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

(The document as of February, 2008)

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Income Tax (Trading and Other Income) Act 2005

2005 CHAPTER 5

CONTENTS

Content
  1. Part 1

    Overview

    1. 1. Overview of Act

    2. 2. Overview of priority rules

  2. Part 2

    Trading income

    1. Chapter 1

      Introduction

      1. 3. Overview of Part 2

      2. 4. Provisions which must be given priority over Part 2

    2. Chapter 2

      Income taxed as trade profits

      1. Charge to tax on trade profits

        1. 5. Charge to tax on trade profits

        2. 6. Territorial scope of charge to tax

        3. 7. Income charged

        4. 8. Person liable

      2. Trades and trade profits

        1. 9. Farming and market gardening

        2. 10. Commercial occupation of land other than woodlands

        3. 11. Commercial occupation of woodlands

        4. 12. Profits of mines, quarries and other concerns

        5. 13. Visiting performers

        6. 14. Visiting performers: supplementary

        7. 15. Divers and diving supervisors

        8. 16. Oil extraction and related activities

      3. Starting and ceasing to trade

        1. 17. Effect of becoming or ceasing to be a UK resident

        2. 18. Effect of company starting or ceasing to be within charge to income tax

      4. Trading income and property income

        1. 19. Tied premises

        2. 20. Caravan sites where trade carried on

        3. 21. Surplus business accommodation

        4. 22. Payments for wayleaves

      5. Rent-a-room and foster-care relief

        1. 23. Rent-a-room and foster-care relief

    3. Chapter 3

      Trade profits: basic rules

      1. 24. Professions and vocations

      2. 25. Generally accepted accounting practice

      3. 26. Losses calculated on same basis as profits

      4. 27. Receipts and expenses

      5. 28. Items treated under CAA 2001 as receipts and expenses

      6. 29. Interest

      7. 30. Animals kept for trade purposes

      8. 31. Relationship between rules prohibiting and allowing deductions

    4. Chapter 4

      Trade profits: rules restricting deductions

      1. Introduction

        1. 32. Professions and vocations

      2. Capital expenditure

        1. 33. Capital expenditure

      3. Wholly and exclusively and losses rules

        1. 34. Expenses not wholly and exclusively for trade and unconnected losses

      4. Bad and doubtful debts

        1. 35. Bad and doubtful debts

      5. Unpaid remuneration

        1. 36. Unpaid remuneration

        2. 37. Unpaid remuneration: supplementary

      6. Employee benefit contributions

        1. 38. Restriction of deductions

        2. 39. Making of "employee benefit contributions"

        3. 40. Provision of qualifying benefits

        4. 41. Timing and amount of certain qualifying benefits

        5. 42. Provision or payment out of employee benefit contributions

        6. 43. Profits calculated before end of 9 month period

        7. 44. Interpretation of sections 38 to 44

      7. Business entertainment and gifts

        1. 45. Business entertainment and gifts: general rule

        2. 46. Business entertainment: exceptions

        3. 47. Business gifts: exceptions

      8. Car or motor cycle hire

        1. 48. Car or motor cycle hire

        2. 49. Car or motor cycle hire: supplementary

        3. 50. Hiring cars (but not motor cycles) with low carbon dioxide emissions

      9. Patent royalties

        1. 51. Patent royalties

      10. Interest payments

        1. 52. Exclusion of double relief for interest

      11. Social security contributions

        1. 53. Social security contributions

      12. Penalties, interest and VAT surcharges

        1. 54. Penalties, interest and VAT surcharges

      13. Crime-related payments

        1. 55. Crime-related payments

    5. Chapter 5

      Trade profits: rules allowing deductions

      1. Introduction

        1. 56. Professions and vocations

      2. Pre-trading expenses

        1. 57. Pre-trading expenses

      3. Incidental costs of obtaining finance

        1. 58. Incidental costs of obtaining finance

        2. 59. Convertible loans and loan stock etc.

      4. Tenants under taxed leases

        1. 60. Tenants under taxed leases: introduction

        2. 61. Tenants occupying land for purposes of trade treated as incurring expenses

        3. 62. Limit on deductions if tenant entitled to mineral extraction allowance

        4. 63. Tenants dealing with land as property employed for purposes of trade

        5. 64. Restrictions on section 61 expenses: lease premium receipts

        6. 65. Restrictions on section 61 expenses: lease of part of premises

        7. 66. Corporation tax receipts treated as taxed receipts

        8. 67. Restrictions on section 61 expenses: corporation tax receipts

      5. Renewals

        1. 68. Replacement and alteration of trade tools

      6. Payments for restrictive undertakings

        1. 69. Payments for restrictive undertakings

      7. Seconded employees

        1. 70. Employees seconded to charities and educational establishments

        2. 71. Educational establishments

      8. Contributions to agents' expenses

        1. 72. Payroll deduction schemes: contributions to agents' expenses

      9. Counselling and retraining expenses

        1. 73. Counselling and other outplacement services

        2. 74. Retraining courses

        3. 75. Retraining courses: recovery of tax

      10. Redundancy payments etc.

        1. 76. Redundancy payments and approved contractual payments

        2. 77. Payments in respect of employment wholly in employer's trade

        3. 78. Payments in respect of employment in more than one capacity

        4. 79. Additional payments

        5. 80. Payments made by the Government

      11. Personal security expenses

        1. 81. Personal security expenses

      12. Contributions to local enterprise organisations or urban regeneration companies

        1. 89. Expenses connected with patents

        2. 90. Expenses connected with designs or trade marks

      13. Export Credits Guarantee Department

        1. 91. Payments to Export Credits Guarantee Department

      14. Expenses connected with foreign trades

        1. 92. Expenses connected with foreign trades

        2. 93. Allocation of expenses

        3. 94. Family expenses

    6. Chapter 6

      Trade profits: receipts

      1. Introduction

        1. 95. Professions and vocations

      2. Capital receipts

        1. 96. Capital receipts

      3. Debts released

        1. 97. Debts incurred and later released

      4. Amounts received following earlier cessation

        1. 98. Acquisition of trade: receipts from transferor's trade

      5. Reverse premiums

        1. 99. Reverse premiums

        2. 100. Excluded cases

        3. 101. Tax treatment of reverse premiums

        4. 102. Arrangements not at arm's length

        5. 103. Connected persons and property arrangements

      6. Assets of mutual concerns

        1. 104. Distribution of assets of mutual concerns

      7. Industrial development grants

        1. 105. Industrial development grants

      8. Proceeds of insurance etc.

        1. 106. Sums recovered under insurance policies etc.

    7. Chapter 7

      Trade profits: gifts to charities etc.

      1. 107. Professions and vocations

      2. 108. Gifts of trading stock to charities etc.

      3. 109. Receipt by donor or connected person of benefit attributable to certain gifts

      4. 110. Meaning of "designated educational establishment"

    8. Chapter 8

      Trade profits: herd basis rules

      1. Introduction

        1. 111. Election for application of herd basis rules

        2. 112. Meaning of "animal", "herd", "production herd" etc.

        3. 113. Other interpretative provisions

      2. The herd basis rules

        1. 114. Initial cost of herd and value of herd

        2. 115. Addition of animals to herd

        3. 116. Replacement of animals in herd

        4. 117. Amount of receipt if old animal slaughtered under disease control order

        5. 118. Sale of animals from herd

        6. 119. Sale of whole or substantial part of herd

        7. 120. Acquisition of new herd begun within 5 years of sale

        8. 121. Section 120: sale for reasons outside farmer's control

        9. 122. Replacement of part sold begun within 5 years of sale

        10. 123. Section 122: sale for reasons outside farmer's control

      3. Elections

        1. 124. Herd basis elections

        2. 125. Five year gap in which no production herd kept

        3. 126. Slaughter under disease control order

      4. Preventing abuse of the herd basis rules

        1. 127. Preventing abuse of the herd basis rules

      5. Supplementary

        1. 128. Information if election made

        2. 129. Further assessment etc. if herd basis rules apply

    9. Chapter 9

      Trade profits: films and sound recordings

      1. Introduction

        1. 130. Expenditure to which this Chapter applies

        2. 131. Meaning of "film" and related expressions

        3. 132. Meaning of "original master version" and "certified master version"

        4. 133. Meaning of "relevant period"

      2. Expenditure treated as revenue in nature

        1. 134. Expenditure treated as revenue in nature

      3. Films and sound recordings: normal rules for allocating expenditure

        1. 135. Films and sound recordings: production or acquisition expenditure

      4. Certified master versions: special rules for allocating expenditure

        1. 136. Application of provisions about certified master versions

        2. 137. Certified master versions: preliminary expenditure

        3. 138. Certified master versions: production or acquisition expenditure

      5. Certified master versions: limited-budget films

        1. 139. Certified master versions: production expenditure on limited-budget films

        2. 140. Certified master versions: acquisition expenditure on limited-budget films

        3. 141. "Total production expenditure in respect of the original master version"

        4. 142. When expenditure is incurred

      6. Election for sections 134 to 140 not to apply

        1. 143. Election for sections 134 to 140 not to apply

      7. Supplementary

        1. 144. Meaning of "genuinely intended for theatrical release"

    10. Chapter 10

      Trade profits: certain telecommunication rights

      1. 145. Professions and vocations

      2. 146. Meaning of "relevant telecommunication right"

      3. 147. Expenditure and receipts treated as revenue in nature

      4. 148. Credits or debits arising from revaluation

    11. Chapter 11

      Trade profits: other specific trades

      1. Dealers in securities etc.

        1. 149. Taxation of amounts taken to reserves

        2. 150. Conversion etc. of securities held as circulating capital

        3. 151. Exchanges of gilts for gilt strips

        4. 152. Consolidation of gilt strips

        5. 153. Meaning of "gilt-edged security" and "strip"

        6. 154. Regulations for determining market value of securities or strips

      2. Persons authorised for purposes of FISMA 2000

        1. 155. Levies and repayments under FISMA 2000

      3. Dealers in land etc.

        1. 156. Purchase or sale of woodlands

        2. 157. Relief in respect of mineral royalties

        3. 158. Lease premiums etc: reduction of receipts

      4. Ministers of religion

        1. 159. Ministers of religion

      5. Barristers and advocates

        1. 160. Alternative basis of calculation in early years of practice

      6. Mineral exploration and access

        1. 161. Mineral exploration and access

      7. Persons liable to pool betting duty

        1. 162. Payments by persons liable to pool betting duty

      8. Intermediaries treated as making employment payments

        1. 163. Deduction for deemed employment payment

        2. 164. Special rules for partnerships

      9. Waste disposal

        1. 165. Deduction for site preparation expenditure

        2. 166. Allocation of site preparation expenditure

        3. 167. Site preparation expenditure: supplementary

        4. 168. Site restoration payments

      10. Cemeteries and crematoria

        1. 169. Cemeteries and crematoria: introduction

        2. 170. Deduction for capital expenditure

        3. 171. Allocation of ancillary capital expenditure

        4. 172. Exclusion of expenditure met by subsidies

    12. Chapter 12

      Trade profits: valuation of stock and work in progress

      1. Valuation of trading stock

        1. 173. Valuation of trading stock on cessation

        2. 174. Meaning of "trading stock"

        3. 175. Basis of valuation of trading stock

        4. 176. Sale basis of valuation: sale to unconnected person

        5. 177. Sale basis of valuation: sale to connected person

        6. 178. Sale basis of valuation: election by connected persons

        7. 179. Connected persons

        8. 180. Cost to buyer of stock valued on sale basis of valuation

        9. 181. Meaning of "sale" and related expressions

      2. Valuation of work in progress

        1. 182. Valuation of work in progress on cessation

        2. 183. Meaning of "work in progress"

        3. 184. Basis of valuation of work in progress

        4. 185. Election for valuation at cost

      3. Supplementary

        1. 186. Determination of questions by Commissioners

    13. Chapter 13

      Deductions from profits: unremittable amounts

      1. 187. Professions and vocations

      2. 188. Application of Chapter

      3. 189. Relief for unremittable amounts

      4. 190. Restrictions on relief

      5. 191. Withdrawal of relief

    14. Chapter 14

      Disposal and acquisition of know-how

      1. 192. Meaning of "know-how" etc.

      2. 193. Disposal of know-how if trade continues to be carried on

      3. 194. Disposal of know-how as part of disposal of all or part of a trade

      4. 195. Seller controlled by buyer etc.

    15. Chapter 15

      Basis periods

      1. Introduction

        1. 196. Professions and vocations

      2. Accounting date

        1. 197. Meaning of "accounting date"

      3. The normal rules

        1. 198. General rule

        2. 199. First tax year

        3. 200. Second tax year

        4. 201. Tax year in which there is no accounting date

        5. 202. Final tax year

      4. Apportionment of profits

        1. 203. Apportionment etc. of profits to basis periods

      5. Overlap profits and losses

        1. 204. Meaning of "overlap period" and "overlap profit"

        2. 205. Deduction for overlap profit in final tax year

        3. 206. Restriction on bringing losses into account twice

        4. 207. Treatment of business start-up payments received in an overlap period

      6. Rules where first accounting date shortly before end of tax year

        1. 208. When the late accounting date rules apply

        2. 209. Rule if there is an accounting date

        3. 210. Rules if there is no accounting date

      7. Slight variations in accounting date

        1. 211. Treating middle date as accounting date

        2. 212. Consequence of treating middle date as accounting date

        3. 213. Circumstances in which middle date not treated as accounting date

      8. Special rules if accounting date changes

        1. 214. When a change of accounting date occurs

        2. 215. Change of accounting date in third tax year

        3. 216. Change of accounting date in later tax year

        4. 217. Conditions for basis period to end with new accounting date

        5. 218. Commercial reasons for change of accounting date

        6. 219. The year after an ineffective change of accounting date

        7. 220. Deduction for overlap profit on change of accounting date

    16. Chapter 16

      Averaging profits of farmers and creative artists

      1. 221. Claim for averaging of fluctuating profits

      2. 222. Circumstances in which claim may be made

      3. 223. Adjustment of profits

      4. 224. Effect of adjustment

      5. 225. Effect of later adjustment of profits

    17. Chapter 17

      Adjustment income

      1. Introduction

        1. 226. Professions and vocations

      2. Adjustment on change of basis

        1. 227. Application of Chapter

        2. 228. Adjustment income and adjustment expense

        3. 229. Income charged

        4. 230. Person liable

        5. 231. Calculation of the adjustment

      3. Treatment of adjustment income and adjustment expense

        1. 232. Treatment of adjustment income

        2. 233. Treatment of adjustment expense

      4. Expenses previously brought into account

        1. 234. No adjustment for certain expenses previously brought into account

      5. Realising or writing off assets

        1. 235. Cases where adjustment not required until assets realised or written off

      6. Mark to market

        1. 236. Change from realisation basis to mark to market

        2. 237. Election for spreading if section 236 applies

      7. Spreading of adjustment income: barristers and advocates

        1. 238. Spreading on ending of exemption for barristers and advocates

        2. 239. Election to accelerate charge under section 238

      8. Supplementary

        1. 240. Liability of personal representatives if person liable dies

    18. Chapter 18

      Post-cessation receipts

      1. Introduction

        1. 241. Professions and vocations

      2. Charge to tax on post-cessation receipts

        1. 242. Charge to tax on post-cessation receipts

        2. 243. Extent of charge to tax

        3. 244. Income charged

        4. 245. Person liable

      3. Meaning of "post-cessation receipts"

        1. 246. Basic meaning of "post-cessation receipt"

        2. 247. Other rules about what counts as post-cessation receipts

      4. Sums treated as post-cessation receipts

        1. 248. Debts paid after cessation

        2. 249. Debts released after cessation

        3. 250. Receipts relating to post-cessation expenditure

        4. 251. Transfer of rights if transferee does not carry on trade

      5. Sums that are not post-cessation receipts

        1. 252. Transfer of trading stock or work in progress

        2. 253. Lump sums paid to personal representatives for copyright etc.

      6. Deductions

        1. 254. Allowable deductions

        2. 255. Further rules about allowable deductions

      7. Reliefs

        1. 256. Treatment of post-cessation receipts

        2. 257. Election to carry back

    19. Chapter 19

      Supplementary

      1. 258. Changes in trustees and personal representatives

      2. 259. Meaning of "statutory insolvency arrangement"

  3. Part 3

    Property income

    1. Chapter 1

      Introduction

      1. 260. Overview of Part 3

      2. 261. Provisions which must be given priority over Part 3

      3. 262. Priority between Chapters within Part 3

    2. Chapter 2

      Property businesses

      1. Introduction

        1. 263. Introduction

      2. Basic meaning of UK and overseas property business

        1. 264. UK property business

        2. 265. Overseas property business

      3. Generating income from land

        1. 266. Meaning of "generating income from land"

        2. 267. Activities not for generating income from land

    3. Chapter 3

      Profits of property businesses: basic rules

      1. Charge to tax on profits of a property business

        1. 268. Charge to tax on profits of a property business

        2. 269. Territorial scope of charge to tax

        3. 270. Income charged

        4. 271. Person liable

      2. Calculation of profits

        1. 272. Profits of a property business: application of trading income rules

        2. 273. Amounts not brought into account as part of a property business

        3. 274. Relationship between rules prohibiting and allowing deductions

      3. Apportionment of profits

        1. 275. Apportionment etc. of profits to tax year

    4. Chapter 4

      Profits of property businesses: lease premiums etc.

      1. Introduction

        1. 276. Introduction

      2. Amounts treated as receipts: leases

        1. 277. Lease premiums

        2. 278. Amount treated as lease premium where work required

        3. 279. Sums payable instead of rent

        4. 280. Sums payable for surrender of lease

        5. 281. Sums payable for variation or waiver of term of lease

        6. 282. Assignments for profit of lease granted at undervalue

        7. 283. Provisions supplementary to section 282

      3. Other amounts treated as receipts

        1. 284. Sales with right to reconveyance

        2. 285. Sale and leaseback transactions

        3. 286. Provisions supplementary to sections 284 and 285

      4. Additional calculation rule for reducing certain receipts

        1. 287. Circumstances in which additional calculation rule applies

        2. 288. The additional calculation rule

        3. 289. The additional calculation rule: special cases

        4. 290. Meaning of "unused amount" and "unreduced amount"

      5. Deductions in relation to certain receipts

        1. 291. Deductions for expenses under section 292

        2. 292. Tenants under taxed leases treated as incurring expenses

        3. 293. Restrictions on section 292 expenses: the additional calculation rule

        4. 294. Restrictions on section 292 expenses: lease of part of premises

      6. Limit on effect of additional calculation rule and deductions

        1. 295. Limit on reductions and deductions

      7. Relationship with ICTA

        1. 296. Corporation tax receipts treated as taxed receipts

        2. 297. Taking account of reductions in corporation tax receipts

        3. 298. Taking account of deductions for rent as a result of section 37(4) or 87(2) of ICTA

      8. Certain administrative provisions

        1. 299. Payment of tax by instalments

        2. 300. Statement of accuracy for purposes of section 282

        3. 301. Claim for repayment of tax payable by virtue of section 284

        4. Chapter 5

          Profits of property businesses: other rules about receipts and deductions

          1. Furnished accommodation: receipts and deductions

            1. 308. Furnished lettings

            2. 309. Rent-a-room relief

          2. Treatment of receipts on acquisition of business

            1. 310. Acquisition of business: receipts from transferor's UK property business

          3. Reverse premiums as receipts

            1. 311. Reverse premiums

          4. Deductions for expenditure on energy-saving items

            1. 312. Deduction for expenditure on energy-saving items

            2. 313. Restrictions on relief

            3. 314. Regulations

          5. Deductions for expenditure on sea walls

            1. 315. Deduction for expenditure on sea walls

            2. 316. Transfer of interest in premises

            3. 317. Ending of lease of premises

            4. 318. Transfer involving company within the charge to corporation tax

          6. Mineral royalties

            1. 319. Relief in respect of mineral royalties

          7. Apportionments on sale of land

            1. 320. Nature of item apportioned on sale of estate or interest in land

          8. Mutual business

            1. 321. Mutual business

        5. Chapter 6

          Commercial letting of furnished holiday accommodation

          1. Introduction

            1. 322. Introduction

          2. Definition

            1. 323. Meaning of "commercial letting of furnished holiday accommodation"

            2. 324. Meaning of "relevant period" in sections 325 and 326

            3. 325. Meaning of "qualifying holiday accommodation"

            4. 326. Under-used holiday accommodation: averaging elections

          3. Separate profit calculations

            1. 327. Capital allowances and loss relief

            2. 328. Earned income and relevant UK earnings for pension purposes

        6. Chapter 7

          Adjustment income

          1. Adjustment on change of basis

            1. 329. Application of Chapter

            2. 330. Adjustment income and adjustment expense

            3. 331. Income charged

            4. 332. Person liable

          2. Treatment of adjustment income and adjustment expense

            1. 333. Treatment of adjustment income

            2. 334. Treatment of adjustment expense

        7. Chapter 8

          Rent receivable in connection with a UK section 12(4) concern

          1. Charge to tax on rent receivable in connection with a UK section 12(4) concern

            1. 335. Charge to tax on rent receivable in connection with a UK section 12(4) concern

            2. 336. Meaning of "rent receivable in connection with a UK section 12(4) concern"

            3. 337. Income charged

            4. 338. Person liable

          2. Management expenses of owner of mineral rights

            1. 339. Deduction for management expenses of owner of mineral rights

          3. Mineral royalties

            1. 340. Relief in respect of mineral royalties

            2. 341. Meaning of "mineral lease or agreement" and "mineral royalties"

            3. 342. Extended meaning of "mineral royalties" etc. in Northern Ireland

            4. 343. Power of Board to determine what counts as "mineral royalties"

        8. Chapter 9

          Rent receivable for UK electric-line wayleaves

          1. Charge to tax on rent receivable for UK electric-line wayleaves

            1. 344. Charge to tax on rent receivable for a UK electric-line wayleave

            2. 345. Meaning of "rent receivable for a UK electric-line wayleave"

            3. 346. Extent of charge to tax

            4. 347. Income charged

            5. 348. Person liable

        9. Chapter 10

          Post-cessation receipts

          1. Charge to tax on post-cessation receipts

            1. 349. Charge to tax on post-cessation receipts

            2. 350. Extent of charge to tax

            3. 351. Income charged

            4. 352. Person liable

          2. Meaning of "post-cessation receipts"

            1. 353. Basic meaning of "post-cessation receipt"

            2. 354. Other rules about what counts as a "post-cessation receipt"

            3. 355. Transfer of rights if transferee does not carry on UK property business

          3. Supplementary

            1. 356. Application to Schedule A businesses

        10. Chapter 11

          Overseas property income

          1. 357. Charge to tax on overseas property income

          2. 358. Meaning of "overseas property income"

          3. 359. Income charged

          4. 360. Person liable

        11. Chapter 12

          Supplementary

          1. 361. Changes in trustees and personal representatives

          2. 362. Effect of company starting or ceasing to be within charge to income tax

          3. 363. Overseas property businesses and overseas land: adaptation of rules

          4. 364. Meaning of "lease" and "premises"

      9. Part 4

        Savings and investment income

        1. Chapter 1

          Introduction

          1. 365. Overview of Part 4

          2. 366. Provisions which must be given priority over Part 4

          3. 367. Priority between Chapters within Part 4

          4. 368. Territorial scope of Part 4 charges

        2. Chapter 2

          Interest

          1. Charge to tax on interest

            1. 369. Charge to tax on interest

            2. 370. Income charged

            3. 371. Person liable

          2. Other income taxed as interest

            1. 372. Building society dividends

            2. 373. Open-ended investment company interest distributions

            3. 374. Date when interest payments under section 373 made

            4. 375. Interpretation of sections 373 and 374

            5. 376. Authorised unit trust interest distributions

            6. 377. Date when interest payments under section 376 made

            7. 378. Interpretation of sections 376 and 377

            8. 379. Industrial and provident society payments

            9. 380. Funding bonds

            10. 381. Discounts

        3. Chapter 3

          Dividends etc. from UK resident companies etc.

          1. Introduction

            1. 382. Contents of Chapter

          2. Charge to tax on dividends and other distributions

            1. 383. Charge to tax on dividends and other distributions

            2. 384. Income charged

            3. 385. Person liable

          3. Amounts treated as dividends

            1. 386. Open-ended investment company dividend distributions

            2. 387. Date when dividends paid under section 386

            3. 388. Interpretation of sections 386 and 387

            4. 389. Authorised unit trust dividend distributions

            5. 390. Date when dividends paid under section 389

            6. 391. Interpretation of sections 389 and 390

          4. Shares in approved share incentive plans ("SIPs")

            1. 392. SIP shares: introduction

            2. 393. Later charge where cash dividends retained in SIPs are paid over

            3. 394. Distribution when dividend shares cease to be subject to SIP

            4. 395. Reduction in tax due in cases within section 394

            5. 396. Interpretation of sections 392 to 395

          5. Tax credits and payment and deduction of tax

            1. 397. Tax credits for qualifying distributions: UK residents and eligible non-UK residents

            2. 398. Increase in amount or value of dividends where tax credit available

            3. 399. Qualifying distributions received by persons not entitled to tax credits

            4. 400. Non-qualifying distributions

            5. 401. Relief: qualifying distribution after linked non-qualifying distribution

        4. Chapter 4

          Dividends from non-UK resident companies

          1. Charge to tax on dividends from non-UK resident companies

            1. 402. Charge to tax on dividends from non-UK resident companies

            2. 403. Income charged

            3. 404. Person liable

          2. Shares in approved share incentive plans ("SIPs")

            1. 405. SIP shares: introduction

            2. 406. Later charge where cash dividends retained in SIPs are paid over

            3. 407. Dividend payment when dividend shares cease to be subject to SIP

            4. 408. Reduction in tax due in cases within section 407

        5. Chapter 5

          Stock dividends from UK resident companies

          1. 409. Charge to tax on stock dividend income

          2. 410. When stock dividend income arises

          3. 411. Income charged

          4. 412. Cash equivalent of share capital

          5. 413. Person liable

          6. 414. Income tax treated as paid

        6. Chapter 6

          Release of loan to participator in close company

          1. 415. Charge to tax under Chapter 6

          2. 416. Income charged

          3. 417. Person liable

          4. 418. Relief where borrowers liable as settlors

          5. 419. Loans and advances to persons who die

          6. 420. Loans and advances to trustees of trusts that have ended

          7. 421. Income tax treated as paid

        7. Chapter 7

          Purchased life annuity payments

          1. 422. Charge to tax on purchased life annuity payments

          2. 423. Meaning of "purchased life annuity"

          3. 424. Income charged

          4. 425. Person liable

          5. 426. Annuity payments received after deduction of tax

        8. Chapter 8

          Profits from deeply discounted securities

          1. Charge to tax under Chapter 8

            1. 427. Charge to tax on profits from deeply discounted securities

            2. 428. Income charged

            3. 429. Person liable

          2. Deeply discounted securities

            1. 430. Meaning of "deeply discounted security"

            2. 431. Excluded occasions of redemption

            3. 432. Securities which are not deeply discounted securities

            4. 433. Meaning of "excluded indexed security"

            5. 434. Securities issued in separate tranches: preliminary

            6. 435. Securities issued in separate tranches: basic rule

            7. 436. Deeply discounted securities issued in separate tranches: nominal value rule

          3. Disposals

            1. 437. Transactions which are disposals

            2. 438. Timing of transfers and acquisitions

          4. Calculating profits

            1. 439. Calculating the profit from disposals

            2. 440. Market value disposals

            3. 441. Market value acquisitions

            4. 442. Securities issued in accordance with qualifying earn-out right

          5. Special rules for strips of government securities

            1. 443. Application of this Chapter to strips of government securities

            2. 444. Meaning of "strip" in Chapter 8

            3. 445. Strips of government securities: acquisitions and disposals

            4. 446. Strips of government securities: relief for losses

            5. 447. Restriction of profits on strips by reference to original acquisition cost

            6. 448. Restriction of losses on strips by reference to original acquisition cost

            7. 449. Strips of government securities: manipulation of acquisition, transfer or redemption payments

            8. 450. Market value of strips etc.

            9. 451. Market value of strips etc. quoted in foreign stock exchange lists

            10. 452. Power to modify this Chapter for strips

          6. Special rules for listed securities held since 26th March 2003

            1. 453. Application of sections 454 to 456

            2. Chapter 9

              Gains from contracts for life insurance etc.

              1. Charge to tax under Chapter 9

                1. 461. Charge to tax under Chapter 9

                2. 462. When gains arise from policies and contracts

                3. 463. Income charged

              2. Person liable etc.

                1. 464. Person liable for tax: introduction

                2. 465. Person liable: individuals

                3. 466. Person liable: personal representatives

                4. 467. Person liable: UK resident trustees

                5. 468. Non-UK resident trustees and foreign institutions

                6. 469. Two or more persons interested in policy or contract

                7. 470. Interests in rights under a policy or contract for section 469

                8. 471. Determination of shares etc.

                9. 472. Trusts created by two or more persons

              3. Policies and contracts to which Chapter 9 applies

                1. 473. Policies and contracts to which Chapter 9 applies: general

                2. 474. Special rules: qualifying policies

                3. 475. Special rules: personal portfolio bonds

                4. 476. Special rules: foreign policies

                5. 477. Special rules: certain older policies and contracts

                6. 478. Exclusion of mortgage repayment policies

                7. 479. Exclusion of pension policies

                8. 480. Exclusion of excepted group life policies

                9. 481. Excepted group life policies: conditions about benefits

                10. 482. Excepted group life policies: conditions about persons intended to benefit

                11. 483. Exclusion of credit union group life policies

              4. When chargeable events occur: general

                1. 484. When chargeable events occur

                2. 485. Disregard of certain events in relation to qualifying policies

                3. 486. Exclusion of maturity of capital redemption policies in certain circumstances

                4. 487. Disregard of certain assignments

                5. 488. Disregard of some events after alterations of life insurance policy terms

                6. 489. Conditions applicable to alterations of life insurance policy terms

                7. 498. Requirement for periodic calculations in part surrender or assignment cases

                8. 499. Meaning of "insurance year" and "final insurance year"

                9. 500. Events treated as part surrenders

                10. 501. Part surrenders: loans

                11. 502. Exception from section 501 for loans to buy life annuities

                12. 503. Exception from section 501 for certain loans under qualifying policies

                13. 504. Part surrenders: payments under guaranteed income bonds etc.

                14. 505. Assignments etc. involving co-ownership

                15. 506. Assignments occurring when there is a co-ownership transaction

                16. 507. Method for making periodic calculations under section 498

                17. 508. The value of rights partially surrendered or assigned

                18. 509. Chargeable events in certain cases where periodic calculations show gains

              5. Transaction-related calculations and part surrender or assignment events

                1. 510. Requirement for transaction-related calculations in certain part surrender and assignment cases

                2. 511. Method for making transaction-related calculations under section 510

                3. 512. Available premium left for relevant transaction

                4. 513. Special rules for part surrenders and assignments in final insurance year

                5. 514. Chargeable events where transaction-related calculations show gains

              6. Personal portfolio bonds

                1. 515. Requirement for annual calculations in relation to personal portfolio bonds

                2. 516. Meaning of "personal portfolio bond"

                3. 517. Policies and contracts which are not personal portfolio bonds

                4. 518. The index categories

                5. 519. The index selection conditions

                6. 520. The property categories

                7. 521. The property selection conditions

                8. 522. Method for making annual calculations under section 515

                9. 523. The total amount of personal portfolio bond excess title="Exceptions to section 530">531. Exceptions to section 530

                10. 532. Relief for policies and contracts with European Economic Area insurers

                11. 533. Meaning of "comparable EEA tax charge"

                12. 534. Regulations providing for relief in other cases where foreign tax chargeable

                13. 535. Top slicing relief

                14. 536. Top slicing relieved liability: one chargeable event

                15. 537. Top slicing relieved liability: two or more chargeable events

                16. 538. Recovery of tax from trustees

              7. Deficiencies

                1. 539. Relief for deficiencies

                2. 540. When deficiencies arise: events following calculation events

                3. 541. Calculation of deficiencies

              8. Supplementary

                1. 542. Replacement of qualifying policies

                2. 543. Issue time of qualifying policy replacing foreign policy

                3. 544. Application of Chapter to policies and contracts in which companies interested

                4. 545. Minor definitions

                5. 546. Table of provisions subject to special rules for older policies and contracts

            3. Chapter 10

              Distributions from unauthorised unit trusts

              1. 547. Charge to tax under Chapter 10

              2. 548. Income charged

              3. 549. Person liable

              4. 550. Income tax treated as paid

            4. Chapter 11

              Transactions in deposits

              1. 551. Charge to tax on profits from disposal of deposit rights

              2. 552. Meaning of "deposit rights"

              3. 553. Income charged

              4. 554. Person liable

            5. Chapter 12

              Disposals of futures and options involving guaranteed returns

              1. Charge to tax under Chapter 12

                1. 555. Charge to tax under Chapter 12

                2. 556. Income charged

                3. 557. Person liable

                4. 558. Meaning of "future", "option" etc.

              2. When disposals involve guaranteed returns

                1. 559. When disposals involve guaranteed returns

                2. 560. Production of guaranteed returns

                3. 561. The return from one or more disposals

              3. When disposals of futures and options occur

                1. 562. When disposals of futures and options occur: general

                2. 563. Timing of certain grants of options where related disposals occur later

                3. 564. Deemed disposal where futures run to delivery or options are exercised

                4. 565. Interpretation of section 564

                5. 566. When transactions are related

              4. Losses

                1. 567. Losses

              5. Trustees

                1. 568. Special rule for certain income of trustees

              6. Transfer of assets abroad

                1. 569. Anti-avoidance: transfer of assets abroad

            6. Chapter 13

              Sales of foreign dividend coupons

              1. 570. Charge to tax under Chapter 13

              2. 571. Meaning of "foreign holdings" etc.

              3. 572. Income charged

              4. 573. Person liable

          7. Part 5

            Miscellaneous income

            1. Chapter 1

              Introduction

              1. 574. Overview of Part 5

              2. 575. Provisions which must be given priority over Part 5

              3. 576. Priority between Chapters within Part 5

              4. 577. Territorial scope of Part 5 charges

            2. Chapter 2

              Receipts from intellectual property

              1. Introduction

                1. 578. Contents of Chapter

              2. Charge to tax on non-trading income from intellectual property

                1. 579. Charge to tax on royalties and other income from intellectual property

                2. 580. Income charged under section 579

                3. 581. Person liable for tax under section 579

                4. 582. Deductions in calculating certain income charged under section 579

              3. Disposals of know-how

                1. 583. Charge to tax on income from disposals of know-how

                2. 584. Exceptions to charge under section 583

                3. 585. Income charged under section 583

                4. 586. Person liable for tax under section 583

              4. Sales of patent rights

                1. 587. Charge to tax on income from sales of patent rights

                2. 588. Income charged under section 587

                3. 589. Person liable for tax under section 587

                4. 590. UK resident sellers: spreading rules

                5. 591. Non-UK resident sellers: election for spreading

                6. 592. Further provision about elections for spreading: instalments

                7. 593. Death of seller

                8. 594. Winding up of a body corporate

                9. 595. Deduction of tax from payments to non-UK residents

                10. 596. Adjustments where tax has been deducted

                11. 597. Licences connected with patents

                12. 598. Rights to acquire future patent rights

                13. 599. Sums paid for Crown use etc. treated as paid under licence

              5. Relief from income tax on patent income

                1. 600. Relief for expenses: patent income

                2. 601. How relief is given under section 600

              6. Payments received after deduction of tax

                1. 602. Payments received after deduction of tax

              7. Supplementary

                1. 603. Contributions to expenditure

                2. 604. Contributions not made by public bodies nor eligible for tax relief

                3. 605. Exchanges

                4. 606. Apportionment where property sold together

                5. 607. Questions about apportionments affecting two or more persons

                6. Chapter 3

                  Films and sound recordings: non-trade businesses

                  1. 609. Charge to tax on films and sound recordings businesses

                  2. 610. Income charged

                  3. 611. Person liable

                  4. 612. Calculation of income

                  5. 613. Application of trading income rules to non-trade businesses

                7. Chapter 4

                  Certain telecommunication rights: non-trading income

                  1. 614. Charge to tax on certain telecommunication rights of a non-trader

                  2. 615. Income charged

                  3. 616. Person liable

                  4. 617. Deductions in calculating certain income charged

                  5. 618. Payments received after deduction of tax

                8. Chapter 5

                  Settlements: amounts treated as income of settlor

                  1. Charge to tax under Chapter 5

                    1. 619. Charge to tax under Chapter 5

                    2. 620. Meaning of "settlement" and "settlor"

                  2. Income charged and person liable

                    1. 621. Income charged

                    2. 622. Person liable

                  3. Rules for calculating income

                    1. 623. Calculation of income

                  4. Income treated as income of settlor: retained interests

                    1. 624. Income where settlor retains an interest

                    2. 625. Settlor's retained interest

                    3. 626. Exception for outright gifts between spouses

                    4. 627. Exceptions for certain types of income

                    5. 628. Exception for gifts to charities

                  5. Income treated as income of settlor: unmarried children

                    1. 629. Income paid to unmarried minor children of settlor

                    2. 630. Exception for gifts to charities

                    3. 631. Retained and accumulated income

                    4. 632. Offshore income gains

                  6. Capital sums treated as income of settlor: trustees' payments

                    1. 633. Capital sums paid to settlor by trustees of settlement

                    2. 634. Meaning of "capital sum" and "sums paid to settlor"

                    3. 635. Amount of available income

                    4. 636. Calculation of undistributed income

                    5. 637. Qualifications to section 636

                  7. Trustees' payments: further provisions

                    1. 638. Capital sums paid by way of loan or repayment of loan

                    2. 639. Loans to participators in close companies

                    3. 640. Grossing-up of deemed income

                  8. Capital sums treated as income of settlor: connected bodies

                    1. 641. Capital sums paid to settlor by body connected with settlement

                    2. 642. Exception for certain loans or repayments of loans

                    3. 643. Interpretation of sections 641 and 642

                  9. Settlements by two or more settlors

                    1. 644. Application to settlements by two or more settlors

                    2. 645. Property or income originating from settlor

                  10. Other supplementary provisions

                    1. 646. Adjustments between settlor and trustees etc.

                    2. 647. Power to obtain information

                9. Chapter 6

                  Beneficiaries' income from estates in administration

                  1. Charge to tax on estate income

                    1. 649. Charge to tax on estate income

                    2. 650. Absolute, limited and discretionary interests

                    3. 651. Meaning of "UK estate" and "foreign estate"

                  2. Types of estate income

                    1. 652. Estate income: absolute interests in residue

                    2. 653. Meaning of "the administration period" and "the final tax year"

                    3. 654. Estate income: limited interests in residue

                    4. 655. Estate income: discretionary interests in residue

                  3. Income charged and person liable

                    1. 656. Income charged: UK estates

                    2. 657. Income charged: foreign estates

                    3. 658. Special rules for foreign income

                    4. 659. Person liable

                  4. Basic amount of estate income: general calculation rules

                    1. 660. Basic amount of estate income: absolute interests

                    2. 661. Basic amount of estate income: limited interests

                    3. 662. Basic amount of estate income: discretionary interests

                    4. 663. The applicable rate for grossing up basic amounts of estate income

                    5. 664. The aggregate income of the estate

                  5. Further provisions for calculating estate income relating to absolute interests

                    1. 665. Assumed income entitlement

                    2. 666. The residuary income of the estate

                    3. 667. Shares of residuary income of estate

                    4. 668. Reduction in share of residuary income of estate

                    5. 669. Reduction in residuary income: inheritance tax on accrued income

                    6. 670. Applicable rate for determining assumed income entitlement (UK estates)

                  6. Special rules for successive interests

                    1. 671. Successive absolute interests

                    2. 672. Successive interests: assumed income entitlement of holder of absolute interest following limited interest

                    3. 673. Successive interests: payments in respect of limited interests followed by absolute interests

                    4. 674. Successive interests: holders of limited interests

                    5. 682. Assessments, adjustments and claims after the administration period

                10. Chapter 7

                  Annual payments not otherwise charged

                  1. 683. Charge to tax on annual payments not otherwise charged

                  2. 684. Income charged

                  3. 685. Person liable

                  4. 686. Payments received after deduction of tax

                11. Chapter 8

                  Income not otherwise charged

                  1. 687. Charge to tax on income not otherwise charged

                  2. 688. Income charged

                  3. 689. Person liable

              8. Part 6

                Exempt income

                1. Chapter 1

                  Introduction

                  1. 690. Overview of Part 6

                2. Chapter 2

                  National savings income

                  1. 691. National Savings Bank ordinary account interest

                  2. 692. Income from savings certificates

                  3. 693. Income from Ulster Savings Certificates

                3. Chapter 3

                  Income from individual investment plans

                  1. 694. Income from individual investment plans

                  2. 695. Investment plans

                  3. 696. Plan managers

                  4. 697. Special requirements for certain foreign managers

                  5. 698. Requirements for discharge of foreign institution's duties

                  6. 699. Non-entitlement to exemption

                  7. 700. Information

                  8. 701. General and supplementary powers

                4. Chapter 4

                  SAYE interest

                  1. 702. Interest under certified SAYE savings arrangements

                  2. 703. Meaning of "certified SAYE savings arrangement"

                  3. 704. Types of arrangements and providers

                  4. 705. Certification of arrangements

                  5. 706. Withdrawal and variation of certifications and connected requirements

                  6. 707. Authorisation of providers

                  7. 708. Withdrawal and variation of authorisations

                5. Chapter 5

                  Venture capital trust dividends

                  1. 709. Venture capital trust dividends

                  2. 710. Treatment of shares where annual acquisition limit exceeded

                  3. 711. Identification of shares after disposals

                  4. 712. Identification of shares after reorganisations etc.

                6. Chapter 6

                  Income from FOTRA securities

                  1. 713. Introduction: securities free of tax to residents abroad ("FOTRA securities")

                  2. 714. Exemption of profits from FOTRA securities

                  3. 715. Interest from FOTRA securities held on trust

                  4. 716. Restriction on deductions etc. relating to FOTRA securities

                7. Chapter 7

                  Purchased life annuity payments

                  1. Partial exemption for purchased life annuity payments

                    1. 717. Exemption for part of purchased life annuity payments

                    2. 718. Excluded annuities

                    3. 719. Extent of exemption under section 717

                    4. 720. Exempt proportion: term dependent solely on duration of life

                    5. 721. Exempt sum: term dependent solely on duration of life

                    6. 722. Consideration for the grant of annuities

                    7. 723. Determinations

                    8. 724. Regulations

                  2. Immediate needs annuities

                    1. 725. Annual payments under immediate needs annuities

                    2. 726. Meaning of "care provider"

                8. Chapter 8

                  Other annual payments

                  1. Certain annual payments by individuals

                    1. 727. Certain annual payments by individuals

                    2. 728. Commercial payments

                    3. 729. Payments for non-taxable consideration

                    4. 730. Foreign maintenance payments

                  2. Periodical payments of personal injury damages etc.

                    1. 731. Periodical payments of personal injury damages

                    2. 732. Compensation awards

                    3. 733. Persons entitled to exemptions for personal injury payments etc.

                    4. 734. Payments from trusts for injured persons

                  3. Health and employment insurance payments

                    1. 735. Health and employment insurance payments

                    2. 736. Health and employment risks and benefits

                    3. 737. Period for which payments may be made

                    4. 738. Risk of significant loss

                    5. 739. Conditions to be met by policies also providing other benefits

                    6. 740. Conditions to be met where policies are linked

                    7. 741. Aggregation of policies where employment ends for health reasons

                    8. 742. Meaning of "the insured"

                    9. 743. Policies for the benefit of others who contribute to premiums

                  4. Payments to adopters

                    1. 744. Payments to adopters: England and Wales

                    2. 745. Payments to adopters: Scotland

                    3. 746. Payments to adopters: Northern Ireland

                    4. 747. Power to amend sections 744 to 746

                  5. Payments by persons liable to pool betting duty

                    1. 748. Payments by persons liable to pool betting duty

                9. Chapter 9

                  Other income

                  1. Interest only income

                    1. 749. Interest paid under repayment supplements

                    2. 750. Interest from tax reserve certificates

                    3. 751. Interest on damages for personal injury

                    4. 752. Interest under employees' share schemes

                    5. 753. Interest on repayment of student loan

                    6. 754. Redemption of funding bonds

                    7. 755. Interest on foreign currency securities etc. owned by non-UK residents

                    8. 756. Which securities and loans are foreign currency ones for section 755

                  2. Interest and royalty payments

                    1. 757. Interest and royalty payments: introduction

                    2. 758. Exemption for certain interest and royalty payments

                    3. 759. The person making the payment

                    4. 760. The person beneficially entitled to the payment

                    5. 761. Meaning of "25% associates"

                    6. 762. Interest payments: exemption notices

                    7. 763. Special relationships

                    8. 764. Application of ICTA provisions about special relationships

                    9. 765. Anti-avoidance

                    10. 766. Interest and royalty payments: interpretation

                    11. 767. Power to amend references to the Directive by order

                  3. Income from commercial occupation of woodlands

                    1. 768. Commercial occupation of woodlands

                  4. Housing grants

                    1. 769. Housing grants

                  5. Approved share incentive plan distributions

                    1. 770. Amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment

                  6. Foreign income of consular officers and employees

                    1. 771. Relevant foreign income of consular officers and employees

                    2. 772. Further provisions about Orders under section 771

                  7. Income of non-UK residents from certain securities

                    1. 773. Income from Inter-American Development Bank securities

                    2. 774. Income from securities issued by designated international organisations

                  8. Other

                    1. 775. Income towards reducing the national debt

                    2. 776. Scholarship income

                    3. 777. VAT repayment supple

                10. Chapter 10

                  General

                  1. 783. General disregard of exempt income for income tax purposes

              9. Part 7

                Income charged under this Act: rent-a-room and foster-care relief

                1. Chapter 1

                  Rent-a-room relief

                  1. Introduction

                    1. 784. Overview of Chapter 1

                    2. 785. Person who qualifies for relief

                  2. Basic definitions

                    1. 786. Meaning of "rent-a-room receipts"

                    2. 787. Meaning of "residence"

                    3. 788. Meaning of "total rent-a-room amount"

                  3. Individual's limit

                    1. 789. The individual's limit

                    2. 790. Exclusive receipts condition

                  4. Relief if amount does not exceed limit

                    1. 791. Full rent-a-room relief: introduction

                    2. 792. Full rent-a-room relief: trading income

                    3. 793. Full rent-a-room relief: property income

                    4. 794. Full rent-a-room relief: income chargeable under Chapter 8 of Part 5

                  5. Alternative calculation of profits if amount exceeds limit

                    1. 795. Alternative calculation of profits: introduction

                    2. 796. Alternative calculation of profits: trading income

                    3. 797. Alternative calculation of profits: property income

                    4. 798. Alternative calculation of profits: income chargeable under Chapter 8 of Part 5

                  6. Elections

                    1. 799. Election not to apply full relief

                    2. 800. Election for alternative method of calculating profits

                    3. 801. Time limit on adjustment of assessment

                  7. Interpretation

                    1. 802. Minor definitions

                2. Chapter 2

                  Foster-care relief

                  1. Introduction

                    1. 803. Overview of Chapter 2

                    2. 804. Person who qualifies for relief

                  2. Basic definitions

                    1. 805. Meaning of "foster-care receipts"

                    2. 806. Meaning of providing foster care

                    3. 807. Calculation of "total foster-care receipts"

                  3. Individual's limit

                    1. 808. The individual's limit

                    2. 809. Share of fixed amount: residence used by more than one foster carer

                    3. 810. Share of fixed amount: income period not a year

                    4. 811. The amount per child

                  4. Relief if amount does not exceed limit

                    1. 812. Full foster-care relief: introduction

                    2. 813. Full foster-care relief: trading income

                    3. 814. Full foster-care relief: income chargeable under Chapter 8 of Part 5

                  5. Alternative calculation of profits if amount exceeds limit

                    1. 815. Alternative calculation of profits: introduction

                    2. 816. Alternative calculation of profits: trading income

                    3. 817. Alternative calculation of profits: income chargeable under Chapter 8 of Part 5

                    4. 818. Election for alternative method of calculating profits

                    5. 819. Adjustment of assessment

                  6. Periods of account not ending on 5th April

                    1. 820. Periods of account not ending on 5th April

                    2. 821. Meaning of "relevant limit"

                    3. 822. Full relief

                    4. 823. Alternative method of calculating profits

                  7. Capital allowances for foster carers carrying on trade

                    1. 824. Capital allowances: introduction

                    2. 825. Carried forward unrelieved qualifying expenditure

                    3. 826. Excluded capital expenditure

                    4. 827. Excluded capital expenditure: subsequent treatment of asset

                  8. Overlap profit

                    1. 828. Overlap profit

              10. Part 8

                Foreign income: special rules

                1. Chapter 1

                  Introduction

                  1. 829. Overview of Part 8

                  2. 830. Meaning of "relevant foreign income"

                2. Chapter 2

                  Relevant foreign income charged on remittance basis

                  1. Remittance basis

                    1. 831. Claims for relevant foreign income to be charged on the remittance basis

                    2. 832. Relevant foreign income charged on the remittance basis

                    3. 833. Income treated as remitted: repayment of UK-linked debts

                    4. 834. Arrangements treated as repayment of UK-linked debts

                  2. Relief for delayed remittances

                    1. 835. Relief for delayed remittances

                    2. 836. Relief for delayed remittances: backdated pensions

                    3. 837. Claims for relief on delayed remittances

                3. Chapter 3

                  Relevant foreign income charged on arising basis: deductions and reliefs

                  1. 838. Expenses attributable to collection or payment of relevant foreign income

                  2. 839. Annual payments payable out of relevant foreign income

                  3. 840. Relief for backdated pensions charged on the arising basis

                4. Chapter 4

                  Unremittable income

                  1. 841. Unremittable income: introduction

                  2. 842. Claim for relief for unremittable income

                  3. 843. Withdrawal of relief

                  4. 844. Income charged on withdrawal of relief after source ceases

                  5. 845. Valuing unremittable income

              11. Part 9

                Partnerships

                1. Introduction

                  1. 846. Overview of Part 9

                  2. 847. General provisions

                  3. 848. Assessment of partnerships

                2. Calculation of partners' shares

                  1. 849. Calculation of firm's profits or losses

                  2. 850. Allocation of firm's profits or losses between partners

                  3. 851. Calculations etc. where firm has other income or losses

                3. Firms with trading income

                  1. 852. Carrying on by partner of notional trade

                  2. 853. Basis periods for partners' notional trades

                4. Firms with trading and other source income

                  1. 854. Carrying on by partner of notional business

                  2. 855. Basis periods for partners' notional businesses

                  3. 856. Overlap profits from partners' notional businesses

                5. Firms with a foreign element

                  1. 857. Partners to whom the remittance basis may apply

                  2. 858. Resident partners and double taxation agreements

                6. Miscellaneous

                  1. 859. Special provisions about farming and property income

                  2. 860. Adjustment income

                  3. 861. Sale of patent rights: effect of partnership changes

                  4. 862. Sale of patent rights: effect of later cessation of trade

                  5. 863. Limited liability partnerships

              12. Part 10

                General provisions

                1. Chapter 1

                  Introduction

                  1. 864. Overview of Part 10

                2. Chapter 2

                  General calculation rules etc.

                  1. Unpaid remuneration

                    1. 865. Unpaid remuneration: non-trades and non-property businesses

                  2. Employee benefit contributions

                    1. 866. Employee benefit contributions: non-trades and non-property businesses

                  3. Business entertainment and gifts

                    1. 867. Business entertainment and gifts: non-trades and non-property businesses

                  4. Social security contributions

                    1. 868. Social security contributions: non-trades etc.

                  5. Penalties, interest and VAT surcharges

                    1. 869. Penalties, interest and VAT surcharges: non-trades etc.

                  6. Crime-related payments

                    1. 870. Crime-related payments: non-trades and non-property businesses

                  7. Apportionment of profits

                    1. 871. Apportionment etc. of miscellaneous profits to tax year

                  8. Calculation of losses

                    1. 872. Losses calculated on same basis as miscellaneous income

                3. Chapter 3

                  Supplementary and general provisions

                  1. Orders and regulations

                    1. 873. Orders and regulations made by Treasury or Board

                  2. Interpretation

                    1. 874. Activities in UK sector of continental shelf

                    2. 875. Meaning of "caravan"

                    3. 876. Meaning of "farming" and related expressions

                    4. 877. Meaning of grossing up

                    5. 878. Other definitions

                    6. 879. Interpretation: Scotland

                    7. 880. Interpretation: Northern Ireland

                  3. General and final

                    1. 881. Disapplication of corporation tax: section 9 of ICTA

                    2. 882. Consequential amendments

                    3. 883. Commencement and transitional provisions etc.

                    4. 884. Repeals and revocations

                    5. 885. Abbreviations and general index in Schedule 4

                    6. 886. Short title

                1. Schedule 1

                  Consequential amendments

                  1. Part 1

                    Income and Corporation Taxes Act 1988

                  2. Part 2

                    Other enactments

                2. Schedule 2

                  Transitionals and savings etc.

                  1. Part 1

                    General provisions

                  2. Part 2

                    Changes in the law

                  3. Part 3

                    Trading income

                  4. Part 4

                    Property income

                  5. Part 5

                    Savings and investment income: general

                  6. Part 6

                    Savings and investment income: insurance contracts and policies made before certain dates

                  7. Part 7

                    Savings and investment income: gains from contracts for life insurance etc. (personal portfolio bonds)

                  8. Part 8

                    Miscellaneous income

                  9. Part 9

                    Exempt income

                  10. Part 10

                    Foster-care relief

                  11. Part 11

                    Foreign income: special rules

                  12. Part 12

                    Other provisions

                3. Schedule 3

                  Repeals and revocations

                4. Schedule 4

                  Abbreviations and defined expressions

                  1. Part 1

                    Abbreviations of Acts

                  2. Part 2

                    Index of expressions defined in this Act etc.

An Act to restate, with minor changes, certain enactments relating to income tax on trading income, property income, savings and investment income and certain other income; and for connected purposes.

[24th March 2005]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part 1 Overview

1 Overview of Act

(1) This Act imposes charges to income tax under--

(a) Part 2 (trading income),

(b) Part 3 (property income),

(c) Part 4 (savings and investment income), and

(d) Part 5 (certain miscellaneous income).

(2) Those charges to tax have effect for the purposes of section 1(1) of ICTA (the general charge to income tax).

(3) Exemptions from those charges are dealt with in Part 6 (exempt income) but any Part 6 exemptions which are most obviously relevant to particular types of income are also mentioned in the provisions about those types of income.

(4) What is or is not mentioned in those provisions does not limit the effect of Part 6.

(5) This Act also contains--

(a) provision about rent-a-room relief and foster-care relief (see Part 7),

(b) special rules for foreign income (see Part 8),

(c) special rules for partnerships (see Part 9), and

(d) certain calculation rules and general provisions (see Part 10).

(6) For abbreviations and defined expressions used in this Act, see section 885 and Schedule 4.

2 Overview of priority rules

(1) This Act contains some rules establishing an order of priority in respect of certain amounts which would otherwise--

(a) fall within a charge to income tax under two or more Chapters or Parts of this Act, or

(b) fall within a charge to income tax under a Chapter or Part of this Act and ITEPA 2003.

(2) See, in particular--

  • section 4 (provisions which must be given priority over Part 2),

  • section 261 (provisions which must be given priority over Part 3),

  • section 262 (priority between Chapters within Part 3),

  • section 366 (provisions which must be given priority over Part 4),

  • section 367 (priority between Chapters within Part 4),

  • section 575 (provisions which must be given priority over Part 5), and

  • section 576 (priority between Chapters within Part 5).

(3) But the rules in those sections need to be read with other rules of law (whether in this Act or otherwise) about the scope of particular provisions or the order of priority to be given to them.

(4) Section 171(2) of FA 1993 (profits of Lloyd's underwriters charged only under Chapter 2 of Part 2 of this Act) is one example of another rule of law.



Part 2 Trading income

Chapter 1 Introduction

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3 Overview of Part 2

(1) This Part imposes charges to income tax under--

(a) Chapter 2 (the profits of a trade, profession or vocation which meet the territorial conditions mentioned in section 6),

(b) Chapter 17 (amounts treated as adjustment income under section 228), and

(c) Chapter 18 (post-cessation receipts that are chargeable under this Part).

(2) Part 6 deals with exemptions from the charges under this Part.

(3) See, in particular, the exemptions under sections 777 (VAT repayment supplements) and 778 (incentives to use electronic communications).

(4) The charges under this Part apply to non-UK residents as well as UK residents but this is subject to sections 6(2) and (3) and 243(3) and (4) (charges on non-UK residents only on UK income).

(5) The rest of this Part contains rules relevant to the charges to tax under this Part.

(6) This section needs to be read with the relevant priority rules (see sections 2 and 4).

4 Provisions which must be given priority over Part 2

(1) Any receipt or other credit item, so far as it falls within--

(a) Chapter 2 of this Part (receipts of trade, profession or vocation), and

(b) Chapter 3 of Part 3 so far as it relates to a UK property business,

is dealt with under Part 3.

(2) Any receipt or other credit item, so far as it falls within--

(a) this Part, and

(b) Part 2, 9 or 10 of ITEPA 2003 (employment income, pension income or social security income),

is dealt with under the relevant Part of ITEPA 2003.

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28 | P.29 | P.30 | P.31 | P.32 | P.33 | P.34 | P.35 | P.36 | P.37 | P.38 | P.39 | P.40 | P.41 | P.42 | P.43 | P.44 | P.45 | P.46 | P.47 | P.48 | P.49 | P.50 | P.51 | P.52 | P.53 | P.54 | P.55 | P.56 | P.57

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