INCOME TAX Citation, commencement and effect 1 1 This Order may be cited as the Income Tax (Trading and Other Income) Act 2005 (Consequential Amendments) Order 2006. 2 This Order shall come into force on 30th March 2006. 3 This Order has effect— a for income tax purposes for the tax year 2006-07 and subsequent tax years, and b for corporation tax purposes, for accounting periods ending after 5th April 2006. 4 This Order shall be deemed to have had effect— a for income tax purposes, for the tax year 2005-06, and b for corporation tax purposes, for accounting periods ending after 5th April 2005 and before 6th April 2006. Consequential amendments to legislation 2 1 In section 836B(2) of the Income and Corporation Taxes Act 1988 (table of provisions to which that section applies), in Part 3 of the Table— a in column 1, after the entry “Section 71(4) of the Finance Act 1989”, insert the following entry— Paragraph 3(1) of Schedule 12 to the Finance ( No. 2) Act 1992 , and b in column 2, after the entry “Employee share ownership trust (borrowing)”, insert the following entry— Banks etc. in compulsory liquidation (taxation of certain receipts) . 3 1 The Taxation of Chargeable Gains Act 1992 is amended as follows. 2 In section 143(1) (commodity and financial futures and qualifying options)— a after “section 128 of the Taxes Act” insert “and section 779 of ITTOIA 2005”, and b for “chargeable to tax under Schedule D otherwise than as the profits of a trade, then” substitute— chargeable to tax— a under Schedule D otherwise than as the profits of a trade, or b under Chapter 8 of Part 5 of ITTOIA 2005, then 3 In section 161(3) (appropriations to and from stock) for the words from “if” to “, and elects” substitute— if— a he is chargeable to corporation tax in respect of the profits of the trade under Case I of Schedule D, or b he is chargeable to income tax in respect of the profits of the trade under Chapter 2 of Part 2 of ITTOIA 2005 and the trade is carried on wholly or partly in the United Kingdom, and he elects . 4 1 In the Finance (No. 2) Act 1992 amend paragraph 3 of Schedule 12 (banks etc. in compulsory liquidation: taxation of certain receipts) as follows. 2 In sub-paragraph (1) for “under Case VI of Schedule D” substitute “(in the case of corporation tax, under Case VI of Schedule D)”. 3 In sub-paragraph (3)(b) after “under section 100 of the Taxes Act 1988” insert “or section 173 of the Income Tax (Trading and Other Income) Act 2005”. 5 1 In the Finance Act 2002 amend Schedule 12 (tax relief for expenditure on research and development) as follows. 2 In paragraph 4(6)(b)— a after “trade, profession or vocation” insert “(i)”, and b after “Schedule D” insert— , or ii which is carried on wholly or partly in the United Kingdom and the profits of which are chargeable to tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 . 3 In paragraph 5(6)(b)— a after “trade, profession or vocation” insert “(i)”, and b after “Schedule D” insert— , or ii which is carried on wholly or partly in the United Kingdom and the profits of which are chargeable to tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 . 4 In paragraph 8(a) after “Schedule D” insert— , or iii by any person otherwise than in the course of carrying on wholly or partly in the United Kingdom a trade, profession or vocation the profits of which are chargeable to tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 . Gillian Merron Joan Ryan Two of the Lords Commissioners of Her Majesty’s Treasury 29th March 2006