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Income Tax Act 2007

Type Public General Act

Publication 2007-03-20

Last updated 2026-01-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) in sub-paragraph (1)(e)(ii) for “subsection (2) of section 306 of the Taxes Act” substitute “ section 306(2) of the Taxes Act or section 203(1) of ITA 2007 ” and for “that section” substitute “ section 306 of the Taxes Act or sections 204 and 205 of ITA 2007 ”,

(b) in sub-paragraph (5)(a) after “Taxes Act” insert “ or section 203(1) of ITA 2007 ”, and

(8) In paragraph 9 (other reconstructions and amalgamations)—

(a) in sub-paragraph (1) after “Taxes Act” insert “ or Part 5 of ITA 2007 ”,

(b) in sub-paragraph (3) after “Taxes Act” insert “ or Part 5 of ITA 2007 ”, and

(c) in sub-paragraph (4)(b) for “subsection (2) of section 306 of the Taxes Act” substitute “ section 306(2) of the Taxes Act or section 203(1) of ITA 2007 ” and for “that section” substitute “ section 306 of the Taxes Act or sections 204 and 205 of ITA 2007 ”.

(9) In paragraph 11(5) (pre-arranged exits)—

(a) after “trading group” insert “ (a) ”, and

(b) at the end insert

, or (b) is a reference to a company that meets the trading requirement in section 181(2)(b) of ITA 2007.

(10) In paragraph 13(5) (value received by investor) after “Taxes Act” insert “ or Chapter 2 of Part 5 of ITA 2007 ”.

(11) In paragraph 13C (provision supplemental to paragraph 13B)—

(a) in sub-paragraph (3) for “Sub-paragraph (4) below” substitute “ This sub-paragraph ”, and

(b) for sub-paragraph (4) substitute—

(4) Where either of the following applies— (a) sub-paragraph (3) above, and (b) section 223(3) of ITA 2007 (which makes corresponding provision in relation to EIS relief under Part 5 of that Act), the person who subscribes for the shares shall not by virtue of his subscription for those shares or any other shares in the same issue be treated as making a qualifying investment for the purposes of this Schedule.

(12) In paragraph 14(3) (value received by other persons)—

(a) after “Taxes Act”, in the first place where it occurs, insert “ or Part 5 of ITA 2007 ”,

(b) for “that Act” substitute “ the Taxes Act or section 209 or 216(2)(a) of ITA 2007 ”, and

(13) In paragraph 16 (information)—

(a) in sub-paragraph (4)—

(i) after “Taxes Act”, in the first place where it occurs, insert “ or section 203(1) of ITA 2007 ”, and

(ii) after “Taxes Act”, in the second place where it occurs, insert “ or section 175(3) of ITA 2007 ”,

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) in sub-paragraph (6) after “Taxes Act” insert “ or section 176(4)(b) or (5)(b), 182(2) or (4), 183(6), 185(1), 190(1)(e) or 191(2)(c), (3), (4) or (5) of ITA 2007 ”,

(d) in sub-paragraph (7)—

(i) in paragraph (a) after “Taxes Act” insert “ or section 182(2) or (4) of ITA 2007 ”,

(ii) in paragraph (aa) after “Taxes Act” insert “ or section 176(4)(b) or (5)(b), 183(6) or 191(3), (4) or (5) of ITA 2007 ”, and

(iii) in paragraph (c) after “Taxes Act” insert “ or section 185(1), 190(1)(e) or 191(2)(c) of ITA 2007 ”, and

(e) in sub-paragraph (7A)—

(i) after “Taxes Act” insert “ and subsections (3), (4) and (5) of section 191 of ITA 2007 ”, and

(ii) for “that Act” substitute “ the Taxes Act or section 190(2) of ITA 2007 ”.

(14) In paragraph 19(1) (interpretation)—

(a) in the definition of “eligible shares” for “that Act” substitute “ the Taxes Act or means shares that meet the requirement in section 173 (2) of ITA 2007 ”,

(b) in the definition of “ordinary share capital” for “the same meaning as in the Taxes Act” substitute “ the meaning given by section 989 of ITA 2007 ”,

(d) for the definition of “qualifying company” substitute—

“qualifying company”, in relation to any eligible shares, means a company which, in relation to those shares, is— (a) a qualifying company for the purposes of Chapter 3 of Part 7 of the Taxes Act (except that for the purposes of this Schedule the reference in section 293(1B)(b)(i) of that Act to section 304A of that Act shall be read as a reference to paragraph 8 above), or (b) a qualifying company for the purposes of Part 5 of ITA 2007 (except that for the purposes of this Schedule the reference in section 184(1)(c)(i) of that Act to section 247 of that Act shall be read as a reference to paragraph 8 above).

(e) in the definition of “the relevant period” for “that Act” insert “ the Taxes Act or section 159(2) of ITA 2007 ”, and

(f) in the definition of “termination date” after “Taxes Act” insert “ or section 256 of ITA 2007 ”.

(15) In paragraph 19(3) omit the “and” immediately before paragraph (c) and after that paragraph insert

; and (d) references to Part 5 of ITA 2007 or any provision of that Part are to a Part or provision that applies only in relation to shares issued on or after 6th April 2007

346

In paragraph 1(1)(a) of Schedule 5BA (enterprise investment scheme: application of taper relief) after “Taxes Act” insert “ or Part 5 of ITA 2007 ”.

347

In paragraph 3(1)(f) of Schedule 5C (VCTs: deferred charge on re-investment) for “section 842AA(8) of the Taxes Act” substitute “ section 281(3) of ITA 2007 ”.

348

(1) Amend Schedule 7C (reliefs for transfers to approved share plans) as follows.

(2) In paragraph 2(6) (conditions relating to the disposal), in the definition of “ordinary share capital” for “section 832(1) of the Taxes Act” substitute “ section 989 of ITA 2007 ”.

(3) In paragraph 7(1) and (3) (shares: special provision) after “Taxes Act” insert “ or Part 5 of ITA 2007 ”.

349

In Schedule 8 (leases), in paragraph 5(6) for “any amount chargeable to tax under section 348 or 349 of the Taxes Act” substitute “ any amount from which a sum representing income tax is required to be deducted under Part 15 of ITA 2007 ”.

Finance (No. 2) Act 1992 (c. 48)

350

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Tribunals and Inquiries Act 1992 (c. 53)

351

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Judicial Pensions and Retirement Act 1993 (c. 8)

352

In section 3(6) of the Judicial Pensions and Retirement Act 1993 (the appropriate annual rate) for “section 279(1) of the Finance Act 2004” substitute “ section 4 of the Income Tax Act 2007 ”.

Charities Act 1993 (c. 10)

353

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Finance Act 1993 (c. 34)

354

The Finance Act 1993 is amended as follows.

355

Omit section 80 (transitional relief for charities etc).

356

Omit section 118 (Scottish trusts).

357

(1) Amend section 176 (ancillary trust funds) as follows.

(2) In subsection (3) for paragraph (a) substitute—

(a) section 636 of ITA 2007 (exception where there is a transfer to a legatee);

(3) In subsection (4) for “sections 710 to” substitute “ Part 12 of ITA 2007 and section ”.

358

(1) Amend section 180 (underwriting profits to be earned income) as follows.

(2) In subsection (1) for paragraph (b) substitute—

(b) accordingly, shall constitute— (i) for the purposes of Part 4 of the Finance Act 2004, relevant UK earnings within section 189(2)(b) of that Act, and (ii) income in relation to which the treatment in section 836(2) of ITA 2007 does not apply.

(3) In the sidenote for “earned income” substitute “ relevant UK earnings etc ”.

359

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360

In section 212 (interpretation) at the end insert “ , and “ITA 2007” means the Income Tax Act 2007 ”.

361

(1) Amend Schedule 20A (Lloyd's underwriters: conversion to limited liability underwriting) as follows.

(2) In paragraph 2—

(a) in sub-paragraph (2) for “The carry-forward provision” substitute “ Section 83 of ITA 2007 ”, and

(b) omit sub-paragraphs (3) and (4).

(3) In paragraph 5(1), in the definition of “ordinary share capital”, for “section 832(1) of the Taxes Act 1988” substitute “ section 989 of ITA 2007 ”.

(4) In paragraph 7(2) for “Section 385 of the Taxes Act 1988” substitute “ Section 83 of ITA 2007 ”.

Agriculture Act 1993 (c. 37)

362

In paragraph 22(2) of Schedule 2 to the Agriculture Act 1993 (tax provisions relating to the carrying out of approved scheme of reorganisation) for “section 469 of the Income and Corporation Taxes Act 1988” substitute “ the Tax Acts ”.

Finance Act 1994 (c. 9)

363

(1) Amend paragraph 11 of Schedule 20 to the Finance Act 1994 (changes for facilitating self-assessment etc) as follows.

(2) In sub-paragraph (3) for the words from “be treated” to “excess” substitute “ be chargeable for that year to an amount of income tax equal to the excess ”.

(3) Omit sub-paragraph (7).

Finance Act 1995 (c. 4)

364

The Finance Act 1995 is amended as follows.

365

Omit section 73 (venture capital trusts: regulations).

366

Omit section 90 (relief for post-cessation expenditure).

367

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368

Omit section 128 (limit on income chargeable on non-residents: income tax).

369

(1) Amend section 154 (short rotation coppice) as follows.

(2) In subsection (1)—

(a) omit “Subject to subsection (1A),”, and

(b) for “Tax Acts” substitute “ Corporation Tax Acts ”.

(3) Omit subsection (1A).

370

(1) Amend Schedule 22 (prevention of exploitation of Schedule 2 to ITTOIA 2005 (so far as relating to overlap profit)) as follows.

(2) In paragraph 5(1)(b) for the words from “section 353” to “provision)” substitute “ section 383 of the Income Tax Act 2007 (relief for interest payments) ”.

(3) In paragraph 17—

(a) in sub-paragraph (2) for “section 839” to the end substitute “ section 993 of the Income Tax Act 2007 (but as if, in subsection (4) of that section, the words from “But this subsection” to the end were omitted). ”, and

(b) in sub-paragraph (6)(a), in paragraph (ii) of the definition of “control”, for “section 840 of that Act” substitute “ section 995 of the Income Tax Act 2007 ”.

Finance Act 1996 (c. 8)

371

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372

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373

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374

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375

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376

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Finance (No.2) Act 1997 (c. 58)

377

The Finance (No.2) Act 1997 is amended as follows.

378

Omit section 29 (unauthorised unit trusts).

379

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Finance Act 1998 (c. 36)

380

The Finance Act 1998 is amended as follows.

381

In section 56(4) (transitional provision in connection with section 55 (construction workers supplied by agencies)) for “section 385 of the Taxes Act 1988” substitute “ section 83 of the Income Tax Act 2007 ”.

382

In section 134(5) (transfer of company's assets to VCT) for “section 842AA of the Taxes Act 1988” substitute “ Part 6 of the Income Tax Act 2007 ”.

383

In section 135(5) (transfer within group to VCT) for “section 842AA of the Taxes Act 1988” substitute “ Part 6 of the Income Tax Act 2007 ”.

384

In section 161(2)(a) (non-FOTRA securities) for the words from “sections 711” to “receiving” substitute “ Chapter 2 of Part 12 of the Income Tax Act 2007 (accrued income profits) in relation only to accrued income profits which a person is treated as making under section 628(5) or 630(2) of that Act ”.

385

(1) Amend Schedule 18 (company tax returns, assessments and related matters) as follows.

(2) In paragraph 3 after sub-paragraph (4) insert—

(5) Sub-paragraph (1)(b) has effect as if the reference to the Corporation Tax Acts included a reference to sections 911, 912, 914 and 915 of the Income Tax Act 2007.

(3) In paragraph 20 after sub-paragraph (3) insert—

(4) In the application of this paragraph to an error relating to information required in a return by virtue of paragraph 3(5), this paragraph has effect as if— (a) the reference in sub-paragraph (1) to a tax-related penalty were a reference to an amount not exceeding £3,000, and (b) sub-paragraphs (2) and (3) were omitted.

(4) In paragraphs 22(3)(a) and 23(3)(a) for sub-paragraph (ii) substitute—

(ii) section 495(1) or 975(2) or (4) of the Income Tax Act 2007 (statements about deduction of income tax),

Greater London Authority Act 1999 (c. 29)

386

The Greater London Authority Act 1999 is amended as follows.

387

In section 157(4) (restriction on exercise of certain powers except through a company)—

(a) in paragraph (a) omit “income tax and” and “and” at the end, and

(b) after that paragraph insert—

(aa) section 838 of the Income Tax Act 2007 (exemption of local authorities from income tax); and

388

In section 419(2) (taxation: certain bodies treated as a local authority)—

(a) in paragraph (a) for “income and corporation taxes” substitute “corporation tax”, and omit “and” at the end, and

(b) after that paragraph insert—

(aa) section 838 of the Income Tax Act 2007 (exemption of local authorities from income tax); and

Finance Act 2000 (c. 17)

389

The Finance Act 2000 is amended as follows.

390

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391

In section 44 (which makes provision about expenses of trustees) for subsections (4) and (5) substitute—

(5A) This section applies if— (a) in a year of assessment qualifying income arises under a UK settlement, (b) the qualifying income consists of charitable income and non-charitable income, and (c) expenses of the trustees are to be used to reduce the charitable income for the purpose of calculating a beneficiary's liability to corporation tax. (5B) The amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income. (5C) The amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income. (5D) In this section— - “charitable income” means income within section 628(1) or 630(1) of ITTOIA 2005, - “non-charitable income” means income which is not charitable income, and - “qualifying income” and “UK settlement” have the same meaning as in section 628 of ITTOIA 2005.

392

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393

In section 155 (interpretation) at the end insert “ and “ITA 2007” means the Income Tax Act 2007 ”.

394

(1) Amend Schedule 15 (the corporate venturing scheme) as follows.

(2) In paragraph 16(4) (the unquoted status requirement) after “Taxes Act 1988” insert “ or section 184(3) of ITA 2007 ”.

(3) In paragraph 55(4) (provision supplementary to paragraph 54) after “Taxes Act 1988” insert “ or Part 5 of ITA 2007 ”.

(4) In paragraph 56(3) (value received by other persons)—

(a) after “Taxes Act 1988”, in the first place where it occurs, insert “ or Part 5 of ITA 2007 ”,

(b) for “section 299 of that Act” substitute “ section 299 of the Taxes Act 1988 or section 209 of ITA 2007 ”,

(c) for “section 300(2)(a) of that Act” substitute “ section 300(2)(a) of the Taxes Act 1988 or section 216(2)(a) of ITA 2007 ”, and

(d) after “section 300 of the Taxes Act 1988” insert “ , section 214 of ITA 2007 ”.

(5) In paragraph 102 (minor definitions etc) after sub-paragraph (8) insert—

(9) References in this Schedule to Part 5 of ITA 2007 or any provision of that Part are to a Part or provision that applies only in relation to shares issued after 5 April 2007.

395

In paragraph 41 of Schedule 22 (tonnage tax: the requirement not to enter into tax avoidance arrangements) for sub-paragraph (3) substitute—

(3) In this paragraph “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.

Capital Allowances Act 2001 (c. 2)

396

The Capital Allowances Act 2001 is amended as follows.

397

(1) Amend section 4 (capital expenditure) as follows.

(2) In subsection (4) for “section 348 or 349(1) of ICTA (annual payments)” substitute “ Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments or patent royalties) or under section 906 of that Act (certain royalties etc where usual place of abode of owner is abroad) ”.

(3) Omit subsection (5).

398

In section 70V(4) (tax avoidance involving international leasing) for “Chapter 1” to the end substitute “ section 840ZA of ICTA ”.

399

Omit section 70YI(4) (application of section 839 of ICTA).

400

In section 138(2)(b) (limit on amount deferred) for “section 385 or” substitute “ section 83 of ITA 2007 or section ”.

401

In section 156(1)(a) and (c) (connected persons) for “section 839 of ICTA” substitute “ section 575 ”.

402

In section 220(8)(a) (allocation of expenditure to a chargeable period) omit “, within the meaning of section 840 of ICTA”.

403

In section 232(1)(a) (meaning of connected person) for “section 839 of ICTA” substitute “ section 575 ”.

404

In section 258 (special leasing: income tax) after subsection (3) insert—

(3A) The allowance or (as the case may be) the proportionate part of the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.

405

In section 266(5)(a) (election where predecessor and successor are connected persons) for “section 839 of ICTA” substitute “ section 575 ”.

406

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407

In section 437 (research and development allowances) for subsection (2) substitute—

(2) In this Part “research and development”— (a) means activities that fall to be treated as research and development in accordance with generally accepted accounting practice, and (b) includes oil and gas exploration and appraisal. (3) But— (a) activities that, as a result of regulations made under section 1006 of ITA 2007, are “research and development” for the purposes of that section are also “research and development” for the purposes of this Part, and (b) activities that, as a result of any such regulations, are not “research and development” for the purposes of that section are also not “research and development” for the purposes of this Part.

408

In section 479 (persons having qualifying non-trade expenditure: income tax) after subsection (2) insert—

(2A) The allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.

409

At the beginning of Chapter 6 of Part 12 insert—

(570B) (1) Any orders or regulations made by the Treasury or the Commissioners for Her Majesty's Revenue and Customs under this Act must be made by statutory instrument. (2) Any orders or regulations made by the Treasury or the Commissioners under this Act are subject to annulment in pursuance of a resolution of the House of Commons. (3) Subsection (2) does not apply to any regulations made under section 70YJ or any order made under section 82(4)(d).

410

In section 574(1) at the end insert “(but, for the purposes of section 575, this definition applies only where expressly indicated)”.

411

For section 575 (connected persons) substitute—

(575) (1) For the purposes of this Act whether a person is connected with another is determined in accordance with this section unless otherwise indicated. (2) An individual (“A”) is connected with another individual (“B”) if— (a) A is B's spouse or civil partner, (b) A is a relative of B, (c) A is the spouse or civil partner of a relative of B, (d) A is a relative of B's spouse or civil partner, or (e) A is the spouse or civil partner of a relative of B's spouse or civil partner. (3) A person, in the capacity as trustee of a settlement, is connected with— (a) any individual who is a settlor in relation to the settlement, (b) any person connected with such an individual, (c) any close company whose participators include the trustees of the settlement, (d) any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement, (e) any body corporate controlled (within the meaning of section 574) by a company within paragraph or , (f) if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and (g) if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement. (4) A person who is a partner in a partnership is connected with— (a) any partner in the partnership, (b) the spouse or civil partner of any individual who is a partner in the partnership, and (c) a relative of any individual who is a partner in the partnership. But this subsection does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements. (5) A company is connected with another company if— (a) the same person has control of both companies, (b) a person (“A”) has control of one company and persons connected with A have control of the other company, (c) A has control of one company and A together with persons connected with A have control of the other company, or (d) a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected. (6) A company is connected with another person (“A”) if— (a) A has control of the company, or (b) A together with persons connected with A have control of the company. (7) In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with— (a) one another, and (b) any person acting on the directions of any of them to secure or exercise control of the company. (575A) (1) In section 575 and this section— - “company” includes any body corporate or unincorporated association, but does not include a partnership (and see also subsection (2)), - “control” is to be read in accordance with section 416 of ICTA (except where otherwise indicated), - “principal settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992, - “relative” means brother, sister, ancestor or lineal descendant, - “settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act), and - “sub-fund settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992. (2) For the purposes of section 575— (a) a unit trust scheme is treated as if it were a company, and (b) the rights of the unit holders are treated as if they were shares in the company. (3) For the purposes of section 575 “trustee”, in the case of a settlement in relation to which there would be no trustees apart from this subsection, means any person— (a) in whom the property comprised in the settlement is for the time being vested, or (b) in whom the management of that property is for the time being vested. Section 466(4) of ITA 2007 does not apply for the purposes of this subsection. (4) If any provision of section 575 provides that a person (“A”) is connected with another person (“B”), it also follows that B is connected with A.

412

In section 577(1) (other definitions)—

(a) omit the definition of “tax year”, and

(b) omit the definition of “the tax year 2001-02”.

413

(1) Amend Schedule 1 (abbreviations and defined expressions) as follows.

(2) In Part 1 in the appropriate place insert—

ITA 2007	The Income Tax Act 2007.

(3) In Part 2—

(a) in the entry for “body of persons”, in the second column, before “section 832(1) of ICTA” insert “ section 989 of ITA 2007 and ”,

(b) in the entry for “connected persons (general meaning)”, in the second column, for “section 575(1)” substitute “ section 575 ”,

(c) in the entry for “offshore installation”, in the second column, before “section 837C of ICTA” insert “ sections 1001 and 1002 of ITA 2007 and ”,

(d) in the entry for “overseas property business”, in the second column, at the end insert “ (as applied by section 989 of ITA 2007) ”,

(e) in the entry for “research and development”, in the second column, for “437(2) and section 837A of ICTA” substitute “ 437(2) and (3) ”,

(f) in the entry for “Schedule A business”, in the second column, before “section 832(1) of ICTA” insert “ section 989 of ITA 2007 and ”,

(g) in the entry for “tax year”, in the second column, for “section 577(1)” substitute “ section 4(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(h) in the entry for “UK property business”, in the second column, omit “section 832(1) of ICTA and” and at the end insert “ (as applied by section 989 of ITA 2007) ”,

(i) in the entry for “United Kingdom”, in the second column, for “section 830 of ICTA and section 41 of ITEPA 2003” substitute “ section 1013 of ITA 2007 and section 830(1) of ICTA ”, and

(j) in the entry for “within the charge to tax”, in the second column, before “section 832(1) of ICTA” insert “ section 1009 of ITA 2007 and ”.

Finance Act 2002 (c. 23)

414

The Finance Act 2002 is amended as follows.

415

Omit section 98.

416

In section 142 (interpretation) at the end insert “, and “ITA 2007” means the Income Tax Act 2007”.

417

In paragraph 19 of Schedule 12 (tax relief for expenditure on research and development) for sub-paragraph (2) substitute—

(2) For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.

418

In paragraph 27 of Schedule 13 (tax relief for expenditure on vaccine research etc) for sub-paragraph (2) substitute—

(2) For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.

419

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420

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421

In Schedule 25 (loan relationships), omit paragraph 57.

422

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423

Omit Schedule 33 (venture capital trusts).

Proceeds of Crime Act 2002 (c. 29)

424

In paragraph 4 of Part 2 of Schedule 10 (tax) to the Proceeds of Crime Act 2002 for the words from “sections 711” to the end substitute “ Chapter 2 of Part 12 of the Income Tax Act 2007, that Part does not apply to the transfer ”.

Income Tax (Earnings and Pensions) Act 2003 (c. 1)

425

The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

426

In section 1 (overview of contents of Act) omit subsection (2).

427

In section 11(3) (calculation of “net taxable earnings”) for “section 380(1) of ICTA” substitute “ section 128 of ITA 2007 ”.

428

In section 24(6)(a) (limit on chargeable overseas earnings where duties of associated employment performed in UK) for “section 840 of ICTA” substitute “ section 995 of ITA 2007 ”.

429

In section 48(2) (scope of Chapter) for “subject to deduction of tax under section 555 of ICTA (payments to non-resident entertainers and sportsmen)” substitute “ or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax) ”.

430

In section 69(1) (extended meaning of “control”) for “section 840 of ICTA” substitute “ section 995 of ITA 2007 ”.

431

In section 178 (exception for loans where interest qualifies for tax relief)—

(a) in paragraph (a) for the words from “(general” to “MIRAS)” substitute “ or section 383 of ITA 2007 (relief for interest payments) ”, and

(b) in paragraph (b) for “that section” substitute “ section 353 of ICTA ”.

432

In section 180(5) (threshold for benefit of loan to be treated as earnings)—

(a) in paragraph (a) for the words from “(general” to “MIRAS)” substitute “ or section 383 of ITA 2007 (relief for interest payments) ”, and

(b) in paragraph (b) for “that section” substitute “ section 353 of ICTA ”.

433

In section 230(5)(a) (the approved amount for mileage allowance payments) for “section 840 of ICTA” substitute “ section 995 of ITA 2007 ”.

434

In section 329(6) (deductions from earnings not to exceed earnings) for “section 380 of ICTA” substitute “ section 128 of ITA 2007 ”.

435

In section 347(2) (payments made after leaving an employment) for “from total income” substitute “ in calculating net income ”.

436

In section 357(2) after “section 505(1)(e) of ICTA” insert “ or section 524 of ITA 2007 ”.

437

After section 404 insert—

(404A) (1) A payment or other benefit which counts as a person's employment income as a result of section 403 is treated as the highest part of the person's total income. (2) Subsection (1) has effect for all income tax purposes except the purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief). (3) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between— (a) the rule in subsection (1), and (b) other rules requiring particular income to be treated as the highest part of a person's total income.

438

In section 476 (charge on occurrence of chargeable event) after subsection (5) insert—

(5A) An amount charged under subsection (5)(a) is treated for income tax purposes as an amount of income.

439

(1) Amend section 515 (tax advantages and charges relating to SIPs) as follows.

(2) In subsection (1)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) omit paragraph (b) and the “and” immediately after it.

(3) In subsection (2)—

(a) omit the “and” immediately after paragraph (b), and

(b) after paragraph (c) insert

, and (d) Chapter 5 of Part 9 of ITA 2007 (which provides for section 479 of that Act not to apply to income of the trustees of an approved SIP in certain circumstances)

(4) Omit subsection (3).

440

(1) Amend section 555 (deduction for liabilities related to former employment) as follows.

(2) In subsection (2)—

(a) for “when computing the former employee's total income” substitute “ in calculating the former employee's net income ”, and

(b) at the end insert “ (see Step 2 of the calculation in section 23 of ITA 2007) ”.

(3) For subsection (6) substitute—

(6) See section 263ZA of TCGA 1992 for relief from capital gains tax where the amount of the deduction allowed under this section exceeds the remaining total income (as defined in that section).

(4) In the sidenote for “from total income” substitute “ in calculating net income ”.

(5) In the italic cross-heading before the section for “from total income” substitute “ in calculating net income ”.

441

In section 609(1) after “section 273 of ICTA” insert “ or section 459 of ITA 2007 ”.

442

In section 718 (connected persons) for “Section 839 of ICTA” substitute “ Section 993 of ITA 2007 ”.

443

In section 719 (control in relation to a body corporate)—

(a) for “Section 840 of ICTA (meaning of control in relation to a body corporate)” substitute “ Section 995 of ITA 2007 (meaning of “control”) ”, and

(b) for the sidenote substitute “ Meaning of “control” .

444

(1) Amend section 721 (other definitions) as follows.

(2) In subsection (1)—

(a) after the definition of “foreign employer” insert “ and ”, and

(b) omit the words after the definition of “non-cash voucher”.

(3) Omit subsection (2).

445

In Part 1 of Schedule 1 (abbreviations) in the appropriate place insert—

ITA 2007	The Income Tax Act 2007.

446

(1) Amend Part 2 of Schedule 1 (defined expressions) as follows.

(2) In the entry for “assignment (in the application of the Act to Scotland)”, in the second column, for “section 721(2)” substitute “ section 1008(1) of ITA 2007 ”.

(3) In the entry for “basic rate”, in the second column, for “section 832(1) of ICTA” substitute “ section 6(2) of ITA 2007 (as applied by section 989 of that Act) ”.

(4) In the entry for “body of persons”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(5) In the entry for “capital allowance”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(6) In the entry for “child, children”, in the second column, omit “section 832(5) of ICTA, and see”.

(7) In the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(8) In the entry for “company”, in the second column, for “section 832(1) of ICTA” substitute “ section 992 of ITA 2007 ”.

(9) In the entry for “connected”, in the second column, for “section 839 of ICTA” substitute “ section 993 of ITA 2007 ”.

(10) In the entry for “control”, in the second column, for “section 840 of ICTA” substitute “ section 995 of ITA 2007 ”.

(11) In the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(12) In the entry for “generally accepted accounting practice”, in the second column, for “section 832(1) of ICTA” substitute “ section 997 of ITA 2007 ”.

(13) Omit the entry for “interest”.

(14) In the entry for “local authority”, in the second column, for “section 842A of ICTA” substitute “ section 999 of ITA 2007 ”.

(15) After the entry for “national insurance contributions” insert—

net income	section 23 of ITA 2007 (as applied by section 989 of that Act)

(16) In the entry for “the normal self-assessment filing date”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”.

(17) In the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(18) In the entry for “offshore installation”, in the second column, for “section 837C of ICTA” substitute “ sections 1001 and 1002 of ITA 2007 ”.

(19) In the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(20) In the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”.

(21) In the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “ section 1005 of ITA 2007 ”.

(22) In the entry for “registered pension scheme”, in the second column, for “section 832(1) of ICTA” substitute “ section 150(2) of FA 2004 (as applied by section 989 of ITA 2007) ”.

(23) In the entry for “Schedule A business”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(24) In the entry for “stepchild”, in the second column, for “section 832(1) of ICTA” substitute “ section 246 of the Civil Partnership Act 2004 (as applied by section 989 of ITA 2007) ”.

(25) In the entry for “51% subsidiary”, in the second column, for “section 838(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(26) In the entry for “tax”, in the second column, at the end insert “ (as applied by section 989 of ITA 2007) ”.

(27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(28) In the entry for “tax year”, in the second column, for “section 721(1)” substitute “ section 4(2) of ITA 2007 (as applied by section 989 of that Act) ”.

(29) In the entry for “the tax year 2003-04 etc”, in the second column, for “section 721(1)” substitute “ section 4(4) of ITA 2007 (as applied by section 989 of that Act) ”.

(30) In the entry for “total income” for “section 835 of ICTA” substitute “ section 23 of ITA 2007 (as applied by section 989 of that Act) ”.

(31) In the entry for “trade”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”.

(32) In the entry for “United Kingdom”, in the second column, for “section 830 of ICTA” substitute “ section 1013 of ITA 2007 ”.

(33) In the entry for “UK property business”, in the second column, omit “section 832(1) of ICTA and” and at the end insert “ (as applied by section 989 of ITA 2007) ”.

447

(1) Amend Schedule 2 (approved share incentive plans) as follows.

(2) In paragraph 49(3)—

(a) in paragraph (a) for “section 840A(1)(b) of ICTA” substitute “ section 991(2)(b) of ITA 2007 ”, and

(b) in paragraph (c) for “section 840A(1)(c) of ICTA” substitute “ section 991(2)(c) of ITA 2007 ”.

(3) In paragraph 100—

(a) in the entry for “building society”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(b) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6))” substitute “ section 721(6) ”,

(c) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(d) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(e) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(f) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(g) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”,

(h) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “ section 1005 of ITA 2007 ”,

(i) in the entry for “tax”, in the second column, at the end insert “ (as applied by section 989 of ITA 2007) ”, and

(j) in the entry for “tax year”, in the second column, for “section 721(1)” substitute “ section 4(2) of ITA 2007 (as applied by section 989 of that Act) ”.

448

In paragraph 49 of Schedule 3 (approved SAYE Option Schemes)—

(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “ section 721(6) ”,

(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(d) omit the entry for “interest”,

(e) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(f) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(g) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”,

(h) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “ section 1005 of ITA 2007 ”,

(i) in the entry for “tax”, in the second column, at the end insert “ (as applied by section 989 of ITA 2007) ”, and

(j) omit the entry for “United Kingdom”.

449

In paragraph 37 of Schedule 4 (approved CSOP Schemes)—

(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “ section 721(6) ”,

(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(d) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(e) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(f) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”,

(g) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “ section 1005 of ITA 2007 ”, and

(h) omit the entry for “United Kingdom”.

450

(1) Amend Schedule 5 (enterprise management incentives) as follows.

(2) In paragraph 11(10) (meaning of “qualifying subsidiary”)—

(a) for “section 312(2A) of ICTA” substitute “ section 252 of ITA 2007 ”, and

(b) for “Chapter 3 of Part 7 of ICTA” substitute “ Part 5 of ITA 2007 ”.

(3) In paragraph 58, in the definition of “research and development”, for “section 837A of ICTA” substitute “ section 1006 of ITA 2007 ”.

(4) In paragraph 59—

(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “ section 721(6) ”,

(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(d) in the entry for “farming”, in the second column, for “section 832(1) of ICTA” substitute “ section 996 of ITA 2007 ”,

(e) in the entry for “generally accepted accounting practice”, in the second column, for “section 50(1) of the Finance Act 2004” substitute “ section 997 of ITA 2007 ”,

(f) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(g) in the entry for “offshore installation”, in the second column, for “section 837C of ICTA” substitute “ sections 1001 and 1002 of ITA 2007 ”,

(h) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(i) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “ section 989 of ITA 2007 ”,

(j) in the entry for “51% subsidiary”, in the second column, for “section 838(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(k) in the entry for “tax”, in the second column, at the end insert “ (as applied by section 989 of ITA 2007) ”,

(l) in the entry for “tax year”, in the second column, for “section 721(1)” substitute “ section 4(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(m) in the entry for “trade”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”, and

(n) in the entry for “United Kingdom”, in the second column, for “section 830 of ICTA” substitute “ section 1013 of ITA 2007 ”.

Finance Act 2003 (c. 14)

451

The Finance Act 2003 is amended as follows.

452

Omit section 151 (non-resident companies: extent of charge to income tax).

453

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

454

In section 153(2)(a) (general replacement of references to branch or agency of company) for “paragraphs 3 and 4” substitute “ paragraph 4 ”.

455

In paragraph 1(2) of Schedule 26 (non-resident companies: transactions through broker, investment manager or Lloyd's agent) omit paragraph (b) and the word “and” before it.

Finance Act 2004 (c. 12)

456

The Finance Act 2004 is amended as follows.

457

In section 50 (generally accepted accounting practice) for “the Tax Acts” wherever occurring substitute “ the Corporation Tax Acts ”.

458

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

459

In section 59 (construction industry scheme: contractors) after subsection (7) insert—

(8) This section is subject to section 73A (designated international organisations: exemption from section 59).

460

In section 65 (change in control of company registered for gross payment) for subsection (3) substitute—

(3) In this section references to a change in the control of a company are references to such a change determined in accordance with section 995 of the Income Tax Act 2007.

461

After section 73 (regulations under this Chapter: supplementary) insert—

(73A) (1) The Treasury may by order designate for the purposes of this section any international organisation of which the United Kingdom is a member. (2) Section 59 does not apply to an organisation which is so designated.

462

(1) Amend section 83 (giving through the self-assessment return) as follows.

(2) Omit subsections (1) to (3).

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

463

Omit sections 101 (payment of royalties without deduction at source) and 102 (claim for tax deducted at source from exempt interest or royalty payments).

464

Omit sections 119 to 123 (individuals benefited by film relief).

465

Omit sections 126 to 130 (individuals in partnership: exit charge).

466

In section 155(6)(a) and (b) (persons by whom scheme may be established: supplementary) for “section 840A(1)(b) of ICTA” substitute “ section 991(2)(b) of ITA 2007 ”.

467

In section 161 (meaning of “payment” etc) for subsection (8) substitute—

(8) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

468

(1) Amend section 162 (meaning of “loan”) as follows.

(2) In subsection (2)(a) for “section 841 of ICTA” substitute “ section 1005 of ITA 2007 ”.

(3) For subsection (6) substitute—

(6) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

469

In section 172A (surrender) for subsection (11) substitute—

(11) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

470

In section 172B (increase in rights of connected person on death) for subsection (9) substitute—

(9) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

471

In section 172C (allocation of unallocated employer contributions) for subsection (7) substitute—

(7) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

472

In section 172D (limit on increase in benefits) for subsection (6) substitute—

(6) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

473

(1) Amend section 189 (relevant UK individual) as follows.

(2) In subsection (2)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) income to which subsection (2A) applies.

(3) After subsection (2) insert—

(2A) This subsection applies to income if— (a) it is patent income, and (b) the individual, alone or jointly, devised the invention for which the patent in question was granted.

(4) After subsection (4) insert—

(5) “UK furnished holiday lettings business” means a UK property business so far as consisting of the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005). (6) If there is a letting of accommodation only part of which is holiday accommodation, just and reasonable apportionments are to be made for the purpose of determining what is comprised in a UK furnished holiday lettings business. (7) “Patent income” means— (a) royalties or other sums paid in respect of the use of a patent charged to tax under section 579 of ITTOIA 2005, (b) amounts on which tax is payable under section 587 or 593 of ITTOIA 2005, or (c) amounts on which tax is payable under— (i) section 472(5) of the Capital Allowances Act, or (ii) paragraph 100 of Schedule 3 to that Act.

474

In section 192 (relief at source) omit subsection (5).

475

In section 193(6) (relief under net pay arrangements)—

(a) for “from the total income” substitute “ in calculating the net income ”, and

(b) at the end insert “ (see Step 2 of the calculation in section 23 of ITA 2007) ”.

476

In section 194(1) (relief on making of claim)—

(a) for “from the total income” substitute “ in calculating the net income ”, and

(b) at the end insert “ (see Step 2 of the calculation in section 23 of ITA 2007) ”.

477

In section 266A (member's liability) for subsection (7) substitute—

(7) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

478

In section 273 (members liable as scheme administrator) for subsection (11) substitute—

(11) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

479

In section 278 (market value) for subsection (4) substitute—

(4) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

480

(1) Amend section 279 (other definitions) as follows.

(2) In subsection (1)—

(a) omit the definition of “charity”,

(b) after the definitions of “pension credit” and “pension debit” insert “ and ”, and

(3) After that subsection insert—

(1A) In this Part, so far as it forms part of the Corporation Tax Acts, expressions which are defined for the purposes of the Income Tax Acts are to be given the same meaning as they have in the Income Tax Acts.

481

(1) Amend section 280 (abbreviations and general index) as follows.

(2) In subsection (1) omit the “and” immediately before the definition of “ITTOIA 2005” and after that definition insert

, and “ITA 2007” means the Income Tax Act 2007.

(3) In subsection (2)—

(a) in the entry for “basic rate”, in the second column, for “section 832(1) of ICTA” substitute “ section 6(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(b) in the entry for “basic rate limit”, in the second column, for “section 832(1) of ICTA” substitute “ section 20(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(c) in the entry for “chargeable gain”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(d) in the entry for “charity”, in the second column, for “section 279(1)” substitute “ section 989 of ITA 2007 ”,

(e) in the entry for “company”, in the second column, for “section 832(1) of ICTA” substitute “ section 992 of ITA 2007 ”,

(f) in the entry for “higher rate”, in the second column, for “section 832(1) of ICTA” substitute “ section 6(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(g) after the entry for “money purchase benefits” insert—

net income	section 23 of ITA 2007 (as applied by section 989 of that Act),

(h) in the entry for “period of account”, in the second column, for “section 832(1) of ICTA” substitute “ section 989 of ITA 2007 ”,

(i) in the entry for “personal representatives”, in the second column, for “section 279(1)” substitute “ section 989 of ITA 2007 ”,

(j) in the entry for “property investment LLP”, in the second column, for “section 842B of ICTA” substitute “ section 1004 of ITA 2007 ”,

(k) in the entry for “retail prices index”, in the second column, for “section 279(1)” substitute “ section 989 of ITA 2007 ”,

(l) in the entry for “tax year”, in the second column, for “section 279(1)” substitute “ section 4(2) of ITA 2007 (as applied by section 989 of that Act) ”,

(m) in the entry for “the tax year 2006-07 etc”, in the second column, for “section 279(1)” substitute “ section 4(4) of ITA 2007 (as applied by section 989 of that Act) ”, and

(n) in the entry for “total income” for “section 835 of ICTA” substitute “ section 23 of ITA 2007 (as applied by section 989 of that Act) ”.

482

(1) Amend Schedule 15 (charge to income tax on benefits received by former owner of property) as follows.

(2) For paragraph 2 substitute—

(2) (1) For the purposes of this Schedule whether a person is connected with another person is determined in accordance with section 993 of the Income Tax Act 2007. (2) But for those purposes sections 993 and 994 of that Act are to be read as if in those sections— (a) “relative” included uncle, aunt, nephew and niece, and (b) “settlement”, “settlor” and “trustee” had the same meanings as in IHTA 1984.

(3) In paragraph 9(1) for paragraph (c) substitute—

(c) sections 720 to 730 of the Income Tax Act 2007,

483

In paragraph 4 of Schedule 27 (meaning of “offshore installation”) for “sections 573 and 574” substitute “ section 573 ”.

484

In paragraph 4 of Schedule 29A (investment-regulated pension schemes) for sub-paragraph (2) substitute—

(2) For the purposes of sub-paragraph (1) whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

485

In paragraph 11D of Schedule 36 (transitional provisions) for sub-paragraph (5) substitute—

(5) For the purposes of this paragraph whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.

Pensions Act 2004 (c. 35)

486

The Pensions Act 2004 is amended as follows.

487

In Schedule 3 (restricted information held by the Regulator: certain permitted disclosures to facilitate exercise of functions), in the entry relating to the Commissioners of Inland Revenue or their officers—

(a) omit the “or” immediately after paragraph (f), and

(b) in the second column after paragraph (g) insert

or— (h) the Income Tax Act 2007 (so far as relating to functions previously exercised under the Income and Corporation Taxes Act 1988).

488

In Schedule 8 (restricted information held by the Board: certain permitted disclosures to facilitate exercise of functions), in the entry relating to the Commissioners of Inland Revenue or their officers—

(a) omit the “or” immediately after paragraph (e), and

(b) in the second column after paragraph (f) insert

or— (g) the Income Tax Act 2007 (so far as relating to functions previously exercised under the Income and Corporation Taxes Act 1988).

Constitutional Reform Act 2005 (c. 4)

489

The Constitutional Reform Act 2005 is amended as follows.

490

In paragraph 4 of Schedule 7 (protected functions of the Lord Chancellor) at the end of Part A (general) insert—

Income Tax Act 2007 Section 704(1)

491

In the table in Part 3 of Schedule 14 (appointments by the Lord Chancellor: offices to which paragraph 2(2)(d) of Schedule 12 to the Act applies) at the end add—

Chairman of section 704 tribunal	Section 704(1) of the Income Tax Act 2007
Member of section 704 tribunal

Income Tax (Trading and Other Income) Act 2005 (c. 5)

492

The Income Tax (Trading and Other Income) Act 2005 is amended as follows.

493

In section 1 (overview of Act) omit subsection (2).

494

In section 12(3) (profits of mines etc) for “Chapter 1 of Part 10 of ICTA” substitute “ Part 4 of ITA 2007 ”.

495

(1) Amend section 13 (visiting performers) as follows.

(2) In subsection (8) omit the definitions of “payment” and “transfer”.

(3) After that subsection insert—

(9) In this section and section 14— (a) references to a payment include references to a payment by way of loan of money, and (b) references to a transfer do not include references to a transfer of money but, subject to that, include references to— (i) a temporary transfer (as by way of loan), and (ii) a transfer of a right (whether or not a right to receive money). (10) This section does not apply to payments or transfers of a kind prescribed in regulations under section 966(6) of ITA 2007.

496

In section 17(3) (effect of becoming or ceasing to be a UK resident) for “set off under section 385 of ICTA against” substitute “ deducted under section 83 of ITA 2007 from ”.

497

Omit section 51 (patent royalties).

498

(1) Amend section 52 (exclusion of double relief for interest) as follows.

(2) In subsections (1), (5) and (6) for “section 353 of ICTA” substitute “ section 383 of ITA 2007 ”.

(3) In subsection (6) for “section 368(3) of ICTA” substitute “ section 387(2) and (3) of that Act ”.

499

In section 87(5) (expenses of research and development) for “section 837A of ICTA” substitute “ section 1006 of ITA 2007 ”.

500

In section 108(4) (gifts of trading stock etc to charities) omit paragraphs (c) and (d).

501

In section 179(a) (connected persons) for “section 839 of ICTA” substitute “ section 993 of ITA 2007 ”.

502

(1) Amend section 232 (treatment of trading adjustment income) as follows.

(2) In subsection (3) for “Chapter 1 of Part 10 of ICTA” substitute “ Part 4 of ITA 2007 ”.

(3) In subsection (4) for the words from “the trade” to the end substitute “ the trade is relevant UK earnings within section 189(2)(b) of FA 2004, adjustment income is similarly relevant UK earnings. ”

503

In section 248(3) (debts paid after cessation)—

(a) for “section 109A(4) or (4A) of ICTA” substitute “ section 96 of ITA 2007 ”, and

(b) after “expenditure)” insert “ as a result of subsection (1)(b) of that section ”.

504

(1) Amend section 250 (receipts relating to post-cessation expenditure) as follows.

(2) In subsection (1) for “section 109A of ICTA” substitute “ section 96 of ITA 2007 ”.

(3) In subsection (2)—

(a) in paragraph (a) for “section 109A(2)(a) or (b) of ICTA” substitute “ section 97(2) or (3) of ITA 2007 ”,

(b) in paragraph (b) for “section 109A(2)(c) of ICTA” substitute “ section 97(4) of ITA 2007 ”, and

505

In section 254(3)(b) (allowable deductions) for “section 90(4) of FA 1995” substitute “ section 261D of TCGA 1992 ”.

506

(1) Amend section 256 (treatment of post-cessation receipts) as follows.

(2) In subsection (1)(b) omit “earned income within section 833(4)(c) of ICTA or”.

(3) In subsection (2) omit “earned income or”.

507

In section 272(2) (profits of a property business: application of trading income rules), omit the entry in the table relating to section 51.

508

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

509

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

510

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

511

In section 333(3) (treatment of property business adjustment income) for “Chapter 1 of Part 10 of ICTA” substitute “ Part 4 of ITA 2007 ”.

512

In section 354(2) (other rules about what counts as a “post-cessation receipt”)—

(a) after “section 248 (debts paid after cessation)” insert “ (reading the reference in subsection (3) to section 96 of ITA 2007 as a reference to section 125 of that Act) ”, and

(b) after “section 250 (receipts relating to post-cessation expenditure)” insert “ (reading the reference in subsection (1) to section 96 of ITA 2007 as a reference to section 125 of that Act) ”.

513

In section 369(4) (charge to tax on interest) for the words from “sections 714(5)” to the end substitute “ Chapter 3 of Part 12 of ITA 2007 (exemption for interest on securities to which Chapter 2 of that Part applies) ”.

514

In section 372(2) (building society dividends) for the words from “has” to the end substitute “ includes any distribution (whether or not described as a dividend) ”.

515

(1) Amend section 397 (tax credits for qualifying distributions: UK residents and eligible non-UK residents) as follows.

(2) In subsection (2) omit paragraph (b) and the “or” immediately before it.

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

(4) In subsection (6) for the words from “section 231AA” to “umbrella scheme),” substitute—

section 504(4) of ITA 2007 (disapplication of certain provisions for income of unauthorised unit trusts), section 592 of ITA 2007 (no tax credits for borrower under stock lending arrangement), section 593 of ITA 2007 (no tax credits for interim holder under repo), section 594 of ITA 2007 (no tax credits for original owner under repo),

516

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

517

(1) Amend section 400 (non-qualifying distributions) as follows.

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

(3) After subsection (6) insert—

(7) Subsection (2) is subject to section 504(4) of ITA 2007 (disapplication of certain provisions for income of unauthorised unit trusts).

518

In section 401 (relief: qualifying distribution after linked non-qualifying distribution) after subsection (6) insert—

(6A) The reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.

519

In section 410(3)(b) (stock dividend income arising to trustees) for the words from “income” to the end substitute “ accumulated or discretionary income (as defined in section 480 of ITA 2007 but excluding income arising under a trust established for charitable purposes only or an unauthorised unit trust in relation to which section 504 of that Act applies) ”.

520

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

521

In section 418(5) (loans to participator in close company: relief where borrowers liable as settlors) for “rate applicable to trusts” substitute “ trust rate ”.

522

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

523

(1) Amend section 426 (annuity payments received after deduction of tax) as follows.

(2) For “Income tax deducted under either of the following sections” substitute “ In accordance with section 848 of ITA 2007 a sum representing income tax deducted under section 901 of that Act ”.

(3) Omit the words after “recipient”.

524

In section 446 (strips of government securities: relief for losses) for subsection (2) substitute—

(2) If a person makes a claim under this section, the relief is given by deducting the loss in calculating the person's net income for the tax year in which the disposal occurs (see Step 2 of the calculation in section 23 of ITA 2007).

525

In section 454 (listed securities held since 26th March 2003: relief for losses) for subsection (4) substitute—

(4) If a claim under this section is made by a person other than a trustee, the relief is given by deducting the loss in calculating the person's net income for the tax year in which the disposal occurs (see Step 2 of the calculation in section 23 of ITA 2007).

526

(1) Amend section 457 (disposal of deeply discounted securities by trustees) as follows.

(2) Omit subsection (3).

(3) For subsection (5) substitute—

(5) If the trustees are trustees of a scheme in relation to which section 504 of ITA 2007 applies, subsection (2) does not apply to profits which are shown in the scheme's accounts as income available for payment to unit holders or for investment.

527

In section 459(2) (profits from deeply discounted securities: transfer of assets abroad) for “sections 739 and 740 of ICTA (transfer of assets abroad) have” substitute “ Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) has ”.

528

In section 460(2) (profits from deeply discounted securities: minor definitions) for “section 709(1)” substitute “ section 840ZA ”.

529

After section 465 insert—

(465A) (1) This section applies if— (a) an individual is liable for tax under this Chapter in respect of an amount, and (b) the individual is treated by section 530 as having paid income tax at the savings rate on the amount. (2) The amount is treated as the highest part of the individual's total income. (3) Subsection (2) has effect for all income tax purposes except the purposes of sections 535 to 537 (gains from contracts for life insurance etc: top slicing relief). (4) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between— (a) the rule in subsection (2), and (b) other rules requiring particular income to be treated as the highest part of a person's total income.

530

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

531

(1) Amend section 467 (liability of trustees for tax on gains from contracts for life insurance etc) as follows.

(2) After subsection (1) insert—

(1A) If trustees are liable for tax under this Chapter, the gain is treated for income tax purposes as income of the trustees.

(3) For subsection (7) substitute—

(7) If trustees are liable for tax under this Chapter, it is charged at the savings rate if— (a) condition A is met, or (b) condition D is met and the trustees are trustees of a charitable trust.

532

In section 468 (gains from contracts for life insurance etc: non-UK resident trustees and foreign institutions)—

(a) in subsection (2) for “Sections 739 and 740”, “prevent” and “apply” substitute “ Chapter 2 of Part 13 of ITA 2007 ”, “prevents” and “applies” respectively, and

(b) in subsections (3) and (4) for “sections 739 and 740 apply” substitute “ Chapter 2 of Part 13 of ITA 2007 applies ”.

533

In section 482 (excepted group life policies: conditions about persons intended to benefit)—

(a) in subsection (6) omit the definition of “tax advantage”, and

(b) after that subsection insert—

(7) In this section “tax advantage” has the meaning given by section 840ZA of ICTA.

534

In section 520(4) (the property categories) after the definition of “internal linked fund” insert—

“investment trust” has the meaning given by section 842 of ICTA,

535

(1) Amend section 530 (income tax treated as paid) as follows.

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

(3) In subsection (4) after “fall to be made” insert “ at Step 2 or 3 of the calculation in section 23 of ITA 2007 (calculation of income tax liability) ”.

536

(1) Amend section 535 (top slicing relief) as follows.

(2) After subsection (2) insert—

(2A) If the relief is given by a reduction in income tax, it is given effect at Step 6 of the calculation in section 23 of ITA 2007.

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

(4) After subsection (6) insert—

(7) For the purposes of the calculations mentioned in subsection (1) any relief under Chapter 2 or 3 of Part 8 of ITA 2007 (which relate to gift aid and other gifts to charities) is ignored.

537

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

538

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

539

For section 539 (relief for deficiencies) substitute—

(539) (1) An individual is entitled to a tax reduction for a tax year in which a deficiency arises from a policy or contract on a chargeable event if— (a) the condition in subsection (2) is met, (b) the individual would (apart from this section) be liable to income tax at the higher rate or the dividend upper rate (or both) for the tax year, and (c) the individual makes a claim. (2) The condition is that, if a gain had arisen instead on the chargeable event— (a) the individual would have been liable to income tax on the gain for the year, or (b) the individual would have been so liable apart from the requirement in section 465(1) that the individual must be UK resident in the tax year in which the gain arises. (3) The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007. (4) See section 540 for the cases in which a deficiency is treated as arising from a policy or contract on a chargeable event, section 541 for how the deficiency is calculated and section 469(5) for the apportionment of deficiencies in cases where two or more persons are interested in a policy or contract. (5) The amount of the tax reduction is calculated as follows. Step 1 Attribute to the amount of the deficiency an amount of the individual's income for the tax year which is liable at the dividend upper rate, so far as is possible. Step 2 If there is an amount of the deficiency remaining after Step 1, attribute to the remaining amount of the deficiency an amount of the individual's savings income for the tax year which is liable at the higher rate, so far as is possible. Step 3 If there is an amount of the deficiency remaining after Step 2, attribute to the remaining amount of the deficiency an amount of the individual's other income for the tax year which is liable at the higher rate, so far as is possible. Step 4 Calculate the amount of the individual's preliminary income tax liability for the tax year (see subsection (6)). Step 5 Calculate the amount of the individual's preliminary income tax liability for the tax year again, on these assumptions— Assume that any income attributed to the deficiency at Step 1 is liable at the dividend ordinary rate. Assume that any income attributed to the deficiency at Step 2 is liable at the savings rate. Assume that any income attributed to the deficiency at Step 3 is liable at the basic rate. Step 6 Deduct the amount found at Step 5 from the amount found at Step 4. The result is the amount of the tax reduction. (6) The individual's preliminary income tax liability is the amount found by calculating the individual's income tax liability in accordance with section 23 of ITA 2007, ignoring Steps 6 and 7 of that calculation.

540

In section 546(4) (table of provisions subject to special rules for older policies and contracts), in the first column of the table, for “Section 539(3)” substitute “ Section 539 ”.

541

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

542

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

543

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

544

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

545

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

546

(1) Amend section 595 (deduction of tax from payments to non-UK residents) as follows.

(2) In subsection (2) for the words after “which” substitute “ is to be deducted under section 910 of ITA 2007 ”.

(3) In subsection (3) for the words after “which” substitute “is to be deducted under section 910 of ITA 2007”.

547

In section 601 (how relief for patent expenses is given) after subsection (2) insert—

(2A) The deduction or set-off is given effect at Step 2 of the calculation in section 23 of ITA 2007.

548

(1) Amend section 602 (payments received after deduction of tax) as follows.

(2) For “Income tax deducted under either of the following sections” substitute “ In accordance with section 848 of ITA 2007, a sum representing income tax deducted under either of the following Chapters ”.

(3) For the words after “recipient” substitute

— Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments and patent royalties), and Chapter 7 of that Part (deduction from other payments connected with intellectual property).

549

(1) Amend section 618 (payments received after deduction of tax) as follows.

(2) For “Income tax deducted under either of the following sections” substitute “ In accordance with section 848 of ITA 2007, a sum representing income tax deducted under Chapter 6 of Part 15 of that Act ”.

(3) Omit the words after “recipient”.

550

In section 619(2) (charge to tax on settlor)—

(a) for “sections 1 to 1B of ICTA” substitute “ Chapter 2 of Part 2 of ITA 2007 (rates at which income tax is charged) ”, and

(b) for “Tax Acts” substitute “ Income Tax Acts ”.

551

After section 619 insert—

(619A) (1) This section applies to income which is treated as income of a settlor as a result of section 624 (income where settlor retains an interest) or 629 (income paid to unmarried minor children of settlor). (2) The income is treated as the highest part of the settlor's total income for the purposes of section 619 (so far as it relates to the income). (3) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between— (a) the rule in subsection (2), and (b) other rules requiring particular income to be treated as the highest part of a person's total income.

552

In section 620(5) (which contains various definitions) in the definition of “charity” for the words from “each” to the end substitute—

(a) the Trustees of the National Heritage Memorial Fund, (b) the Historic Buildings and Monuments Commission for England, and (c) the National Endowment for Science, Technology and the Arts

553

In section 624 (income where settlor retains an interest in the settlement) after subsection (1) insert—

(1A) If the settlement is a trust, expenses of the trustees are not to be used to reduce the income of the settlor.

554

In section 627(2) (income where settlor retains an interest: exceptions), in paragraph (b), for “section 25 of FA 1990 (donations to charity by individuals)” substitute “ Chapter 2 of Part 8 of ITA 2007 (gift aid) ”.

555

(1) Amend section 628 (exception for gifts to charities) as follows.

(2) In subsection (2)—

(a) in paragraph (a) for “is to” substitute “ must ”, and

(b) in paragraph (b) omit the words after “person”.

(3) After that subsection insert—

(2A) The cases covered by subsection (2)(b) include cases where the trustees have, or any other person has, any discretion over one or more of the following matters— (a) whether, or the extent to which, the income is to be accumulated, (b) the persons to whom the income is to be paid, and (c) how much of the income is to be paid to any person.

(4) In subsection (6)—

(a) in the definition of “charity” for the words from “each” to the end substitute—

(a) the Trustees of the National Heritage Memorial Fund, (b) the Historic Buildings and Monuments Commission for England, and (c) the National Endowment for Science, Technology and the Arts, and

, and

(b) omit the definition of “resident” and the “and” immediately after it.

556

In section 631(7) (retained and accumulated income) for “the total income” substitute “ the child's total income or net income at Step 2 or 3 of the calculation in section 23 of ITA 2007 ”.

557

In section 635(3)(d) (settlements: amounts treated as income of settlor: amount of available income) for “rate applicable to trusts” substitute “ trust rate ”.

558

(1) Amend section 636 (calculation of undistributed income) as follows.

(2) In subsection (6) for “section 505 of ICTA (charities: general)” substitute “ any provision to which subsection (7) applies ”.

(3) After that subsection insert—

(7) This subsection applies to the following provisions of ITA 2007— - section 521(4) (gifts entitling donor to gift-aid relief), - section 522(5) (gifts of money from companies), - section 523(5) (payments from other charities), - section 524 (profits etc of charitable trades), - section 529 (profits from fund-raising events), - section 530 (profits from lotteries), - section 531 (property income etc), - section 532 (savings and investment income), - section 533 (public revenue dividends), - section 536 (miscellaneous income), and - section 537 (income from estates in administration).

559

In section 640(1) and (3)(a) (settlements: amounts treated as income of settlor: grossing-up of deemed income) for “rate applicable to trusts” substitute “ trust rate ”.

560

After section 646 insert—

(646A) (1) This section applies if— (a) in a tax year qualifying income arises under a UK settlement, and (b) the qualifying income consists of charitable income and non-charitable income. (2) If expenses of the trustees are to be set against the charitable income by virtue of section 484 of ITA 2007, the amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income. (3) If— (a) Chapter 8 of Part 9 of ITA 2007 applies in relation to the charitable income, and (b) expenses of the trustees are to be used to reduce the charitable income for income tax purposes, the amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income. (4) For the purposes of subsections and (3) the amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income. (5) In this section— - “charitable income” means income within section 628(1) or 630(1), - “non-charitable income” means income which is not charitable income, and - “qualifying income” and “UK settlement” have the same meaning as in section 628.

561

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

562

In section 677 (relief where UK income tax borne by foreign estate: absolute interests) after subsection (2) insert—

(3) The tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.

563

In section 678 (relief where UK income tax borne by foreign estate: limited and discretionary interests) after subsection (2) insert—

(3) The tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.

564

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

565

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

566

After section 680 insert—

(680A) (1) Subsections (2) and (3) apply to income if it— (a) is treated under section 656(3) or 657(4) (gross amount of estate income treated as bearing tax at the applicable rate) as bearing tax at the savings rate or the dividend ordinary rate, and (b) is not paid through a trustee. (2) So far as the income is treated as bearing tax at the savings rate, it is treated as savings income. (3) So far as the income is treated as bearing tax at the dividend ordinary rate, it is treated as dividend income. (4) Subsections (5) and (6) apply to income if it— (a) is treated by section 662, read with section 656(3) or 657(4), as bearing tax at the savings rate or the dividend ordinary rate, and (b) is paid through a trustee. (5) So far as the income is treated as bearing tax at the savings rate, it is treated as savings income of the trustee. (6) So far as the income is treated as bearing tax at the dividend ordinary rate, it is treated as dividend income of the trustee.

567

In section 682 (assessments, adjustments and claims after the administration period) after subsection (4) insert—

(4A) The excess charged under subsection (4)(b) is treated as an amount of income for income tax purposes, except so far as it represents a tax reduction given effect at Step 6 of the calculation in section 23 of ITA 2007.

568

In section 684(3) (Chapter 7 of Part 5 subject to section 687 of ICTA) for “section 687 of ICTA” substitute “ section 494 of ITA 2007 ”.

569

(1) Amend section 685A (discretionary payments under settlor-interested settlements) as follows.

(2) In subsection (4) omit paragraph (c) and the “and” immediately before it.

(3) In subsection (6) for “Section 687 of ICTA” substitute “ Sections 494 and 495 of ITA 2007 ”.

570

(1) Amend section 686 (payments received after deduction of tax) as follows.

(2) In subsection (1)—

(a) for “Income tax deducted under either of the following sections” substitute “ In accordance with section 848 of ITA 2007, a sum representing income tax deducted under Chapter 6 of Part 15 of that Act ”, and

(b) omit the words after “recipient”.

(3) In subsection (2) for “section 687(2) of that Act” substitute “ section 494(3) of ITA 2007 ”.

571

In section 704(4)(a) (types of arrangements and providers) for “section 840A(1)(b) of ICTA” substitute “ section 991(2)(b) of ITA 2007 ”.

572

In section 714(6) (exemption of profits from FOTRA securities) for “Chapter 3 of Part 17 of ICTA” substitute “ Chapter 2 of Part 13 of ITA 2007 ”.

573

In section 724 (regulations) omit subsection (3).

574

In section 755(3) (exemption of interest on foreign currency securities etc owned by non-UK residents) for “Chapter 3 of Part 17 of ICTA” substitute “ Chapter 2 of Part 13 of ITA 2007 ”.

575

In section 756A(5) (interest on certain deposits of victims of National-Socialist persecution) for “meaning given by section 481(3) of ICTA” substitute “ same meaning as in Chapter 19 of Part 15 of ITA 2007 (see section 983 of that Act) ”.

576

In section 757 (interest and royalty payments: introduction) at the end insert—

(4) See section 914 of ITA 2007 for provision enabling a company to make a royalty payment gross if it reasonably believes that the payment is exempt from income tax as a result of section 758 of this Act.

577

In section 767(2) (power to amend references to the Directive by order)—

(a) for “section 101 of FA 2004” substitute “ sections 914 to 916 of ITA 2007 ”, and

(b) for “subsection (9) of that section” substitute “ section 917(2) of that Act ”.

578

In section 841 (unremittable income: introduction) for subsection (5) substitute—

(5) This Chapter does not apply to accrued income profits which a person is treated as making under Chapter 2 of Part 12 of ITA 2007, but see sections 668 and 669 of that Act (which make similar provision).

579

In section 852(7) (carrying on by partner of notional trade) for “carried forward under section 385 of ICTA and set against” substitute “ deducted under section 83 of ITA 2007 from ”.

580

In section 863(2) (limited liability partnerships)—

(a) in paragraph (a) after “firm” insert “ or partnership ”, and

(b) in paragraph (b)—

(i) after “members”, in the first place where it occurs, insert “ or partners ”, and

(ii) after “firm” insert “ or partnership ”.

581

In section 871 (apportionment etc of miscellaneous profits to tax year)—

(a) in subsection (1)(a) for “section 836B of ICTA” substitute “ section 1016 of ITA 2007 ”, and

(b) in subsection (2)—

(i) for “section 836B of ICTA” substitute “ section 1016 of ITA 2007 ”, and

(ii) for “subsection (4)(a)” substitute “ subsection (3)(a) ”.

582

In section 872(3)(a) (losses calculated on same basis as miscellaneous income) for “section 836B of ICTA” substitute “ section 1016 of ITA 2007 ”.

583

Omit section 876 (meaning of “farming” and related expressions).

584

Omit section 877 (meaning of “grossing up”).

585

(1) Amend section 878 (other definitions) as follows.

(2) In subsection (1)—

(a) omit the definition of “charity”,

(b) after the definition of “houseboat” insert “ and ”, and

(3) In subsection (5) for “Section 839 of ICTA” substitute “ Section 993 of ITA 2007 ”.

(4) In subsection (6) for “Section 840 of ICTA (meaning of control in relation to a body corporate)” substitute “ Section 995 of ITA 2007 (meaning of “control”) ”.

586

In section 879 (interpretation: Scotland)—

(a) in subsection (1) omit the definitions of “assignment” and “surrender” and the “and” immediately before the definition of “surrender”, and

(b) omit subsection (2).

587

In section 885(3)(c) (general index in Schedule 4) for “ICTA or ITEPA 2003” substitute “ another Act ”.

588

In Schedule 2 (transitionals and savings etc) omit paragraph 50(3).

589

(1) Amend paragraph 82 of Schedule 2 (transitionals and savings etc) as follows.

(2) In paragraph (a) for “section 505(1) of ICTA (exemption from income tax for certain income forming part of the income of a charity)” substitute “ any of sections 521(4), 522(5), 523(5), 524, 529 to 533, 536 and 537 of ITA 2007 (certain exemptions: special rules about charitable trusts) ”.

(3) In paragraph (b) for the words from “505(3)” to the end substitute “ 541 of that Act (restrictions on exemptions: attributing items of income to the non-exempt amount) ”.

590

In paragraph 109(4) of Schedule 2 (transitional provision: contracts in accounting periods beginning before 1st January 1992) for the words from “Section 539(3)” to the end substitute

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