Income and Corporation Taxes Act 1988 PART I THE CHARGE TO TAX Income tax The charge to income tax. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of lower rate to income from savings and distributions. 1A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rates of tax applicable to distribution income etc. 1B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fractions of a pound, and yearly assessments. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain income charged at basic rate. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction of references in Income Tax Acts to deduction of tax. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date for payment. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax The charge to corporation tax and exclusion of income tax and capital gains tax. 6 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of certain payments and repayment of income tax. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General scheme of corporation tax. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Resolutions to reduce corporation tax. 8A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of income: application of income tax principles. 9 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Where . . . any enactment applies both to income tax and to corporation tax— a it shall not be affected in its operation by the fact that they are distinct taxes but, so far as is consistent with the Corporation Tax Acts, shall apply in relation to income tax and corporation tax as if they were one tax, so that, in particular, a matter which in a case involving two individuals is relevant for both of them in relation to income tax shall in a like case involving an individual and a company be relevant for him in relation to that tax and for it in relation to corporation tax; and b for that purpose references in any such enactment to a relief from or charge to income tax, or to a specified provision of the Income Tax Acts shall, in the absence of or subject to any express adaptation, be construed as being or including a reference to any corresponding relief from or charge to corporation tax, or to any corresponding provision of the Corporation Tax Acts. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time for payment of tax. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies not resident in United Kingdom. 11 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determination of profits attributable to permanent establishment 11AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basis of, and periods for, assessment. 12 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Where it appears to the inspector that the beginning or end of any accounting period of a company is uncertain, he may make an assessment on the company for such period, not exceeding 12 months, as appears to him appropriate, and that period shall be treated for all purposes as an accounting period of the company unless either— a the inspector on further facts coming to his knowledge sees fit to revise it; or b on an appeal against the assessment in respect of some other matter the company shows the true accounting periods; and if on an appeal against an assessment made by virtue of this subsection the company shows the true accounting periods, the assessment appealed against shall, as regards the period to which it relates, have effect as an assessment or assessments for the true accounting periods, and there may be made such other assessments for any such periods or any of them as might have been made at the time when the assessment appealed against was made. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Small companies’ rate Small companies’ relief. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 13(7) 13ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax starting rate. 13AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The non-corporate distribution rate 13AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Close investment-holding companies. 13A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Advance corporation tax Advance corporation tax and qualifying distributions. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The six Schedules Schedule A. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule B. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule C. 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule D. 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule E. 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule F. 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART II PROVISIONS RELATING TO THE SCHEDULE A CHARGE General Persons chargeable and basis of assessment. 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of amount chargeable. 21A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of other rules applicable to Case I of Schedule D. 21B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Schedule A charge and mutual business. 21C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessments. 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collection from lessees and agents. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction of Part II. 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions and other allowances Deductions from rent: general rules. 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions from rent: land managed as one estate. 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions from rent: maintenance funds for historic buildings. 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions from receipts other than rent. 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sporting rights. 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure on making sea walls. 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 25 to 30. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction for expenditure on energy-saving items 31ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on relief 31ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations 31ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions for expenditure by landlords on energy-saving items 31A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 31A 31B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital allowances for machinery and plant used in estate management. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Agricultural land: allowance for excess expenditure on maintenance. 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected persons Rents or receipts payable by a connected person. 33A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rents or receipts relating to land in respect of which a connected person makes payments to a third party. 33B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Premiums, leases at undervalue etc Treatment of premiums, etc. as rent. 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on assignment of lease granted at an undervalue. 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on sale of land with right to reconveyance. 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Premiums paid etc: deductions from premiums and rent received. 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 37(4) and reductions in receipts under ITTOIA 2005 37A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rules for ascertaining duration of leases. 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Saving for pre-1963 leases, and special relief for individuals. 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions Tax treatment of receipts and outgoings on sale of land. 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for rent etc. not paid. 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals against determinations under . . . Chapter 4 of Part 3 of ITTOIA 2005 . 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-residents and their representatives. 42A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-residents. 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent factoring Finance agreement: interpretation. 43A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of rent. 43B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of rent: exceptions, &c. 43C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interposed lease. 43D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interposed lease: exceptions, &c. 43E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance business. 43F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation. 43G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART III GOVERNMENT SECURITIES General Income tax: mode of charge. 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Part III. 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government securities: exemptions from tax Savings certificates and tax reserve certificates. 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom government securities held by non-residents. 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Securities of foreign states. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock and dividends in name of Treasury etc. 49 1 No tax shall be chargeable in respect of the stock or dividends— a transferred, in pursuance of any Act of Parliament, to accounts in the books of the Bank of England in the name of the Treasury or the National Debt Commissioners, or b transferred, in pursuance of any Act of Parliament, to the Treasury or the National Debt Commissioners and in respect of which the Treasury or those Commissioners are entered as holder in the registers kept by the Registrar of Government Stock, but the Bank of England and the Registrar of Government Stock shall each transmit to the Board an account of the total amount thereof in those books or registers as the case may be. 2 No tax shall be chargeable in respect of the stock or dividends belonging to the Crown, in whatever name they may stand in the books of the Bank of England or in the registers kept by the Registrar of Government Stock . 3 In this section “dividends” means any interest, public annuities, dividends or shares of annuities. 4 In this section “ Registrar of Government Stock ” means the person or persons appointed in accordance with regulations under section 47(1)(b) of the Finance Act 1942 (see regulation 3 of the Government Stock Regulations 2004). Government securities: interest payable without deduction of tax United Kingdom securities: Treasury directions for payment without deduction of tax. 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treasury directions as respects Northern Ireland securities. 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commencement of direction under section 50 or 51. 51AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gilt-edged securities held under authorised arrangements. 51A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Periodic accounting for tax on interest on gilt-edged securities. 51B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of interest on converted government securities and interest which becomes subject to deduction. 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART IV PROVISIONS RELATING TO THE SCHEDULE D CHARGE CHAPTER I SUPPLEMENTARY CHARGING PROVISIONS Farming and other commercial occupation of land (except woodlands). 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Woodlands managed on a commercial basis. 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mines, quarries and other concerns. 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions in deposits with and without certificates or in debts. 56 1 Subsection (2) below applies to the following rights— a the right to receive the amount, with or without interest, stated in a certificate of deposit; b the right to receive an amount payable with interest— i in a transaction in which no certificate of deposit or security is issued, and ii which is payable by a bank or similar institution or a person regularly engaging in similar transactions; and the right to receive that interest. 2 Profits or gains arising to a company from the disposal of a right to which this subsection applies or, except so far as it is a right to receive interest, from the exercise of any such right (whether by the person to whom the certificate was issued or by some other person, or, as the case may be, by the person who acquired the right in the transaction referred to in subsection (1) above or by some person acquiring it directly or indirectly from that person), shall, if not falling to be taken into account as a trading receipt, be treated as an amount to which the charge to corporation tax on income applies . 3 Subsection (2) above and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do not apply in the case of the disposal or exercise of a right to receive an amount stated in a certificate of deposit or interest on such an amount— a if the company disposing of the right acquired it before 7th March 1973; b to any profits or gains arising to a fund or scheme in the case of which provision is made by section 613(4) or 614(2) or (3) or section 186 of the Finance Act 2004 for exempting the whole or part of its income from income tax; c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A This section and section 56A shall not apply for the purposes of corporation tax except in relation to rights in existence before 1st April 1996. 4B For the purposes of corporation tax, where any profits or gains arising from the disposal or exercise of a right in existence before 1st April 1996 are, or (if there were any) would be, chargeable under this section, nothing in Part 5 of CTA 2009 (loan relationships) shall require any amount relating to that disposal, or to the exercise of that right, to be brought into account for the purposes of that Part . 5 In this section— “ certificate of deposit ” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable; and “ security ” has the same meaning as in section 132 of the 1992 Act . Disposal or exercise of rights in pursuance of deposits. 56A 1 This section applies where there is an arrangement under which— a there is a right to receive an amount (with or without interest) in pursuance of a deposit of money, b when the right comes into existence there is no certificate of deposit in respect of the right, and c the person for the time being entitled to the right is entitled to call for the issue of a certificate of deposit in respect of the right. 2 In such a case— a the right shall be treated as not falling within section 56(1)(b), and b if there is a disposal or exercise of the right before such time (if any) as a certificate of deposit is issued in respect of it, section 56(2) shall apply to it by virtue of this paragraph. 3 In the application of section 56 by virtue of this section— a subsection (2) shall have effect as if the words from “(whether” to “person)” read “(whether by the person originally entitled to the right or by some other person)”, and b subsection (3) shall have effect as if the words “stated in a certificate of deposit” read “under an arrangement”. 4 In this section “ certificate of deposit ” has the meaning given by section 56(5). Deep discount securities. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign pensions. 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons chargeable. 59 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II INCOME TAX: BASIS OF ASSESSMENT ETC. Cases I and II Assessment on current year basis. 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basis of assessment at commencement. 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of basis period. 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions for such a change. 62A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basis of assessment on discontinuance. 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overlap profits and overlap losses. 63A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases III, IV and V Case III assessments. 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases IV and V assessments: general. 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case V income from land outside UK: income tax. 65A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special rules for fresh income. 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special rules where source of income disposed of or yield ceases. 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special rules where property etc. situated in Republic of Ireland. 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share incentive plans: application of section 68B 68A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share incentive plans: cash dividends and dividend shares 68B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share incentive plans: interpretation 68C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case VI Case VI assessments. 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III CORPORATION TAX: BASIS OF ASSESSMENT ETC Basis of assessment etc. 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case V income from land outside UK: corporation tax. 70A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV PROVISIONS SUPPLEMENTARY TO CHAPTERS II AND III Computation of income tax where no profits in year of assessment. 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionments etc. for purposes of Cases I, II and VI. 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Single assessments for purposes of Cases III, IV and V. 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V COMPUTATIONAL PROVISIONS Deductions General rules as to deductions not allowable. 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses of management: companies with investment business 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting period to which expenses of management are referable 75A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts reversing expenses of management deducted: charge to tax 75B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses of insurance companies 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments for restrictive undertakings Payments for restrictive undertakings 76ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seconded employees Employees seconded to charities and educational establishments 76ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Counselling and retraining expenses Counselling and other outplacement services 76ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retraining courses 76ZD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retraining courses: recovery of tax 76ZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redundancy payments etc Redundancy payments and approved contractual payments 76ZF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments in respect of employment wholly in employer's business 76ZG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments in respect of employment in more than one capacity 76ZH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional payments 76ZI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments by the Government 76ZJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to local enterprise organisations or urban regeneration companies Contributions to local enterprise organisations or urban regeneration companies 76ZK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unpaid remuneration Unpaid remuneration 76ZL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unpaid remuneration: supplementary 76ZM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Car or motor cycle hire Car or motor cycle hire 76ZN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hiring cars (but not motor cycles) with low CO 2 emissions before 1 April 2013 76ZO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Levies and repayments under the Financial Services and Markets Act 2000. 76A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Levies and repayments under the Financial Services and Markets Act 2000: investment companies. 76B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incidental costs of obtaining loan finance. 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discounted bills of exchange. 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to local enterprise agencies. 79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to training and enterprise councils and local enterprise companies. 79A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to urban regeneration companies 79B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses connected with foreign trades etc. 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Travel between trades etc. 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid to non-residents. 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure on research and development. 82A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to research associations, universities etc. 82B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Patent fees etc. and expenses. 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gifts in kind to charities etc. 83A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gifts to educational establishments. 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs of establishing share option or profit sharing schemes: relief. 84A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to trustees of approved profit sharing schemes. 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Costs of establishing employee share ownership trusts: relief. 85A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approved share incentive plans 85B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employees seconded to charities and educational establishments. 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charitable donations: contributions to agent’s expenses. 86A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxable premiums etc. 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 87(2) and (3) and reductions in receipts under ITTOIA 2005 87A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to Export Credit Guarantee Department. 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debts of overseas governments etc. 88A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 88A debts: restriction on deductions under section 74(j). 88B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 88A debts: restriction on other deductions. 88C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction of deductions in respect of certain debts 88D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debts proving to be irrecoverable after discontinuance etc 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional payments to redundant employees. 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cemeteries. 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waste disposal: restoration payments. 91A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waste disposal: preparation expenditure. 91B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waste disposal: entitlement of successor to allowances. 91BA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mineral exploration and access. 91C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of regional development and other grants and debts released etc. Regional development grants. 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other grants under Industrial Development Act 1982 etc. 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debts deducted and subsequently released. 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of dealers in respect of distributions etc. 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of UK distributions received by insurance companies 95ZA 1 If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly section 130(2) of CTA 2009 does not apply in relation to those distributions). 2 A company (“company A”) receives a “relevant distribution” if— a it receives a distribution made by a company . . . (“company B”), b the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution, c a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and d either— i the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or ii the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days. 3 In this section “ relevant insurance business ” means any kind of insurance business other than business in relation to which section 111 of the Finance Act 2012 applies . 4 Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i). 5 Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding. Special provisions Creative artists: relief for fluctuating profits 95A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farming and market gardening: relief for fluctuating profits. 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of farm animals etc. 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tied premises: receipts and expenses treated as those of trade. 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dealers in land. 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI DISCONTINUANCE . . . Valuation of trading stock etc. Valuation of trading stock at discontinuance of trade. 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation of work in progress at discontinuance of profession or vocation. 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 100 and 101. 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case VI charges on receipts Receipts after discontinuance: earnings basis charge and related charge affecting conventional basis. 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conventional basis: general charge on receipts after discontinuance . . . . 104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Allowable deductions. 105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of charges where rights to payments transferred. 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliefs Treatment of receipts as earned income. 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election for carry-back. 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge under section 104: relief for individuals born before 6th April 1917. 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for post-cessation expenditure Relief for post-cessation expenditure. 109A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental Interpretation etc. 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of residence Change of residence. 110A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VII PARTNERSHIPS AND SUCCESSIONS General Treatment of partnerships. 111 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnerships controlled abroad. 112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect, for income tax, of change in ownership of trade, profession or vocation. 113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnerships involving companies Special rules for computing profits and losses. 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 114. 115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements for transferring relief. 116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limited partners Restriction on relief: individuals. 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on relief: companies. 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limited liability partnerships Treatment of limited liability partnerships. 118ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on relief: companies 118ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Member’s contribution to trade. 118ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry forward of unrelieved losses. 118ZD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-active general partners and non-active members of limited liability partnerships Restriction on relief for non-active partners 118ZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “the aggregate amount” 118ZF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “The individual’s contribution to the trade” 118ZG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “A significant amount of time” 118ZH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry forward of unrelieved losses of non-active partners 118ZI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commencement: the first restricted year 18ZJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provision for years after the first restricted year 118ZK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnerships exploiting films Partnerships exploiting films 118ZL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnerships exploiting films: supplementary 118ZM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partners: meaning of “contribution to the trade” Partners: meaning of “contribution to the trade” 118ZN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant loss” in section 118ZN 118ZO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter VIIA Paying and collecting agents Definitions. 118A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paying agents. 118B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collecting agents. 118C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chargeable payments and chargeable receipts. 118D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction of tax from chargeable payments and chargeable receipts. 118E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting for tax on chargeable payments and chargeable receipts. 118F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant securities of eligible persons. 118G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant securities of eligible persons: administration. 118H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction of tax at reduced rate. 118I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prevention of double accounting. 118J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations. 118K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VIII MISCELLANEOUS AND SUPPLEMENTAL Rent etc. payable in connection with mines, quarries and similar concerns. 119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent etc. payable in respect of electric line wayleaves. 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management expenses of owner of mineral rights. 121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief in respect of mineral royalties. 122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign dividends. 123 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on quoted Eurobonds. 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual payments for dividends or non-taxable consideration 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treasury securities issued at a discount. 126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax on appropriation of securities and bonds. 126A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enterprise allowance. 127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Futures and options: transactions with guaranteed returns. 127A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commodity and financial futures etc.: losses and gains. 128 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock lending. 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock lending: interest on cash collateral. 129A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock lending fees. 129B 1 The income which, as income deriving from investments of a description specified in any of the relevant provisions, is eligible for relief from tax by virtue of that provision shall be taken to include any relevant stock lending fee. 2 For the purposes of this section the relevant provisions are sections 613(4) and 614(3) and section 186 of the Finance Act 2004 . 3 In this section “ relevant stock lending fee ”, in relation to investments of any description, means any amount, in the nature of a fee, which is payable in connection with any stock lending arrangement relating to investments which, but for any transfer under the arrangement, would be investments of that description. 4 In this section “ stock lending arrangement ” has the same meaning as in section 263B of the 1992 Act. Meaning of “investment company” in Part 4 130 In this Part of this Act — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ investment company ”, means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, but includes any savings bank or other bank for savings except any which, for the purposes of the Trustee Savings Bank Act 1985, is a successor or a further successor to a trustee savings bank. PART V PROVISIONS RELATING TO THE SCHEDULE E CHARGE CHAPTER I SUPPLEMENTARY CHARGING PROVISIONS OF GENERAL APPLICATION Miscellaneous provisions Chargeable emoluments. 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Place of performance, and meaning of emoluments received in the U.K. 132 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Voluntary pensions. 133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Workers supplied by agencies. 134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholdings, loans etc. Gains by directors and employees from share options. 135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 135. 136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of tax under section 135 by instalments. 137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share acquisitions by directors and employees. 138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 138. 139 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further interpretation of sections 135 to 139. 140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditional acquisition of shares. 140A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consideration for shares conditionally acquired. 140B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where interest to be treated as only conditional. 140C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Convertible shares. 140D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consideration for convertible shares. 140E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental provision with respect to convertible shares. 140F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information for the purposes of sections 140A to 140F. 140G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction of sections 140A to 140G. 140H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vouchers etc. Non-cash vouchers. 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Credit-tokens. 142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash vouchers taxable under P.A.Y.E. 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions. 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments etc. received free of tax. 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Living accommodation Living accommodation provided for employee. 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional charge in respect of certain living accommodation. 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Priority of rules applying to living accommodation. 146A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Occupation of Chevening House. 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments on retirement, sick pay etc. Payments and other benefits in connection with termination of employment, etc. 148 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sick pay. 149 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Job release scheme allowances, maternity pay and statutory sick pay. 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income support etc. 151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jobseeker’s allowance. 151A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notification of taxable amount of certain benefits . 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS Expenses Payments in respect of expenses. 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits in kind General charging provision. 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from the general charge. 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accommodation, supplies or services used in performing duties of employment. 155ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to provide for exemption of minor benefits. 155ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mobile telephones. 155AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Care for children. 155A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash equivalent of benefits charged under section 154. 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limited exemption for computer equipment. 156A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cars available for private use. 157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cars available for private use: cash alternative, etc. 157A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Car fuel. 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pooled cars. 159 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vans available for private use. 159AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pooled vans. 159AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Heavier commercial vehicles available for private use. 159AC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beneficial loan arrangements. 160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from section 160. 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of qualifying loans. 161A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beneficial loans: loans on ordinary commercial terms. 161B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee shareholdings. 162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses connected with living accommodation. 163 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director’s tax paid by employer. 164 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scholarships. 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General supplementary provisions Notice of nil liability under this Chapter. 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employment to which this Chapter applies. 167 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other interpretative provisions. 168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car as regards a year. 168A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equipment to enable disabled person to use car. 168AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equipment etc. to enable car to run on road fuel gas. 168AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: accessories not included in list price. 168B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: accessories available after car first made available. 168C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: capital contributions. 168D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: replacement accessories. 168E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: classic cars. 168F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Price of a car: cap for expensive car. 168G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III PROFIT-RELATED PAY Preliminary Interpretation. 169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of profit-related pay. 170 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The relief Relief from tax. 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from tax. 172 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registration Persons who may apply for registration. 173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Excluded employments. 174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applications for registration. 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registration. 176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of scheme employer. 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Death of scheme employer. 177A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alteration of scheme’s terms. 177B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancellation of registration. 178 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administration Recovery of tax from scheme employer. 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual returns etc. 180 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other information. 181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals. 182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary Partnerships. 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Independent accountants. 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV OTHER EXEMPTIONS AND RELIEFS Share option and profit sharing schemes Approved share option schemes. 185 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approved profit sharing schemes. 186 1 The provisions of this section apply where, after 5th April 1979 and before 1st January 2003 , the trustees of an approved profit sharing scheme appropriate shares— a which have previously been acquired by the trustees, and b as to which the conditions in Part II of Schedule 9 are fulfilled, to an individual who participates in the scheme (“the participant”). 2 Notwithstanding that, by virtue of such an appropriation of shares as is mentioned in subsection (1) above, the beneficial interest in the shares passes to the participant to whom they are appropriated— a the value of the shares at the time of the appropriation shall be treated as not being income of his chargeable to tax under Schedule E; and b he shall not be chargeable to income tax under that Schedule by virtue of section 78 or 79 of the Finance Act 1988 in respect of the shares or by virtue of section 162 in any case where the shares are appropriated to him at an undervalue within the meaning of that section. 3 Subject to the provisions of this section and paragraph 4 of Schedule 10, if, in respect of or by reference to any of a participant’s shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money’s worth (“a capital receipt”), . . . the appropriate percentage (determined as at the time the trustees become or the participant becomes so entitled) of so much of the amount or value of the receipt as exceeds the appropriate allowance for that year, as determined under subsection (12) below counts as employment income of the participant for the year of assessment in which the entitlement arises . 4 If the trustees dispose of any of a participant’s shares at any time before the release date or, if it is earlier, the date of the participant’s death, then, subject to subsections (6) and (7) below, . . . the appropriate percentage of the locked-in value of the shares at the time of the disposal counts as employment income of the participant for the year of assessment in which the disposal takes place . 5 Subject to paragraphs 5 and 6(6) of Schedule 10, the locked-in value of a participant’s shares at any time is— a if prior to that time he has become entitled to a capital receipt (within the meaning of subsection (3) above) which is referable to those shares and— i an amount calculated by reference to that capital receipt counts as his employment income by virtue of subsection (3) above, or ii if the entitlement to the capital receipt arose before 6th April 2003, he was chargeable to income tax by virtue of that subsection (as it had effect before that date) in respect of that capital receipt, the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and b in any other case, their initial market value. 6 Subject to subsection (7) below, if, on a disposal of shares falling within subsection (4) above, the proceeds of the disposal are less than the locked-in value of the shares at the time of the disposal, subsection (4) above shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal. 7 If, at any time prior to the disposal of any of a participant’s shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (8) below, subsections (4) and (6) above shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant’s shares held by the trustees at that time. 8 For the purposes of subsection (7) above— a no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and b in relation to a particular disposal the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals; and any reference in subsection (7) or paragraph (a) above to the rights arising under a rights issue is a reference to rights conferred in respect of a participant’s shares, being rights to be allotted, on payment, other shares or securities or rights of any description in the same company. 9 If at any time the participant’s beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of the relevant provisions as having been disposed of at that time by the trustees for (subject to subsection (10) below) the like consideration as was obtained for the disposal of the beneficial interest; and for the purposes of this subsection there is no disposal of the participant’s beneficial interest if and at the time when— a in England and Wales or Northern Ireland, that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of law, or b in Scotland, that interest becomes vested in a judicial factor, in a trustee on the participant’s sequestrated estate or in a trustee for the benefit of the participant’s creditors. 10 If— a a disposal of shares falling within subsection (4) above is a transfer to which paragraph 2(2)(c) of Schedule 9 applies, or b any other disposal falling within that subsection is not at arm’s length, c a disposal of shares falling within that subsection is one which is treated as taking place by virtue of subsection (9) above and takes place within the period of retention, then for the purposes of the relevant provisions the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal. 11 Where the trustees of an approved scheme acquire any shares as to which the requirements of Part II of Schedule 9 are fulfilled and, within the period of 18 months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme, section 686 shall not apply to income consisting of dividends on those shares received by the trustees; and, for the purpose of determining whether any shares are appropriated within that period, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time. 12 For the purposes of subsection (3) above, “ the appropriate allowance ”, in relation to any year of assessment, means a sum which, subject to a maximum of £60 , is the product of multiplying £20 by 1 plus the number of years which fall within the period of three years immediately preceding the year in question and in which shares were appropriated to the participant under the scheme; and if in any year (and before the release date) the trustees become or the participant becomes entitled, in respect of or by reference to any of his shares, to more than one capital receipt, the receipts shall be set against the appropriate allowance for that year in the order in which they are received. 13 Schedule 10 shall have effect with respect to profit sharing schemes. Interpretation of sections 185 and 186 and Schedules 9 and 10. 187 1 In sections 185 and 186, this section and Schedules 9 and 10 “ the relevant provisions ” means those sections (including this section) and Schedules. 2 For the purposes of the relevant provisions, except where the context otherwise requires— “ appropriate percentage ” shall be construed in accordance with paragraph 3 of Schedule 10; “ approved ”, in relation to a scheme, means approved under Schedule 9; “ associated company ” has the same meaning as in section 416, except that, for the purposes of paragraph 23 of Schedule 9, subsection (1) of that section shall have effect with the omission of the words “ or at any time within one year previously ” ; “ bonus date ” has the meaning given by paragraph 17 of Schedule 9; “ capital receipt ” means money or money’s worth to which the trustees of or a participant in a profit sharing scheme become or becomes entitled as mentioned in section 186(3), but subject to paragraph 4 of Schedule 10; “ certified contractual savings scheme ” has the meaning given by section 326; “ control ” has the same meaning as in section 840; “ grantor ”, in relation to any scheme, means the company which has established the scheme; “ group scheme ” and, in relation to such a scheme, “ participating company ” have the meanings given by paragraph 1(3) and (4) of Schedule 9; “ initial market value ”, in relation to shares in a profit sharing scheme, has the meaning given by paragraph 30(4) of Schedule 9; “ locked-in value ”, in relation to any shares, shall be construed in accordance with section 186(5); “ market value ” has the same meaning as in Part VIII of the 1992 Act ; “ new holding ” has the meaning given by section 126(1)(b) of the 1992 Act ; “ participant ”, in relation to a profit sharing scheme, means an individual to whom the trustees of the scheme have appropriated shares; “ participant’s shares ”, in relation to a participant in a profit sharing scheme, means, subject to paragraph 5(4) of Schedule 10, shares which have been appropriated to the participant by the trustees; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ period of retention ” has the meaning given by paragraph 2 of Schedule 10; “ release date ”, in relation to any of the shares of a participant in a profit sharing scheme, means the third anniversary of the date on which they were appropriated to him; “ relevant amount ”, in relation to a participant in a profit sharing scheme, means an amount which is not less than £3,000 and not more than £8,000 but which, subject to that, is 10 per cent. of his salary (determined under subsection (5) below) for the year of assessment in question or the preceding year of assessment, whichever is the greater; “ relevant requirements ” has the meaning given by paragraph 1 of Schedule 9; “ savings-related share option scheme ” has the meaning given by paragraph 1 of Schedule 9; “ scheme ” means a savings-related share option scheme, a share option scheme which is not a savings-related share option scheme or a profit sharing scheme, as the context may require; “ shares ” includes stock; “ specified age ”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme; “ the trustees ”, in relation to an approved profit sharing scheme or the shares of a participant in such a scheme, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 30 of Schedule 9; and “ just instrument ”, in relation to an approved profit sharing scheme, means the instrument referred to in paragraph 30(1)(c) of Schedule 9. 3 For the purposes of the application of the relevant provisions in relation to any share option scheme or profit sharing scheme, a person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,— a is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the ordinary share capital of the company, or b where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the assets which would then be available for distribution among the participators. In this subsection “ associate ” has the meaning given by section 417(3) and (4) and “ participator ” has the meaning given by section 417(1) . 4 Subsection (3) above shall have effect subject to the provisions of Part VI of Schedule 9. 5 For the purposes of subsection (2) above, a participant’s salary for a year of assessment means such of the emoluments of the office or employment by virtue of which he is entitled to participate in a profit sharing scheme as are liable to be paid in that year under deduction of tax pursuant to section 203 after deducting therefrom amounts included by virtue of Chapter II of this Part. 6 Section 839 shall apply for the purposes of the relevant provisions. 7 For the purposes of the relevant provisions a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company’s ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital. 8 Where the disposal referred to in section 186(4) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of the relevant provisions— a the initial market value and the locked-in value of each of those shares, . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Any of the relevant provisions with respect to— a the order in which any of a participant’s shares are to be treated as disposed of for the purposes of those provisions, or b the shares in relation to which an event is to be treated as occurring for any such purpose, shall have effect in relation to a profit sharing scheme notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time. 10 In the relevant provisions “ workers’ cooperative ” means a registered society , as defined in section 1119 of CTA 2010 , which is a cooperative society and the rules of which include provisions which secure— a that the only persons who may be members of it are those who are employed by, or by a subsidiary of, the society and those who are the trustees of its profit sharing scheme; and b that, subject to any provision about qualifications for membership which is from time to time made by the members of the society by reference to age, length of service or other factors of any description, all such persons may be members of the society; and in this subsection “ cooperative society ” has the same meaning as in section 2 of the Co-operative and Community Benefit Societies Act 2014 or, as the case may be, section 1 of the Industrial and Provident Societies Act (Northern Ireland) 1969. Contributions in respect of share option gains Relief for contributions in respect of share option gains. 187A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retirement benefits etc. Exemptions from section 148. 188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lump sum benefits on retirement. 189 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to MPs and others. 190 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Job release scheme allowances not to be treated as income. 191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Removal expenses and benefits Removal expenses and benefits. 191A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Removal benefits: beneficial loan arrangements. 191B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign emoluments and earnings, pensions and certain travel facilities Relief from tax for foreign emoluments. 192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign earnings deduction for seafarers. 192A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign earnings and travel expenses. 193 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other foreign travel expenses. 194 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Travel expenses of employees not domiciled in the United Kingdom. 195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign pensions. 196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leave travel facilities for the armed forces. 197 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Car parking facilities 197A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Works bus services. 197AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Support for public transport road services. 197AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision of cycle or cyclist’s safety equipment. 197AC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mileage allowances Mileage allowance payments 197AD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Passenger payments 197AE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mileage allowance relief 197AF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Giving effect to mileage allowance relief 197AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 197AD to 197AG 197AH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mileage allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sporting and recreational facilities Sporting and recreational facilities. 197G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other expenses, subscriptions etc. Relief for necessary expenses. 198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses necessarily incurred and defrayed from official emoluments. 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses of Members of Parliament. 200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses of members of Scottish Parliament, National Assembly for Wales or Northern Ireland Assembly. 200ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incidental benefits for holders of certain offices etc. 200AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incidental overnight expenses. 200A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Work-related training provided by employers. 200B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure excluded from section 200B. 200C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other work-related training. 200D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Education and training funded by employers. 200E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 200E: exclusion of expenditure not directly related to training. 200F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 200E: exclusion of expenditure if contributions not generally available to staff. 200G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 200E: exclusion of expenditure otherwise relieved. 200H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Education or training funded by third parties. 200J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fees and subscriptions to professional bodies, learned societies etc. 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee liabilities and indemnity insurance. 201AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense of entertainers. 201A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Donations to charity: payroll deduction scheme. 202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V ASSESSMENT, COLLECTION, RECOVERY AND APPEALS Assessment on receipts basis. 202A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Receipts basis: meaning of receipt. 202B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pay as you earn. 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P.A.Y.E.: meaning of payment. 203A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: payment by intermediary. 203B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: employee of non-UK employer. 203C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: employee non-resident, etc. 203D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: mobile UK workforce. 203E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: tradeable assets. 203F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: enhancing the value of an asset. 203FA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: gains from share options etc. 203FB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: non-cash vouchers. 203G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: credit-tokens. 203H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE: cash vouchers. 203I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S.203B to s.203I: accounting for tax. 203J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading arrangements. 203K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S.203B to s.203K: interpretation, etc. 203L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P.A.Y.E repayments. 204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessments unnecessary in certain circumstances. 205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional provision for certain assessments. 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PAYE settlement agreements. 206A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disputes as to domicile or ordinary residence. 207 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART VI COMPANY DISTRIBUTIONS, TAX CREDITS ETC CHAPTER I TAXATION OF COMPANY DISTRIBUTIONS Application of lower rate to company distributions. 207A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K. company distributions not generally chargeable to corporation tax. 208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II MATTERS WHICH ARE DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS Meaning of “distribution”. 209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 209(3AA): link to shares of company or associated company 209A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 209(3AA): hedging arrangements 209B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bonus issue following repayment of share capital. 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matters to be treated or not to be treated as repayments of share capital. 211 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III MATTERS WHICH ARE NOT DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS Payments of interest Interest etc. paid in respect of certain securities. 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demergers Exempt distributions. 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exempt distributions: division of business 213A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chargeable payments connected with exempt distributions. 214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Advance clearance by Board of distributions and payments. 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Returns. 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information. 217 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 213 to 217. 218 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of own shares Purchase by unquoted trading company of own shares. 219 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions as to residence and period of ownership. 220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction of vendor’s interest as shareholder. 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions applicable where purchasing company is member of group. 222 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other conditions. 223 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relaxation of conditions in certain cases. 224 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Advance clearance of payments by Board. 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Returns and information. 226 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Associated persons. 227 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected persons. 228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other interpretative provisions. 229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock dividends Stock dividends: distributions. 230 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial and provident society dividends etc Dividend or bonus granted by industrial and provident society 230A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV TAX CREDITS Tax credits for certain recipients of qualifying distributions. 231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on the use of tax credits by pension funds. 231A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement. 231AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No tax credit for original owner under repurchase agreement in respect of certain manufactured dividends. 231AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consequences of certain arrangements to pass on the value of a tax credit. 231B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax credits for non-U.K. residents. 232 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of certain recipients of distributions and in respect of non-qualifying distributions. 233 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information relating to distributions. 234 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information relating to distributions: further provisions. 234A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions of exempt funds etc. 235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 235. 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disallowance of reliefs in respect of bonus issues. 237 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V ADVANCE CORPORATION TAX AND FRANKED INVESTMENT INCOME Interpretation of terms and collection of ACT. 238 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Set-off of ACT against liability to corporation tax. 239 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Set-off of company’s surplus ACT against subsidiary’s liability to corporation tax. 240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of ACT where company receives franked investment income. 241 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Set-off of losses etc. against surplus of franked investment income. 242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Set-off of loss brought forward, or terminal loss. 243 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further provisions relating to claims under section 242 or 243. 244 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation etc. of ACT on change of ownership of company. 245 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on application of section 240 in certain circumstances. 245A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on set-off where asset transferred after change in ownership of company. 245B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge of ACT at previous rate until new rate fixed, and changes of rate. 246 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter VA Foreign Income Dividends Election by company paying dividend Election by company paying dividend. 246A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Procedure for making election. 246B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recipient of foreign income dividend No tax credit for recipient. 246C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individuals etc. 246D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies: payments and receipts Foreign income dividend not franked payment. 246E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of ACT where company receives foreign income dividend. 246F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information relating to foreign income dividends. 246G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power of inspector to require information. 246H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign source profit and distributable foreign profit Foreign source profit and distributable foreign profit. 246I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matching of dividend with distributable foreign profit Matching of dividend with distributable foreign profit. 246J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matching: subsidiaries. 246K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Requirement as to subsidiaries. 246L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matching: further provisions. 246M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment or set-off of advance corporation tax ACT to be repaid or set off against corporation tax liability. 246N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notional foreign source advance corporation tax. 246P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment or set-off: supplementary. 246Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary claims. 246R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International headquarters companies International headquarters companies. 246S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liability to pay ACT displaced. 246T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of liability by IHC as to ACT. 246U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of liability by non-IHC as to ACT. 246V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments and repayments where further matching takes place. 246W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments Adjustments where profits or foreign tax altered. 246X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of this Chapter Application of this Chapter. 246Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI MISCELLANEOUS AND SUPPLEMENTAL Group income Dividends etc. paid by one member of a group to another. 247 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 247. 248 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock dividends Stock dividends treated as income. 249 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Returns. 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 249 and 250. 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approved share incentive plans Application of sections 251B and 251C 251A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of cash dividend retained and then later paid out 251B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on dividend shares ceasing to be subject to plan 251C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 251A to 251C 251D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental Rectification of excessive set-off etc. of ACT or tax credit. 252 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to modify or replace section 234(5) to (9) and Schedule 13. 253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Part VI. 254 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “Gross rate” and “gross amount” of distributions to include ACT. 255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS CHAPTER I PERSONAL RELIEFS The reliefs General. 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “adjusted net income” 256A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “the minimum amount” 256B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal allowance. 257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Children’s tax credit. 257AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Married couple’s allowance (pre-5th December 2005 marriages) . 257A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Married couple's allowance (post-5th December 2005 marriages and civil partnerships etc.) 257AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elections as to transfer of relief under section 257A or 257AB . 257BA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of relief under section 257A where relief exceeds income or 257AB. 257BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of relief under section 257A. 257B 1 Where— a a man is entitled to relief under section 257A, but b the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it, his wife shall be entitled to a deduction from her total income of an amount equal to the excess. 2 In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made— a on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or b under section 289 or c on account of any payments to which section 593(2) or 639(3) applies, or d on account of any payments to which section 54(5) of the Finance Act 1989 applies. , or e on account of any payments to which section 32(4) of the Finance Act 1991 applies. 3 This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice— a shall be given not later than six years after the end of the year of assessment to which it relates, b shall be in such form as the Board may determine, and c shall be irrevocable. Indexation of amounts in sections 256B, 257 , 257A and 257AB . 257C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional relief: husband with excess allowances. 257D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional relief: the elderly. 257E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional relief: separated couples. 257F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Widower’s or widow’s housekeeper. 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional relief in respect of children. 259 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment of relief under section 259. 260 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims under section 259 for year of marriage. 261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional relief in respect of children for year of separation. 261A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Widow’s bereavement allowance. 262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dependent relatives. 263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claimant depending on services of a son or daughter. 264 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Blind person’s allowance. 265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life assurance premiums. 266 1 Subject to the provisions of this section, section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an eligible individual who pays any such premium as is specified in subsection (2) below . . . shall (without making any claim) be entitled to relief under this section. 1A For the purposes of subsection (1) above an individual is an eligible individual if the individual— a is resident in the United Kingdom, or b meets the conditions in section 56(3) of ITA 2007. 2 The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where— a the payments are made to — i a person who has permission under Part 4A of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or ii a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000; iv in the case of a deferred annuity, the National Debt Commissioners; and b the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse or civil partner ; and c the insurance or contract was made by him or his spouse or civil partner . 3 Subject to subsections . . . (10) and (11) below, no relief under this section shall be given— a except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not; b in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy; c in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 . . . ; d in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance. 4 Subject to subsection (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year. 5 Subject to the provisions of Schedule 14— a an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to 12.5 per cent of the payment; and b the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Where the individual is not resident in the United Kingdom (but is entitled to relief by virtue of subsection (1A)(b)) , subsection (4) above shall not apply but . . . the like relief shall be given to him under paragraph 6 of Schedule 14. 9 Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the spouse or civil partner of such a member as if the individual were so resident. 10 Subsection (3)(b) above shall not apply— a to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or b to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV. In the application of this subsection to Scotland, for any reference to a mortgage there shall be substituted a reference to a heritable security within the meaning of the Conveyancing (Scotland) Act 1924 (but including a security constituted by ex facie absolute disposition or assignation). 11 Subsection (3)(a) and (d) above shall not affect premiums payable— a under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the spouse, civil partner, widow, widower , surviving civil partner or children or other dependants of any such employee or person, or b under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers. 12 Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section. 13 In . . . Schedule 14, “ friendly society ” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act). 14 In subsection (2)(a)— “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and “member of the society” has the same meaning as in Lloyd’s Act 1982 . Life assurance premiums paid by employer 266A 1 This section applies if— a pursuant to an employer-financed retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and b the payment is made under such an insurance or contract as is mentioned in section 266. This section applies whether or not the accrual of the relevant benefits is dependent on any contingency. 2 Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if— a the payment had been made by him, and b the insurance or contract under which the payment is made had been made with him. 3 For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives. 4 If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them. 5 The amount treated as paid for or in respect of each employee is— A × B C where— A is the sum paid, B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, and C is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them. 6 This section does not apply if— a in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or b the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met. 7 Those conditions are— a that the employment is with a foreign employer, and b that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme. 8 In subsection (6)(a) “ earnings charged on remittance ” means earnings which are taxable earnings under— a section 22 of ITEPA 2003 (chargeable overseas earnings for year when remittance basis applies and employee outside section 26 ), or b section 26 of that Act (foreign earnings for year when remittance basis applies and employee meets section 26A requirement ). 8A Section 835BA of ITA 2007 (deemed domicile) applies for the purposes of subsection (6)(b). 9 In this section— “ employer-financed retirement benefits scheme ”, and “ relevant benefits ”, have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act). Qualifying policies. 267 Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule. Early conversion or surrender of life policies. 268 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrender etc. of policies after four years. 269 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 268 and 269. 270 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed surrender in cases of certain loans. 271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collection of sums payable under sections 268 and 269. 272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments securing annuities. 273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on relief under section 266 . 274 1 The aggregate of the premiums . . . in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater. 2 The aggregate of the relief given under section 266 in respect of premiums . . . payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at 12.5% on £100. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section. In this subsection “ war insurance premiums ” means any additional premium . . . paid in order to extend an existing life insurance policy to risks arising from war or war service abroad, and any part of any premium . . . paid in respect of a life insurance policy covering those risks, or either of them, which is attributable to those risks, or either of them. Supplemental Meaning of “relative”. 275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect on relief of charges on income. 276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partners. 277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-residents. 278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II TAXATION OF INCOME OF SPOUSES AND CIVIL PARTNERS General rules Aggregation of wife’s income with husband’s. 279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of reliefs. 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax repayments to wives. 281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction of references to spouses or civil partners living together. 282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jointly held property. 282A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jointly held property: declarations. 282B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Separate assessments Option for separate assessment. 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of separate assessment on personal reliefs. 284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collection from wife of tax assessed on husband but attributable to her income. 285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Right of husband to disclaim liability for tax on deceased wife’s income. 286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Separate taxation Separate taxation of wife’s earnings. 287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elections under section 287. 288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III ENTERPRISE INVESTMENT SCHEME Eligibility for relief. 289 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Form of relief. 289A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attribution of relief to shares. 289B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minimum and maximum subscriptions. 290 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction of relief where amounts raised exceed permitted maximum. 290A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Individuals qualifying for relief. 291 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected persons: directors. 291A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected persons: persons interested in capital etc. of company. 291B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Parallel trades. 292 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying companies. 293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies with interests in land. 294 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation of interests in land for purposes of section 294(1)(b). 295 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 294 disapplied where amounts raised total £50,000 or less. 296 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying trades. 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 293 and 297. 298 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of shares. 299 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan linked investments. 299A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pre-arranged exits. 299B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value received from company. 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Receipt of replacement value 300A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 300. 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Receipts of insignificant value: supplementary provision 301A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Replacement capital. 302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value received by persons other than claimants. 303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insignificant repayments disregarded for purposes of s.303(1) 303AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on withdrawal of relief under section 303. 303A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spouses and civil partners. 304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of share capital by new company. 304A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reorganisation of share capital. 305 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for loss on disposal of shares. 305A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims. 306 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Withdrawal of relief. 307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application to subsidiaries. 308 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further provisions as to subsidiaries. 309 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information. 310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nominees, bare trustees and approved investment funds. 311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter III. 312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV SPECIAL PROVISIONS Taxation of consideration for certain restrictive undertakings. 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Divers and diving supervisors. 314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wounds and disability pensions. 315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Allowances, bounties and gratuities. 316 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Victoria Cross and other awards. 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other pensions in respect of death due to war service etc. 318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Crown servants: foreign service allowance. 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commonwealth Agents-General and official agents etc. 320 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consuls and other official agents. 321 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consular officers and employees. 322 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Visiting forces. 323 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated international organisations. 324 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on deposits with National Savings Bank. 325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest etc. under contractual savings schemes. 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax-exempt special savings accounts. 326A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss of exemption for special savings accounts. 326B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Follow-up TESSAs. 326BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax-exempt special savings accounts: supplementary. 326C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax-exempt special savings accounts: tax representatives. 326D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disabled person’s vehicle maintenance grant. 327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to adopters 327A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Funds in court. 328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on damages for personal injuries. 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal injury damages in the form of periodical payments. 329AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compensation for personal injury under statutory or other schemes. 329AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuities purchased for certain persons. 329A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuities assigned in favour of certain persons. 329B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuities: criminal injuries. 329C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compensation for National-Socialist persecution. 330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scholarship income. 331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Student loans: certain interest to be disregarded. 331A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure and houses of ministers of religion. 332 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Venture capital trusts: relief. 332A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment plan regulations 333 Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans. Personal equity plans: tax representatives. 333A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Involvement of insurance companies with plans and accounts. 333B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V RESIDENCE OF INDIVIDUALS Commonwealth citizens and others temporarily abroad. 334 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residence of persons working abroad. 335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Temporary residents in the United Kingdom. 336 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART VIII TAXATION OF INCOME AND CHARGEABLE GAINS OF COMPANIES Taxation of income Company beginning or ceasing to carry on trade 337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of company’s profits or income: exclusion of general deductions 337A 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges on income deducted from total profits 338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “charges on income" 338A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges on income: annuities or other annual payments 338B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges on income: donations to charity. 339 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges on income: interest payable to non-residents. 340 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments of interest etc. between related companies. 341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax on company in liquidation. 342 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax on companies in administration 342A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company reconstructions without a change of ownership. 343 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of trade to obtain balancing allowances 343ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company reconstructions involving business of leasing plant or machinery 343A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company reconstructions: supplemental. 344 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chargeable gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 PART IX ANNUAL PAYMENTS AND INTEREST Annual payments General rule. 347A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying maintenance payments. 347B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments out of profits or gains brought into charge to income tax: deduction of tax. 348 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments not out of profits or gains brought into charge to income tax, and annual interest. 349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extension of section 349: proceeds of sale of UK patent rights 349ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions to section 349 for payments between companies etc 349A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The conditions mentioned in section 349A(1) 349B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Directions disapplying section 349A(1) 349C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 349A(1): consequences of reasonable but incorrect belief 349D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions under section 349(1): payment of royalties overseas 349E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax where payments made under section 349. 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK public revenue dividends: deduction of tax. 350A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Small maintenance payments. 351 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certificates of deduction of tax. 352 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for payments of interest (excluding MIRAS) General provision. 353 1 Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to . . . section 52 of ITTOIA 2005 ) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of section 365 . 1A Where a person is entitled for a year of assessment to relief under this section in respect of an amount of interest which is eligible for relief by virtue of section 365, the relief is given as a tax reduction for that tax year. 1AA The amount of the tax reduction is 23% of the amount of the interest. 1AB The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007. 1B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1E Where any person is entitled for any year of assessment to relief . . . in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in section 383 of ITA 2007 (relief for interest payments) , that amount of interest shall be apportioned between the cases to which each of those provisions applies without regard to what parts of the total amount borrowed remain outstanding but according to . . . — a the proportions of the total amount borrowed which were applied for different purposes; . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and subsection (1A) above or section 383 of ITA 2007 shall apply accordingly to the case in which that subsection or section applies . 1F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 This section does not apply to a payment of relevant loan interest to which section 369 applies. 3 Relief under this section shall not be given in respect of— a interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or b where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans to buy land etc. 354 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matters excluded from section 354. 355 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Job-related accommodation. 356 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limit on relief for home loans: residence basis. 356A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residence basis: married couples. 356B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to which sections 356A and 356B apply. 356C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 356A to 356C. 356D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limit on amount of loan eligible for relief by virtue of section 354. 357 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Substitution of security. 357A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of loans following security substitution. 357B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Substitution of security: supplemental. 357C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief where borrower deceased. 358 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to buy machinery or plant. 359 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to buy interest in close company. 360 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “material interest” in section 360. 360A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to buy interest in co-operative or employee-controlled company. 361 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to buy into partnership. 362 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 360 to 362. 363 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to pay inheritance tax. 364 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to buy life annuity. 365 1 Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied— aa that the loan was made before 9th March 1999; a that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“ the annuitants ”) who include the person to whom the loan was made; b that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years; c that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and d that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants used the land on which it was secured as his only or main residence immediately before 9th March 1999 . 1AA Where— a a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and b the offer was either in writing or evidenced by a note or memorandum made by the lender before that date, the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date. 1AB Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“ the new loan ”) if— a the new loan was made on or after the day on which the Finance Act 1999 was passed; b the new loan was made as part of a scheme (“ the scheme ”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“ the old loan ”); and c the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan. 1AC If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him. 1AD In subsection (1AC) above “ the remaining part ” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan. 1A The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if— a the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and b the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest. 1B If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case. 2 Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants. 3 If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the sum of £30,000 ; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to that sum the same proportion as the interest payable by him bears to the interest payable by both or all of them. Information. 366 1 A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing— a the date when the debt was incurred; b the amount of the debt when incurred; c the interest paid in the year of assessment for which the claim is made . . . ; and d the name and address of the debtor. 2 Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request. 3 Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority. Provisions supplementary to sections 354 to 366. 367 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In section 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year. Alternative finance arrangements 367A 1 Sections 353 and 365 have effect as if— a purchase and resale arrangements involved the making of a loan, and b alternative finance return were interest. 2 Section 366 has effect accordingly. 3 In this section— “ alternative finance return ” has the meaning given in sections 564I to 564L of ITA 2007, and “ purchase and resale arrangements ” means arrangements to which section 564C of ITA 2007 applies. Exclusion of double relief etc. 368 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mortgage interest relief at source Mortgage interest payable under deduction of tax. 369 1 If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to the applicable percentage thereof. 1A In subsection (1) above “ the applicable percentage ” means 23 per cent. . 2 Where a sum is deducted under subsection (1) above from a payment of relevant loan interest— a the person to whom the payment is made shall allow the deduction on receipt of the residue; b the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and c the sum deducted shall be treated as income tax paid by the person to whom the payment is made. 3 The following payments, that is to say— a payments of relevant loan interest to which this section applies, and b payments which would be such payments but for section 373(5), shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection. 6 Sections 967(2) and 968(2) of CTA 2010 do not apply to a payment of relevant loan interest to which this section applies, but any person by whom such a payment is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates. 7 The following provisions of the Management Act, namely— a section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act; b section 30 (tax repaid in error etc.) apart from subsection (1B) , c section 86 (interest), and d section 95 (incorrect return or accounts), shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due. 8 In the application of section 86 of the Management Act by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment (“the relevant year of assessment”) under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date— a is 1st January in the relevant year of assessment in a case where the person falling within subsection (6) above has made a relevant interim claim; and b in any other case, is the later of the following dates, that is to say— i 1st January in the relevant year of assessment; or ii the date of the making of the payment by the Board which gives rise to the assessment. 9 In this section— “ financial year ”, in relation to any person, means a financial year of that person for the purposes of the relevant regulations; “ interim claim ” means an interim claim within the meaning of the relevant regulations; “ relevant interim claim ” means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person’s financial year, an interim claim made for a period falling wholly or partly within that financial year; and “ the relevant regulations ” means regulations made under section 378(3) for the purposes of subsection (6) above. Relevant loan interest. 370 1 Subject to this section and sections 373 to 376, in this Part “ relevant loan interest ” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) . . . below applies. 2 Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2) and any other provision applying to interest falling to be treated as relevant loan interest — a it is interest falling within section . . . 365; and b apart (where applicable) from section . . . 365(3), the whole of the interest would be eligible for relief under section 353 ; . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 In determining whether subsection (2) above applies to any interest, section 365 shall have effect as if the words “or the Republic of Ireland” were omitted. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second loans. 371 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Home improvement loans. 372 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans in excess of the qualifying maximum, and joint borrowers. 373 1 The provisions of this section have effect in relation to a loan where, by virtue of . . . section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “ limited loan ”. 2 None of the interest on a limited loan is relevant loan interest unless— a the loan is made on or after 6th April 1987; or b the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled . . . only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest. 6 Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless— a each of the persons to whom the loan was made is a qualifying borrower; and b in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with section 370 and this section. 7 In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . . Conditions for application of section 369. 374 1 Section 369 does not apply to any relevant loan interest unless— a in the case of a loan of a description specified by regulations for the purposes of this paragraph, the borrower or, in the case of joint borrowers, each of them has given notice to the lender in the prescribed form certifying— i that he is a qualifying borrower; and ii that the interest is relevant loan interest; and iii such other matters as may be prescribed; or b the Board have given notice to the lender and the borrower that the interest may be paid under deduction of tax; or c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d the loan to which the interest relates is of a description specified by regulations for the purposes of this paragraph and was made— i if sub-paragraph (2) of paragraph 2 of Schedule 7 to the Finance Act 1982 applied to interest on the loan which became due on or after a date earlier than 6th April 1983, being a date specified by the Board in pursuance of sub-paragraph (5) of that paragraph, before that earlier date; or ii if the qualifying lender is a building society or a local authority, before 1st April 1983; or iii if sub-paragraphs (i) and (ii) above do not apply and the interest falls within section 370(2), before 6th April 1983. 2 Where notice has been given as mentioned in paragraph (a) or (b) of subsection (1) above, section 369 applies to any relevant loan interest to which the notice relates and which becomes due on or after the relevant date, as defined by subsection (3) below; and in a case falling within paragraph . . . (d) of subsection (1) above, section 369 applies to the relevant loan interest referred to in that paragraph. 3 In subsection (2) above “ the relevant date ” means— a in the case of a notice under subsection (1)(a) above, the date the notice is given, and b in the case of a notice under subsection (1)(b) above, a date specified in the notice as being the relevant date (which may be earlier than the date so specified as the date from which the interest may be paid under deduction of tax). Interest which never has been relevant loan interest etc. 374A 1 This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower. 2 Without prejudice to subsection (3) below, in relation to a payment of interest— a as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and b from which a deduction was made as mentioned in section 369(1), section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower. 3 Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount. 4 The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . . . . 5 If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted. Interest ceasing to be relevant loan interest, etc. 375 1 If at any time— a the interest on a loan ceases to be relevant loan interest; or b a person making payments of relevant loan interest ceases to be a qualifying borrower; the borrower shall give notice of the fact to the lender. 2 Without prejudice to subsection (3) below, in relation to a payment of interest— a which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and aa as respects which any of the conditions mentioned in section 374(1) is fulfilled, and b from which a deduction was made as mentioned in section 369(1), section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower. 3 Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted , he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess. 4 The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . 4A If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay. 5 If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters. 6 Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower. 7 Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower. 8 In any case where— a section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and b the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and c a payment of that interest was made on or after the relevant date but not under deduction of tax, regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date. 8A In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may— a provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and b make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A. 8B Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Option to deduct interest for the purposes of Schedule A. 375A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying borrowers and qualifying lenders. 376 1 Subject to subsection (2) below, an individual is a qualifying borrower with respect to the interest on any loan. 2 In relation to interest paid at a time when the borrower or the borrower’s husband or wife holds an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act) , the borrower is not a qualifying borrower. 3 In subsection (2) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . . 4 The following bodies are qualifying lenders:— a a building society; b a local authority; c the Bank of England; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance; f any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985; g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h a development corporation within the meaning of the New Towns Act 1981 or the New Towns (Scotland) Act 1968; j the Homes and Communities Agency; ja the Greater London Authority so far as exercising its housing or regeneration functions or its new towns and urban development functions; k the Regulator of Social Housing, ka the Secretary of State if the loan is made by him under section 79 of the Housing Associations Act 1985; l the Northern Ireland Housing Executive; m the Scottish Special Housing Association; n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o the Church of England Pensions Board; p any body which is for the time being registered under section 376A. 4A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The register of qualifying lenders. 376A 1 The Board shall maintain, and publish in such manner as they consider appropriate, a register for the purposes of section 376(4). 1A The following are entitled to be registered— a a person who has permission under Part 4A of the Financial Services and Markets Act 2000— i to accept deposits; or ii to effect or carry out contracts of general insurance; b a 90 per cent subsidiary of a person mentioned in— i section 376(4)(e); or ii paragraph (a) above; c any other body whose activities and objects appear to the Board to qualify it for registration. 2 If the Board are satisfied that an applicant for registration is entitled to be registered, they may register the applicant generally or in relation to any description of loan specified in the register, with effect from such date as may be so specified; and a body which is so registered shall become a qualifying lender in accordance with the terms of its registration. 3 The registration of any body may be varied by the Board— a where it is general, by providing for it to be in relation to a specified description of loan, or b where it is in relation to a specified description of loan, by removing or varying the reference to that description of loan, and where they do so, they shall give the body written notice of the variation and of the date from which it is to have effect. 4 If it appears to the Board at any time that a body which is registered under this section would not be entitled to be registered if it applied for registration at that time, the Board may by written notice given to the body cancel its registration with effect from such date as may be specified in the notice. 5 The date specified in a notice under subsection (3) or (4) above shall not be earlier than the end of the period of 30 days beginning with the date on which the notice is served. 6 Any body which is aggrieved by the failure of the Board to register it under this section, or by the variation or cancellation of its registration, may appeal , by notice given to the Board before the end of the period of 30 days beginning with the date on which the body is notified of the Board’s decision . . . . Variation of terms of repayment of certain loans. 377 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary regulations. 378 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Board may by regulations make provision— a for the purposes of any provision of sections 369 to 376A which relates to any matter or thing to be specified by or done in accordance with regulations; b for the application of those sections in relation to loan interest paid by personal representatives and trustees; c with respect to the furnishing of information by borrowers or lenders, including, in the case of lenders, the inspection of books, documents and other records on behalf of the Board; d for, and with respect to, appeals to the tribunal against the refusal of the Board to issue a notice under section 374(1)(b) or the issue of a notice under section 375(6) or (7); and e generally for giving effect to sections 369 to 376A . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 In sections 369 to 378— “contracts of general insurance” means contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contracts of long-term insurance” means contracts which fall within Part II of that Schedule; “ prescribed ” . . . means prescribed by the Board; “ qualifying borrower ” has the meaning given by section 376(1) to (3); “ qualifying lender ” has the meaning given by section 376(4) . . . ; “ regulations ” . . . means regulations made by the Board under section 378; “ relevant loan interest ” has the meaning given by section 370(1); “ separated ” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent. PART X LOSS RELIEF AND GROUP RELIEF CHAPTER I LOSS RELIEF: INCOME TAX Losses from UK property business or overseas property business Losses from UK property business . 379A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses from overseas property business. 379B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade etc. losses Set-off against general income. 380 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Further relief for individuals for losses in early years of trade. 381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 380 and 381. 382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extension of right of set-off to capital allowances. 383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on right of set-off. 384 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction of set-off of allowances against general income 384A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-forward against subsequent profits. 385 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-forward where business transferred to a company. 386 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-forward as losses of amounts taxed under section 350. 387 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-back of terminal losses. 388 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions relating to carry-back of terminal losses. 389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of interest as a loss for purposes of carry-forward and carry-back. 390 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses from trade etc. carried on abroad 391 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case VI losses Losses from miscellaneous transactions 392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II LOSS RELIEF: CORPORATION TAX Losses from UK property business or overseas property business UK property business losses 392A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses from overseas property business. 392B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade etc. losses Losses other than terminal losses. 393 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses: set off against profits of the same, or an earlier, accounting period. 393A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses of ring fence trade: set off against profits of an earlier accounting period 393B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminal losses. 394 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leasing contracts and company reconstructions. 395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case VI losses Losses from miscellaneous transactions 396 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III LOSS RELIEF: MISCELLANEOUS PROVISIONS Restriction of relief in case of farming and market gardening. 397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions in deposits with and without certificates or in debts. 398 Where a company sustains a loss on the exercise or disposal of a right to receive any amount, being a right to which section 56(2) . . . applies, in a case where— a if a profit had arisen from that exercise or disposal, that profit would have been chargeable to corporation tax by virtue of section 56(2) . . . , and b the company is chargeable to corporation tax under Part 5 of CTA 2009 (loan relationships) in respect of interest payable on that amount, then the amount of that interest shall be included in the amounts against which the amount of its loss may be set off under section 91 of CTA 2010 . Dealings in commodity futures etc: withdrawal of loss relief. 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Write-off of government investment. 400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for pre-trading expenditure. 401 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV GROUP RELIEF Surrender of relief between members of groups and consortia. 402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses etc. which may be surrendered by way of group relief. 403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts eligible for group relief: trading losses. 403ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts eligible for group relief: excess capital allowances. 403ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amounts eligible for group relief: non-trading deficit on loan relationships. 403ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other amounts available by way of group relief. 403ZD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of gross profits. 403ZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on group relief. 403A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionments under section 403A. 403B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount of relief in consortium cases. 403C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for or in respect of UK losses of non-resident companies 403D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for overseas losses of UK resident companies. 403E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief in respect of overseas losses of non-resident companies 403F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unallowable overseas losses of non-resident companies 403G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limitation of group relief in relation to certain dual resident companies. 404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims relating to losses etc. of members of both group and consortium. 405 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims relating to losses etc. of consortium company or group member. 406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relationship between group relief and other relief. 407 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corresponding accounting periods. 408 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies joining or leaving group or consortium. 409 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements for transfer of company to another group or consortium. 410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exclusion of double allowances. 411 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No relief where deduction of relevant return under alternative finance arrangements disallowed 411ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group relief by way of substitution for loss relief. 411A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims and adjustments. 412 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter IV. 413 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XI CLOSE COMPANIES CHAPTER I INTERPRETATIVE PROVISIONS Close companies. 414 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain quoted companies not to be close companies. 415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “associated company” and “control”. 416 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “participator”, “associate”, “director” and “loan creditor”. 417 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional matters to be treated as distributions “Distribution” to include certain expenses of close companies. 418 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II CHARGES TO TAX IN CONNECTION WITH LOANS Loans to participators etc. 419 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from section 419. 420 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of borrower when loan under section 419 released etc 421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extension of section 419 to loans by companies controlled by close companies. 422 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III APPORTIONMENT OF UNDISTRIBUTED INCOME ETC. Apportionment of certain income, deductions and interest. 423 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exclusions from section 423. 424 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manner of apportionment. 425 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income tax where apportionment is to an individual. 426 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction of charge under section 426 in certain cases. 427 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase of apportioned sum etc. by reference to ACT. 428 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment and collection of income tax. 429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consequences of apportionment: ACT. 430 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XII SPECIAL CLASSES OF COMPANIES AND BUSINESSES CHAPTER I INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS Insurance companies: general Interpretative provisions relating to insurance companies. 431 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election that assets not be foreign business assets 431ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendment of Chapter etc 431A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant benefits for purposes of section 431(4)(d) and (e). 431AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Classes of life assurance business Meaning of “pension business”. 431B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “child trust fund business” 431BA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “individual savings account business” 431BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “life reinsurance business”. 431C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “overseas life assurance business”. 431D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overseas life assurance business: regulations. 431E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “gross roll-up business” 431EA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “basic life assurance and general annuity business”. 431F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basis of taxation etc Company carrying on life assurance business 431G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company carrying on life assurance business and other insurance business 431H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Separation of different categories of business. 432 1 Where an insurance company carries on life assurance business in conjunction with insurance business of any other category , the life assurance business shall, for the purposes of the Corporation Tax Acts, be treated as a separate business from any other category of business carried on by the company. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PHI business other than life assurance business — adjustment consequent on change in Insurance Prudential Sourcebook 432YA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Linked assets. 432ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment of income and gains. 432A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK property business or overseas property business 432AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses from UK property business or overseas property business. 432AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment of receipts brought into account. 432B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 432B apportionment: non-participating funds 432C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment of asset value increase where line 51 amount decreases 432CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business involving excess assets 432CB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 432B apportionment: value of non-participating funds. 432D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 432B apportionment: participating funds. 432E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 432B apportionment: supplementary provisions. 432F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 432B apportionment: business transfers-in 432G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profits reserved for policy holders and annuitants. 433 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous provisions relating to life assurance business Franked investment income etc. 434 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of losses and limitation on relief. 434A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduced loss relief for additions to non-profit funds 434AZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additions to non-profit funds: amount of loss reduction 434AZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 434AZA and 434AZB: supplementary 434AZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of interest and annuities. 434B 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on repayment of advance corporation tax. 434C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital allowances: management assets. 434D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital allowances: investment assets. 434E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of gains reserved for policy holders and annuitants. 435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension business : separate charge on profits. 436 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross roll-up business: separate charge on profits 436A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains referable to gross roll-up business not to be chargeable gains 436B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General annuity business. 437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “steep-reduction annuity” etc. 437A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension business: exemption from tax. 438 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension business: payments on account of tax credits and deducted tax. 438A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income or gains arising from property investment LLP 438B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determination of policy holders’ share for purposes of s.438B 438C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restricted government securities. 439 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of pure reinsurance business. 439A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life reinsurance business: separate charge on profits. 439B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of assets etc. 440 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Securities. 440A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modifications where tax charged under section 35 of CTA 2009 . 440B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modifications for change of tax basis 440C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modifications in relation to BLAGAB group reinsurers 440D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overseas life assurance business. 441 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 441: distributions. 441A 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of UK land. 441B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overseas business of U.K. companies. 442 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of investment return where risk reinsured. 442A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life policies carrying rights not in money. 443 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life policies issued before 5th August 1965. 444 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business. 444A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of life assurance business: gross roll-up business losses of the transferor 444AZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of life assurance business: trade losses of the transferor 444AZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business: deemed periodical returns 444AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer schemes: transferor 444AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non long-term fund transferred assets 444ABA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-profit fund transferred assets 444ABAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained assets 444ABB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business: election for transferee to pay tax of transferor 444ABBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer scheme transferring part of business: transferor 444ABC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transferor's period of account including transfer 444ABD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer schemes: reduction of income of transferee 444AC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer schemes transferring part of business: reduction in income of transferee 444ACZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business: transferor shares are assets of transferee's long-term insurance fund etc 444ACA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business: modification of s.83(2B) FA 1989 444AD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of business: FAFTS 444AE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer schemes: anti-avoidance rule 444AEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life assurance trade profits advantage: transferor 444AEB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life assurance trade profits advantage: transferee 444AEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Parts of transfer scheme arrangements: anti-avoidance rule 444AECA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Parts of transfer scheme arrangements: life assurance trade profits advantage transferor 444AECB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Parts of transfer scheme arrangements: life assurance trade profits advantage transferee 444AECC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clearance: no avoidance or group advantage 444AED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surpluses of mutual and former mutual businesses Demutualisation surplus: life assurance business 444AF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 444AF: “demutualisation transfer surplus” 444AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modification of section 444AG etc for gross roll-up businesses 444AH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 444AF: “reduction in company's unappropriated surplus” 444AI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 444AF and 444AK: “relevant receipts reduction” 444AJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mutual surplus: gross roll-up business 444AK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 444AF to 444AK 444AL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions applying in relation to overseas life insurance companies Modification of Act in relation to overseas life insurance companies. 444B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equalisation reserves Equalisation reserves for general business. 444BA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modification of s. 444BA for mutual or overseas business and for non-resident companies. 444BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modification of s. 444BA for non-annual accounting etc. 444BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of s. 444BA rules to other equalisation reserves. 444BD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modification of section 440. 444C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying distributions, tax credits, etc. 444D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from investments attributable to BLAGAB, etc. 444E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions applying only to overseas life insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Annuity business. 446 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Capital redemption business Capital redemption business. 458 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital redemption business: power to apply life assurance provisions. 458A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II FRIENDLY SOCIETIES, TRADE UNIONS AND EMPLOYERS’ ASSOCIATIONS Unregistered friendly societies Exemption from tax. 459 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registered friendly societies Exemption from tax in respect of life or endowment business. 460 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation in respect of other business. 461 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation in respect of other business: incorporated friendly societies qualifying for exemption. 461A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation in respect of other business: incorporated friendly societies etc. 461B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation in respect of other business: withdrawal of “qualifying” status from incorporated friendly society. 461C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of other business 461D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions for tax exempt business. 462 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election as to tax exempt business. 462A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Long-term business: application of the Corporation Tax Acts. 463 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maximum benefits payable to members. 464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Old societies. 465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets of branch of registered friendly society to be treated as assets of society after incorporation. 465A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter II. 466 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade unions and employers’ associations Exemption for trade unions and employers’ associations. 467 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC. Unit trust schemes Authorised unit trusts. 468 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorised unit trusts: futures and options. 468AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certified unit trusts. 468A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Open-ended investment companies 468A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certified unit trusts: corporation tax. 468B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certified unit trusts: distributions. 468C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Funds of funds: distributions. 468D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorised unit trusts: corporation tax. 468E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporation tax: cases where lower rate applies. 468EE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authorised unit trusts: distributions. 468F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid to investment trusts. 468G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions of authorised unit trusts: general Interpretation. 468H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution accounts. 468I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend and foreign income distributions Dividend distributions. 468J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign income distributions. 468K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest distributions Interest distributions. 468L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where no obligation to deduct tax 468M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction of tax (mixed funds). 468N 1 Subsection (2) below applies where— a an interest distribution is made for a distribution period to a unit holder; and b the gross income entered in the distribution accounts for the purposes of computing the total amount available for distribution to unit holders does not derive from eligible income entirely. 2 Where this subsection applies, the obligation to deduct under section 349(2) shall not apply to the relevant amount of the interest distribution to the unit holder if the residence condition is on the distribution date fulfilled with respect to him. 3 Section 468O makes provision with respect to the circumstances in which the residence condition is fulfilled with respect to a unit holder. 4 This is how to calculate the relevant amount of the interest distribution— R = A x B C Where— R = the relevant amount; A = the amount of the interest distribution before deduction of tax to the unit holder in question; B = such amount of the gross income as derives from eligible income; C = the amount of the gross income. 5 In subsection (4) above the references to the gross income are references to the gross income entered as mentioned in subsection (1)(b) above. Residence condition and reputable intermediary condition . 468O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residence declarations. 468P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 468O(1A): consequences of reasonable but incorrect belief 468PA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations supplementing sections 468M to 468PA 468PB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions to corporate unit holder Dividend distribution to corporate unit holder. 468Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign income distribution to corporate unit holder. 468R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other unit trusts. 469 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Court common investment funds. 469A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provisions relating to unit trusts. 470 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dealers in securities, banks and insurance businesses Exchange of securities in connection with conversion operations, nationalisation etc. 471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution of securities issued in connection with nationalisation etc. 472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading profits etc. from securities: taxation of amounts taken to reserves 472A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conversion etc. of securities held as circulating capital. 473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of tax-free income. 474 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax-free Treasury securities: exclusion of interest on borrowed money. 475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS Building societies: regulations for payment of tax. 476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments becoming or ceasing to be relevant building society investments. 477 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building societies: loan relationships . 477A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building societies: incidental costs of issuing qualifying shares. 477B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building societies: time for payment of tax. 478 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid on deposits with banks etc. 479 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits becoming or ceasing to be composite rate deposits. 480 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant deposits: deduction of tax from interest payments. 480A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant deposits: exception from section 480A. 480B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant deposits: computation of tax on interest. 480C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “Deposit-taker”, “deposit” and “relevant deposit”. 481 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions. 482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit powers in relation to non-residents. 482A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determination of reduced rate for building societies and composite rate for banks etc. 483 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Savings banks: exemption from tax. 484 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Savings banks: supplemental. 485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial and provident societies and co-operative associations. 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Credit unions. 487 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Co-operative housing associations. 488 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Self-build societies. 489 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies carrying on a mutual business or not carrying on a business. 490 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution of assets of body corporate carrying on mutual business. 491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V PETROLEUM EXTRACTION ACTIVITIES Treatment of oil extraction activities etc. for tax purposes. 492 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation of oil disposed of or appropriated in certain circumstances. 493 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan relationships etc. 494 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale and lease-back. 494AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of amount available for surrender by way of group relief. 494A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional development grants. 495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tariff receipts and tax-exempt tariffing receipts 496 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exploration expenditure supplement 496A Schedule 19B to this Act (exploration expenditure supplement) shall have effect. Ring fence expenditure supplement 496B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on setting ACT against income from oil extraction activities etc. 497 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limited right to carry back surrendered ACT. 498 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrender of ACT where oil extraction company etc. owned by a consortium. 499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction of PRT in computing income for corporation tax purposes. 500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on repayment of PRT. 501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary charge in respect of ring fence trades 501A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessment, recovery and postponement of supplementary charge 501B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter V. 502 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 5A Special rules for long funding leases of plant or machinery: corporation tax Introductory Scope of Chapter 5A 502A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessors under long funding finance leases Lessor under long funding finance lease: rental earnings 502B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessor under long funding finance lease: exceptional items 502C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessor under long funding finance lease making termination payment 502D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessors under long funding operating leases Lessor under long funding operating lease: periodic deduction 502E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Long funding operating lease: lessor's additional expenditure 502F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessor under long funding operating lease: termination of lease 502G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessors under long funding finance or operating leases: avoidance etc Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock 502GA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where ss. 502B to 502G do not apply: lessor also lessee under non-long funding lease 502GB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where ss. 502B to 502G do not apply: other avoidance 502GC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where ss 502B to 502G do not apply: films 502GD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance company as lessor Insurance company as lessor 502H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessees under long funding finance leases Lessee under long funding finance lease: limit on deductions 502I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessee under long funding finance lease: termination 502J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessees under long funding operating leases Lessee under long funding operating lease 502K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter Interpretation of this Chapter 502L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI MISCELLANEOUS BUSINESSES AND BODIES Letting of furnished holiday accommodation treated as a trade for certain corporation tax purposes. 503 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions. 504 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Letting of furnished holiday accommodation treated as trade for certain income tax purposes 504A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charitable companies : general. 505 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charitable and non-charitable expenditure 506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions with substantial donors 506A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 506A: exceptions 506B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 506A and 506B: supplemental 506C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The National Heritage Memorial Fund, the Historic Buildings and Monuments Commission for England and the British Museum. 507 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scientific research organisations. 508 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment trusts investing in housing. 508A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 508A. 508B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contemplative religious communities: profits exempt from corporation tax 508A 1 Subsection (2) applies in a case where members of a qualifying contemplative religious community transfer all their income and assets, or covenant all their income, to the community (“the independent community”) (and for this purpose it is irrelevant whether or not the community is part of an order or religious institution). 2 As respects each chargeable period of the independent community, and each person who is a qualifying member of the independent community at any time in that period, the independent community shall be treated for the purposes of corporation tax as if an amount of its profits for the chargeable period equal to the relevant amount (see subsections (5) to (7)) were income of the qualifying member. 3 Subsection (4) applies in a case where— a one or more qualifying contemplative religious communities (“constituent communities”) are part of an order or religious institution (“the parent body”), and b members of the constituent communities transfer all their income and assets, or covenant all their income, to the parent body. 4 As respects each chargeable period of the parent body, and each person who is a qualifying member of a constituent community at any time in that period, the parent body shall be treated for the purposes of corporation tax as if an amount of its profits for the chargeable period equal to the relevant amount (see subsections (5) to (7)) were income of the qualifying member. 5 For the purposes of subsections (2) and (4), the relevant amount, in relation to a chargeable period, is the amount of the annual personal allowance for persons born after 5 April 1948 (see section 35 of ITA 2007) for— a the tax year which begins in the chargeable period, or b if no tax year begins in the chargeable period, the tax year which is current when the chargeable period begins. 6 But, if the chargeable period is less than 12 months, the relevant amount is— P 365 × A where— P is the number of days in the chargeable period; A is the amount determined under subsection (5) in relation to the chargeable period. 7 If, during the chargeable period, an individual ceases to be a qualifying member of the independent community or a constituent community (otherwise than on death), the relevant amount, in relation to the chargeable period and that qualifying member, is— Q P × B where— Q is the number of days in the chargeable period for which the individual is a qualifying member of the independent community or constituent community; P is the number of days in the chargeable period; B is the amount determined under subsection (5), or subsections (5) and (6), in relation to the chargeable period. 8 So far as the exemption from corporation tax conferred by this section calls for repayment of tax, no repayment shall be made except on a claim made by the independent community or parent body. 9 In a case where a member of an independent community or constituent community— a has transferred or covenanted income to the community (in the case of an independent community) or the parent body (in the case of a constituent community), and b has income for a tax year which does not exceed 20% of the annual personal allowance for persons born after 5 April 1948 (see section 35 of ITA 2007) for that tax year, the member is, for the purposes of this section, to be taken to have transferred or covenanted all his or her income for that tax year to the community or parent body. 10 For the purposes of this section a contemplative religious community is a “qualifying” contemplative religious community if— a the community is established in the United Kingdom, b the members of the community live and practise their religion in a communal establishment, and c the community is not a charity, but the religion that is professed by the members of the community does not prevent the community from being a charity. 11 In this section— “ member ”, in relation to a religious community, means an individual who— is living in the community, and has taken vows or made equivalent commitments (whether probationary or not); “ qualifying member ”, in relation to a religious community, means a member of the community who— has been a member of the community for a period of at least six months, and has transferred all his or her income and assets, or covenanted all his or her income, to the community (in the case of an independent community) or the parent body (in the case of a constituent community). Contemplative religious communities: gains exempt from corporation tax 508B 1 Subsection (2) applies if, as respects a chargeable period— a section 508A(2) applies in relation to an independent community, b the profits of the independent community in the chargeable period are less than the total of the amounts that fall to be treated as income of the qualifying members of the community in accordance with section 508A(2), and c the independent community has chargeable gains in the chargeable period. 2 As respects the chargeable period and each qualifying member of the independent community, the community shall be treated for the purposes of corporation tax as if the relevant amount of its chargeable gains for that period were income of the qualifying member. 3 Subsection (4) applies if, as respects a chargeable period— a section 508A(4) applies in relation to a parent body, b the profits of the parent body in the chargeable period are less than the total of the amounts that fall to be treated as income of the qualifying members of the constituent communities in accordance with section 508A(4), and c the parent body has chargeable gains in the chargeable period. 4 As respects the chargeable period and each qualifying member of a constituent community, the parent body shall be treated for the purposes of corporation tax as if the relevant amount of its chargeable gains for that period were income of the qualifying member. 5 For the purposes of subsections (2) and (4), the relevant amount, in relation to a qualifying member of the independent community or a constituent community, is the smaller of— a the shortfall in profits, and b the average gain. 6 The shortfall in profits is the difference between— a the relevant amount determined under section 508A(5) to (7) in relation to the qualifying member, and b the amount that has actually been treated as the income of the qualifying member. 7 The average gain is— G N where— G is the amount of the chargeable gains which the independent community or parent body has in the chargeable period; N is the number calculated by adding together the relevant value for each qualifying member of the independent community or constituent communities who, under section 508A(2) or (4), falls to be treated as having income. 8 For the purposes of calculating “N” in subsection (7)— a the relevant value for a qualifying member is 1; b but, if section 508A(7) applies in relation to the qualifying member, the relevant value for that member is— 1 × Q P where Q and P have the same meanings as in section 508A(7). 9 So far as the exemption from corporation tax conferred by this section calls for repayment of tax, no repayment shall be made except on a claim made by the independent community or parent body. Reserves of marketing boards and certain other statutory bodies. 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Agricultural societies. 510 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . European economic interest groupings. 510A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Electricity Council and Boards, the Northern Ireland Electricity Service and the Gas Council. 511 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Atomic Energy Authority and National Radiological Protection Board. 512 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . British Airways Board and National Freight Corporation. 513 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Funds for reducing the National Debt. 514 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signatories to Operating Agreement for INMARSAT. 515 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government securities held by non-resident central banks. 516 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issue departments of the Reserve Bank of India and the State Bank of Pakistan. 517 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Harbour reorganisation schemes. 518 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Local authorities. 519 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Health service bodies. 519A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XIII MISCELLANEOUS SPECIAL PROVISIONS CHAPTER I INTELLECTUAL PROPERTY Patents and know-how Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure. 520 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 520. 521 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Allowances for expenditure on purchase of patent rights: pre-1st April 1986 expenditure. 522 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lapses of patent rights, sales etc. 523 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of receipts from sale of patent rights. 524 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital sums: . . . winding up or partnership change. 525 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for expenses. 526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spreading of royalties over several years. 527 1 Where— a a royalty or other sum is paid to a company in respect of the user of a patent, b the user extended over a period of six complete years or more, and c the payment is one from which a sum representing income tax must be deducted under section 903 of ITA 2007, the company may on the making of a claim require that the corporation tax payable by it by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of corporation tax which would have been payable by it if that royalty or sum had been paid in six equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made. 2 Subsection (1) above shall apply in relation to a royalty or other sum where the period of the user is two complete years or more but less than six complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to six equal instalments of a reference to so many equal instalments as there are complete years comprised in that period. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manner of making allowances and charges. 528 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Patent income to be earned income in certain cases. 529 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposal of know-how. 530 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 530. 531 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Capital Allowances Act 532 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 520 to 532. 533 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Copyright and public lending right Relief for copyright payments etc. 534 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief where copyright sold after ten years or more. 535 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of royalties where owner abroad. 536 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public lending right. 537 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designs Relief for payments in respect of designs. 537A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of design royalties where owner abroad. 537B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Artists’ receipts Relief for painters, sculptors and other artists. 538 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES Introductory. 539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of this Chapter etc. to policies and contracts in which persons other than companies are interested 539ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The conditions for being an excepted group life policy 539A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life policies: chargeable events. 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life policies: computation of gain. 541 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life annuity contracts: chargeable events. 542 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life annuity contracts: computation of gain. 543 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second and subsequent assignment of life policies and contracts. 544 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital redemption policies. 545 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of certain amounts for purposes of sections 540, 542 and 545. 546 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of certain assignments etc involving co-ownership 546A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special provision in respect of certain section 546 excesses 546B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charging the section 546 excess to tax where section 546B applies 546C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modifications of s.546C for final year ending with terminal chargeable event 546D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Method of charging gain to tax. 547 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Method of charging gain to tax: multiple interests. 547A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed surrender of certain loans. 548 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of rebated or reinvested commission in certain cases 548A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 548A: further definitions 548B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain deficiencies allowable as deductions. 549 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief where gain charged at a higher rate. 550 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Right of individual to recover tax from trustees. 551 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Right of company to recover tax from trustees. 551A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information: duty of insurers. 552 1 Where a chargeable event . . . has happened in relation to any policy or contract, the body by or with whom the policy or contract was issued, entered into or effected shall— a unless satisfied that no gain is to be treated as arising by reason of the event, deliver to the appropriate policy holder before the end of the relevant three month period a certificate specifying the information described in subsection (5) below; and b if the condition in paragraph (a) or (b) of subsection (2) below is satisfied, deliver to the inspector before the end of the relevant three month period a certificate specifying the information described in subsection (5) below together with the name and address of the appropriate policy holder. 2 For the purposes of this section— a the condition in this paragraph is that the event is an assignment for money or money’s worth of the whole of the rights conferred by the policy or contract; or b the condition in this paragraph is that the amount of the gain, or the aggregate amount of the gain and any gains connected with it, exceeds one half of the basic rate limit for the relevant year of assessment. 3 If, in the case of every certificate which a body delivers under subsection (1)(a) above which relates to a gain attributable to a year of assessment . . . , the body also delivers to the inspector— a before the end of the relevant three month period for the purposes of subsection (1)(b) above, b by a means prescribed by the Board for the purposes of this subsection under section 552ZA(5), and c in a form so prescribed in the case of that means, a certificate specifying the same information as the certificate under subsection (1)(a) together with the name and address of the appropriate policy holder, the body shall be taken to have complied with the requirements of subsection (1)(b) above in relation to that year of assessment . . . so far as relating to the chargeable events to which the certificates relate. 4 Where a certificate is not required to be delivered under subsection (1)(b) above in the case of any chargeable event— a the inspector may by notice require the body to deliver to him a copy of any certificate that the body was required to deliver under subsection (1)(a) above which relates to the chargeable event; and b it shall be the duty of the body to deliver such a copy within 30 days of receipt of the notice. 5 The information to be given to the appropriate policy holder pursuant to subsection (1)(a) above or the inspector pursuant to subsection (1)(b) above is— a any unique identifying designation given to the policy or contract; b the nature of the chargeable event and— i the date on which it happened; and ii if it is a chargeable event by virtue of . . . section 514(1) of ITTOIA 2005 (chargeable events where transaction-related calculations show gains), the date on which the insurance year ends ; c if the event is the assignment of all the rights conferred by the policy or contract, such of the following as may be required for computing the amount of the gain to be treated as arising by virtue of . . . Chapter 9 of Part 4 of ITTOIA 2005 — i . . . the amount or value of any capital sums of a kind referred to in section 492(1)(b) to (e) of ITTOIA 2005 ; ii the amounts previously paid under the policy or contract by way of premiums or otherwise by way of consideration for an annuity; iii . . . the amount of so much of any payment previously made on account of an annuity as is exempt under section 717 of ITTOIA 2005 ; iv the value of any previously assigned parts of or shares in the rights conferred by the policy or contract; v . . . the total of the amounts of gains treated as arising on previous chargeable events within section 509(1) or 514(1) of ITTOIA 2005 ; d except where paragraph (c) above applies, the amount of the gain treated as arising by reason of the event; e the number of years relevant for computing the annual equivalent of the amount of the gain for the purposes of subsection (1) of section 536 of ITTOIA 2005 (top slicing relieved liability: one chargeable event), apart from subsections (6) and (8) of that section; f on the assumption that section 465 of ITTOIA 2005 (person liable: individuals) has effect in relation to the gain — i whether an individual would fall to be treated as having paid income tax at the basic rate on the amount of the gain in accordance with section 530 of that Act; and ii if so, except in a case where paragraph (c) above applies, the amount of such tax that would fall to be so treated as paid. 6 For the purposes of subsection (1)(a) above, the relevant three month period is whichever of the following periods ends the latest— a the period of three months following the happening of the chargeable event; b if the event is a surrender or assignment which is a chargeable event by virtue of . . . section 514(1) of ITTOIA 2005 . . . , the period of three months following the end of the insurance year in which the event happens; c if the event is a death or an assignment of the whole of the rights or a surrender or assignment which is a chargeable event by virtue of . . . section 514(1) of ITTOIA 2005 . . . , the period of three months beginning with receipt of written notification of the event. 7 For the purposes of subsection (1)(b) above, the relevant three month period is whichever of the following periods ends the latest— a the period of three months following the end of the year of assessment . . . in which the event happened; b if the event is a surrender or assignment which is a chargeable event by virtue of section 514(1) of ITTOIA 2005, the period of three months following the end of the insurance year in which the event happens; c if the event is a death or an assignment, the period of three months beginning with receipt of written notification of the event; d if a certificate under subsection (1)(b) above would not be required in respect of the event apart from the happening of another event, and that other event is one of those mentioned in paragraph (c) above, the period of three months beginning with receipt of written notification of that other event. 8 For the purposes of this section the cases where a gain is connected with another gain are those cases where— a both gains arise in connection with policies or contracts containing obligations which, immediately before the chargeable event, were obligations of the same body; b the policy holder of those policies or contracts is the same; c both gains are attributable to the same year of assessment . . . ; d the terms of the policies or contracts are the same, apart from any difference in their maturity dates; and e the policies or contracts were issued in respect of insurances made, or were entered into or effected, on the same date. 9 For the purposes of this section, the year of assessment . . . to which a gain is attributable is— a in the case of a gain treated as arising by virtue of subsection (1) of section 514 of ITTOIA 2005, the year of assessment which includes the end of the insurance year mentioned in subsection (3) and (4) of that section; or b in any other case, the year of assessment . . . in which happens the chargeable event by reason of which the gain is treated as arising. 10 In this section— “ amount ”, in relation to any gain, means the amount of the gain apart from . . . section 528 of ITTOIA 2005 ; “ appropriate policy holder ” means— in relation to an assignment of part of or a share in the rights conferred by a policy or contract, any person who is both— the policy holder, or one of the policy holders, immediately before the assignment; and the assignor or one of the assignors; and in relation to any other chargeable event, the person who is the policy holder immediately before the happening of the event; “ chargeable event ” means an event which is a chargeable event within the meaning of . . . Chapter 9 of Part 4 of ITTOIA 2005; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “ insurance year ” has the same meaning as in Chapter 9 of Part 4 of ITTOIA 2005 (see section 499 of that Act); “ the relevant year of assessment ”, in the case of any gain, means— the year of assessment to which the gain is attributable, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 This section is supplemented by section 552ZA. 13 For the purposes of this section— a section 491(2) of ITTOIA 2005 is taken to have effect as if, in the definition of “PG”, the words from “but” to the end were omitted, and b no account is to be taken of the effect of section 465B or 541A of that Act. 14 For the purposes of this section no account is to be taken of the effect of sections 528 and 528A of ITTOIA 2005. Information: supplementary provisions 552ZA 1 This section supplements section 552 and shall be construed as one with it. 2 Where the obligations under any policy or contract of the body that issued, entered into or effected it (“ the original insurer ”) are at any time the obligations of another body (“ the transferee ”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, section 552 shall have effect in relation to that time, except where the chargeable event— a happened before the transfer, and b in the case of a death or an assignment, is an event of which the notification mentioned in subsection (6) or (7) of that section was given before the transfer, as if the policy or contract had been issued, entered into or effected by the transferee. 3 Where, in consequence of . . . section 514(1) of ITTOIA 2005 , paragraph (a) or (b) of section 552(1) requires certificates to be delivered in respect of two or more surrenders, happening in the same year, of part of or a share in the rights conferred by the policy or contract, a single certificate may be delivered under the paragraph in question in respect of all those surrenders (and may treat them as if they together constituted a single surrender) unless between the happening of the first and the happening of the last of them there has been— a an assignment of part of or a share in the rights conferred by the policy or contract; or b an assignment, otherwise than for money or money’s worth, of the whole of the rights conferred by the policy or contract. 4 Where the appropriate policy holder is two or more persons— a section 552(1)(a) requires a certificate to be delivered to each of them; but b nothing in section 552 or this section requires a body to deliver a certificate under subsection (1)(a) of that section to any person whose address has not been provided to the body (or to another body, at a time when the obligations under the policy or contract were obligations of that other body). 5 A certificate under section 552(1)(b) or (3)— a shall be in a form prescribed for the purpose by the Board; and b shall be delivered by any means prescribed for the purpose by the Board; and different forms, or different means of delivery, may be prescribed for different cases or different purposes. 6 The Board may by regulations make such provision as they think fit for securing that they are able— a to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 or this section; and b to verify any certificate under that section. 7 Regulations under subsection (6) above may include, in particular, provisions requiring persons to whom premiums under any policy are or have at any time been payable— a to supply information to the Board; and b to make available books, documents and other records for inspection on behalf of the Board. 8 Regulations under subsection (6) above may— a make different provision for different cases; and b contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate. Regulations in relation to qualifying policies 552ZB 1 The Commissioners for Her Majesty's Revenue and Customs may make regulations— a requiring relevant persons— i to provide prescribed information to persons who apply for the issue of qualifying policies or who are, or may be, required to make statements under paragraph B3(2) of Schedule 15; ii to provide to an officer of Revenue and Customs prescribed information about qualifying policies which have been issued by them or in relation to which they are or have been a relevant transferee; b making such provision (not falling within paragraph (a)) as the Commissioners think fit for securing that an officer of Revenue and Customs is able— i to ascertain whether there has been or is likely to be any contravention of the requirements of the regulations or of paragraph B3(2) of Schedule 15; ii to verify any information provided to an officer of Revenue and Customs as required by the regulations. 2 The provision that may be made by virtue of subsection (1)(b) includes, in particular, provision requiring relevant persons to make available books, documents and other records for inspection by or on behalf of an officer of Revenue and Customs. 3 The regulations may— a make different provision for different cases or circumstances, and b contain incidental, supplementary, consequential, transitional, transitory or saving provision. 4 In this section— “ prescribed ” means prescribed by the regulations, “ qualifying policy ” includes a policy which would be a qualifying policy apart from— paragraph A1(2), B1(2), B2(2) or B3(3) of Schedule 15, or paragraph 17(2)(za) of that Schedule (including as applied by paragraph 18), and “ relevant person ” means a person— who issues, or has issued, qualifying policies, or who is, or has been, a relevant transferee in relation to qualifying policies. 5 For the purposes of this section a person (“X”) is at any time a “ relevant transferee ” in relation to a qualifying policy if the obligations under the policy of its issuer are at that time the obligations of X as a result of there having been a transfer to X of the whole or any part of a business previously carried on by the issuer. Tax representatives. 552A 1 This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative. 2 In this section “ overseas insurer ” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of— a policies of life insurance; b contracts for life annuities; or c capital redemption policies. 3 This section applies to an overseas insurer— a if the condition in subsection (4) below is satisfied on the designated day; or b where that condition is not satisfied on that day, if it has subsequently become satisfied. 4 The condition mentioned in subsection (3) above is that— a there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and b the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more. 5 In this section “ relevant insurance ” means any policy of life insurance, contract for a life annuity or capital redemption policy . . . in the case of which— a the holder is resident in the United Kingdom; b the obligations of the insurer are obligations of a person not resident in the United Kingdom; and c those obligations are not attributable to a branch or agency of that person’s in the United Kingdom. 6 Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative. 7 A person shall not be a tax representative unless— a if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or b if he is not an individual, he has a business establishment in the United Kingdom, and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board. 8 A person shall not be an overseas insurer’s tax representative unless— a his nomination by the overseas insurer has been approved by the Board; or b he has been appointed by the Board. 9 The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to— a the making of a nomination by an overseas insurer of a person to be his tax representative; b the information which is to be provided in connection with such a nomination; c the form in which such a nomination is to be made; d the powers and duties of the Board in relation to such a nomination; e the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so; f the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative; g the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made); h the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative; j circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative; k appeals to the tribunal against decisions of the Board under this section or regulations under it. 10 The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B. 11 Section 1122 of CTA 2010 (connected persons) applies for the purposes of this section. 12 In this section— “ capital redemption policy ” means a capital redemption policy in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect; “ contract for a life annuity ” means a contract for a life annuity in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect; “ the designated day ” means such day as the Board may specify for the purpose in regulations; “ policy of life insurance ” means a policy of life insurance in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect; “ tax representative ” means a tax representative under this section. Duties of overseas insurers’ tax representatives. 552B 1 It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer. 2 For the purposes of this section “ the relevant duties ” are— a the duties imposed by section 552, b the duties imposed by section 552ZA(2), (4) or (5), . . . c any duties imposed by regulations made under subsection (6) of section 552ZA by virtue of subsection (7) of that section, and d any duties imposed by regulations under section 552ZB, so far as relating to relevant insurances under which the overseas insurer in question has any obligations. 3 An overseas insurer’s tax representative shall be personally liable— a in respect of any failure to secure the discharge of the relevant duties, and b in respect of anything done for purposes connected with acting on the overseas insurer’s behalf, as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer. 4 In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment. 5 This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made. 5A In subsection (5) “ chargeable event ” has the same meaning as in section 552 (see subsection (10) of that section). 6 Expressions used in this section and in section 552A have the same meaning in this section as they have in that section. Non-resident policies and off-shore capital redemption policies. 553 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overseas life assurance business: life policies. 553A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overseas life assurance business: capital redemption policies. 553B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal portfolio bonds. 553C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings on life policies to be treated as income in certain cases. 554 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III ENTERTAINERS AND SPORTSMEN Payment of tax. 555 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Activity treated as trade etc. and attribution of income. 556 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on profits . 557 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions. 558 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV SUB-CONTRACTORS IN THE CONSTRUCTION INDUSTRY Deductions on account of tax etc. from payments to certain sub-contractors. 559 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of sums deducted under s.559 559A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons who are sub-contractors or contractors for purposes of Chapter IV. 560 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from section 559. 561 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions to be satisfied by individuals. 562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions to be satisfied by partners who are individuals. 563 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions to be satisfied by firms. 564 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions to be satisfied by companies. 565 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General powers to make regulations under Chapter IV. 566 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “construction operations”. 567 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V SCHEMES FOR RATIONALIZING INDUSTRY Deductions from profits of contributions paid under certified schemes. 568 1 Notwithstanding anything contained in . . . section 33 of ITTOIA 2005 or section 53 of CTA 2009 (no deduction for capital expenditure) but subject to the following provisions of this Chapter, where a person pays, wholly and exclusively for the purposes of a trade in respect of which he is chargeable under Part 2 of ITTOIA 2005 or Part 3 of CTA 2009, a contribution in furtherance of a scheme which is for the time being certified by the Secretary of State under this section, the contribution shall, in so far as it is paid in furtherance of the primary object of the scheme, be allowed to be deducted as an expense in computing the profits of that trade. 2 The Secretary of State shall certify a scheme under this section if he is satisfied— a that the primary object of the scheme is the elimination of redundant works or machinery or plant from use in an industry in the United Kingdom; and b that the scheme is in the national interest and in the interests of that industry as a whole; and c that such number of persons engaged in that industry as are substantially representative of the industry are liable to pay contributions in furtherance of the primary object of the scheme by agreement between them and the body of persons carrying out the scheme. References in this subsection to an industry in the United Kingdom shall include references to the business carried on by owners of ships or of a particular class of ships, wherever that business is carried on, and, in relation to that business, references in this subsection to works or machinery or plant shall include references to ships. 3 The Secretary of State shall cancel any certificate granted under this section if he ceases to be satisfied as to any of the matters referred to in subsection (2) above. 4 The Secretary of State may at any time require the body of persons carrying out a scheme certified under this section to produce any books or documents of whatever nature relating to the scheme and, if the requirement is not complied with, he may cancel the certificate. 5 In this section and in section 569 “ contribution ”, in relation to a scheme, does not include a sum paid by a person by way of loan or subscription of share capital, or in consideration of the transfer of assets to him, or by way of a penalty for contravening or failing to comply with the scheme. Repayment of contributions. 569 1 In the event of the repayment, whether directly or by way of distribution of assets on a winding up or otherwise, of a contribution or any part of a contribution which has been allowed to be deducted under section 568, the deduction of the contribution, or so much of it as has been repaid, shall be deemed to be an unauthorised deduction in respect of which an assessment shall be made, and, notwithstanding the provisions of the Tax Acts requiring assessments to be made within six years after the end of the chargeable period to which they relate, any such assessment and any consequential assessment may be made at any time within three years after the end of the chargeable period in which the repayment was made. 2 For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on. Payments under certified schemes which are not repayments of contributions. 570 1 Subject to the provisions of this section, where, under any scheme which is for the time being certified or has at any time been certified by the Secretary of State under section 568, any payment (not being a payment made by way of repayment of contributions) is made to a person carrying on a trade to which the scheme relates, that payment shall be treated for the purposes of the Tax Acts as a trading receipt of the trade, and shall accordingly be taken into account in computing the profits of the trade for those purposes. 2 Where . . . the payments which have been made under such a scheme in respect of a trade (not being payments made by way of repayment of contributions) have been made wholly or partly in respect of damage in respect of which no relief may be given under the Tax Acts, and a claim is made to that effect, then, subject to and in accordance with the provisions of Schedule 21 — a relief shall be given in respect of those payments by reducing the amounts which are to be treated as trading receipts of the trade under subsection (1) above; but b where such relief is given, section 568 shall, in relation to contributions subsequently paid under the scheme in respect of the trade, have effect subject to the modifications specified in Part III of that Schedule, and paragraph 6 of that Schedule applies for the purposes of this subsection as it applies for the purposes of that Schedule. 3 The provisions of this section and Schedule 21 shall apply in relation to any payment made to a person who has ceased to carry on a trade to which any such scheme as is mentioned in subsection (1) above relates as they apply in relation to payments made to a person carrying on such a trade, subject to the modification that so much of that payment as falls to be treated as a trading receipt by virtue of those provisions shall be deemed for the purposes of those provisions to have been made to him on the last day on which he was engaged in carrying on the trade. 4 In determining for the purposes of this section and of Schedule 21— a whether any trade has ceased to be carried on; or b whether any contribution is paid in respect of a trade in respect of which a payment has been made; or c whether any payment is made in respect of a trade in respect of which a contribution has been paid, no regard shall be had to any event which, by virtue of section 18 of ITTOIA 2005 or section 41 of CTA 2009 (company starting or ceasing to be within charge to corporation tax) is to be treated as effecting a cessation of trading. Cancellation of certificates. 571 1 Where any certificate granted with respect to a scheme under section 568 is cancelled by the Secretary of State, and any deductible contributions paid in furtherance of the scheme have not been repaid at the expiration of one year from the cancellation, the body of persons carrying out the scheme shall, for the chargeable period in which that year expires, be charged to tax . . . upon the aggregate amount of the deductible contributions which have not been repaid at that time. 1A An amount charged to income tax under subsection (1) above is treated for income tax purposes as an amount of income. 1B So far as relating to corporation tax, the charge to tax under subsection (1) has effect as an application of the charge to corporation tax on income. 2 The charge to tax under subsection (1) above shall not be made if the total amount of any contributions, other than deductible contributions, which have been paid under the scheme and have not been repaid before that time is greater than the available resources of the scheme, and shall not in any case be made upon an amount greater than the excess, if any, of those resources over that total amount. 3 In subsection (2) above “ the available resources ”, in relation to any scheme, means a sum representing the total funds held for the purposes of the scheme at the expiration of one year from the cancellation of the certificate plus a sum representing any funds held for the purposes of the scheme which, during that year, have been applied otherwise than in accordance with the provisions of the scheme as in force when the certificate was granted. 4 Where the body of persons carrying out a scheme are charged to tax by virtue of subsection (1) above, and, after the expiration of one year from the cancellation of the certificate, any deductible contribution paid in furtherance of the scheme is repaid, the amount upon which the charge is made shall on the making of a claim be reduced by the amount repaid, and all such repayments of tax shall be made as are necessary to give effect to the provisions of this subsection. 5 In this section “ contribution ” includes a part of a contribution, and “ deductible contribution ” means a contribution allowed to be deducted under section 568, any reduction under Part III of Schedule 21 being left out of account. 6 For the purposes of this section, a sum received by any person by way of repayment of contributions shall be deemed to be by way of repayment of the last contribution paid by him, and, if the sum exceeds the amount of that contribution, by way of repayment of the penultimate contribution so paid, and so on. Application to statutory redundancy schemes. 572 1 Sections 569 to 571 and Schedule 21 shall, subject to the adaptations specified in subsection (2) below, apply in relation to a statutory redundancy scheme as they apply in relation to a scheme certified under section 568. 2 The adaptations referred to above are as follows, that is to say— a for any reference to a contribution allowed to be deducted under section 568 there shall be substituted a reference to a contribution allowed to be deducted under any provision of the Tax Acts other than that section; b any provision that section 568 shall, in relation to contributions, have effect subject to modifications, shall be construed as a provision that so much of any provision of the Tax Acts other than that section as authorises the deduction of contributions shall, in relation to the contributions in question, have effect subject to the modifications in question; c for any reference to the cancellation of a certificate with respect to a scheme there shall be substituted a reference to the scheme ceasing to have effect; and d for any reference to the provisions of the scheme as in force when the certificate was granted there shall be substituted a reference to the provisions of the scheme as in force when the contributions were first paid thereunder. 3 In this section “ statutory redundancy scheme ” means a scheme for the elimination or reduction of redundant works, machinery or plant, or for other similar purposes, to which effect is given by or under any Act, whether passed before or after this Act. Chapter 5A Share loss relief Relief for losses on unquoted shares in trading companies Relief for companies. 573 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exclusion of relief under section 573 . . . in certain cases. 575 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 573 and 575 . 576 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying trading companies 576A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying trading companies: the requirements The trading requirement 576B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ceasing to meet the trading requirement because of administration or receivership 576C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The control and independence requirement 576D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The qualifying subsidiaries requirement 576E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The property managing subsidiaries requirement 576F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The gross assets requirement 576G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The unquoted status requirement 576H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to amend requirements by Treasury order 576I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying trading companies: supplementary provisions Relief after an exchange of shares for shares in another company 576J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Substitution of new shares for old shares 576K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental Interpretation of Chapter 576L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI OTHER PROVISIONS Relief for losses on unquoted shares in trading companies Relief for individuals. 574 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous Business entertaining expenses. 577 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure involving crime. 577A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Housing grants. 578 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure on car hire 578A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure on car hire: supplementary 578B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statutory redundancy payments. 579 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 579. 580 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief from tax on annual payments under certain insurance policies. 580A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “self-contained” for the purposes of s.580A. 580B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief from tax on annual payments under immediate needs annuities 580C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowing in foreign currency by local authorities and statutory corporations. 581 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest on foreign currency securities etc. 581A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Funding bonds issued in respect of interest on certain debts. 582 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated international organisations: miscellaneous exemptions. 582A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter-American Development Bank. 583 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief for unremittable overseas income 584 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief from tax on delayed remittances. 585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disallowance of deductions for war risk premiums. 586 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disallowance of certain payments in respect of war injuries to employees. 587 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New issues of securities: extra return. 587A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gifts of shares, securities and real property to charities etc 587B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying interests in land held jointly 587BA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provision for gifts of real property 587C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Training courses for employees. 588 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying courses of training etc. 589 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Counselling services for employees. 589A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying counselling services etc. 589B 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XIV PENSION SCHEMES, SOCIAL SECURITY BENEFITS, LIFE ANNUITIES ETC. CHAPTER I RETIREMENT BENEFIT SCHEMES Approval of schemes Conditions for approval of retirement benefit schemes. 590 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 590: supplementary provisions. 590A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 590: further supplementary provisions. 590B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings cap. 590C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discretionary approval. 591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect on approved schemes of regulations under section 591. 591A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cessation of approval: general provisions. 591B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cessation of approval: tax on certain schemes. 591C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 591C: supplementary. 591D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax reliefs Exempt approved schemes. 592 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief by way of deductions from contributions. 593 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exempt statutory schemes. 594 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax in certain cases Charge to tax in respect of certain sums paid by employer etc. 595 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from section 595. 596 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: benefits under non-approved schemes. 596A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 596A: supplementary provisions. 596B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notional interest treated as paid if amount charged in respect of beneficial loan. 596C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: pensions. 597 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: repayment of employee’s contributions. 598 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: commutation of entire pension in special circumstances. 599 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: payments out of surplus funds. 599A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: unauthorised payments to or for employees. 600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax: payments to employers. 601 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations relating to pension fund surpluses. 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction of surpluses. 603 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions Application for approval of a scheme. 604 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information. 605 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . False statements etc. 605A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Default of administrator etc. 606 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recourse to scheme members. 606A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pilots’ benefit fund. 607 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Superannuation funds approved before 6th April 1980. 608 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schemes approved before 23rd July 1987. 609 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendments of schemes. 610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definition of “retirement benefits scheme”. 611 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definition of relevant statutory scheme. 611A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definition of the administrator. 611AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definition of relevant statutory scheme. 611A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other interpretative provisions, and regulations for purposes of this Chapter. 612 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II OTHER PENSION FUNDS AND SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS Parliamentary pension funds. 613 1 The salary of a Member of the House of Commons shall, for all the purposes of the Income Tax Acts, be treated as reduced by the amounts deducted in pursuance of section 4 of the House of Commons Members' Fund Act 2016 ; but a Member shall not by reason of any such deduction be entitled to relief under any other provision of the Income Tax Acts. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The . . . trustees of— a the House of Commons Members’ Fund specified in section 1 of the 2016 Act ; b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . bb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . shall be entitled to exemption from income tax in respect of all income derived from that Fund or any investment of that Fund . A claim under this subsection shall be made to the Board. Exemptions and reliefs in respect of income from investments etc. of certain pension schemes. 614 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Any interest or dividends received by the person in whom is vested any of the Family Pension Funds mentioned in section 273 of the Government of India Act 1935, and having effect as a scheme made under section 2 of the Overseas Pensions Act 1973, on sums forming part of that fund shall be exempt from income tax. 2A The reference in subsection (2) above to interest on sums forming part of a fund include references to any amount which is treated as income by virtue of Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) and derives from any investment forming part of that fund. 3 Income derived from investments or deposits of any fund referred to in section 648, 649, 650 or 651 of ITEPA 2003 shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income. 4 In respect of income derived from investments or deposits of the Overseas Service Pensions Fund established pursuant to section 7(1) of the Overseas Aid Act 1966, the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person ... and not resident in the United Kingdom. 5 In respect of dividends and other income derived from investments, deposits or other property of a superannuation fund to which section 615(3) applies the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person ... not resident in the United Kingdom. 6 A claim under this section shall be made to the Board. Exemption from tax in respect of certain pensions. 615 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments and patent royalties) by the trustees or other persons having the control of the fund. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Subsection (3) above applies to any superannuation fund which— a is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom; b has for its sole purpose (subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme) the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; . . . c is recognised by the employer and employed persons in the trade or undertaking; and d meets the benefit accrual condition (see subsection (6A)); and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom . 6A The benefit accrual condition is— a that, in the case of any money purchase arrangement relating to a member of the fund that is not a cash balance arrangement, no contributions are made under the arrangement on or after 6 April 2017; b that, in the case of any cash balance arrangement relating to a member of the fund, there is no increase on or after 6 April 2017 in the value of any person's rights under the arrangement; c that, in the case of any defined benefits arrangement relating to a member of the fund, there is no increase on or after 6 April 2017 in the value of any person's rights under the arrangement; and d that, in the case of any arrangement relating to a member of the fund that is neither a money purchase arrangement nor a defined benefits arrangement— i no contributions are made under the arrangement on or after 6 April 2017, and ii there is no increase on or after 6 April 2017 in the value of any person's rights under the arrangement. 6B For the purposes of subsection (6A)(b)— a whether there is an increase in the value of a person's rights is to be determined by reference to whether there is an increase in the amount that would, on the valuation assumptions, be available for the provision of benefits under the arrangement to or in respect of the person (and, if there is, the amount of the increase), but b in the case of rights that accrued to a person before 6 April 2017, ignore increases in the value of the rights if in no tax year do they exceed the relevant percentage. 6C For the purposes of subsection (6A)(c)— a whether there is an increase in the value of a person's rights is to be determined by reference to whether there is an increase in the benefits amount as defined by paragraph 14(7) of Schedule 18 to the Finance Act 2011, but b in the case of rights that accrued to a person before 6 April 2017, ignore increases in the value of the rights if in no tax year do they exceed the relevant percentage. 6D For the purposes of subsection (6A)(d)(ii), regulations made by the Commissioners for Her Majesty's Revenue and Customs may make provision— a for determining whether there is an increase in the value of a person's rights, b for determining the amount of any increase, and c for ignoring the whole or part of any increase; and regulations under this subsection may make provision having effect in relation to times before the regulations are made. 6E In this section, “ relevant percentage ”, in relation to a tax year, means— a where, on 20 March 2017, the rules of the fund include provision for the value of the rights of a person to increase during the tax year at an annual rate specified in those rules, that rate, or b in any other case, the percentage by which the consumer prices index for September in the previous tax year is higher than it was for the September in the tax year before that (or, if greater, 0%). 6F The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision— a so as to change, or modify the effect of, the benefit accrual condition; b as to the matters to be taken into account in determining whether the benefit accrual condition is met; c for a superannuation fund to be treated to any extent as meeting or not meeting the benefit accrual condition. 6G Provision under subsection (6D) or (6F) may be made by amending this section. 7 For the purposes of this section— “ arrangement ”, in relation to a member of a superannuation fund, means an arrangement relating to the member under the fund; a money purchase arrangement relating to a member of a superannuation fund is a “cash balance arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are cash balance benefits; an arrangement relating to a member of a superannuation fund is a “defined benefits arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are defined benefits; an arrangement relating to a member of a superannuation fund is a “money purchase arrangement” at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are money purchase benefits; “cash balance benefits”, “defined benefits” and “money purchase benefits” have the meaning given by section 152 of the Finance Act 2004, but for this purpose reading references in that section to a pension scheme as references to a superannuation fund; “ member ”, in relation to a superannuation fund, has the meaning given by section 151 of the Finance Act 2004, but for this purpose reading references in that section to a pension scheme as references to a superannuation fund; “ pension ” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto; “ overseas territory ” means any territory or country outside the United Kingdom; “ the Pensions (Increase) Acts ” means the Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act; “ United Kingdom trust territory ” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations; “ the valuation assumptions ” has the meaning given by section 277 of the Finance Act 2004. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 For the purposes of this section, a person shall be taken to be employed in the public service of an overseas territory at any time when— a he is employed in any capacity under the government of that territory, or under any municipal or other local authority in it, b he is employed, in circumstances not falling within paragraph (a) above, by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or c he is the holder of a public office in that territory in circumstances not falling within either paragraph (a) or (b). 10 For the purposes of subsection (9), references to the government of an overseas territory include references to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories. 11 Where the conditions in subsection (6)(a) to (c) are met in the case of a superannuation fund (“ the actual fund ”)— a any disqualifying contributions made under an arrangement relating to a member of the actual fund are treated for the purposes of the Income Tax Acts as instead made under an arrangement relating to the member under a separate superannuation fund (“the shadow fund” for the actual fund), b any disqualifying increase in the value of a person's rights under an arrangement relating to a member of the actual fund is treated for the purposes of the Income Tax Acts as instead being an increase under an arrangement relating to the member under the shadow fund for the actual fund, and c any reference in this or any other Act (including the reference in subsection (3) and any reference enacted after the coming into force of this subsection) to a fund, or superannuation fund, to which subsection (3) applies does not include so much of the actual fund as— i represents any contribution treated as made under, or any increase in the value of any rights treated as an increase under, the shadow fund of the actual fund or the shadow fund of any other superannuation fund, or ii arises, or (directly or indirectly) derives, from anything within sub-paragraph (i) or this sub-paragraph. 12 For the purposes of subsection (11) a contribution, or an increase in the value of any rights, is “disqualifying” if it would (ignoring that subsection) cause the benefit accrual condition not to be met in the case of the actual fund. 13 For the purposes of the provisions of this section relating to the benefit accrual condition, where there is a recognised transfer— a any transfer of sums or assets to the recipient fund by the recognised transfer is to be categorised as not being “a contribution” to the recipient fund, and b any increase in the value of rights under the recipient fund that occurs at the time of the recognised transfer is to be treated as not being an increase in that value if the increase is solely a result of the transfer effected by the recognised transfer. 14 For the purposes of subsection (13), where there is a transfer such that sums or assets held for the purposes of, or representing accrued rights under, an arrangement relating to a member of a superannuation fund (“ the transferor fund ”) are transferred so as to become held for the purposes of, or to represent rights under, an arrangement relating to that person as a member of another superannuation fund, the transfer is a “recognised transfer” if— a the conditions in subsection (6)(a) to (c) are met in the case of each of the funds, and b none of the sums and assets transferred— i represents any contribution treated as made under, or any increase in the value of any rights treated as an increase under, the shadow fund of the transferor fund or the shadow fund of any other superannuation fund, or ii arises, or (directly or indirectly) derives, from anything within sub-paragraph (i) or this sub-paragraph. Other overseas pensions. 616 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Social security benefits and contributions. 617 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax credits under Part 1 of Tax Credits Act 2002 617A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III RETIREMENT ANNUITIES Termination of relief under this Chapter, and transitional provisions. 618 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemption from tax in respect of qualifying premiums. 619 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying premiums. 620 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other approved contracts. 621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Substituted retirement annuity contracts. 622 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant earnings. 623 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sponsored superannuation schemes and controlling directors. 624 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-forward of unused relief under section 619. 625 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modification of section 619 in relation to persons over 50. 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lloyd’s underwriters. 627 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partnership retirement annuities. 628 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuity premiums of Ministers and other officers. 629 1 For the purposes of this Chapter so much of any salary which— a is payable to the holder of a qualifying office who is also a Member of the House of Commons, and b is payable for a period in respect of which the holder is not a participant in relation to that office in arrangements contained in the Parliamentary pension scheme but is a participant in relation to his membership of the House of Commons in any such arrangements, or for any part of such a period, as is equal to the difference between a Member’s pensionable salary and the salary which (in accordance with any such resolution as is mentioned in subsection (3)(a) below) is payable to him as a Member holding that qualifying office shall be treated as remuneration from the office of Member and not from the qualifying office. 2 In this section— “ Member’s pensionable salary ” means a Member’s ordinary salary under any resolution of the House of Commons which, being framed otherwise than as an expression of opinion, is for the time being in force relating to the remuneration of Members or, if the resolution provides for a Member’s ordinary salary thereunder to be treated for pension purposes as being at a higher rate, a notional yearly salary at that higher rate; “ qualifying office ” means an office mentioned in section 2(2)(b), (c) or (d) of the Parliamentary and other Pensions Act 1987; “ the Parliamentary pension scheme ” has the same meaning as in that Act; and without prejudice to the power conferred by virtue of paragraph 13 of Schedule 1 to that Act, regulations under section 2 of that Act may make provision specifying the circumstances in which a person is to be regarded for the purposes of this section as being or not being a participant in relation to his Membership of the House of Commons, or in relation to any office, in arrangements contained in the Parliamentary pension scheme. 3 In subsection (2) above “ a Member’s ordinary salary ”, in relation to any resolution of the House of Commons, means— a if the resolution provides for salary to be paid to Members at different rates according to whether or not they are holders of particular offices, or are in receipt of salaries or pensions as the holders or former holders of particular offices, a Member’s yearly salary at the higher or highest rate; and b in any other case, a Member’s yearly salary at the rate specified in or determined under the resolution. CHAPTER IV PERSONAL PENSION SCHEMES Preliminary Interpretation. 630 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approval of schemes. 631 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conversion of certain approved retirement benefits schemes. 631A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on approval Establishment of schemes. 632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Eligibility to make contributions. 632A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Eligibility to make contributions: concurrent membership. 632B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scope of benefits. 633 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuity to member. 634 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income withdrawals by member. 634A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lump sum to member. 635 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuity after death of member. 636 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income withdrawals after death of member. 636A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Death benefit. 637 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return of contributions on or after death of member. 637A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other restrictions on approval. 638 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal pension arrangements with more than one pension date etc. 638ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to prescribe restrictions on approval. 638A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax reliefs Member’s contributions. 639 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maximum amount of deductions. 640 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings cap. 640A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-back of contributions. 641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Election for contributions to be treated as paid in previous year. 641A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carry-forward of relief. 642 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employer’s contributions and personal pension income etc. 643 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant earnings”. 644 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings from pensionable employment. 645 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “net relevant earnings”. 646 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings from associated employments. 646A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Presumption of same level of relevant earnings etc for 5 years. 646B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 646B. 646C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Higher level contributions after cessation of actual relevant earnings: modification of section 646B. 646D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax Unauthorised payments. 647 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions under unapproved arrangements. 648 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annuities: charge under Schedule E. 648A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return of contributions after pension date. 648B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous Minimum contributions under Social Security Act 1986. 649 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Withdrawal of approval. 650 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge on withdrawal of approval from arrangements. 650A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals. 651 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information powers. 651A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information about payments. 652 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information: penalties. 653 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notices to be given to scheme administrator. 653A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remuneration of Ministers and other officers. 654 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provisions. 655 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V PURCHASED LIFE ANNUITIES Purchased life annuities other than retirement annuities. 656 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchased life annuities to which section 656 applies. 657 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary. 658 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI MISCELLANEOUS Charges and assessments on administrators. 658A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial futures and traded options. 659 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Futures and options. 659A 1 For the purposes of sections . . . 613(4), 614(3) and (4) . . . — a “ investments ” (or “ investment ”) includes futures contracts and options contracts, and b income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations. Definition of insurance company. 659B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of appointment or arrangements under section 659B. 659C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of provisions about pension sharing. 659D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of income from property investment LLPs 659E 1 The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP (see section 1004 of ITA 2007) . 2 The exemptions are those provided by— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . section 613(4) (Parliamentary pension funds), section 614(3) (certain colonial, &c. pension funds), section 614(4) (the Overseas Service Pension Fund), section 614(5) (other pension funds for overseas employees), . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B. 4 Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above. PART XV SETTLEMENTS Chapter IA Liability of settlor Main provisions Income arising under settlement where settlor retains an interest. 660A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments to unmarried minor children of settlor. 660B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nature of charge on settlor. 660C 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments between settlor and trustees, &c. 660D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions Application to settlements by two or more settlors. 660E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information. 660F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “settlement” and related expressions. 660G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER I DISPOSITIONS FOR SHORT PERIODS Dispositions for period which cannot exceed six years. 660 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments between disponor and trustees. 661 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Chapter I to dispositions by two or more disponors. 662 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II SETTLEMENTS ON CHILDREN The general rule. 663 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulation settlements. 664 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “irrevocable”. 665 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid by trustees. 666 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments between disponor and trustees. 667 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Chapter II to settlements by two or more settlors. 668 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information under Chapter II. 669 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter II. 670 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 1B PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR Revocable settlements allowing release of obligation. 671 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revocable settlements allowing reversion of property. 672 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlements where settlor retains an interest. 673 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlements: discretionary power for benefit of settlor etc. 674 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other settlements where settlor retains interest in settled property. 674A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 671 to 674. 675 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disallowance of deduction from total income of certain sums paid by settlor. 676 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sums paid to settlor otherwise than as income. 677 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital sums paid by body connected with settlement. 678 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Chapter III to settlements by two or more settlors. 679 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information for purposes of Chapter III. 680 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Chapter III. 681 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ascertainment of undistributed income. 682 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions. 682A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER 1C LIABILITY OF TRUSTEES . . . Settlements made after 6th April 1965. 683 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlements made before 7th April 1965 but after 9th April 1946. 684 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to sections 683 and 684. 685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “settled property” 685A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “settlor” 685B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer between settlements: identification of settlor 685C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variation of will or intestacy, etc: identification of settlor 685D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trustees of settlements 685E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of section 739 and 740 685F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-funds 685G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulation and discretionary trusts: special rates of tax. 686 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Receipts to be treated as income to which section 686 applies 686A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share incentive plans: distributions in respect of unappropriated shares 686B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 686B 686C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special trust rates not to apply to first slice of trust income 686D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of section 686D where settlor has made more than one settlement 686E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payments under discretionary trusts. 687 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discretionary payments by trustees to companies . 687A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schemes for employees and directors to acquire shares. 688 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recovery from trustees of discretionary trusts of higher rate tax due from beneficiaries. 689 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter ID Trust management expenses Disregard of expenses where beneficiary non-resident. 689A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Order in which expenses to be set against income. 689B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V MAINTENANCE FUNDS FOR HISTORIC BUILDINGS Schedule 4 directions. 690 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain income not to be income of settlor etc. 691 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reimbursement of settlor. 692 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Severance of settled property for certain purposes. 693 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trustees chargeable to income tax in certain cases at higher rate reduced by rate applicable to trusts 694 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XVI ESTATES OF DECEASED PERSONS IN COURSE OF ADMINISTRATION Limited interests in residue. 695 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Absolute interests in residue. 696 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary provisions as to absolute interests in residue. 697 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special provisions as to certain interests in residue. 698 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation of income of beneficiaries at lower rate or at rates applicable to distribution income. 698A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief from higher rate tax for inheritance tax on accrued income. 699 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Untaxed sums comprised in the income of the estate. 699A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments and information. 700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation. 701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application to Scotland. 702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XVII TAX AVOIDANCE CHAPTER I CANCELLATION OF CORPORATION TAX ADVANTAGES FROM CERTAIN TRANSACTIONS IN SECURITIES Cancellation of corporation tax advantage. 703 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The prescribed circumstances. 704 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals against Board’s notices under section 703. 705 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of case by tribunal for opinion of High Court. 705A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceedings in Northern Ireland. 705B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The tribunal. 706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Procedure for clearance in advance. 707 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information. 708 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “corporation tax advantage” and other expressions. 709 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II TRANSFERS OF SECURITIES Transfers with or without accrued interest: introductory Meaning of “securities”, “transfer” etc. for purposes of sections 711 to 728. 710 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “interest”, “transfers with or without accrued interest” etc. 711 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “settlement day” for purposes of sections 711 to 728. 712 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers with or without accrued interest: charge to tax and reliefs Deemed sums and reliefs. 713 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of deemed sums and reliefs. 714 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exceptions from sections 713 and 714 715 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of unrealised interest. 716 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variable interest rate. 717 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest in default. 718 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrealised interest in default 719 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers with or without accrued interest: supplemental Nominees, trustees etc. 720 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Death. 721 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trading stock. 722 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gilt strips: deemed transfer. 722A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign securities: delayed remittances 723 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance companies. 724 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726 New issues of securities. 726A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock lending. 727 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exception for sale and repurchase of securities. 727A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information. 728 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other transfers of securities Sale and repurchase of securities. 729 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of rights to receive distributions in respect of shares 730 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of price differential on sale and repurchase of securities. 730A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 730A. 730B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange gains and losses on sale and repurchase of securities 730BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchanges of gilts: traders etc. 730C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase and sale of securities Application and interpretation of sections 732 to 734. 731 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dealers in securities. 732 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons entitled to exemptions. 733 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons other than dealers in securities. 734 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “appropriate amount in respect of” interest. 735 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous provisions relating to securities Company dealing in securities: distribution materially reducing value of holding. 736 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured dividends and interest. 736A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed manufactured payments in the case of stock lending arrangements. 736B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed interest: cash collateral under stock lending arrangements 736C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quasi-stock lending arrangements and quasi-cash collateral 736D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured dividends: treatment of tax deducted. 737 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale and repurchase of securities: deemed manufactured payments. 737A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 737A. 737B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed manufactured payments: further provisions. 737C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental Power to provide for manufactured payments to be eligible for relief. 737D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to modify sections . . . 730A, 730BB and 737A to 737C 737E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to amend sections 732, 735 and 737. 738 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III TRANSFER OF ASSETS ABROAD Prevention of avoidance of income tax. 739 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liability of non-transferors. 740 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemption from sections 739 and 740 (transactions before 5th December 2005) 741 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemption from sections 739 and 740 (transactions on or after 5th December 2005) 741A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of sections 741 and 741A 741B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where there are both old transactions and new transactions 741C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 739: just and reasonable apportionment in certain cases 741D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of this Chapter 742 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplemental provisions. 743 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No duplication of charge. 744 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information. 745 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons resident in the Republic of Ireland. 746 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV CONTROLLED FOREIGN COMPANIES Imputation of chargeable profits and creditable tax of controlled foreign companies 747 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special rule for computing chargeable profits. 747A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cases where section 747(3) does not apply. 748 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exclusion of small profits exemptions 748ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Territorial exclusions from exemption under section 748 748A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Residence. 749 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elections and designations under section 749: supplementary provisions. 749A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interests in companies. 749B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Territories with a lower level of taxation. 750 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deemed lower level of taxation: designer rate tax provisions. 750A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting periods and creditable tax 751 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction in chargeable profits for certain activities of EEA business establishments 751A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction in chargeable profits for certain financing income 751AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction in chargeable profits: failure to qualify for exemptions 751AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction in chargeable profits following an exempt period 751AC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 751A to 751AC : supplementary 751B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment of chargeable profits and creditable tax 752 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant interests. 752A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 752(3): the percentage of shares which a relevant interest represents. 752B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of apportionment provisions. 752C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notices and appeals. 753 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessment, recovery and postponement of tax. 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Returns where it is not established whether acceptable distribution policy applies. 754A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Determinations requiring the sanction of the Board. 754B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information relating to controlled foreign companies 755 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business. 755A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendment of return where general insurance business of foreign company accounted for on non-annual basis. 755B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Chapter where general insurance business of foreign company accounted for on non-annual basis. 755C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “Control" and the two “40 per cent" tests. 755D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation and construction of Chapter IV. 756 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER V OFFSHORE FUNDS Meaning of offshore fund General definition of offshore fund 756A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of umbrella funds Treatment of umbrella funds 756B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of funds comprising more than one class of interest Treatment of funds comprising more than one class of interest 756C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Material interests in non-qualifying offshore funds Disposal of material interests in non-qualifying offshore funds 757 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offshore funds operating equalisation arrangements 758 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Material interests in offshore funds 759 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-qualifying offshore funds 760 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to tax of offshore income gains Charge to income tax or corporation tax of offshore income gain. 761 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offshore income gains accruing to persons resident or domiciled abroad. 762 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offshore income gains: application of transfer of assets abroad provisions 762ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income treated as arising under section 761(1): remittance basis 762ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange of interests of different classes 762A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction of offshore income gain in determining capital gain. 763 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offshore income gains of trustees. 764 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER VI MISCELLANEOUS Migration etc. of company Migration etc. of companies. 765 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Movements of capital between residents of member States. 765A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offences under section 765. 766 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation and commencement of sections 765 and 766. 767 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership of company Change in company ownership: corporation tax. 767A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in company ownership: postponed corporation tax. 767AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change of company ownership: supplementary. 767B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in company ownership: information. 767C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership of company: disallowance of trading losses. 768 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership: disallowance of carry back of trading losses. 768A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership of company with investment business: deductions generally 768B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deductions: asset transferred within group. 768C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership of company carrying on property business. 768D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in ownership of company with unused non-trading loss on intangible fixed assets 768E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rules for ascertaining change in ownership of company. 769 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions between associated persons Provision not at arm’s length. 770A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales etc. at an undervalue or overvalue. 770 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions by petroleum companies. 771 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information for purposes of section 770, and appeals. 772 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 770 and 771. 773 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions between dealing company and associated company. 774 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Factoring of income receipts etc Meaning of “structured finance arrangement” for purposes of s.774B 774A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disregard of intended effects of arrangement involving disposals of assets 774B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “structured finance arrangement” for purposes of s.774D 774C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disregard of intended effects of arrangement involving change in relation to a partnership 774D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 774B and 774D: exceptions 774E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 774B and 774D: power to provide further exceptions 774F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sections 774A to 774D: minor definitions etc 774G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other provisions Sale by individual of income derived from his personal activities. 775 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers of rights to receive annual payments 775A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions in land: taxation of capital gains. 776 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplementary to section 776 . 777 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to obtain information. 778 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale and leaseback: limitation on tax reliefs. 779 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale and leaseback: taxation of consideration received. 780 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets leased to traders and others. 781 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leased assets: special cases. 782 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leased assets: supplemental. 783 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leased assets subject to hire-purchase agreements. 784 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “asset”, “capital sum” and “lease” for purposes of sections 781 to 784. 785 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on use of losses: leasing partnerships 785ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 785ZA: definitions 785ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent factoring of leases of plant or machinery 785A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plant and machinery leases: capital receipts to be treated as income 785B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 785B: interpretation 785C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 785B: lease of plant and machinery and other property 785D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 785B: expectation that relevant capital payment will not be paid 785E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions associated with loans or credit. 786 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction of relief for payments of interest. 787 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XVIII DOUBLE TAXATION RELIEF CHAPTER I THE PRINCIPAL RELIEFS Relief by agreement with other territories . 788 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements made under old law. 789 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unilateral relief. 790 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to make regulations for carrying out section 788. 791 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER II RULES GOVERNING RELIEF BY WAY OF CREDIT General Interpretation of credit code. 792 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction of United Kingdom taxes by amount of credit due. 793 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No double relief etc. 793A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Requirement as to residence. 794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of income subject to foreign tax. 795 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on credit: minimisation of the foreign tax. 795A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on credit: income tax. 796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on credit: corporation tax. 797 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign tax on items giving rise to a non-trading credit : loan relationships . 797A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign tax on items giving rise to a non-trading credit: intangible fixed assets 797B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 796: trade income 798 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 797: trade income 798A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 798A: special cases 798B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disallowed credit: use as deduction 798C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax underlying dividends Computation of underlying tax. 799 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid between related companies but not covered by arrangements. 800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid between related companies: relief for U.K. and third country taxes. 801 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction of relief for underlying tax. 801A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid out of transferred profits. 801B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Separate streaming of dividend so far as representing an ADP dividend of a CFC. 801C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K. insurance companies trading overseas. 802 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underlying tax reflecting interest on loans. 803 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign taxation of group as a single entity. 803A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous rules Relief against income tax in respect of income arising in years of commencement. 804 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schemes and arrangements designed to increase relief 804ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of notice under section 804ZA 804ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notices under section 804ZA: further provision 804ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life assurance companies with overseas branches etc: restriction of credit. 804A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance companies carrying on more than one category of business: restriction of credit. 804B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance companies: allocation of expenses etc in computations under section 35 of CTA 2009 . 804C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 804C in relation to life assurance business etc. 804D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of section 804C in relation to other insurance business. 804E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of sections 804A to 804E. 804F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduction in credit: payment by reference to foreign tax 804G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elections against credit. 805 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time limit for claims etc. 806 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign dividends: onshore pooling and utilisation of eligible unrelieved foreign tax Eligible unrelieved foreign tax on dividends: introductory. 806A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The amounts that are eligible unrelieved foreign tax. 806B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Onshore pooling. 806C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Utilisation of eligible unrelieved foreign tax. 806D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rules for carry back of relievable tax under section 806D. 806E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Credit to be given for underlying tax before other foreign tax etc. 806F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims for the purposes of section 806D(4) or (5). 806G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrender of relievable tax by one company in a group to another. 806H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of foreign dividend provisions of this Chapter. 806J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere Application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere. 806K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unrelieved foreign tax: profits of overseas branch or agency Carry forward or carry back of unrelieved foreign tax. 806L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions supplemental to section 806L. 806M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER III MISCELLANEOUS PROVISIONS Sale of securities with or without accrued interest. 807 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals and acquisitions of company loan relationships with or without interest. 807A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . European cross-border transfers of business Introduction to section 807C 807B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets 807C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . European cross-border mergers Introduction to section 807E 807D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets 807E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transparent entities involved in cross-border transfers and mergers Introduction to section 807G 807F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax treated as chargeable in respect of relevant transactions 807G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on deduction of interest or dividends from trading income. 808 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest: special relationship. 808A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Royalties: special relationship. 808B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relief in respect of discretionary trusts. 809 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Postponement of capital allowances to secure double taxation relief. 810 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduction for foreign tax where no credit allowable. 811 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Withdrawal of right to tax credit of certain non-resident companies connected with unitary states. 812 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recovery of tax credits incorrectly paid. 813 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements to avoid section 812. 814 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to inspect documents. 815 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer of a non-UK trade. 815A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK residents and foreign enterprises 815AZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mutual agreement procedure and presentation of cases under arrangements. 815AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Arbitration Convention. 815B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange of information with other territories . 815C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disclosure of information. 816 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART XIX SUPPLEMENTAL Miscellaneous Deductions not to be allowed in computing profits or gains. 817 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements for payments of interest less tax or of fixed net amount. 818 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Old references to standard rate tax. 819 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Income Tax Acts from year to year. 820 In order to ensure the collection in due time of income tax which may be granted for any year commencing on 6th April, all such provisions contained in the Income Tax Acts as were in force on the preceding day shall have full force and effect with respect to tax which may be so granted, in the same manner as if that tax had been actually granted by Act of Parliament and those provisions had been applied thereto by the Act. Under-deductions from payments made before passing of annual Act. 821 1 Where, in any year of assessment or accounting period , any half-yearly or quarterly payments (or half-periodic or quarterly payments) have been made on account of any interest, dividends or other annual profits or gains, previously to the passing of the Act imposing income or corporation tax for that year or period , and tax has not been charged thereon or deducted therefrom or has not been charged thereon or deducted therefrom at the rate ultimately imposed for that year or period — a the amount not so charged or deducted shall be charged in respect of those payments to income tax under Chapter 2 of Part 4 of ITTOIA 2005 (interest) or shall be charged to corporation tax . . . . . . ; and b the agents entrusted with the payment of the interest, dividends or other annual profits or gains shall furnish to the Board a list containing the names and addresses of the persons to whom payments have been made and the amount of those payments, upon a requisition made by the Board in that behalf. 2 Any person liable to pay any rent, interest or annuity, or to make any other annual payment— a shall be authorised— i to make any deduction on account of income tax for any year of assessment which he has failed to make previously to the passing of the Act imposing the tax for that year, or ii to make up any deficiency in any such deduction which has been so made, on the occasion of the next payment of the rent, interest or annuity or making of the other annual payment after the passing of the Act so imposing the tax, in addition to any other deduction which he may be by law authorised to make; and b shall also be entitled, if there is no future payment from which the deduction may be made, to recover the sum which might have been deducted as if it were a debt due from the person as against whom the deduction could originally have been made if the Act imposing the tax for the year had been in force. 3 Subsection (2) above shall apply with respect to— a any payment to which section 906 of ITA 2007 applies (certain royalties etc where usual place of abode of owner is abroad), and aa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b any royalty or other sum paid in respect of the user of a patent; . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . as it applies with respect to any rent, interest, annuity or other annual payment. 4 In this section “ interest ” and “ dividends ” do not include any interest or dividend which is a distribution. Over-deductions from interest on loan capital etc. made before passing of annual Act. 822 1 If in any year of assessment (“ the year ”) a resolution having statutory effect under the Provisional Collection of Taxes Act 1968 provides for the charging of income tax at a lower rate less than that charged for the previous year, the following provisions of this section shall have effect with respect to deductions in respect of income tax by any body corporate, from payments of interest (not being a distribution) on any of its securities. 2 Any deduction which was made before the expiration of one month from the passing of the resolution and which would, if the tax had been renewed at the rate imposed for the previous year, have been a legal deduction, shall be deemed to be a deduction rendered legal by section 2 of the Provisional Collection of Taxes Act 1968 and that section shall, subject to this section, apply accordingly. 3 Any over-deduction to be made good under that section may be made good by a reduction of the amount of tax deducted from the next payment of like nature made on the security in question after the passing of the Act imposing the tax for the year. 4 Any amount made good under section 2 of the Provisional Collection of Taxes Act 1968 shall— a in the case of an over-deduction which is made good under subsection (3) above, enure to the benefit of the person entitled to the payment on the occasion of which the over-deduction is made good; and b in any other case, enure to the benefit of the person entitled to the security in question at the date when the amount is made good, irrespective, in either case, of whether or not he is the person who was entitled to the payment, or to the security at the date when the original deduction was made. 5 Subsection (3) above shall not authorise the retention of any part of the amount over-deducted for more than one year from the passing of the Act imposing the tax for the year. Adjustments of reliefs where given at different times. 823 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment supplements: individuals and others. 824 1 Subject to the following provisions of this section, a repayment made by the Board or an officer of the Board of any of the following, namely— a an amount paid on account of income tax under section 59A of the Management Act; b any income tax paid by or on behalf of an individual for a year of assessment; c a penalty payable under any paragraph of Schedule 56 to the Finance Act 2009 in respect of an amount falling within any of the following items of the Table in paragraph 1 of that Schedule— i item 1, 12, 18 or 19; or ii insofar as the tax falls within item 1, item 17, 23 or 24; and d a penalty incurred by an individual under any of the provisions of that Act the Finance Act 2009 or Schedules 24 to 26 to the Finance Act 2021 , shall be increased under this section by an amount (a “ repayment supplement ”) equal to interest on the amount repaid at the rate applicable under section 178 of the Finance Act 1989 for the period (if any) between the relevant time and the date on which the order for the repayment is issued. 1A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2A Subsection (1) above shall apply to a repayment made in consequence of a claim under section 228 of the Income Tax Act 1952 (relief in respect of income accumulated under trusts) as if the repayment were of income tax paid by the claimant for the year of assessment in which the contingency mentioned in that section happened. 2B Subsection (1) above shall apply to a payment made by the Board under section 375(8) (payment of amount which borrower would have been able to deduct from interest payment under section 369(1)) as if the payment were a repayment falling within that subsection. 2C Subsection (1) above shall apply to a repayment made by the Board as a result of a claim for relief under— a paragraph 2 of Schedule 1B to the Management Act (carry back of loss relief), b paragraph 3 of that Schedule (relief for fluctuating profits of farming etc.), or c Schedule 4A to this Act (relief for fluctuating profits of creative artists etc.), as if it were a repayment falling within that subsection. 2D Subsection (1) shall apply— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b to a payment made under paragraph 6(1) of Schedule 14 (payment where entitlement to life assurance premium relief has not been given by deduction) as if the payment were a repayment of income tax paid for the tax year in which the entitlement to relief arose. 3 For the purposes of subsection (1) above— aa if the repayment is a payment made by the Board under section 375(8), the relevant time is— i if the interest payment was made in the year 1996-97 or a subsequent year of assessment, the 31st January next following that year; ii if the interest payment was made in an earlier year of assessment, the 5th April next following that year; ab if the repayment is a repayment as a result of a claim for relief under any of the provisions mentioned in subsection (2C) above, the relevant time is the 31st January next following the year that is the later year in relation to the claim; ac if the repayment is a repayment as a result of a claim under section 496B of ITA 2007 (relief for payments by discretionary trust taxable as employment income), the relevant time is the 31 January next following the end of the tax year to which the claim relates; ad if the repayment is a payment falling within subsection (2D)(b), the relevant time is 31 January next following the end of the tax year in which the entitlement to relief arose; a if the repayment is— i the repayment of an amount paid in accordance with the requirements of section 59A of the Management Act on account of income tax for a year of assessment, or ii the repayment of income tax for such a year which is not income tax deducted at source (other than a repayment within paragraph (ac)) , the relevant time is the date of the payment that is being repaid; b if the repayment is of income tax deducted at source for a year of assessment, the relevant time is the 31st January next following that year; and c if the repayment is of a penalty or surcharge, the relevant time is the date on which the penalty or surcharge was paid . 4 For the purposes of subsection (3) above, where a repayment in respect of income tax for a year of assessment is made to any person, that repayment— a shall be attributed first to so much of any payment made by him under section 59B of the Management Act as is a payment in respect of income tax for that year; b in so far as it exceeds the amount (if any) to which it is attributable under paragraph (a) above, shall be attributed in two equal parts to each of the payments made by him under section 59A of the Management Act on account of income tax for that year; c in so far as it exceeds the amounts (if any) to which it is attributable under paragraphs (a) and (b) above, shall be attributed to income tax deducted at source for that year; and d in so far as it is attributable to a payment made in instalments shall be attributed to a later instalment before being attributed to an earlier one. 4A In this section any reference to income tax deducted at source for a year of assessment is a reference to— a income tax deducted or treated as deducted from any income, or treated as paid on any income, in respect of that year, . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . but does not include a reference to amounts which, in that year, are deducted at source under PAYE regulations in respect of previous years. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . The Treasury may by order from time to time increase or decrease the rate of interestby reference to which— a repayment supplements are calculated under subsection (1) above; and b repayment supplements are calculated under section 47 of the Finance (No. 2) Act 1975. 7 A repayment supplement shall not be payable under this section in respect of a repayment or payment made in consequence of an order or judgment of a court having power to allow interest on the repayment or payment, or in respect of a repayment of a post-war credit within the meaning of the Income Tax (Repayment of Post-War Credits) Act 1959. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Subsections (1) to (7) above shall apply in relation to . . . the trustees of a settlement , scheme administrators of registered pension schemes sub-scheme administrators of sub-schemes which form part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006 or personal representatives . . . as they apply in relation to an individual. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment supplements: companies. 825 1 This section applies to the following payments made to a company in connection with any accounting period for which the company was resident in the United Kingdom (“ the relevant accounting period ”), that is to say— a a repayment of corporation tax paid by the company for that accounting period (including advance corporation tax paid in respect of distributions made by the company in that accounting period . . . ); or b a repayment of income tax in respect of a payment received by the company in that accounting period on which the company bore income tax by deduction; . . . c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Subject to the following provisions of this section, where a payment . . . to which this section applies is made by the Board or an inspector after the end of the 12 months beginning with the material date, the payment shall be increased under this section by an amount (a “ repayment supplement ”) equal to interest on the amount paid at the rate applicable under section 178 of the Finance Act 1989 for each complete tax month contained in the period (if any) beginning with the relevant date and ending at the end of the tax month in which the order for the payment is issued. 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 For the purposes of subsection (2) above— a if the payment is a repayment of corporation tax that was paid on or after the first anniversary of the material date, the relevant date is the anniversary of the material date that occurs next after the date on which that tax was paid; b in any other case, the relevant date is the first anniversary of the material date; and where a payment to which this section applies is a repayment of corporation tax paid by a company on different dates, the payment shall as far as possible be treated for the purposes of this subsection as a repayment of tax paid on a later rather than an earlier date among those dates. 4 For the purposes of this section— a a repayment of corporation tax made in consequence of a claim by a company under section 239(3) to have the whole or any part of an amount of surplus advance corporation tax arising in the case of any accounting period treated as if it were advance corporation tax paid in respect of distributions made by the company in any earlier accounting period shall be treated as a repayment of corporation tax paid for the accounting period in the case of which that amount of surplus advance corporation tax arose; and b a repayment of income tax or corporation tax made on a claim under subsection (4) of section 419 shall be treated as if it were a repayment of corporation tax paid for the accounting period in which the repayment of, or of the part in question of, the loan or advance mentioned in that subsection was made; and c a repayment of corporation tax or income tax falling to be made as a result of a claim under section 393A(1) to have the whole or any part of a loss incurred in an accounting period set off against profits of an earlier accounting period (“ the earlier period ”)— i shall, in a case where the earlier period falls wholly within the period of twelve months immediately preceding the accounting period in which the loss was incurred, be treated as a repayment of tax paid for the earlier period; and ii in any other case, shall be treated as a repayment of tax paid for the accounting period in which the loss is incurred; and d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . The Treasury may by order from time to time increase or decrease the rate of interest by reference to which repayment supplements are calculated under subsection (2) above. 6 A repayment supplement shall not be payable under this section in respect of a payment made in consequence of an order or judgment of a court having power to allow interest on the payment. 7 A repayment supplement paid under this section shall be disregarded for all purposes of income tax and corporation tax. 8 In this section— “ tax month ” means the period beginning with the 6th day of any calendar month and ending with the 5th day of the following calendar month; “ the material date ” in relation to a payment to which this section applies, means the last date on which corporation tax on any of the profits of the company in question arising in the relevant accounting period could have been paid— in a case where section 10(1) applies, within the nine months there mentioned; in a case where section 478 applies, within the time limit imposed by subsection (2)(a) of that section, but subject to subsection (6) of that section. 9 This section has effect subject to section 826(8). Interest on tax overpaid. 826 1 In any case where— a a repayment falls to be made of corporation tax paid by a company for an accounting period which ends after the appointed day; or aa a repayment falls to be made under sections 246N and 246Q of advance corporation tax paid by a company in respect of distributions made by it in such an accounting period; or b a repayment of income tax falls to be made in respect of a payment received by a company in such an accounting period; or c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d a payment of R&D tax credit falls to be made to a company under Chapter 2 or 7 of Part 13 of CTA 2009 in respect of an accounting period ; or da . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e a payment of land remediation tax credit or life assurance company tax credit falls to be made to a company under Part 14 of CTA 2009 in respect of an accounting period ; or f a payment of film tax credit falls to be made to a company , or fa a payment of television tax credit falls to be made to a company; or fb a payment of video game tax credit falls to be made to a company; or fc a payment of theatre tax credit falls to be made to a company; or fd a payment of orchestra tax credit falls to be made to a company; or fe a payment of museums and galleries exhibition tax credit falls to be made to a company; or g a payment of first-year tax credit falls to be made to a company under Schedule A1 to the Capital Allowances Act, then, from the material date until the order for repayment or payment is issued , the repayment or payment shall carry interest at the rate which, under section 89 of the Management Act, is for the time being the prescribed rate for the purposes of this section. 2 Subject to section 826A(2), in relation to corporation tax paid by a company for an accounting period, the material date for the purposes of this section is the date on which corporation tax was paid or, if it is later, the date on which corporation tax for that accounting period became (or, as the case may be, would have become) due and payable in accordance with section 59D of the Management Act (payment of corporation tax) . 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In relation to a repayment of income tax falling within subsection (1)(b) above . . . , the material date is the day after the end of the accounting period in which the payment referred to in subsection (1)(b) above . . . was received by the company. 3A In relation to a payment of R&D tax credit falling within subsection (1)(d) above the material date is whichever is the later of— a the filing date for the company’s company tax return for the accounting period for which the R&D tax credit is claimed, and b the date on which the company tax return or amended company tax return containing the claim for payment of the R&D tax credit is delivered to the Inland Revenue. For this purpose “ the filing date ”, in relation to a company tax return, has the same meaning as in Schedule 18 to the Finance Act 1998. 3AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3B In relation to a payment of land remediation tax credit or life assurance company tax credit falling within subsection (1)(e) above the material date is whichever is the later of— a the filing date for the company’s company tax return for the accounting period for which the land remediation tax credit or the life assurance company tax credit is claimed, and b the date on which the company tax return or amended company tax return containing the claim for payment of the land remediation tax credit or the life assurance company tax credit is delivered to the Inland Revenue. For this purpose “ the filing date ”, in relation to a company tax return, has the same meaning as in Schedule 18 to the Finance Act 1998. 3C In relation to a payment of film tax credit , television tax credit , video game tax credit , theatre tax credit , orchestra tax credit or museums and galleries exhibition tax credit the material date is whichever is the later of— a the filing date for the company's company tax return for the accounting period for which the tax credit is payable, and b the date on which the company tax return or amended company tax return containing the claim for payment is delivered to an officer of Revenue and Customs. For this purpose “ the filing date ”, in relation to a company tax return, has the same meaning as in Schedule 18 to the Finance Act 1998. 3D In relation to a payment of first-year tax credit falling within subsection (1)(g) above the material date is whichever is the later of— a the filing date for the company's company tax return for the accounting period for which the tax credit is claimed, and b the date on which the company tax return or amended company tax return containing the claim for payment of the tax credit is delivered to the Commissioners for Her Majesty's Revenue and Customs. For this purpose “ the filing date ”, in relation to a company tax return, has the same meaning as in Schedule 18 to the Finance Act 1998. 4 For the purposes of this section a repayment of tax made on a claim under section 458 of CTA 2010 shall be treated as if it were a repayment of corporation tax for the accounting period in which the event giving rise to entitlement to relief under that section occurred but, in relation to such a repayment of tax, the material date for the purposes of this section is— a the date when the entitlement to relief in respect of the repayment accrued, that is to say— i where the repayment , or the release or writing off, of the loan or advance (or part thereof) occurred on or after the day mentioned in section 458(4) of CTA 2010 , the date nine months after the end of that accounting period; and ii in any other case, the date nine months after the end of the accounting period in which the loan or advance was made; or b if it is later, the date on which the tax which is to be repaid was in fact paid. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Where a repayment of corporation tax is a repayment of tax paid by a company on different dates, the repayment shall so far as possible be treated for the purposes of this section as a repayment of tax paid on a later rather than an earlier date among those dates. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7A In any case where— a a company carrying on a trade incurs a loss in the trade in an accounting period (“ the later period ”), b as a result of a claim under section 37 of CTA 2010 , the whole or any part of that loss is relieved (whether under section 37 or 42 of that Act ) for the purposes of corporation tax against profits (of whatever description) of an earlier accounting period (“ the earlier period ”) which does not fall wholly within the period of twelve months immediately preceding the later period, and c a repayment falls to be made of corporation tax paid for the earlier period or of income tax in respect of a payment received by the company in that accounting period, then, in determining the amount of interest (if any) payable under this section on the repayment referred to in paragraph (c) above, no account shall be taken of so much of the amount of that repayment as falls to be made as a result of the claim under section 37 of CTA 2010 , except so far as concerns interest for any time after the date on which any corporation tax for the later period became (or, as the case may be, would have become) due and payable, as mentioned in subsection (7D) below . 7AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7AA In any case where— a a company ceases to carry on a trade in an accounting period (“the terminal period”), b as a result of a claim under section 45F of CTA 2010, the whole or any part of a loss made in the trade is relieved for the purposes of corporation tax against profits (of whatever description) of an earlier accounting period (“ the earlier period ”) which does not fall wholly within the period of 12 months immediately preceding the terminal period, and c a repayment falls to be made of corporation tax paid for the earlier period or of income tax in respect of a payment received by the company in that accounting period, then, in determining the amount of interest (if any) payable under this section on the repayment referred to in paragraph (c) above, no account shall be taken of so much of the amount of that repayment as falls to be made as a result of the claim under section 45F, except so far as concerns interest for any time after the date on which any corporation tax for the terminal period became (or, as the case may be, would have become) due and payable, as mentioned in subsection (7D) below). 7B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7BB Subject to subsection (7BC) below, in any case where— a within the meaning of section 806D, any relievable underlying tax or relievable withholding tax arises in an accounting period of a company (“ the later period ”), b pursuant to a claim under section 806G, the whole or any part of that tax is treated as mentioned in section 806D(4)(c) or (5)(c) in relation to the single related dividend or the single unrelated dividend arising in an earlier accounting period (“ the earlier period ”), and c a repayment falls to be made of corporation tax paid for the earlier period or of income tax in respect of a payment received by the company in that period, then, in determining the amount of interest (if any) payable under this section on the repayment referred to in paragraph (c) above, no account shall be taken of so much of the amount of the repayment as falls to be made as a result of the claim under section 806G, except so far as concerns interest for any time after the date on which any corporation tax for the later period became due and payable (as mentioned in subsection (7D) below). 7BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7C In a case where— a there is for an accounting period of a company (“ the later period ”) a non-trading deficit on the company’s loan relationships, b as a result of a claim under section 389(1) or 459(1)(b) of CTA 2009 the whole or part of the deficit for the later period is set off against profits of an earlier accounting period (“ the earlier period ”), and c a repayment falls to be made of corporation tax for the earlier period or of income tax in respect of a payment received by the company in that accounting period , then, in determining the amount of interest (if any) payable under this section on the repayment referred to in paragraph (c) above, no account shall be taken of so much of the amount of the repayment as falls to be made as a result of the claim under section 389(1) or 459(1)(b) of CTA 2009 except so far as concerns interest for any time after the date on which any corporation tax for the later period became (or, as the case may be, would have become) due and payable, as mentioned in subsection (7D) below . 7CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7D In subsections (7), (7A), (7AA), (7B) , (7BB) and (7C) above, any reference to the date on which corporation tax for an accounting period became, or would have become, due and payable shall be construed on the basis that corporation tax for an accounting period becomes due and payable on the day following the expiry of nine months from the end of the accounting period. 7E The power conferred by section 59E of the Management Act (alteration of date on which corporation tax becomes due and payable) does not include power to make provision in relation to subsection (7), (7A), (7AA) (7B), (7BB), (7C) or (7D) above the effect of which would be to change the meaning of references in subsection (7), (7A), (7AA) (7B) , (7BB) or (7C) above to the date on which corporation tax for an accounting period became, or would have become, due and payable (as mentioned in subsection (7D) above). 8 In consequence of the preceding provisions of this section, no repayment supplement (within the meaning of section 825) shall be paid in respect of any repayment of tax or payment of tax credit where the relevant accounting period (within the meaning of that section) ends after the appointed day. 8A Where— a interest has been paid to a company under subsection (1)(a) , (d) , (e) (f), (fa), (fb) , (fc) , (fd) or (fe) above, b there is— i a change in the company’s assessed liability to corporation tax, or ii a change in the amount of the R&D tax credit . . . , land remediation tax credit or life assurance company tax credit or film tax credit or television tax credit or video game tax credit or theatre tax credit or orchestra tax credit or museums and galleries exhibition tax credit or first-year tax credit under Schedule A1 to the Capital Allowances Act payable to the company (which does not result in a change falling within sub-paragraph (i)), other than a change which in whole or in part corrects an error made by the Board or an officer of the Board, and c as a result only of that change (and, in particular, not as a result of any error in the calculation of the interest), it appears to an officer of the Board that the interest ought not to have been paid, either at all or to any extent, the interest that ought not to have been paid may be recovered from the company as if it were interest charged under Part IX of the Management Act (interest on overdue tax). 8B For the purposes of subsection (8A) above, the cases where there is a change in a company’s assessed liability to corporation tax are those cases where— a an assessment, or an amendment of an assessment, of the amount of corporation tax payable by the company for the accounting period in question is made, or b a determination of that amount is made under paragraph 36 or 37 of Schedule 18 to the Finance Act 1998 (which until superseded by a self-assessment under that Schedule has effect as if it were one), whether or not any previous assessment or determination has been made. 8BA For the purposes of subsection (8A)(b) above, the cases where there is a change in the amount of the R&D tax credit . . . , the land remediation tax credit or the life assurance company tax credit or film tax credit or television tax credit or video game tax credit or theatre tax credit or orchestra tax credit or museums and galleries exhibition tax credit or first-year tax credit under Schedule A1 to the Capital Allowances Act payable to the company are those cases where an assessment, or an amendment to an assessment, is made to recover an amount of R&D tax credit . . . , land remediation tax credit or life assurance company tax credit or film tax credit or television tax credit or video game tax credit or theatre tax credit or orchestra tax credit or museums and galleries exhibition tax credit or first-year tax credit under Schedule A1 to the Capital Allowances Act paid to the company for the accounting period in question. 8C In subsection (8A)(b) above “ error ” includes— a any computational error; and b the allowance of a claim or election which ought not to have been allowed. 9 In this section “ the appointed day ” means such day or days, not being earlier than 31st March 1992, as the Treasury may by order appoint for the purposes of this section. Interest on payments in respect of corporation tax and meaning of “the material date". 826A 1 The Treasury may by regulations make provision applying section 826, with such modifications as may be prescribed, for the purpose of conferring on companies of such descriptions as may be prescribed a right to interest— a on such payments made by them in respect of corporation tax as may be prescribed, b at the rate applicable under section 178 of the Finance Act 1989, and c for such period as may be prescribed, and for treating any such interest for the purposes, or prescribed purposes, of the Tax Acts as interest under section 826(1)(a) on a repayment of corporation tax. 2 The Treasury may by regulations make provision modifying section 826(2) in relation to companies of such description as may be prescribed. 3 Subsections (1) and (2) above do not apply in relation to companies in relation to which section 826(2) is modified or otherwise affected by regulations under section 59E of the Management Act (alteration of date on which corporation tax becomes due and payable) in relation to the accounting period to which the corporation tax in question relates. 4 Where the Treasury make regulations under subsection (2) above in relation to companies of any description, they may also make regulations modifying section 59DA(2) of the Management Act in relation to those companies, or any description of such companies, by varying the date before which the claim there mentioned may not be made. 5 Regulations under this section— a may make different provision in relation to different cases or circumstances or in relation to companies or accounting periods of different descriptions; b may make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient. 6 Regulations under this section may not make provision in relation to accounting periods ending before the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment). 7 In this section “ prescribed ” means prescribed by regulations made under this section. VAT penalties etc. 827 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Territorial scope of charges under certain provisions to which section 836B applies 827A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Orders and regulations made by the Treasury or the Board. 828 1 . . . Any power of the Treasury or the Board to make any order or regulations under this Act . . . shall be exercisable by statutory instrument. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Subject to subsection (4) below and to any other provision to the contrary, any statutory instrument containing any order or regulations made by the Treasury or the Board . . . shall be subject to annulment in pursuance of a resolution of the House of Commons. 4 Subsection (3) above shall not apply in relation to an order or regulations made under section . . . . . . . . . . . . . . . . . . . . . 590C(6) . . . . . . . . . or paragraph 7 of Schedule 14 . . . or— a if any other Parliamentary procedure is expressly provided; b if the order in question is an order appointing a day for the purposes of any provision of the Tax Acts, being a day as from which the provision will have effect, with or without amendments, or will cease to have effect. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Application of Income Tax Acts to public departments and avoidance of exempting provisions. 829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Territorial sea . . . . 830 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation Interpretation of this Act. 831 1 In this Act, except so far as the context otherwise requires— a “ the Corporation Tax Acts ” means the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating also to income tax); and b “ the Income Tax Acts ” means the enactments relating to income tax, including any provisions of the Corporation Tax Acts which relate to income tax. 2 In this Act “ the Tax Acts ”, except so far as the context otherwise requires, means this Act and all other provisions of the Income Tax Acts and the Corporation Tax Acts. 3 In this Act— “ CTA 2009 ” means the Corporation Tax Act 2009; “ CTA 2010 ” means the Corporation Tax Act 2010; “ ITEPA 2003 ” means the Income Tax (Earnings and Pensions) Act 2003; “ ITTOIA 2005 ” means the Income Tax (Trading and Other Income) Act 2005; “ ITA 2007 ” means the Income Tax Act 2007; “ the Management Act ” means the Taxes Management Act 1970; “ TIOPA 2010 ” means the Taxation (International and Other Provisions) Act 2010; “ the 1968 Act ” means the Capital Allowances Act 1968; “ the 1970 Act ” means the Income and Corporation Taxes Act 1970; and “ the 1979 Act ” means the Capital Gains Tax Act 1979. “ the 1990 Act ” means the Capital Allowances Act 1990. “ the 1992 Act ” means the Taxation of Chargeable Gains Act 1992. 4 Section 1 of the Family Law Reform Act 1987, the paragraph inserted in Schedule 1 to the Interpretation Act 1978 by paragraph 73 of Schedule 2 to that Act and section 1(3) of the Law Reform (Parent and Child) (Scotland) Act 1986 (legal equality of illegitimate children) shall be disregarded in construing references in this Act to a child or to children (however expressed). 5 This Act, so far as it relates to capital gains tax, shall be construed as one with the 1992 Act. 6 Any reference in this Act to a section, Part or Schedule is a reference to that section, Part or Schedule of or to this Act, unless the context otherwise requires. Interpretation of the Corporation Tax Acts etc . 832 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Income Tax Acts. 833 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of the Corporation Tax Acts. 834 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D) 834A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “UK property business” and “overseas property business” 834B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total profits 834C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “Total income” in the Income Tax Acts. 835 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Returns of total income. 836 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Generally accepted accounting practice 836A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of provisions to which this section applies 836B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “Annual value” of land. 837 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “ research and development ”. 837A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “ oil and gas exploration and appraisal ”. 837B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “offshore installation” 837C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Subsidiaries. 838 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Connected persons. 839 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “control” in certain contexts. 840 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “tax advantage” 840ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Banks. 840A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “recognised stock exchange” etc 841 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recognised clearing systems. 841A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment trusts. 842 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Venture capital trusts. 842AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Local authorities. 842A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of . . . “property investment LLP” 842B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commencement, savings, repeals etc. Commencement. 843 1 Except as otherwise provided by the following provisions of this section, this Act shall come into force in relation to tax for the year 1988-89 and subsequent years of assessment, and for companies’ accounting periods ending after 5th April 1988. 2 Except as otherwise provided by the following provisions of this section, such of the provisions of this Act as relate to capital gains tax (including the provisions of Part XVIII as applied to capital gains tax by section 277 of the 1992 Act ) shall come into force in relation to that tax for the year 1988-89 and subsequent years of assessment. 3 The following provisions of this Act, that is to say— a so much of any provision as authorises the making of any Order in Council or regulations or other instrument; b so much of any provision as relates to the making of a return, the furnishing of a certificate or the giving of any other information, including any such provision which imposes a duty on the Board or an officer of the Board as well as any such provision which imposes a duty on any other person; c so much of any provision as imposes any penalty; d except where the tax concerned is all tax for years of assessment before the year 1988-89 or accounting periods ending before 6th April 1988, so much of any other provision as confers any power or imposes any duty the exercise or performance of which operates or may operate in relation to tax for more than one chargeable period, shall come into force for all purposes on 6th April 1988 to the exclusion of the corresponding enactments repealed by this Act. 4 This section has effect except as otherwise provided by any other provision of this Act, and in particular except as provided by sections 96, 380 to 384, 393, . . ., 400, 703 . . . . Savings, transitional provisions, consequential amendments and repeals. 844 1 Schedule 29, which makes amendments to other enactments consequential on the passing of this Act, shall have effect. 2 Schedule 29, section 843 and this section are without prejudice to the provisions of the Interpretation Act 1978 as respects the effect of repeals. 3 Schedule 30 which contains savings and transitional provisions shall have effect. 4 The enactments mentioned in Schedule 31 are hereby repealed to the extent specified in the third column of that Schedule. 5 Subject to subsection (6) below, section 843(3), Schedule 30 and to any other provision of this Act by which any provision is brought into force to the exclusion of the corresponding enactments repealed by this Act, those repeals shall come into force in accordance with subsections (1) and (2) of section 843. 6 No provision mentioned in subsection (5) above shall be taken as bringing a repeal into force except to the extent that the repealed enactment is being superseded. Short title. 845 This Act may be cited as the Income and Corporation Taxes Act 1988.