141]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 26 para. 28(3ZC)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/26/paragraph/28/3ZC) (as inserted (with effect in accordance with [Sch. 22 para. 5(3)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/5/3) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 22 para. 5(2)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/5/2))
[^c23819151]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [ss. 91H(5)](https://www.legislation.gov.uk/ukpga/1996/8/section/91H/5), [91I(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/91I/6) (as inserted (with effect in accordance with [Sch. 22 para. 17(3)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/17/3) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 22 para. 17(1)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/17/1))
[^c23819161]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 94B(10)](https://www.legislation.gov.uk/ukpga/1996/8/section/94B/10) (as inserted (with effect in accordance with [Sch. 22 para. 18(3)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/18/3) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 22 para. 18(1)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/22/paragraph/18/1))
[^c23819171]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (22.7.2008) by [Crossrail Act 2008 (c. 18)](https://www.legislation.gov.uk/ukpga/2008/18), [Sch. 13 para. 34(7)](https://www.legislation.gov.uk/ukpga/2008/18/schedule/13/paragraph/34/7)
[^c23819181]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)](https://www.legislation.gov.uk/uksi/2006/964), [reg. 14C(10)(b)](https://www.legislation.gov.uk/uksi/2006/964/regulation/14C/10/b) (as inserted (1.1.2009 with effect in accordance with reg. 1(2) of the amending S.I.) by [The Authorised Investment Funds (Tax) (Amendment No. 3) Regulations 2008 (S.I. 2008/3159)](https://www.legislation.gov.uk/uksi/2008/3159), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2008/3159/regulation/1/1), [11](https://www.legislation.gov.uk/uksi/2008/3159/regulation/11))
[^c23819191]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 1316(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1316/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23819201]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Betting and Gaming Duties Act 1981 (c. 63)](https://www.legislation.gov.uk/ukpga/1981/63), [s. 21(7)](https://www.legislation.gov.uk/ukpga/1981/63/section/21/7) (as inserted (1.6.2009) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [s. 22(6)(12)](https://www.legislation.gov.uk/ukpga/2009/10/section/22/6/12))
[^c23819211]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [Sch. 9 paras. 5(2B)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/9/paragraph/5/2B), [7(9)](https://www.legislation.gov.uk/ukpga/2003/14/schedule/9/paragraph/7/9) (as inserted (with effect in accordance with [s. 81(8)](https://www.legislation.gov.uk/ukpga/2009/10/section/81/8) of the amending Act) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [s. 81(6)(b)(7)(b)](https://www.legislation.gov.uk/ukpga/2009/10/section/81/6/b/7/b))
[^c23819221]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (with effect in accordance with Sch. 3 para. 11 of the affecting Act) by [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 3 para. 8](https://www.legislation.gov.uk/ukpga/2009/10/schedule/3/paragraph/8)
[^c23819231]: [S. 839](https://www.legislation.gov.uk/ukpga/1988/1/section/839) applied (1.12.2009 with effect in accordance with reg. 1(2) of the affecting S.I.) by [The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)](https://www.legislation.gov.uk/uksi/2009/3001), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2009/3001/regulation/1/1), [76(3)(b)](https://www.legislation.gov.uk/uksi/2009/3001/regulation/76/3/b), [82(3)(b)](https://www.legislation.gov.uk/uksi/2009/3001/regulation/82/3/b) (with [regs. 119](https://www.legislation.gov.uk/uksi/2009/3001/regulation/119), [122](https://www.legislation.gov.uk/uksi/2009/3001/regulation/122), [Sch. 1](https://www.legislation.gov.uk/uksi/2009/3001/schedule/1))
[^c23819051]: Words in [s. 839(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/839/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 223(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/223/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23819071]: [S. 839(3B)(b)(i)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/section/839/3B/b/i/ii) substituted for words in s. 839(3B)(b) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 223(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/223/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22806791]: [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 87(3)](https://www.legislation.gov.uk/ukpga/1988/39/section/87/3) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied by [Finance Act 1989 (c. 26)](https://www.legislation.gov.uk/ukpga/1989/26), [s. 67(3)](https://www.legislation.gov.uk/ukpga/1989/26/section/67/3) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied by [Capital Allowances Act 1990 (c. 1)](https://www.legislation.gov.uk/ukpga/1990/1), [s.77(6)](https://www.legislation.gov.uk/ukpga/1990/1/section/77/6) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (1.5.1995) by [Finance Act 1995 (c. 4)](https://www.legislation.gov.uk/ukpga/1995/4), [Sch. 22 para. 17(6)(a)(ii)](https://www.legislation.gov.uk/ukpga/1995/4/schedule/22/paragraph/17/6/a/ii) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 9 para. 8(9)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/9/paragraph/8/9) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (1.2.2001) by [Trustee Act 2000 (c. 29)](https://www.legislation.gov.uk/ukpga/2000/29), [ss. 19(3)](https://www.legislation.gov.uk/ukpga/2000/29/section/19/3), [42(2)](https://www.legislation.gov.uk/ukpga/2000/29/section/42/2); [S.I. 2001/49](https://www.legislation.gov.uk/uksi/2001/49), [art. 2](https://www.legislation.gov.uk/uksi/2001/49/article/2) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (29.7.2002) by [Trustee Act (Northern Ireland) 2001 (c. 14)](https://www.legislation.gov.uk/nia/2001/14), [ss. 19(3)](https://www.legislation.gov.uk/nia/2001/14/section/19/3), [45(1)](https://www.legislation.gov.uk/nia/2001/14/section/45/1); [S.R. 2002/253](https://www.legislation.gov.uk/nisr/2002/253), [art. 2](https://www.legislation.gov.uk/nisr/2002/253/article/2) [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [Sch. 5AA para. 4(3)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/5AA/paragraph/4/3) (as inserted (with effect in accordance with [Sch. 9 para. 7](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 9 para. 3](https://www.legislation.gov.uk/ukpga/2002/23/schedule/9/paragraph/3))
[^c23819241]: [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (23.1.2003 with effect in accordance with s. 57(4)(a) of the affecting Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 57(3)](https://www.legislation.gov.uk/ukpga/2002/23/section/57/3), [Sch. 16 para. 14(3)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/16/paragraph/14/3); [S.I. 2003/88](https://www.legislation.gov.uk/uksi/2003/88), [art. 2](https://www.legislation.gov.uk/uksi/2003/88/article/2)
@@ -71900,10 +63198,20 @@
[^c21631261]: Source—1970 s.534
[^c23819301]: [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 73AB(4)](https://www.legislation.gov.uk/ukpga/2003/14/section/73AB/4) (as inserted (with effect in accordance with [s. 155(4)](https://www.legislation.gov.uk/ukpga/2008/9/section/155/4) of the amending Act) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 155(3)](https://www.legislation.gov.uk/ukpga/2008/9/section/155/3))
[^c23819311]: [S. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [s. 1316(2)](https://www.legislation.gov.uk/ukpga/2009/4/section/1316/2) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23819281]: Words in [s. 840](https://www.legislation.gov.uk/ukpga/1988/1/section/840) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 224](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/224) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21631271]: Source—1970 s.535; 1973 Sch.21 9; 1987 (No.2) s.73
[^c22806911]: Words in [s. 841(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/841/3) substituted (1.12.2001) by [Financial Services and Markets Act 2000 (c. 8)](https://www.legislation.gov.uk/ukpga/2000/8), [s. 431(2)](https://www.legislation.gov.uk/ukpga/2000/8/section/431/2), [Sch. 20 para. 4(6)](https://www.legislation.gov.uk/ukpga/2000/8/schedule/20/paragraph/4/6); [S.I. 2001/3538](https://www.legislation.gov.uk/uksi/2001/3538), [art. 2(1)](https://www.legislation.gov.uk/uksi/2001/3538/article/2/1)
[^c23819401]: [S. 841(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/841/1) substituted for s. 841(1)(2) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 227(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/227/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23819421]: Words in [s. 841(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/841/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 227(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/227/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21631371]: Source—1970 s.359; 1973 s.54; 1979(C) Sch.7.
[^c21631381]: 1988(F) s.117(1)(a)*for accounting periods ending after* 5*th April* 1988.
@@ -71946,6 +63254,8 @@
[^c23819521]: [S. 842(1AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/842/1AA) repealed (with effect in accordance with s. 145(2) of the repealing Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 143(c)](https://www.legislation.gov.uk/ukpga/2006/25/section/143/c), [Sch. 26 Pt. 4](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/4)
[^c23819541]: Words in [s. 842(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/842/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 228](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/228) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21631491]: [S. 842A(2)(a)-(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/842A/2/a) substituted (1.4.1993) by [Local Government Finance Act 1992 (c. 14)](https://www.legislation.gov.uk/ukpga/1992/14), [s. 117(1)](https://www.legislation.gov.uk/ukpga/1992/14/section/117/1), [Sch. 13 para. 57](https://www.legislation.gov.uk/ukpga/1992/14/schedule/13/paragraph/57) (with [s. 118(1)(2)(4)](https://www.legislation.gov.uk/ukpga/1992/14/section/118/1/2/4)); [S.I. 1992/2454](https://www.legislation.gov.uk/uksi/1992/2454), [art. 3(1)(a)](https://www.legislation.gov.uk/uksi/1992/2454/article/3/1/a)
[^c21631501]: [1988 c. 41](https://www.legislation.gov.uk/ukpga/1988/41).
@@ -71972,31 +63282,7 @@
[^c23819681]: [S. 842A(2)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/842A/2/f) substituted (E.W.) (1.10.2004 for E. and 10.11.2004 for W.) by [Fire and Rescue Services Act 2004 (c. 21)](https://www.legislation.gov.uk/ukpga/2004/21), [s. 61](https://www.legislation.gov.uk/ukpga/2004/21/section/61), [Sch. 1 para. 64](https://www.legislation.gov.uk/ukpga/2004/21/schedule/1/paragraph/64); [S.I. 2004/2304](https://www.legislation.gov.uk/uksi/2004/2304), [art. 2](https://www.legislation.gov.uk/uksi/2004/2304/article/2) (with [art. 3](https://www.legislation.gov.uk/uksi/2004/2304/article/3)); [S.I. 2004/2917](https://www.legislation.gov.uk/uksi/2004/2917), [art. 2](https://www.legislation.gov.uk/uksi/2004/2917/article/2)
[^c22807181]: [S. 842AA(5A)(5B)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/5A/5B) inserted (retrospectively) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 75(1)](https://www.legislation.gov.uk/ukpga/1997/16/section/75/1)
[^c22807201]: [S. 842AA(6)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/6/ca) inserted (retrospectively) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 75(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/75/2)
[^c22807171]: Words in [s. 842AA(2)(e)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/2/e) substituted (with effect in accordance with [Sch. 38 para. 7(3)(4)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/7/3/4) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 38 para. 7(1)(2)(c)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/38/paragraph/7/1/2/c)
[^c22807221]: Word in [s. 842AA(14)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/14) repealed (with effect in accordance with s. 73(6) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 73(1)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/73/1/a), [Sch. 27 Pt. 3(13)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/13), Note 1
[^c22807231]: [S. 842AA(5AA)-(5AC)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/5AA) inserted (16.6.1999 with effect in accordance with [s. 69(5)(a)](https://www.legislation.gov.uk/ukpga/1999/16/section/69/5/a) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 69(4)(5)](https://www.legislation.gov.uk/ukpga/1999/16/section/69/4/5)
[^c22807251]: [S. 842AA(5AD)(5AE)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/5AD/5AE) inserted (with effect in accordance with [Sch. 18 para. 8(4)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/18/paragraph/8/4) of the amending Act) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 18 para. 8(2)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/18/paragraph/8/2)
[^c22807351]: [S. 842AA](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA): power to modify conferred (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 33 paras. 3-12](https://www.legislation.gov.uk/ukpga/2002/23/schedule/33/paragraph/3)
[^c23819761]: [S. 842AA](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA) modified (17.9.2004 with effect in accordance with reg. 1(2) of the affecting S.I.) by [The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (S.I. 2004/2199)](https://www.legislation.gov.uk/uksi/2004/2199), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/1/1), [12(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/12/1), [13(7)(9)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/13/7/9), [14(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/14/1)
[^c22807271]: Words in [s. 842AA(2)(f)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/2/f) substituted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 57(2)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/57/2)
[^c22807331]: Words in [s. 842AA(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/5A) inserted (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 33 para. 13](https://www.legislation.gov.uk/ukpga/2002/23/schedule/33/paragraph/13)
[^c22807291]: [S. 842AA(11)(za)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/11/za) inserted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 57(3)(a)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/57/3/a)
[^c22807311]: Words in [s. 842AA(11)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/11/b) inserted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 57(3)(b)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/57/3/b)
[^c23819771]: [S. 842AA(11A)-(11C)](https://www.legislation.gov.uk/ukpga/1988/1/section/842AA/11A) inserted (with effect in accordance with [Sch. 14 para. 8(2)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/8/2) of the amending Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [Sch. 14 para. 8(1)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/14/paragraph/8/1)
[^c23819701]: Words in [s. 842A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/842A/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 230](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/230) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22806801]: [S. 840A(1)(b)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/840A/1/b/c) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by [The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)](https://www.legislation.gov.uk/uksi/2001/3629), [art. 46(2)](https://www.legislation.gov.uk/uksi/2001/3629/article/46/2)
@@ -72014,17 +63300,33 @@
[^c23819321]: Words in [s. 840A(1)(b)(iv)](https://www.legislation.gov.uk/ukpga/1988/1/section/840A/1/b/iv) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/36) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
[^c23819341]: Words in [s. 840A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/840A/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 226(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/226/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23819361]: [S. 840A(1)(ca)](https://www.legislation.gov.uk/ukpga/1988/1/section/840A/1/ca) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 226(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/226/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22805651]: Words in [s. 837A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/837A/2) substituted (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 103(4)(a)](https://www.legislation.gov.uk/ukpga/2002/23/section/103/4/a)
[^c22805661]: [S. 837A(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/837A/5) repealed (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(16)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/16)
[^c23818481]: Words in [s. 837A(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/837A/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 219(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/219/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23818501]: Words in [s. 837A(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/837A/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 219(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/219/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23818521]: [S. 837A(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/section/837A/2A/2B) substituted for s. 837A(3)(4) (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 219(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/219/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22805601]: [1998 c. 17](https://www.legislation.gov.uk/ukpga/1998/17).
[^c23818541]: Words in [s. 837B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/837B/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 220](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/220) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22807511]: Words in [s. 842B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/842B/2) repealed (24.7.2002) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 40 Pt. 3(16)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/40/part/3/16)
[^c23818441]: [S. 836B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/836B/2) Table Pt. 3: entry in Column 1 inserted (30.3.2006 with effect in accordance with art. 1(3)(4) of the amending S.I.) by [The Income Tax (Trading and Other Income) Act 2005 (Consequential Amendments) Order 2006 (S.I. 2006/959)](https://www.legislation.gov.uk/uksi/2006/959), [arts. 1(2)](https://www.legislation.gov.uk/uksi/2006/959/article/1/2), [2(1)(a)](https://www.legislation.gov.uk/uksi/2006/959/article/2/1/a)
[^c23818461]: [S. 836B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/836B/2) Table Pt. 3: entry in Column 2 inserted (30.3.2006 with effect in accordance with art. 1(3)(4) of the amending S.I.) by [The Income Tax (Trading and Other Income) Act 2005 (Consequential Amendments) Order 2006 (S.I. 2006/959)](https://www.legislation.gov.uk/uksi/2006/959), [arts. 1(2)](https://www.legislation.gov.uk/uksi/2006/959/article/1/2), [2(1)(b)](https://www.legislation.gov.uk/uksi/2006/959/article/2/1/b)
[^c23819791]: Words in [s. 842B(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/842B/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 231(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/231/2/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23819811]: [S. 842B(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/842B/1/a) and word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 231(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/231/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23819831]: Words in [s. 842B(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/842B/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 231(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/231/3), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23818561]: Words in [s. 837C(1)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/837C/1/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 221](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/221) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21631581]: Source—1970 Sch.2
@@ -72592,6 +63894,8 @@
[^c23403041]: [Sch. 14 para. 1(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/1/1/b) inserted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [101(2)(b)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/101/2/b)
[^c23403171]: Words in [Sch. 14 para. 6(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/14/paragraph/6/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 232(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/232/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21636791]: Source—1970 s.337(1)(b); 1985 s.41(7)(a)
[^c21636951]: *See* S.I.[1989 No.1343](https://www.legislation.gov.uk/ukcm/1989/1343)(N.I.14) Art.10(2)*and* Sch.1 para.38(3)*for construction in the case of a solicitor who is a member of a recognised body.*
@@ -72636,14 +63940,6 @@
[^c21637231]: 1989 s.149(3)(d)—*not to affect the making of assessments before* 1983-84*or for accounting periods ending before* 1*April* 1983.*Previously* “sections 36 and 37”.
[^c21637151]: [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) modified by [S.I. 1991/512](https://www.legislation.gov.uk/uksi/1991/512), [reg.3](https://www.legislation.gov.uk/uksi/1991/512/regulation/3) [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) excluded (22.3.1992) by [S.I. 1992/569](https://www.legislation.gov.uk/uksi/1992/569), [reg. 13(2)(d)](https://www.legislation.gov.uk/uksi/1992/569/regulation/13/2/d) [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) applied (with modifications) (24.9.1992) by [S.I. 1992/2074](https://www.legislation.gov.uk/uksi/1992/2074), [reg. 14(5)](https://www.legislation.gov.uk/uksi/1992/2074/regulation/14/5) [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) applied (with modifications) (1.10.1993) by [S.I. 1993/2004](https://www.legislation.gov.uk/uksi/1993/2004), [reg. 13(3)](https://www.legislation.gov.uk/uksi/1993/2004/regulation/13/3)
[^c21637161]: *See*—1970(M) s.55—*recovery of tax not in dispute.*1970(M) s.87—*interest on overdue ACT.*1988 s.339—*donations to charity.*1988 s.341—*payments of interest etc between related companies.*1988 s.479—*interest paid on deposits with banks etc.* (*but ceases to have effect as regards interest paid or credited on or after* 6*April* 1991).1988 s.480A—*relevant deposits: deduction of tax from interest payments.*[S.I](https://www.legislation.gov.uk/ukpga/1988/1/section/I). [1988 No.482](https://www.legislation.gov.uk/ukcm/1988/482) (*in* Part III Vol.5) regn. 7—*Building Society Regulations.*
[^c21637171]: Source—1972 Sch.20
[^c22737611]: [Sch. 16](https://www.legislation.gov.uk/ukpga/1988/1/schedule/16) applied (with modifications) (1.7.1997) by [The Manufactured Interest (Tax) Regulations 1997 (S.I. 1997/992)](https://www.legislation.gov.uk/uksi/1997/992), [reg. 3](https://www.legislation.gov.uk/uksi/1997/992/regulation/3)
[^c21637241]: Source—1987 (No.2) Sch.4
[^c22742631]: Words in [Sch. 18 paras. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/1/1), [2(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/2/1), [3(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/3/1), [4(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/4/3/4), [5A(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/5A/3/4), [5C(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/5C/3/4), [5D(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/5D/3/4), [5E(3)(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/5E/3/4), [6](https://www.legislation.gov.uk/ukpga/1988/1/schedule/18/paragraph/6) substituted (retrospectively) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [s. 100(4)(a)(5)](https://www.legislation.gov.uk/ukpga/2000/17/section/100/4/a/5)
@@ -72984,7 +64280,9 @@
[^c22767701]: [Sch. 20 para. 7(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/7/3) inserted (with application in accordance with [Sch. 37 para. 10](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/10) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 2(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/2/3)
[^c23823921]: Words in [Sch. 20 para. 8](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/8) substituted (6.4.2005 with effect in accordance with [s. 883(1)](https://www.legislation.gov.uk/ukpga/2005/5/section/883/1) of the amending Act) by virtue of [Income Tax (Trading and Other Income) Act 2005 (c. 5)](https://www.legislation.gov.uk/ukpga/2005/5), [Sch. 1 para. 347(3)](https://www.legislation.gov.uk/ukpga/2005/5/schedule/1/paragraph/347/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2005/5/schedule/2))
[^c23824001]: Words in [Sch. 20 para. 8](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 237(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/237/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824021]: Words in [Sch. 20 para. 9(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/9/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 237(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/237/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21638921]: [Sch. 20 para. 3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/3A) inserted (1.9.1992) by [Charities Act 1992 (c. 41)](https://www.legislation.gov.uk/ukpga/1992/41), [s. 78(1)](https://www.legislation.gov.uk/ukpga/1992/41/section/78/1), [Sch. 6 para. 17](https://www.legislation.gov.uk/ukpga/1992/41/schedule/6/paragraph/17); [S.I. 1992/1900](https://www.legislation.gov.uk/uksi/1992/1900), [art. 2(1)](https://www.legislation.gov.uk/uksi/1992/1900/article/2/1), [Sch. 1](https://www.legislation.gov.uk/uksi/1992/1900/schedule/1)
@@ -72996,10 +64294,16 @@
[^c22767751]: [Sch. 20 para. 10(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/10/2) inserted (with application in accordance with [Sch. 37 para. 10](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/10) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 37 para. 2(4)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/37/paragraph/2/4)
[^c23824051]: Words in [Sch. 20 para. 10(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/10/1/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 237(4)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/237/4/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824081]: Words in [Sch. 20 para. 10(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/10/1/d) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 237(4)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/237/4/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21638961]: Words in [Sch. 20 para. 12(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/paragraph/12/2) substituted (6.3.1992 with effect as mentioned in [s. 289(1)(2)](https://www.legislation.gov.uk/ukpga/1992/12/section/289/1/2) of the amending Act) by [Taxation of Chargeable Gains Act 1992 (c. 12)](https://www.legislation.gov.uk/ukpga/1992/12), [ss. 289](https://www.legislation.gov.uk/ukpga/1992/12/section/289), [290](https://www.legislation.gov.uk/ukpga/1992/12/section/290), [Sch. 10 para. 14(59)](https://www.legislation.gov.uk/ukpga/1992/12/schedule/10/paragraph/14/59) (with [ss. 60](https://www.legislation.gov.uk/ukpga/1992/12/section/60), [101(1)](https://www.legislation.gov.uk/ukpga/1992/12/section/101/1), [171](https://www.legislation.gov.uk/ukpga/1992/12/section/171), [201(3)](https://www.legislation.gov.uk/ukpga/1992/12/section/201/3))
[^c23823961]: [Sch. 20 Pt. 3](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20/part/3) (paras. 11-14) repealed (with effect in accordance with s. 55(5) of the repealing Act) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 55(3)](https://www.legislation.gov.uk/ukpga/2006/25/section/55/3), [Sch. 26 Pt. 3(5)](https://www.legislation.gov.uk/ukpga/2006/25/schedule/26/part/3/5)
[^c23823981]: Words in [Sch. 20](https://www.legislation.gov.uk/ukpga/1988/1/schedule/20) heading substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 237(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/237/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21639001]: *For regulations see* Part III Vol.5 (*under “Pension scheme surpluses: valuation”*).
[^c21639031]: *See* S.I.[1989 No.2290](https://www.legislation.gov.uk/ukcm/1989/2290), regn.10(5)*in* Part III Vol.5.
@@ -73404,12 +64708,16 @@
[^c22899511]: [Sch. 23A para. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/1/1): words in definition of "UK securities" repealed (28.7.2000) by [Finance Act 2000 (c. 17)](https://www.legislation.gov.uk/ukpga/2000/17), [Sch. 40 Pt. 2(17)](https://www.legislation.gov.uk/ukpga/2000/17/schedule/40/part/2/17)
[^c23824821]: [Sch. 23A para. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/1/1): definition of "interest manufacturer" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/2/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824841]: [Sch. 23A para. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/1/1): words in definition of "manufactured dividend", "manufactured interest" and "manufactured overseas dividend" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824801]: [Sch. 23A para. 1(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/1/1): definition of "manufactured interest" inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(2)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/2/c) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21639261]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para. 1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in [s. 58(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/3) in relation to payments made on or after such day as may be specified: [26](https://www.legislation.gov.uk/ukpga/1991/31/section/26).[2](https://www.legislation.gov.uk/ukpga/1991/31/section/2).[1992](https://www.legislation.gov.uk/ukpga/1991/31/section/1992) specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg. 2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); [30](https://www.legislation.gov.uk/ukpga/1988/1/regulation/30).[6](https://www.legislation.gov.uk/ukpga/1988/1/regulation/6).[1992](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1992) specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs. 2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); [21](https://www.legislation.gov.uk/ukpga/1988/1/regulation/21).[4](https://www.legislation.gov.uk/ukpga/1988/1/regulation/4).[1993](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1993) specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs. 2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b), [4](https://www.legislation.gov.uk/uksi/1993/933/regulation/4))
[^c22890991]: [Sch. 23A paras 2-2B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2) and cross-headings substituted for Sch. 23A para. 2 and cross-heading (with effect in accordance with [Sch. 10 para. 16](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16) of the amending Act) by Finance Act [1997 c. 16](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 10(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/10/1)
[^c22891451]: [Sch. 23A para. 2(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/3/c) extended (with effect in accordance with s. 24(15) of the extending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 24(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/24/13)
[^c22891411]: Words in [Sch. 23A para. 2(6)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/6) repealed (with effect in accordance with Sch. 6 para. 17(5) of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 6 para. 17(3)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/6/paragraph/17/3), [Sch. 8 Pt. 2(11)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/11), Note
[^c23824791]: [Sch. 23A para. 2](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2) modified (19.7.2006) by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [ss. 134](https://www.legislation.gov.uk/ukpga/2006/25/section/134), [139(1)(2)](https://www.legislation.gov.uk/ukpga/2006/25/section/139/1/2), [Sch. 17 para. 30](https://www.legislation.gov.uk/ukpga/2006/25/schedule/17/paragraph/30) (as that affecting s. 139 is amended by [Finance Act 2006 (c. 25)](https://www.legislation.gov.uk/ukpga/2006/25), [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2006/25/section/1034/1), [Sch. 1 para. 621](https://www.legislation.gov.uk/ukpga/2006/25/schedule/1/paragraph/621), [Sch. 3 Pt.1](https://www.legislation.gov.uk/ukpga/2006/25/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2006/25/schedule/2)) and [S.I. 2009/2859](https://www.legislation.gov.uk/uksi/2009/2859), [arts. 1](https://www.legislation.gov.uk/uksi/2009/2859/article/1), [3](https://www.legislation.gov.uk/uksi/2009/2859/article/3))
@@ -73420,10 +64728,22 @@
[^c22901351]: [Sch. 23A para. 2(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/4/5) repealed (with effect in accordance with s. 102(10) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 102(8)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/8/a), [Sch. 27 Pt. 3(24)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/24), Note
[^c22892601]: Words in [Sch. 23A para. 2(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/6/a) inserted (with effect in accordance with [s. 102(10)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/10) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 102(7)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/7)
[^c22901361]: [Sch. 23A para. 2(6)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/6/b) and preceding word repealed (with effect in accordance with s. 102(10) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 102(8)(a)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/8/a), [Sch. 27 Pt. 3(24)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/24), Note
[^c23824871]: Word in [Sch. 23A para. 2(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/2) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/a) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825971]: [Sch. 23A para. 2(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/2/b) applied by [The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)](https://www.legislation.gov.uk/uksi/2006/964), [reg. 69Z24C(3)](https://www.legislation.gov.uk/uksi/2006/964/regulation/69Z24C/3) (as inserted (1.1.2009 with effect in accordance with reg. 1(2)(3) of the amending S.I.) by [The Authorised Investment Funds (Tax) (Amendment No. 3) Regulations 2008 (S.I. 2008/3159)](https://www.legislation.gov.uk/uksi/2008/3159), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2008/3159/regulation/1/1), [27](https://www.legislation.gov.uk/uksi/2008/3159/regulation/27))
[^c23824891]: Word in [Sch. 23A para. 2(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/3/b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/b) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824951]: [Sch. 23A para. 2(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/3/c) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824981]: Words in [Sch. 23A para. 2(6)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/6/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824911]: [Sch. 23A para. 2(6)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/6/aa) and preceding word inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/e) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23824931]: Words in [Sch. 23A para. 2(7)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2/7/c) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(3)(f)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/3/f) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22891011]: [Sch. 23A paras. 2-2B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2) and cross-headings substituted for Sch. 23A para. 2 and cross-heading (with effect in accordance with [Sch. 10 para. 16](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16) of the amending Act) by Finance Act [1997 c. 16](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 10(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/10/1)
[^c21639321]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para.1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in [s. 58(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/3) in relation to payments made on or after such day as may be specified: [26](https://www.legislation.gov.uk/ukpga/1991/31/section/26).[2](https://www.legislation.gov.uk/ukpga/1991/31/section/2).[1992](https://www.legislation.gov.uk/ukpga/1991/31/section/1992) specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg.2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); [30](https://www.legislation.gov.uk/ukpga/1988/1/regulation/30).[6](https://www.legislation.gov.uk/ukpga/1988/1/regulation/6).[1992](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1992) specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs.2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); [21](https://www.legislation.gov.uk/ukpga/1988/1/regulation/21).[4](https://www.legislation.gov.uk/ukpga/1988/1/regulation/4).[1993](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1993) specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs.2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b), [4](https://www.legislation.gov.uk/uksi/1993/933/regulation/4))
@@ -73432,18 +64752,10 @@
[^c21639341]: [Sch. 23A para. 4(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/1) applied (1.10.1993) by [S.I. 1993/2004](https://www.legislation.gov.uk/uksi/1993/2004), [reg.2](https://www.legislation.gov.uk/uksi/1993/2004/regulation/2)
[^c21639351]: [Sch. 23A para. 4(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2) restricted (1.10.1993) by [S.I. 1993/2004](https://www.legislation.gov.uk/uksi/1993/2004), [reg.5(1)](https://www.legislation.gov.uk/uksi/1993/2004/regulation/5/1)
[^c21639361]: [Sch. 23A para. 4(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/3) restricted (1.10.1993) by [S.I. 1993/2004](https://www.legislation.gov.uk/uksi/1993/2004), [reg.7(1)](https://www.legislation.gov.uk/uksi/1993/2004/regulation/7/1) (as amended by [S.I. 2011/1787](https://www.legislation.gov.uk/uksi/2011/1787), [regs. 1](https://www.legislation.gov.uk/uksi/2011/1787/regulation/1), [7](https://www.legislation.gov.uk/uksi/2011/1787/regulation/7))
[^c22887831]: [Sch. 23A para. 4(7A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/7A) inserted (3.5.1994) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [s. 124](https://www.legislation.gov.uk/ukpga/1994/9/section/124)
[^c22889731]: Words in [Sch. 23A para 4(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/3) substituted (with effect in accordance with [s. 159(9)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/9) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(4)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/4)
[^c22889751]: [Sch. 23A para 4(3A)(3B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/3A/3B) inserted (with effect in accordance with [s. 159(9)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/9) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(5)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/5)
[^c22889771]: Words in [Sch. 23A para. 4(7)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/7) substituted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/6)
[^c22889851]: [Sch. 23A para. 4(7AA)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/7AA) inserted (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 159(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/159/6)
[^c22889791]: [Sch. 23A para. 4(7A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/7A) repealed (29.4.1996) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 41 Pt. 5(21)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/21), Note 2
@@ -73456,14 +64768,30 @@
[^c23824601]: [Sch. 23A para. 4(1A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/1A) inserted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(3)
[^c23824621]: Words in [Sch. 23A para. 4(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2) inserted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(4)(a)
[^c23824641]: Words in [Sch. 23A para. 4(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2/b) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(4)(b)(i)
[^c23824661]: Words in [Sch. 23A para. 4(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2/b) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(4)(b)(ii)
[^c23824691]: [Sch. 23A para. 4(2A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2A) inserted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(5)
[^c23825061]: [Sch. 23A para. 4(2)-(3B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/a), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825211]: Words in [Sch. 23A para. 4(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825231]: Words in [Sch. 23A para. 4(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/ii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825251]: Words in [Sch. 23A para. 4(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/iii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825121]: Words in [Sch. 23A para. 4(4)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(iv)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/iv), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825271]: Words in [Sch. 23A para. 4(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(v)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/v) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825311]: Words in [Sch. 23A para. 4(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/4/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(b)(vi)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/b/vi) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825141]: [Sch. 23A para. 4(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/5/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/c), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825161]: [Sch. 23A para. 4(6)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825181]: [Sch. 23A para. 4(7)(7AA)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/7/7AA) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(e)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825341]: Word in [Sch. 23A para. 4(9)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4/9) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(5)(f)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/5/f) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21639371]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para.1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in s. 58(3) in relation to payments made on or after such day as may be specified: 26.2.1992 specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg.2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); 30.6.1992 specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs.2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); 21.4.1993 specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs. 2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b),4)
[^c21639381]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para. 1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in [s. 58(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/3) in relation to payments made on or after such day as may be specified: [26](https://www.legislation.gov.uk/ukpga/1991/31/section/26).[2](https://www.legislation.gov.uk/ukpga/1991/31/section/2).[1992](https://www.legislation.gov.uk/ukpga/1991/31/section/1992) specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg.2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); [30](https://www.legislation.gov.uk/ukpga/1988/1/regulation/30).[6](https://www.legislation.gov.uk/ukpga/1988/1/regulation/6).[1992](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1992) specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs.2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); [21](https://www.legislation.gov.uk/ukpga/1988/1/regulation/21).[4](https://www.legislation.gov.uk/ukpga/1988/1/regulation/4).[1993](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1993) specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs.2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b), [4](https://www.legislation.gov.uk/uksi/1993/933/regulation/4))
@@ -73494,6 +64822,32 @@
[^c23824711]: Words in [Sch. 23A para. 7(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 37(7)
[^c23825421]: Words in [Sch. 23A para. 7(1)(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1/b/i) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825441]: Words in [Sch. 23A para. 7(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825461]: Words in [Sch. 23A para. 7(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/iii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825481]: Words in [Sch. 23A para. 7(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(iv)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/iv), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825501]: Words in [Sch. 23A para. 7(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(v)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/v), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825361]: Words in [Sch. 23A para. 7(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(vi)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/vi) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825381]: Words in [Sch. 23A para. 7(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(a)(vii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/a/vii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825521]: Words in [Sch. 23A para. 7(1A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/1A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825401]: Words in [Sch. 23A para. 7(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(c)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/c/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825541]: Words in [Sch. 23A para. 7(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(c)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/c/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825561]: Words in [Sch. 23A para. 7(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/3/a) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(c)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/c/iii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825581]: Words in [Sch. 23A para. 7(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(c)(iv)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/c/iv), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825601]: Words in [Sch. 23A para. 7(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7/4/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(6)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/6/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21639431]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para.1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in [s. 58(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/3) in relation to payments made on or after such day as may be specified: [26](https://www.legislation.gov.uk/ukpga/1991/31/section/26).[2](https://www.legislation.gov.uk/ukpga/1991/31/section/2).[1992](https://www.legislation.gov.uk/ukpga/1991/31/section/1992) specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg.2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); [30](https://www.legislation.gov.uk/ukpga/1988/1/regulation/30).[6](https://www.legislation.gov.uk/ukpga/1988/1/regulation/6).[1992](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1992) specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs.2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); [21](https://www.legislation.gov.uk/ukpga/1988/1/regulation/21).[4](https://www.legislation.gov.uk/ukpga/1988/1/regulation/4).[1993](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1993) specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs.2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b), [4](https://www.legislation.gov.uk/uksi/1993/933/regulation/4))
[^c21639441]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) inserted by [Finance Act 1991 (c. 31, SIF 63:1)](https://www.legislation.gov.uk/ukpga/1991/31), [s. 58](https://www.legislation.gov.uk/ukpga/1991/31/section/58), [Sch. 13 para. 1](https://www.legislation.gov.uk/ukpga/1991/31/schedule/13/paragraph/1) (with effect as mentioned in [s. 58(3)](https://www.legislation.gov.uk/ukpga/1991/31/section/58/3) in relation to payments made on or after such day as may be specified: [26](https://www.legislation.gov.uk/ukpga/1991/31/section/26).[2](https://www.legislation.gov.uk/ukpga/1991/31/section/2).[1992](https://www.legislation.gov.uk/ukpga/1991/31/section/1992) specified for certain purposes by [S.I. 1992/173](https://www.legislation.gov.uk/uksi/1992/173), [reg.2](https://www.legislation.gov.uk/uksi/1992/173/regulation/2); [30](https://www.legislation.gov.uk/ukpga/1988/1/regulation/30).[6](https://www.legislation.gov.uk/ukpga/1988/1/regulation/6).[1992](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1992) specified for certain purposes by [S.I. 1992/1346](https://www.legislation.gov.uk/uksi/1992/1346), [regs.2](https://www.legislation.gov.uk/uksi/1992/1346/regulation/2), [3](https://www.legislation.gov.uk/uksi/1992/1346/regulation/3), [4](https://www.legislation.gov.uk/uksi/1992/1346/regulation/4); [21](https://www.legislation.gov.uk/ukpga/1988/1/regulation/21).[4](https://www.legislation.gov.uk/ukpga/1988/1/regulation/4).[1993](https://www.legislation.gov.uk/ukpga/1988/1/regulation/1993) specified for certain purposes by [S.I. 1993/933](https://www.legislation.gov.uk/uksi/1993/933), [regs.2](https://www.legislation.gov.uk/uksi/1993/933/regulation/2), [3(b)](https://www.legislation.gov.uk/uksi/1993/933/regulation/3/b), [4](https://www.legislation.gov.uk/uksi/1993/933/regulation/4))
@@ -73508,61 +64862,41 @@
[^c22891331]: [Sch. 23A para. 8(2A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/2A) inserted (with effect in accordance with [Sch. 10 para. 16](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/16) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 10 para. 13(3)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/10/paragraph/13/3); [S.I. 1997/991](https://www.legislation.gov.uk/uksi/1997/991), [art. 2](https://www.legislation.gov.uk/uksi/1997/991/article/2)
[^c23825731]: Words in [Sch. 23A para. 8(1)(a)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1/a/aa) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(a)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/a/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825761]: Words in [Sch. 23A para. 8(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(a)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/a/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825651]: Words in [Sch. 23A para. 8(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(a)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/a/iii) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825671]: Word in [Sch. 23A para. 8(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(a)(iv)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/a/iv) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825691]: Word in [Sch. 23A para. 8(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1A/b) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(b)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/b/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825781]: Words in [Sch. 23A para. 8(1A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/1A/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(b)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/b/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825801]: [Sch. 23A para. 8(2)(c)(d)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/2/c/d) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(c)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/c/i), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825831]: Words in [Sch. 23A para. 8(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(c)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/c/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825851]: Words in [Sch. 23A para. 8(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/2) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(c)(iii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/c/iii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825871]: [Sch. 23A para. 8(2A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(d)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/d), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825711]: Words in [Sch. 23A para. 8(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/3/a) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(e)(i)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/e/i) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825891]: [Sch. 23A para. 8(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/8/3/b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(8)(e)(ii)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/8/e/ii), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22891351]: [Sch. 23A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A) modified (19.3.1997) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 7 para. 7(3)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/7/paragraph/7/3)
[^c22891431]: [Sch. 23A para. 2A(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/2) repealed (with effect in accordance with s. 24(15) of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 24(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/24/13), [Sch. 8 Pt. 2(8)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/8), Note 1
[^c22892731]: [Sch. 23A para. 2A(3)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/3) repealed (with effect in accordance with s. 102(10) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [s. 102(8)(b)](https://www.legislation.gov.uk/ukpga/1998/36/section/102/8/b), [Sch. 27 Pt. 3(24)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/24), Note
[^c22900751]: [Sch. 23A para. 2A(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1A/1B) inserted (with effect in accordance with [s. 108(6)](https://www.legislation.gov.uk/ukpga/2002/23/section/108/6) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 108(3)](https://www.legislation.gov.uk/ukpga/2002/23/section/108/3)
[^c23824281]: [Sch. 23A para. 2A(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1) substituted (with effect in accordance with [Sch. 24 para. 2(7)-(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/7) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(2)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/2)
[^c23824301]: [Sch. 23A para. 2A(1ZA)(1ZB)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1ZA/1ZB) inserted (with effect in accordance with [Sch. 24 para. 2(7)(8)(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/7/8/10) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(3)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/3)
[^c23824321]: Words in [Sch. 23A para. 2A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1A) substituted (with effect in accordance with [Sch. 24 para. 2(9)(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/9/10) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(4)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/4/a)
[^c23824461]: [Sch. 23A para. 2A(1A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1A/a) repealed (with effect in accordance with Sch. 24 para. 2(7)(8)(10) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(4)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/4/b), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16), Note 1
[^c23824481]: [Sch. 23A para. 2A(1A)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1A/c) and preceding word repealed (with effect in accordance with Sch. 24 para. 2(11) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(4)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/4/c), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16), Note 2
[^c23824511]: Words in [Sch. 23A para. 2A(1A)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1A) repealed (with effect in accordance with Sch. 24 para. 2(11) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(4)(d)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/4/d), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16), Note 2
[^c23824341]: Words in [Sch. 23A para. 2A(1B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1B) substituted (with effect in accordance with [Sch. 24 para. 2(7)-(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/7) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/a)
[^c23824371]: Words in [Sch. 23A para. 2A(1B)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1B/a) substituted (with effect in accordance with [Sch. 24 para. 2(7)(8)(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/7/8/10) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/b)
[^c23824391]: Word at the end of Sch. 23A para. 2A(1B)(a) inserted (with effect in accordance with [Sch. 24 para. 2(7)(8)(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/7/8/10) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/b)
[^c23824411]: Words in [Sch. 23A para. 2A(1B)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1B/b) substituted (with effect in accordance with [Sch. 24 para. 2(9)(10)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/9/10) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(c)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/c)
[^c23824531]: [Sch. 23A para. 2A(1B)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1B/c) and preceding word repealed (with effect in accordance with Sch. 24 para. 2(11) of the repealing Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(d)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/d), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16), Note 2
[^c23824431]: Words in [Sch. 23A para. 2A(1B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/1B) substituted (with effect in accordance with [Sch. 24 para. 2(11)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/11) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(5)(e)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/5/e)
[^c23824561]: Words in [Sch. 23A para. 2A(4)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/4/a) repealed (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(6)(a)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/6/a), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16)
[^c23824581]: Words in [Sch. 23A para. 2A(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/4/b) repealed (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 24 para. 2(6)(b)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/24/paragraph/2/6/b), [Sch. 42 Pt. 2(16)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/2/16)
[^c23825001]: [Sch. 23A paras. 2A-3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c22891471]: [Sch. 23A para. 2B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2B) repealed (with effect in accordance with Sch. 6 para. 17(5) of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 6 para. 17(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/6/paragraph/17/4), [Sch. 8 Pt. 2(11)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/11), Note
[^c22891511]: [Sch. 23A para. 3(5)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/3/5) excluded (1.7.1997) by [The Manufactured Interest (Tax) Regulations 1997 (S. I. 1997/992)](https://www.legislation.gov.uk/uksi/1997/992), [regs. 1](https://www.legislation.gov.uk/uksi/1997/992/regulation/1), [4](https://www.legislation.gov.uk/uksi/1997/992/regulation/4)
[^c22891061]: [1996 c. 8](https://www.legislation.gov.uk/ukpga/1996/8).
[^c23824241]: [Sch. 23A paras. 3](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/3), [4](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/4) modified (with effect in accordance with s. 153(4) of the modifying Act) by [Finance Act 2003 (c. 14)](https://www.legislation.gov.uk/ukpga/2003/14), [s. 153(2)(a)](https://www.legislation.gov.uk/ukpga/2003/14/section/153/2/a)
[^c22900791]: Words in [s. 23A para. 3(2)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/23A/paragraph/3/2/c) added (with effect in accordance with [s. 108(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/108/7) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [s. 108(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/108/4)
[^c22900811]: [Sch. 23A para 3(2A)(2B)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/3/2A/2B) inserted (with effect in accordance with [s. 108(7)](https://www.legislation.gov.uk/ukpga/2002/23/section/108/7) of the amending Act) by [Finance Act 2002 (c. 23, s. 108(5)](https://www.legislation.gov.uk/ukpga/2002/23)
[^c23824731]: Words in [Sch. 23A para. 2A(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/a) inserted (with effect in accordance with [Sch. 7 para. 6(5)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/5) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 7 para. 6(2)(a)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/2/a)
[^c23824751]: [Sch. 23A para. 2A(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/b) substituted (with effect in accordance with [Sch. 7 para. 6(5)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/5) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 7 para. 6(2)(b)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/2/b)
[^c23824771]: Word in [Sch. 23A para. 2A(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A/b) substituted (with effect in accordance with [Sch. 7 para. 6(4)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/4) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 7 para. 6(3)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/6/3)
[^c22891531]: Word in [Sch. 23A para. 3A(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/3A/2/a) substituted (with effect in accordance with [s. 37(8)-(13)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/8) of the amending Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [s. 37(7)](https://www.legislation.gov.uk/ukpga/1997/58/section/37/7)
[^c23825021]: [Sch. 23A paras. 2A-3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825041]: [Sch. 23A paras. 2A-3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825631]: [Sch. 23A para. 7A(10)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7A/10): definition of "tax advantage" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c21633191]: [Sch. 6A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/6A) inserted (27.7.1993 with effect for the year 1993-94 and subsequent years of assessment) by [1993 c. 34](https://www.legislation.gov.uk/ukpga/1993/34), [s. 73](https://www.legislation.gov.uk/ukpga/1993/34/section/73), [Sch. 4 paras.7](https://www.legislation.gov.uk/ukpga/1993/34/schedule/4/paragraph/7), [8](https://www.legislation.gov.uk/ukpga/1993/34/schedule/4/paragraph/8)
@@ -74196,10 +65530,6 @@
[^c23835401]: Word in [Sch. 28B para. 11A(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B/paragraph/11A/1) inserted (with effect in accordance with [Sch. 19 para. 16](https://www.legislation.gov.uk/ukpga/2004/12/schedule/19/paragraph/16) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 19 para. 15](https://www.legislation.gov.uk/ukpga/2004/12/schedule/19/paragraph/15)
[^c23835701]: [Sch. 28B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B) applied (17.9.2004 with effect in accordance with reg. 1(2)(b) of the affecting S.I.) by [The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (S.I. 2004/2199)](https://www.legislation.gov.uk/uksi/2004/2199), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/1/1), [12(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/12/1)
[^c23835711]: [Sch. 28B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B) modified (17.9.2004 with effect in accordance with reg. 1(2)(b) of the modifying S.I.) by [The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (S.I. 2004/2199)](https://www.legislation.gov.uk/uksi/2004/2199), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/1/1), [13(5)(6)(8)](https://www.legislation.gov.uk/uksi/2004/2199/regulation/13/5/6/8)
[^c22779561]: Words in [Sch. 13A para. 5(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/13A/paragraph/5/1) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 50(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/50/2); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22779581]: [Sch. 13A para. 5(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/13A/paragraph/5/2) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 50(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/50/3); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
@@ -74310,6 +65640,8 @@
[^c23834061]: [Sch. 28AA para. 5(7)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28AA/paragraph/5/7) inserted (with effect in accordance with [s. 37](https://www.legislation.gov.uk/ukpga/2004/12/section/37) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 30(2)(c)](https://www.legislation.gov.uk/ukpga/2004/12/section/30/2/c)
[^c23834401]: [Sch. 28AA para. 5(7)(a)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28AA/paragraph/5/7/a/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 239](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/239) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23316441]: [Sch. 28AA paras. 6](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28AA/paragraph/6), [7](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28AA/paragraph/7) modified (27.7.1999) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [s. 87(1)-(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/87/1) (with [s. 87(4)](https://www.legislation.gov.uk/ukpga/1999/16/section/87/4))
[^c23316461]: [Sch. 28AA para. 6(7)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28AA/paragraph/6/7): in definition of "relevant notice", para. (a) substituted (with effect in accordance with [s. 88(3)](https://www.legislation.gov.uk/ukpga/2001/9/section/88/3) of the amending Act) by [Finance Act 2001 (c. 9)](https://www.legislation.gov.uk/ukpga/2001/9), [Sch. 29 para. 35(3)(a)](https://www.legislation.gov.uk/ukpga/2001/9/schedule/29/paragraph/35/3/a)
@@ -74454,10 +65786,6 @@
[^c23380081]: O.J. L374, 31.12.1991, p.7.
[^M_C_2ff0b80a-162b-47c9-c6f4-ff0bd810eb8b]: S. 727A applied (with modifications) (2.1.1996) by [The Sale and Repurchase of Securities (Modification of Enactments) Regulations 1995 (S.I. 1995/3220)](https://www.legislation.gov.uk/uksi/1995/3220), [regs. 1](https://www.legislation.gov.uk/uksi/1995/3220/regulation/1), [4](https://www.legislation.gov.uk/uksi/1995/3220/regulation/4)
[^M_C_0169c535-0cbc-4d28-ef6b-3703edc5fb9c]: S. 727A applied (with modifications) (2.1.1996) by [The Sale and Repurchase of Securities (Modification of Enactments) Regulations 1995 (S.I. 1995/3220)](https://www.legislation.gov.uk/uksi/1995/3220), [regs. 1](https://www.legislation.gov.uk/uksi/1995/3220/regulation/1), [5](https://www.legislation.gov.uk/uksi/1995/3220/regulation/5)
[^M_C_35587500-78f4-49c8-c329-adb9d7d0e49d]: S. 730A applied (with modifications) (2.1.1996) by [The Sale and Repurchase of Securities (Modification of Enactments) Regulations 1995 (S.I. 1995/3220)](https://www.legislation.gov.uk/uksi/1995/3220), [regs. 1](https://www.legislation.gov.uk/uksi/1995/3220/regulation/1), [4](https://www.legislation.gov.uk/uksi/1995/3220/regulation/4)
[^M_C_1dee2bfc-1fd1-48cf-d531-2f5548898d8a]: S. 730A applied (with modifications) (2.1.1996) by [The Sale and Repurchase of Securities (Modification of Enactments) Regulations 1995 (S.I. 1995/3220)](https://www.legislation.gov.uk/uksi/1995/3220), [regs. 1](https://www.legislation.gov.uk/uksi/1995/3220/regulation/1), [5](https://www.legislation.gov.uk/uksi/1995/3220/regulation/5)
@@ -74488,7 +65816,7 @@
#### Travel expenses of employees not domiciled in the United Kingdom.
#### Mileage allowance relief
#### Provisions supplementary to section 138.
#### Application of lower rate to company distributions.
@@ -74510,541 +65838,541 @@
#### Meaning of “distribution”.
#### Relief for contributions in respect of share option gains.
#### Relief for necessary expenses.
#### Further interpretation of sections 135 to 139.
#### Restrictions on the use of tax credits by pension funds.
#### Children’s tax credit.
#### Married couple's allowance (post-5th December 2005 marriages and civil partnerships etc.)
#### Stock dividends: distributions.
#### Interpretation of sections 249 and 250.
#### Meaning of “the minimum amount”
#### Children’s tax credit.
#### Married couple’s allowance(pre-5th December 2005 marriages).
#### Company reconstructions without a change of ownership.
#### Early conversion or surrender of life policies.
#### Company reconstructions: supplemental.
#### Substitution of security: supplemental.
#### Transfer of reliefs.
#### Minimum and maximum subscriptions.
#### Losses from UK property business.
#### Withdrawal of relief.
#### Tax on companies in administration
#### Dealings in commodity futures etc: withdrawal of loss relief.
#### Close companies.
#### Company reconstructions: supplemental.
#### Certain quoted companies not to be close companies.
#### Section 432B apportionment: value of non-participating funds.
#### Section 432B: apportionment of business transfer-in
#### Additions to non-profit funds: amount of loss reduction
#### Relief where borrower deceased.
#### Loan to pay inheritance tax.
#### Home improvement loans.
#### Securities.
#### Transfers of life assurance business: Case VI losses of the transferor
#### Transfers of life assurance business: Case I losses of the transferor
#### Capital redemption business: power to apply life assurance provisions.
#### Restrictions on right of set-off.
#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
#### Leasing contracts and company reconstructions.
#### Transactions in deposits with and without certificates or in debts.
#### Close companies.
#### Limits on group relief.
#### Dividends paid to investment trusts.
#### Interpretation.
#### Charitable and non-charitable expenditure
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
#### Determination of policy holders’ share for purposes of s.438B
#### Taxation of pure reinsurance business.
#### Modification of s. 444BA for mutual or overseas business and for non-resident companies.
#### Retained assets
#### Taxation in respect of other business.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exploration expenditure supplement
#### Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
#### Conditions to be satisfied by individuals.
#### Reduction in chargeable profits for certain financing income
#### Reduction in chargeable profits: failure to qualify for exemptions
#### Transactions associated with loans or credit.
#### Offshore income gains: application of transfer of assets abroad provisions
#### Income treated as arising under section 761(1): remittance basis
#### Provision not at arm’s length.
#### Form of relief.
#### Relief where borrower deceased.
#### Interpretation of Chapter III.
#### Meaning of “participator”, “associate”, “director” and “loan creditor”.
#### Losses from UK property business.
#### Amounts eligible for group relief: trading losses.
#### Court common investment funds.
#### Capital sums: . . . winding up or partnership change.
#### Introductory.
#### Information: supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lessee under long funding finance lease: limit on deductions
#### General powers to make regulations under Chapter IV.
#### Meaning of “construction operations”.
#### Change in ownership of company carrying on property business.
#### Change in company ownership: postponed corporation tax.
#### Supplementary provisions.
#### Provisions supplementary to section 138.
#### Travel expenses of employees not domiciled in the United Kingdom.
#### U.K. company distributions not generally chargeable to corporation tax.
#### Meaning of “distribution”.
#### Election by company paying dividend.
#### Returns.
#### Further interpretation of sections 135 to 139.
#### Relief for contributions in respect of share option gains.
#### Further interpretation of sections 135 to 139.
#### Stock dividends: distributions.
## [SCHEDULE 19A
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Relief by agreement with other territories.
#### Exceptions from the general charge.
#### Provisions supplementary to section 138.
#### Interpretation of sections 251A to 251C
#### Interpretation of sections 251A to 251C
#### Relief for contributions in respect of share option gains.
#### Application of lower rate to company distributions.
#### U.K. company distributions not generally chargeable to corporation tax.
#### Further interpretation of sections 135 to 139.
#### Application of lower rate to company distributions.
#### Section 209(3AA): link to shares of company or associated company
#### Exempt distributions: division of business
#### Stock dividends: distributions.
#### Interpretation of sections 249 and 250.
#### Meaning of “the minimum amount”
#### Children’s tax credit.
#### Married couple’s allowance(pre-5th December 2005 marriages).
#### Transitional relief: the elderly.
#### Early conversion or surrender of life policies.
#### Eligibility for relief.
#### Aggregation of wife’s income with husband’s.
#### Transfer of reliefs.
#### Minimum and maximum subscriptions.
#### Disposal of shares.
#### Withdrawal of relief.
#### Tax on companies in administration
#### The conditions mentioned in section 349A(1)
#### Transfers of trade to obtain balancing allowances
#### Company reconstructions: supplemental.
#### Company reconstructions involving business of leasing plant or machinery
#### Directions disapplying section 349A(1)
#### Directions disapplying section 349A(1)
#### Substitution of security: supplemental.
#### Relief where borrower deceased.
#### Loan to pay inheritance tax.
#### Home improvement loans.
#### “Distribution” to include certain expenses of close companies.
#### Loans to participators etc.
#### Apportionment of certain income, deductions and interest.
#### Extension of section 349: proceeds of sale of UK patent rights
#### Apportionment of income and gains.
#### Losses from trade etc. carried on abroad
#### Determination of reduced rate for building societies and composite rate for banks etc.
#### Treatment of oil extraction activities etc. for tax purposes.
#### Securities.
#### Calculation of certain amounts for purposes of sections 540, 542 and 545.
#### Regulations in relation to qualifying policies
#### Non-resident policies and off-shore capital redemption policies.
#### Charge on profits.
#### Conditions for tax exempt business.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Income arising under settlement where settlor retains an interest.
#### Lessee under long funding finance lease: termination
#### Reduction in chargeable profits following an exempt period
#### Section 751A: supplementary
#### Apportionment of chargeable profits and creditable tax
#### Deductions from profits of contributions paid under certified schemes.
#### Relief by agreement with other territories.
#### Qualifying vehicles
#### Arrangements made under old law.
#### Reduction of United Kingdom taxes by amount of credit due.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments not out of profits or gains brought into charge to income tax, and annual interest.
#### Exceptions from section 419.
#### Building societies: time for payment of tax.
#### Loan relationships etc.
#### Sale and lease-back.
#### Application of this Chapter etc. to policies and contracts in which persons other than companies are interested
#### Election as to tax exempt business.
#### Provisions supplementary to sections 573 and 575.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing release of obligation.
#### Charities: general.
#### Taxation of design royalties where owner abroad.
#### Returns where it is not established whether acceptable distribution policy applies.
#### Offshore income gains accruing to persons resident or domiciled abroad.
#### Schemes and arrangements designed to increase relief
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Exemptions from section 148.
#### Giving effect to mileage allowance relief
#### Limited exemption for computer equipment.
#### Taxation of profit-related pay.
#### Taxation of profit-related pay.
#### Meaning of “distribution”.
#### Elections as to transfer of relief under section 257A or 257AB.
#### Schedule A losses.
#### Equalisation reserves for general business.
#### Certified unit trusts: distributions.
#### Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
#### Apportionment of asset value increase where line 51 amount decreases
#### Life policies: chargeable events.
#### Ceasing to meet the trading requirement because of administration or receivership
#### Old societies.
#### The qualifying subsidiaries requirement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements made after 6th April 1965.
#### Schedule 4 directions.
#### Stock lending.
#### Qualifying trading companies
#### Provisions supplementary to sections 573 to 575.
#### The trading requirement
#### Employment
#### Section 796: trade income
#### Separate streaming of dividend so far as representing an ADP dividend of a CFC.
#### Limited exemption for computer equipment.
#### Provisions supplementary to section 138.
#### Interest which never has been relevant loan interest etc.
#### Losses from overseas property business.
#### Losses from overseas property business.
#### Treatment of interest as a loss for purposes of carry-forward and carry-back.
#### Restrictions on right of set-off.
#### Losses of ring fence trade: set off against profits of an earlier accounting period
#### Leasing contracts and company reconstructions.
#### Transactions in deposits with and without certificates or in debts.
#### Close companies.
#### Limits on group relief.
#### Meaning of “participator”, “associate”, “director” and “loan creditor”.
#### “Distribution” to include certain expenses of close companies.
#### Computation of losses and limitation on relief.
#### Additions to non-profit funds: amount of loss reduction
#### Determination of policy holders’ share for purposes of s.438B
#### Taxation of pure reinsurance business.
#### Modification of s. 444BA for mutual or overseas business and for non-resident companies.
#### Retained assets
#### Taxation in respect of other business.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exploration expenditure supplement
#### Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
#### Conditions to be satisfied by individuals.
#### Conditions to be satisfied by companies.
#### General powers to make regulations under Chapter IV.
#### Transactions associated with loans or credit.
#### Relevant deposits: computation of tax on interest.
#### Tariff receipts and tax-exempt tariffing receipts
#### Qualifying courses of training etc.
#### Qualifying counselling services etc.
#### Cessation of approval: general provisions.
#### Tax credits under Part 1 of Tax Credits Act 2002
#### Supplementary provisions.
#### Definition of insurance company.
#### Lessee under long funding finance lease: limit on deductions
#### Letting of furnished holiday accommodation treated as trade for certain income tax purposes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Income arising under settlement where settlor retains an interest.
#### Income arising under settlement where settlor retains an interest.
#### Revocable settlements allowing release of obligation.
#### Relief by agreement with other territories.
#### Repayment supplements: companies.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interest on tax overpaid.
#### VAT penalties etc.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Substituted retirement annuity contracts.
#### Revocable settlements allowing release of obligation.
#### Repayment supplements: companies.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Territorial sea and designated areas.
#### Interest on tax overpaid.
#### Schedule C.
#### Schedule E.
#### Regulations
#### Rules for ascertaining duration of leases.
#### United Kingdom government securities held by non-residents.
#### Amounts reversing expenses of management deducted: charge to tax
#### United Kingdom government securities held by non-residents.
#### Disposal or exercise of rights in pursuance of deposits.
#### Discounted bills of exchange.
#### Expenses of insurance companies
#### Discounted bills of exchange.
#### Payments to Export Credit Guarantee Department.
#### Expenses connected with living accommodation.
#### Restrictions on the use of tax credits by pension funds.
#### Section 432B apportionment: value of non-participating funds.
#### Lessee under long funding finance lease: limit on deductions
#### Cessation of approval: tax on certain schemes.
#### Termination of relief under this Chapter, and transitional provisions.
#### Computation of amount available for surrender by way of group relief.
#### Charities: general.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of section 737A.
#### Interpretation of credit code.
#### Revocable settlements allowing reversion of property.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Old societies.
#### Relief for individuals.
#### Savings banks: exemption from tax.
#### Patent income to be earned income in certain cases.
#### The prescribed circumstances.
#### Appeals against Board’s notices under section 703.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: supplementary provisions
#### Change in ownership of company carrying on property business.
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Dividends paid out of transferred profits.
#### Schemes and arrangements designed to increase relief
#### Onshore pooling.
#### Interpretation of Income Tax Acts.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Interpretation of the Corporation Tax Acts.
#### Meaning of “UK property business” and “overseas property business”
#### Meaning of “UK property business” and “overseas property business”
#### Expenditure on car hire: supplementary
#### Gifts of shares, securities and real property to charities etc
#### Conditions for approval of retirement benefit schemes.
#### Supplementary provisions as to absolute interests in residue.
#### Interpretation.
#### Interpretation of section 730A.
#### Deemed manufactured payments in the case of stock lending arrangements.
#### Certain deficiencies allowable as deductions.
#### Information: supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Statutory redundancy payments.
#### Qualifying interests in land held jointly
#### Exemption from tax in respect of qualifying premiums.
#### Payments under discretionary trusts.
#### Certain income not to be income of settlor etc.
#### Arrangements to avoid section 812.
#### Cancellation of tax advantage.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Corporation Tax Acts.
#### Qualifying interests in land held jointly
#### Introductory.
#### Information: supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Offshore income gains: application of transfer of assets abroad provisions
#### Income treated as arising under section 761(1): remittance basis
#### Provision not at arm’s length.
#### Form of relief.
#### Attribution of relief to shares.
#### Interpretation of Chapter III.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from UK property business.
#### Amounts eligible for group relief: trading losses.
#### Loans to participators etc.
#### Income or gains arising from property investment LLP
#### Securities.
#### Taxation in respect of other business.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lessee under long funding finance lease: limit on deductions
#### General powers to make regulations under Chapter IV.
#### Meaning of “construction operations”.
#### Change in ownership of company carrying on property business.
#### Change in company ownership: postponed corporation tax.
#### Supplementary provisions.
#### Provisions supplementary to section 138.
#### Travel expenses of employees not domiciled in the United Kingdom.
#### U.K. company distributions not generally chargeable to corporation tax.
#### Meaning of “distribution”.
#### Election by company paying dividend.
#### Returns.
#### Further interpretation of sections 135 to 139.
#### Relief for contributions in respect of share option gains.
#### Further interpretation of sections 135 to 139.
#### Relief for necessary expenses.
## [SCHEDULE 19A
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Relief by agreement with other territories.
#### Exceptions from the general charge.
#### Provisions supplementary to section 138.
#### Interpretation of sections 251A to 251C
#### Interpretation of sections 251A to 251C
#### Relief for contributions in respect of share option gains.
#### Meaning of “distribution”.
#### Married couple's allowance (post-5th December 2005 marriages and civil partnerships etc.)
#### Tax on companies in administration
#### Qualifying maintenance payments.
#### Payments out of profits or gains brought into charge to income tax: deduction of tax.
#### Payments not out of profits or gains brought into charge to income tax, and annual interest.
#### Extension of section 349: proceeds of sale of UK patent rights
#### The conditions mentioned in section 349A(1)
#### Losses from trade etc. carried on abroad
#### Exclusions from section 423.
#### Election that assets not be foreign business assets
#### Securities.
#### Transfers of life assurance business: Case VI losses of the transferor
#### Taxation in respect of other business.
#### Taxation in respect of other business: incorporated friendly societies etc.
#### Transfers of other business
#### Conditions for tax exempt business.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Lessee under long funding finance lease: termination
#### Lessee under long funding finance lease: termination
#### Deductions from profits of contributions paid under certified schemes.
#### General powers to make regulations under Chapter IV.
#### General powers to make regulations under Chapter IV.
#### Deductions from profits of contributions paid under certified schemes.
#### Relief by agreement with other territories.
#### Section 785B: expectation that relevant capital payment will not be paid
#### Arrangements made under old law.
#### Reduction of United Kingdom taxes by amount of credit due.
#### Dividends paid out of transferred profits.
#### Payments not out of profits or gains brought into charge to income tax, and annual interest.
#### Payments out of profits or gains brought into charge to income tax: deduction of tax.
#### Exclusions from section 423.
#### Interpretative provisions relating to insurance companies.
#### Schedule A business or overseas property business.
#### Modifications where tax charged under Case I of Schedule D.
#### Election as to tax exempt business.
#### Maximum benefits payable to members.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Letting of furnished holiday accommodation treated as trade for certain income tax purposes
#### Charities: general.
#### Taxation of design royalties where owner abroad.
#### Deductions from profits of contributions paid under certified schemes.
#### Provisions supplementary to sections 573 to 575.
#### Schemes and arrangements designed to increase relief
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Exemptions from section 148.
#### Giving effect to mileage allowance relief
#### Limited exemption for computer equipment.
#### Taxation of profit-related pay.
#### Taxation of profit-related pay.
#### Relief for contributions in respect of share option gains.
#### Elections as to transfer of relief under section 257A or 257AB.
#### Application to subsidiaries.
#### Losses from overseas property business.
#### Meaning of “associated company” and “control”.
#### Section 432B apportionment: income of non-participating funds.
#### Apportionment of asset value increase where line 51 amount decreases
#### Modifications in relation to BLAGAB group reinsurers
#### Election as to tax exempt business.
#### Old societies.
#### Assets of branch of registered friendly society to be treated as assets of society after incorporation.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions with substantial donors
#### Transactions with substantial donors
#### Introductory.
#### Qualifying trading companies
#### Provisions supplementary to sections 573 to 575.
#### The trading requirement
#### Arrangements made under old law.
#### Section 796: trade income
#### Separate streaming of dividend so far as representing an ADP dividend of a CFC.
#### Limited exemption for computer equipment.
#### Provisions supplementary to section 138.
#### Attribution of relief to shares.
#### Taxation of borrower when loan under section 419 released etc
#### Section 432B apportionment: income of non-participating funds.
#### Authorised unit trusts.
#### Certified unit trusts: corporation tax.
#### Dividends paid to investment trusts.
#### Transitional provisions relating to unit trusts.
#### Supplementary provisions.
#### Audit powers in relation to non-residents.
#### Lessee under long funding finance lease: limit on deductions
#### Letting of furnished holiday accommodation treated as trade for certain income tax purposes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Income arising under settlement where settlor retains an interest.
#### Income arising under settlement where settlor retains an interest.
#### Revocable settlements allowing release of obligation.
#### Payments to unmarried minor children of settlor.
#### Repayment supplements: companies.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interest on tax overpaid.
#### VAT penalties etc.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Substituted retirement annuity contracts.
#### Revocable settlements allowing release of obligation.
#### Repayment supplements: companies.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Territorial sea and designated areas.
#### Interest on tax overpaid.
#### Schedule C.
#### Certain income charged at basic rate.
#### Restrictions on relief
#### Regulations
#### Rules for ascertaining duration of leases.
#### Tax treatment of receipts and outgoings on sale of land.
#### United Kingdom government securities held by non-residents.
#### Disposal or exercise of rights in pursuance of deposits.
#### Discounted bills of exchange.
#### Expenses of insurance companies
#### Discounted bills of exchange.
#### Payments to Export Credit Guarantee Department.
#### Expenses connected with living accommodation.
#### Restrictions on the use of tax credits by pension funds.
#### Section 432B apportionment: value of non-participating funds.
#### Section 432B apportionment: value of non-participating funds.
#### Distribution accounts.
#### Interest paid on deposits with banks etc.
#### Computation of amount available for surrender by way of group relief.
#### Charities: general.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 548A: further definitions
#### Payments to unmarried minor children of settlor.
#### Revocable settlements allowing reversion of property.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Old societies.
#### Assets of branch of registered friendly society to be treated as assets of society after incorporation.
#### Savings banks: exemption from tax.
#### Patent income to be earned income in certain cases.
#### Relief for expenses.
#### Introductory.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: supplementary provisions
#### The property managing subsidiaries requirement
#### Settlements made before 7th April 1965 but after 9th April 1946.
#### Sub-funds
#### Certain distributions to be treated as income to which section 686 applies.
#### Earnings from associated employments.
#### Interpretation of Income Tax Acts.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Interpretation of the Corporation Tax Acts.
#### Meaning of “UK property business” and “overseas property business”
#### Meaning of “UK property business” and “overseas property business”
#### Assets of branch of registered friendly society to be treated as assets of society after incorporation.
#### Exemption for trade unions and employers’ associations.
#### Funds of funds: distributions.
#### Provisions supplementary to section 520.
#### Provisions supplementary to section 520.
#### Life policies: chargeable events.
#### Treatment of certain assignments etc involving co-ownership
#### Certain deficiencies allowable as deductions.
#### Information: supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Statutory redundancy payments.
#### Qualifying interests in land held jointly
#### Counselling services for employees.
#### Exemption from tax in respect of qualifying premiums.
#### Payments under discretionary trusts.
#### Certain income not to be income of settlor etc.
#### Special provisions as to certain interests in residue.
#### Cancellation of tax advantage.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Corporation Tax Acts.
#### Authorised unit trusts.
#### Introductory.
#### Information: supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The trading requirement
#### Counselling services for employees.
#### Exemption from tax in respect of qualifying premiums.
#### Application to Scotland.
#### Mutual agreement procedure and presentation of cases under arrangements.
#### Meaning of “interest”, “transfers with or without accrued interest” etc.
@@ -75262,1020 +66590,1036 @@
#### Schedule E.
#### Section 37(4) and reductions in receipts under ITTOIA 2005
#### Tax treatment of receipts and outgoings on sale of land.
#### Charitable donations: contributions to agent’s expenses.
#### Restriction on relief: individuals.
#### Tax credits for non-U.K. residents.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme ; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is not an authorised unit trust; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*” has the same meaning as in section 468, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Building societies: incidental costs of issuing qualifying shares.
#### Interpretation.
#### Power to provide for manufactured payments to be eligible for relief.
#### The qualifying subsidiaries requirement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Earnings from pensionable employment.
#### Interpretation of Income Tax Acts.
#### Exchange gains and losses on sale and repurchase of securities
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Manufactured dividends and interest.
#### Qualifying trade, profession or vocation
#### How averaging claim is given effect
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Levies and repayments under the Financial Services and Markets Act 2000.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Payments to trustees of approved profit sharing schemes.
#### Section 87(2) and (3) and reductions in receipts under ITTOIA 2005
#### Restriction on relief: individuals.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER 1B — PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR
### CHAPTER 1C — LIABILITY OF TRUSTEES
#### Section 785B: expectation that relevant capital payment will not be paid
#### Restriction of relief for payments of interest.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restriction on deduction of interest or dividends from trading income.
#### Meaning of “settlement day” for purposes of sections 711 to 728.
#### Reduction in chargeable profits for certain financing income
#### Special rule for computing chargeable profits.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### Introduction
#### Introduction
## Part IV — Disallowed debits and non-trading deficits
#### Reduction in chargeable profits: failure to qualify for exemptions
#### Reduction in chargeable profits for certain financing income
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### Employment
#### The approved amount: mileage allowance payments
#### Taxable premiums etc.
#### Charitable donations: contributions to agent’s expenses.
#### Payments to Export Credit Guarantee Department.
#### Meaning of “the aggregate amount”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dealers in securities.
#### Manufactured dividends and interest.
#### Prevention of avoidance of income tax.
#### Provision not at arm’s length.
#### Assets leased to traders and others.
#### Revocable settlements allowing reversion of property.
#### Settlements made before 7th April 1965 but after 9th April 1946.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of deemed sums and reliefs.
#### Appeals against Board’s notices under section 703.
#### Unrealised interest in default
#### Interest on tax overpaid.
#### Transfers of rights to receive distributions in respect of shares
#### Offshore income gains: application of transfer of assets abroad provisions
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Offshore income gains accruing to persons resident or domiciled abroad.
#### Change in ownership of company carrying on property business.
#### The approved amount: mileage allowance payments
#### The approved amount: mileage allowance payments
#### Qualifying companies
#### Tax year
#### Treatment of receipts as earned income.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of price differential on sale and repurchase of securities.
#### The conditions for being an excepted group life policy
#### Change in company ownership: corporation tax.
#### Substituted retirement annuity contracts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from sections 713 and 714
#### Variable interest rate.
#### Trading stock.
#### Section 751A: supplementary
#### Introduction
#### Adjustment of profits on averaging claim
#### Tax year
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured interest on UK securities: general
### Manufactured interest on gilt-edged securities etc.
#### Amount of post-commencement supplement for a post-commencement period
#### Valuation of work in progress at discontinuance of profession or vocation.
#### Tax credits for non-U.K. residents.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme ; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is not an authorised unit trust; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*” has the same meaning as in section 468, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Building societies: incidental costs of issuing qualifying shares.
#### “Deposit-taker”, “deposit” and “relevant deposit”.
#### Non-resident policies and off-shore capital redemption policies.
#### The qualifying subsidiaries requirement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Earnings from pensionable employment.
#### Treatment of price differential on sale and repurchase of securities.
#### Exchange gains and losses on sale and repurchase of securities
#### Persons entitled to exemptions.
#### Manufactured dividends and interest.
#### Meaning of “the aggregate amount”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Regulations in relation to qualifying policies
#### Effect of appointment or arrangements under section 659B.
#### Exemption from tax in respect of qualifying premiums.
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Disposals and acquisitions of company loan relationships with or without interest.
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variable interest rate.
#### Interpretation of the Corporation Tax Acts etc.
#### Deemed interest: cash collateral under stock lending arrangements
#### Income treated as arising under section 761(1): remittance basis
#### Change in company ownership: postponed corporation tax.
#### Change in company ownership: postponed corporation tax.
#### Sales etc. at an undervalue or overvalue.
#### Section 785B: expectation that relevant capital payment will not be paid
#### Company vehicles
#### Introduction
#### The approved amount: mileage allowance payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect of appointment or arrangements under section 659B.
#### Interpretation of section 686B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed manufactured payments: further provisions.
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Sales etc. at an undervalue or overvalue.
#### Restriction of relief for payments of interest.
#### Tax year
#### Company vehicles
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “A significant amount of time”
#### Conventional basis: general charge on receipts after discontinuance . . . .
#### “A significant amount of time”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The control and independence requirement
#### Business entertaining expenses.
#### Appeals against Board’s notices under section 703.
#### Meaning of “settlement day” for purposes of sections 711 to 728.
#### Repayment supplements: companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Application of sections 741 and 741A
### Introductory
### Payments and other benefits to which section 148 applies
### Payments and other benefits excluded from charge under section 148
### Application of £30,000 threshold
### Exclusion or reduction of charge in case of foreign service
### Valuation of benefits
### Notional interest treated as paid if amount charged in respect of beneficial loan
### Giving effect to the charge to tax
### Reporting requirements
### Interpretation
#### Leased assets: special cases.
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Supplemental provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Leased assets subject to hire-purchase agreements.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Liability of non-transferors.
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Company vehicles
#### Introduction
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Power to obtain information.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Tax year
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax credits under Part 1 of Tax Credits Act 2002
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Trading stock.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits for certain financing income
#### Reduction in chargeable profits: failure to qualify for exemptions
### The appropriate percentage
### Car with CO2 emissions figure
### The lower threshold
### Bi-fuel cars
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### The non-qualifying pool
#### Supplement in respect of a pre-commencement accounting period
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery of tax credits incorrectly paid.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect of notice under section 804ZA
#### Utilisation of eligible unrelieved foreign tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### About this Schedule
#### Supplement in respect of a pre-commencement accounting period
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “The individual’s contribution to the trade”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interest: special relationship.
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Supplement in respect of a pre-commencement accounting period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in company ownership: corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of this Act.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery of tax credits incorrectly paid.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowable deductions.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits following an exempt period
#### Reduction in chargeable profits following an exempt period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to inspect documents.
#### The Arbitration Convention.
#### Schemes and arrangements designed to increase relief
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The non-qualifying pool
#### About this Schedule
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Income Tax Acts from year to year.
#### Repayment supplements: companies.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The non-qualifying pool
#### About this Schedule
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conventional basis: general charge on receipts after discontinuance . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### Recovery of tax credits incorrectly paid.
#### Old references to standard rate tax.
#### Reduction of United Kingdom taxes by amount of credit due.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Annual value” of land.
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Restriction on relief for non-active partners
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to inspect documents.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Qualifying companies
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “research and development”.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Allowable deductions.
#### Partners: meaning of “contribution to the trade”
#### Partners: meaning of “contribution to the trade”
#### Restriction on deduction of interest or dividends from trading income.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definitions.
#### Meaning of “relevant loss” in section 118ZN
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definitions.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Repayment supplements: companies.
#### Meaning of “investment LLP” and “property investment LLP”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
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##### 468A
- (1) In relation to an open-ended investment company the rate of corporation tax for the financial year 2005 and subsequent financial years shall be deemed to be the rate at which income tax at the savings rate is charged for the year of assessment which begins on 6th April in the financial year concerned (and section 13 shall not apply).
- (2) In this section “*open-ended investment company*” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.
- (3) Each of the parts of an umbrella company shall be regarded for the purposes of this section as an open-ended investment company and the umbrella company as a whole shall not be so regarded (and shall not, unless an enactment expressly provides otherwise, be regarded as a company for any other purpose of the Tax Acts).
- (4) In subsection (3) “*umbrella company*” means an open-ended investment company—
- (a) in respect of which the instrument of incorporation provides arrangements for separate pooling of the contributions of the shareholders and the profits or income out of which payments are to be made to them, and
- (b) the shareholders of which are entitled to exchange rights in one pool for rights in another,
and a reference to part of an umbrella company is a reference to a separate pool.
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
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#### Qualifying trade, profession or vocation
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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#### Meaning of “research and development”.
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#### How averaging claim is given effect
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#### About this Schedule
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#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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#### Levies and repayments under the Financial Services and Markets Act 2000.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Payments to trustees of approved profit sharing schemes.
#### Charitable donations: contributions to agent’s expenses.
#### Restriction on relief: individuals.
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### CHAPTER 1B — PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR
### CHAPTER 1C — LIABILITY OF TRUSTEES
#### Cessation of approval: general provisions.
#### Section 591C: supplementary.
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#### Receipts to be treated as income to which section 686 applies
#### Meaning of “settlement day” for purposes of sections 711 to 728.
#### Reduction in chargeable profits for certain financing income
#### Special rule for computing chargeable profits.
#### Special rule for computing chargeable profits.
#### Reduction in chargeable profits following an exempt period
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#### The approved amount: passenger payments
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#### Qualifying trade, profession or vocation
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#### Supplement in respect of a pre-commencement accounting period
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
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#### Introduction
#### Introduction
## Part IV — Disallowed debits and non-trading deficits
#### Reduction in chargeable profits: failure to qualify for exemptions
#### Reduction in chargeable profits for certain financing income
#### Adjustment of profits on averaging claim
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### Employment
#### The approved amount: mileage allowance payments
#### Costs of establishing share option or profit sharing schemes: relief.
#### Charitable donations: contributions to agent’s expenses.
#### Taxable premiums etc.
#### Meaning of “the aggregate amount”
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#### Introductory.
#### Life policies: computation of gain.
#### Information: supplementary provisions
#### Business entertaining expenses.
#### Qualifying counselling services etc.
#### Revocable settlements allowing reversion of property.
#### Settlements made before 7th April 1965 but after 9th April 1946.
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#### Treatment of deemed sums and reliefs.
#### Appeals against Board’s notices under section 703.
#### Unrealised interest in default
#### Nominees, trustees etc.
#### Transfers of rights to receive distributions in respect of shares
#### Offshore income gains: application of transfer of assets abroad provisions
#### Offshore income gains accruing to persons resident or domiciled abroad.
#### Offshore income gains accruing to persons resident or domiciled abroad.
#### Change in ownership of company carrying on property business.
#### The approved amount: mileage allowance payments
#### The approved amount: mileage allowance payments
#### Qualifying companies
#### Tax year
#### Treatment of receipts as earned income.
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#### Application of this Chapter etc. to policies and contracts in which persons other than companies are interested
#### The conditions for being an excepted group life policy
#### The property managing subsidiaries requirement
#### Substituted retirement annuity contracts.
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#### Exceptions from sections 713 and 714
#### Variable interest rate.
#### Trading stock.
#### Section 751A: supplementary
#### Relevant interests.
#### Determinations requiring the sanction of the Board.
#### Tax year
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### Manufactured interest on UK securities: general
### Manufactured interest on gilt-edged securities etc.
#### Amount of post-commencement supplement for a post-commencement period
#### Taxable premiums etc.
#### Meaning of “the aggregate amount”
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#### Regulations in relation to qualifying policies
#### Effect of appointment or arrangements under section 659B.
#### Exemption from tax in respect of qualifying premiums.
#### Certain distributions to be treated as income to which section 686 applies.
#### Application of section 686D where settlor has made more than one settlement
#### Receipts to be treated as income to which section 686 applies
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#### Variable interest rate.
#### Transfers of rights to receive distributions in respect of shares
#### Deemed interest: cash collateral under stock lending arrangements
#### Income treated as arising under section 761(1): remittance basis
#### Change in company ownership: postponed corporation tax.
#### Change in company ownership: postponed corporation tax.
#### Sales etc. at an undervalue or overvalue.
#### Section 785B: expectation that relevant capital payment will not be paid
#### Company vehicles
#### Introduction
#### The approved amount: mileage allowance payments
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#### Effect of appointment or arrangements under section 659B.
#### Interpretation of section 686B
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#### Deemed manufactured payments: further provisions.
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Sales etc. at an undervalue or overvalue.
#### Restriction of relief for payments of interest.
#### Tax year
#### Company vehicles
#### Employment
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#### “A significant amount of time”
#### Section 87(2) and (3) and reductions in receipts under ITTOIA 2005
#### “A significant amount of time”
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#### The control and independence requirement
#### Business entertaining expenses.
#### Appeals against Board’s notices under section 703.
#### Meaning of “settlement day” for purposes of sections 711 to 728.
#### Exceptions from sections 713 and 714
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#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Application of sections 741 and 741A
### Introductory
### Payments and other benefits to which section 148 applies
### Payments and other benefits excluded from charge under section 148
### Application of £30,000 threshold
### Exclusion or reduction of charge in case of foreign service
### Valuation of benefits
### Notional interest treated as paid if amount charged in respect of beneficial loan
### Giving effect to the charge to tax
### Reporting requirements
### Interpretation
#### Leased assets: special cases.
#### The approved amount: passenger payments
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### About this Schedule
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#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Supplemental provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### About this Schedule
#### Qualifying companies
#### Section 590: supplementary provisions.
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#### Liability of non-transferors.
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Company vehicles
#### Introduction
#### The non-qualifying pool
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#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Power to obtain information.
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#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Tax year
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#### Tax credits under Part 1 of Tax Credits Act 2002
#### Nominees, trustees etc.
#### Trading stock.
#### Information.
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#### Reduction in chargeable profits for certain financing income
#### Reduction in chargeable profits: failure to qualify for exemptions
### The appropriate percentage
### Car with CO2 emissions figure
### The lower threshold
### Bi-fuel cars
#### Interpretation of credit code.
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#### Supplement in respect of a post-commencement period
#### The non-qualifying pool
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#### Qualifying companies
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#### Manufactured dividends and interest.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation.
#### Amount of post-commencement supplement for a post-commencement period
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#### About this Schedule
#### Amount of post-commencement supplement for a post-commencement period
#### About this Schedule
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Qualifying companies
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#### Effect of notice under section 804ZA
#### Utilisation of eligible unrelieved foreign tax.
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Supplement in respect of a pre-commencement accounting period
#### Supplement in respect of a post-commencement period
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “The individual’s contribution to the trade”
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#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interest: special relationship.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a pre-commencement accounting period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
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#### Change in company ownership: corporation tax.
#### Income treated as arising under section 761(1): remittance basis
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#### Interpretation of this Act.
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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#### Recovery of tax credits incorrectly paid.
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 87(2) and (3) and reductions in receipts under ITTOIA 2005
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits following an exempt period
#### Reduction in chargeable profits following an exempt period
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#### Power to inspect documents.
#### The Arbitration Convention.
#### Schemes and arrangements designed to increase relief
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
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#### The non-qualifying pool
#### About this Schedule
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of Income Tax Acts from year to year.
#### Repayment supplements: companies.
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The non-qualifying pool
#### About this Schedule
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conventional basis: general charge on receipts after discontinuance . . . .
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#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
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#### Introduction
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
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#### Restriction of relief for payments of interest.
#### Recovery of tax credits incorrectly paid.
#### Old references to standard rate tax.
#### Reduction of United Kingdom taxes by amount of credit due.
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#### “Annual value” of land.
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Conventional basis: general charge on receipts after discontinuance . . . .
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#### Power to inspect documents.
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#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Qualifying companies
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “research and development”.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Allowable deductions.
#### Partners: meaning of “contribution to the trade”
#### Partners: meaning of “contribution to the trade”
#### Restriction on deduction of interest or dividends from trading income.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
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#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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#### Supplement in respect of a post-commencement period
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#### Restriction on relief: companies.
#### Meaning of “relevant loss” in section 118ZN
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#### Definitions.
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#### Repayment supplements: companies.
#### Meaning of “investment LLP” and “property investment LLP”
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#### Introduction
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#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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##### 468A
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##### 468A
- (1) In relation to an open-ended investment company the rate of corporation tax for the financial year 2005 and subsequent financial years shall be deemed to be the rate at which income tax at the lower rate is charged for the year of assessment which begins on 6th April in the financial year concerned (and section 13 shall not apply).
- (2) In this section “*open-ended investment company*” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.
- (3) Each of the parts of an umbrella company shall be regarded for the purposes of this section as an open-ended investment company and the umbrella company as a whole shall not be so regarded (and shall not, unless an enactment expressly provides otherwise, be regarded as a company for any other purpose of the Tax Acts).
- (4) In subsection (3) “*umbrella company*” means an open-ended investment company—
- (a) in respect of which the instrument of incorporation provides arrangements for separate pooling of the contributions of the shareholders and the profits or income out of which payments are to be made to them, and
- (b) the shareholders of which are entitled to exchange rights in one pool for rights in another,
and a reference to part of an umbrella company is a reference to a separate pool.
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
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#### Qualifying trade, profession or vocation
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#### About this Schedule
#### About this Schedule
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#### Meaning of “research and development”.
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#### How averaging claim is given effect
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#### About this Schedule
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#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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#### Qualifying trade, profession or vocation
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#### Supplement in respect of a pre-commencement accounting period
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
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#### Introduction
#### Adjustment of profits on averaging claim
#### About this Schedule
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### Meaning of “industrial assurance business”
##### 20A
In this Part of this Schedule “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
2007-04-01
Income and Corporation Taxes Act 1988
2007-03-29
Income and Corporation Taxes Act 1988
2007-03-21
Income and Corporation Taxes Act 1988
2007-03-01
Income and Corporation Taxes Act 1988
2007-01-08
Income and Corporation Taxes Act 1988
2007-01-01
Income and Corporation Taxes Act 1988
2006-12-31
Income and Corporation Taxes Act 1988
2006-12-26
Income and Corporation Taxes Act 1988
2006-12-12
Income and Corporation Taxes Act 1988
2006-12-06
Income and Corporation Taxes Act 1988
2006-08-11
Income and Corporation Taxes Act 1988
2006-07-19
Income and Corporation Taxes Act 1988
2006-06-09
Income and Corporation Taxes Act 1988
2006-04-06
Income and Corporation Taxes Act 1988
2006-04-01
Income and Corporation Taxes Act 1988
2006-03-22
Income and Corporation Taxes Act 1988
2006-01-06
Income and Corporation Taxes Act 1988
2005-12-27
Income and Corporation Taxes Act 1988
2005-12-05
Income and Corporation Taxes Act 1988
2005-11-01
Income and Corporation Taxes Act 1988
2005-10-05
Income and Corporation Taxes Act 1988
2005-09-27
Income and Corporation Taxes Act 1988
2005-08-12
Income and Corporation Taxes Act 1988
2005-08-11
Income and Corporation Taxes Act 1988
2005-08-03
Income and Corporation Taxes Act 1988
2005-07-24
Income and Corporation Taxes Act 1988
2005-07-20
Income and Corporation Taxes Act 1988
2005-06-08
Income and Corporation Taxes Act 1988
2005-04-07
Income and Corporation Taxes Act 1988
2005-04-06
Income and Corporation Taxes Act 1988
original version
Text at this date