UK Laws - Legal Portal
 
Navigation
News

Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

-- Back--

Page 65

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 | P.58 | P.59 | P.60 | P.61 | P.62 | P.63 | P.64 | P.65 | P.66 | P.67 | P.68 | P.69 | P.70

Power to facilitate company reorganisations

88 Section 330 does not apply in relation to exchanges of shares or securities taking effect before 21 March 2000.

Meaning of a company being "in administration"

89 (1) Sub-paragraph (2) applies in relation to--

(a) an administration order under Part 3 of the Insolvency (Northern Ireland) Order 1989 the petition for which was presented before 6 April 2007, or

(b) any corresponding order under the law of a country or territory outside the United Kingdom the proceedings for which were instituted before that date.

(2) Section 331 applies with the substitution for subsection (2) of--

" (2) A company is "in administration" if--

(a) it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986, or

(b) there is in force in relation to it--

(i) an administration order under Part 3 of the Insolvency (Northern Ireland) Order 1989, or

(ii) any corresponding order under the law of a country or territory outside the United Kingdom. "

(3) In relation to an administration order under Part 2 of the Insolvency Act 1986 the petition for which was presented before 15 September 2003, section 331 applies with the substitution for subsection (2) of--

" (2) A company is "in administration" if there is in force in relation to it--

(a) an administration order under Part 2 of the Insolvency Act 1986 or Part 3 of the Insolvency (Northern Ireland) Order 1989, or

(b) any corresponding order under the law of a country or territory outside the United Kingdom. "

Meaning of "company", "shares" and "research and development" in Part 6

90 (1) This paragraph applies in relation to the meaning of "company", "shares" and "research and development" in Part 6 (see section 332).

(2) If--

(a) a company holds investments of any description in an entity immediately before 6 April 2007, and

(b) the entity is a company for any purposes of the Part 6 provisions but not for the corresponding purposes of the ICTA provisions,

any question whether the entity is a company for those purposes of the Part 6 provisions is to be determined in accordance with the ICTA provisions until such time as the company ceases to hold investments of that description.

(3) If--

(a) a company holds investments of any description in an entity immediately before 6 April 2007, and

(b) the investments are shares for any purposes of either of the following--

(i) the Part 6 provisions, and

(ii) the ICTA provisions,

but not for the corresponding purposes of the other set of provisions,

any question whether the investments are shares for those purposes of the Part 6 provisions is to be determined in accordance with the ICTA provisions until such time as the company ceases to hold investments of that description.

(4) In sub-paragraphs (2) and (3)--

  • "the ICTA provisions" means section 842AA of ICTA (VCT approvals) and Schedule 28B to that Act (qualifying holdings),

  • "the Part 6 provisions" means Chapter 3 of Part 6 (VCT approvals) and Chapter 4 of that Part (qualifying holdings).

(5) For the purpose of determining whether any shares or securities are to be regarded as comprised in a company's qualifying holdings, section 332 applies in relation to shares issued before 6 April 2000 with the substitution for the definition of "research and development" of--

" "research and development" means any activity which is intended to result in a patentable invention (within the meaning of the Patents Act 1977) or in a computer program. "



Part 9 Other reliefs

Interest: loans for interests in close companies

91 Section 392(3)(a) does not apply if the shares were acquired before 14 March 1989.

92 Section 392(3)(b) does not apply if the shares were acquired before 6 April 1989.

93 (1) In relation to a loan made before 14 November 1986--

(a) section 395(1)(c) applies with the substitution for "the trustees of" of "any person (other than the individual) interested in", and

(b) section 395(1)(d) applies with the substitution for "the personal representatives" of "any person (other than the individual) interested in the estate".

(2) No individual is an associate because of sub-paragraph (1)(a) if the trust relates exclusively to a registered pension scheme.

(3) No individual is an associate because of sub-paragraph (1)(a) if --

(a) the trust--

(i) is exclusively for the benefit of the employees, or the employees and directors, of the company or their dependants, and

(ii) is not wholly or mainly for the benefit of the directors or their relatives, and

(b) the individual--

(i) is not (either alone or with relatives) the beneficial owner of more than 5% of the company's ordinary share capital, and

(ii) could not become so as a result of the operation of the trust.

(4) For the purposes of sub-paragraph (3)(b), charitable trusts that may arise on the failure or determination of other trusts are ignored.

(5) In relation to any time before 6 April 2006, sub-paragraph (2) applies as if the reference to a registered pension scheme were a reference to an exempt approved scheme, as defined in section 592 of ICTA.

94 Section 395(2) does not apply in relation to a loan made before 26 July 1989, and, for the purposes of that section, section 550 of ITEPA 2003 (which defines "employee benefit trust" and is applied for the purposes of section 395 by section 395(6)) has effect as if section 550 of ITEPA 2003 referred to that day instead of 13 March 1989.

Interest: loans for interests in employee-controlled companies

95 (1) In relation to a loan used before 6 April 1990 in one or more of the ways specified in section 396(2)--

(a) section 396 applies as if--

(i) the reference in subsection (3) to full-time employees included a reference to full-time employees' spouses,

(ii) the references in subsection (4) to an individual included a reference to an individual's spouse, unless the individual and the individual's spouse are both full-time employees of the company within the meaning of section 396(5), and

(b) section 397(4) applies as if references to the individual included references to the individual's spouse.

(2) If a loan within section 396(2)(b) was made on or after that date, interest on the loan is eligible for relief under section 383 only if interest on the original loan would have been allowable under section 353 of ICTA after that date.

Interest relief: film partnerships

96 Section 399(4) (restriction on relief for interest on loans for purchasing interest in some film partnerships) only applies if the interest accrued on or after 10 March 2006.

Interest: loans for investing in co-operatives

97 Section 401 applies in relation to a loan used in one or more of the ways specified in subsection (2)(a) or (b) of that section only if the loan was made after 10 March 1981, but subsection (2)(c) of that section applies whenever the original loan was made.

Gift aid: gifts of money for relief in poor countries

98 Despite the amendments made by this Act to section 25 of FA 1990, that section continues to apply for the purposes of section 48 of FA 1998 (gifts of money for relief in poor countries) as if those amendments had not been made.

Gift aid: restrictions on associated benefits

99 (1) This paragraph applies if--

(a) a gift is made on or after 6 April 2007, and

(b) a benefit associated with the gift is received before that date or relates (wholly or partly) to a period falling before that date.

(2) Step 2 of the calculation in section 419(8) is to be read as if the words "(and neither condition C nor condition D is met in relation to it)" were omitted.

Gift aid: election to carry back relief

100 (1) This paragraph applies if in the tax year 2007-08 an individual makes a gift to a charity that is a qualifying donation for the purposes of Chapter 2 of Part 8.

(2) Section 426 has effect with the substitution for subsections (2) and (3) of--

" (2) The condition is that in year P the grossed up amount of the gift would, if made in year P, be payable out of profits or gains brought into charge to income tax or capital gains tax.

(3) If an election is made, section 25(6) to (9A) of FA 1990 have effect in relation to the individual as if the gift were a qualifying donation (within the meaning of section 25 of FA 1990) made in year P. "

(3) Section 426 has effect with the omission of subsections (4) and (5).

Qualifying maintenance payments: maintenance assessments

101 (1) This paragraph applies for the purposes for which, on the day on which this Act comes into force, the amendments to section 347B of ICTA made by paragraph 8(1) and (2) of Schedule 3 to the Child Support, Pensions and Social Security Act 2000 (c. 19) (maintenance assessments superseded by maintenance calculations) do not have effect.

(2) Until a day is appointed for any of those purposes under this paragraph, section 454 and 455 have effect for that purpose as if--

(a) in section 454(7) and section 455(1)(a), (b), (c) and (3) for "calculation" there were substituted "assessment", and

(b) for section 454(8) there were substituted--

" (8) In this section "maintenance assessment" means a maintenance assessment made under the Child Support Act 1991 or the Child Support (Northern Ireland) Order 1991. "

(3) The power to appoint a day under this paragraph is exercisable by the Secretary of State by order made by statutory instrument and different days may be appointed for different purposes (including different days for different areas).



Part 10 Special rules about settlements and trustees

Trustees' expenses to be set against trustees' trust rate income

102 (1) This paragraph applies if the trustees of a settlement incur an allowable expense (see section 484) in a tax year prior to the tax year 2007-08.

(2) So far as the trustees have not paid the expense, the expense cannot, under Chapter 4 of Part 9, be set against the trustees' trust rate income for any tax year.

(3) So far as the expense is paid by the trustees in a tax year ("the relevant tax year") after the tax year 2006-07, the expense is treated for the purposes of sections 484(1) and 485(1) as if it were incurred in the relevant tax year.

(4) So far as the expense is paid by the trustees in a tax year prior to the tax year 2007-08, section 485 applies in relation to the expense with the following modifications.

(5) It applies as if for subsection (3) there were substituted--

" (3) Condition A is--

(a) that section 686(2AA) of ICTA could not be applied in relation to the allowable expense so as to reduce the trustees' liability to tax for the tax year in which the trustees paid the expense, and

(b) that was the case only because the trustees' section 686 income for that year was insufficient or they had no section 686 income for that year.

  • "Section 686 income" means income to which section 686 of ICTA applies. "

(6) It applies as if for subsection (4) there were substituted--

" (4) Condition B is that--

(a) for no tax year prior to the tax year 2007-08 has the allowable expense been used to reduce the trustees' liability to tax, and

(b) the allowable expense has not been set against the trustees' trust rate income for a tax year prior to the current tax year as a result of this section. "

Share incentive plans: definition of "applicable period"

103 (1) This paragraph applies for the purposes of section 489 if the relevant shares (see subsection (1) of that section) were acquired by the trustees before 11 May 2001.

(2) That section applies in relation to those shares with the following modifications.

(3) It applies as if subsection (2) were omitted.

(4) It applies as if in subsection (3) the words "If any were" were omitted.

(5) It applies as if in subsection (4)--

(a) for "If none were" there were substituted "But if when the trustees acquired the relevant shares none of the shares in the relevant company were readily convertible assets", and

(b) in paragraph (b) for "any shares in the relevant company" there were substituted "the relevant shares".

(6) It applies as if in subsection (5) for "(2) to" there were substituted "(3) and".

Discretionary payments: trustees' tax pool

104 (1) Section 497 applies with the following modifications in relation to the trustees of a settlement established prior to the tax year 2007-08 if the current tax year is the tax year 2007-08.

(2) It also so applies if--

(a) the current tax year is a tax year subsequent to the tax year 2007-08, and

(b) the trustees have been UK resident for no tax year prior to the current tax year or the last tax year prior to the current tax year for which they were UK resident is a tax year prior to the tax year 2007-08.

(3) It applies as if in subsection (1) for Step 1 there were substituted--

" Step 1

Take the amount of the trustees' final section 687(3) tax pool and deduct from that amount (but not so that it goes below nil) the total of all tax (if any) treated under section 687(2)(a) of ICTA as being paid as a result of payments made by the trustees in the tax year 2006-07.

"The amount of the trustees' final section 687(3) tax pool" is the total amount--

(a)

available to the trustees under section 687(3) of ICTA for setting against tax assessable on them under section 687(2)(b) of that Act for the tax year 2006-07, or

(b)

which would have been so available had tax been so assessable. "

(4) It applies as if subsections (2) and (3) were omitted.



Part 11 Special rules about charitable trusts etc

Transactions with substantial donors

105 Section 543(1)(g) and (h) and sections 549 to 557 (non-charitable expenditure: transactions with substantial donors) do not have effect in relation to--

(a) a transaction occurring before 22 March 2006, or

(b) a transaction entered into in pursuance of a contract made before 22 March 2006 (otherwise than in pursuance of a variation on or after that date).

106 For the purposes of section 549 a person may meet the definition of "substantial donor" by reference to gifts made at a time before this Act comes into force.

Non-charitable expenditure

107 (1) This paragraph applies if, as a result of sections 562 to 564, an amount of expenditure for the tax year 2007-2008 or any subsequent tax year ("the carry back tax year") is treated as non-charitable expenditure for the tax year 2005-2006 or any earlier tax year.

(2) The amount of relief or exemption to be disallowed in respect of the tax year 2005-2006 or any earlier tax year is not to exceed the amount which would have been disallowed in respect of that tax year if--

(a) sections 562 to 564 had not applied in relation to the carry back tax year, and

(b) the amount of expenditure for the carry back tax year to be treated as non-charitable expenditure for an earlier tax year had instead been calculated in accordance with the provisions mentioned in sub-paragraph (3).

(3) Those provisions are--

(a) sections 505 and 506 of ICTA, and

(b) Part 3 of Schedule 20 to that Act,

as those provisions would have had effect in relation to the carry back tax year if the amendments made to them by section 55 of FA 2006 had not been made and the amendments made to them by this Act had not been made.



Part 12 Manufactured payments and repos

Tax credits: stock lending arrangements and repos

108 Sections 592 and 593 do not apply if the qualifying distribution was made before 8 April 1998.

109 (1) Section 592(3) does not apply if the qualifying distribution was received by the borrower before the relevant date.

(2) The relevant date is--

(a) if the borrower is an individual, 6 November 2003, and

(b) if the borrower is not an individual, 17 March 2004.

110 (1) Section 593(3) does not apply if the qualifying distribution was received by the interim holder before the relevant date.

(2) The relevant date is--

(a) if the interim holder is an individual, 6 November 2003, and

(b) if the interim holder is not an individual, 17 March 2004.

Deemed manufactured payments: stock lending arrangements

111 Section 596 does not apply if the stock lending arrangement was made before 1 July 1997.

112 (1) Section 597 does not apply if the stock lending arrangement was made before 5 December 2005.

(2) In relation to a stock lending arrangement made on or after 5 December 2005 but before 22 March 2006, section 597 has effect with the omission of subsection (6).

(3) If--

(a) a stock lending arrangement was made before 5 December 2005 in respect of any securities ("the original securities"), and

(b) on or after that date the lender under the stock lending arrangement transfers securities ("the substituted securities") in substitution for some or all of the original securities,

section 597 has effect as if that arrangement were made on the date of the substitution (and the substituted securities were the relevant securities).

113 Sections 596(5) and 599 do not apply in relation to any arrangement made before 22 March 2006.

Deemed manufactured payments: repos

114 (1) Section 602 does not apply if--

(a) the securities are UK shares or UK securities, and

(b) the agreement to sell them was entered into by the original owner before 1 May 1995.

(2) Section 602 does not apply if--

(a) the securities are overseas securities, and

(b) the agreement to sell them was entered into by the original owner before 6 November 1996.

115 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003, for the purpose of determining whether (for the purposes of sections 601 and 602) there is a repo in respect of the securities.

(2) Section 569 has effect as if for subsection (4) there were substituted--

" (4) Condition C is that the original owner or a person connected with the original owner--

(a) is required to buy back the securities by the agreement or a related agreement, or

(b) exercises an option to buy back the securities which was acquired under the agreement or a related agreement. "

116 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003, for the purpose of determining whether section 602 applies.

(2) Section 601 applies with these modifications.

(3) It applies as if in subsection (1)(c) for "the first or second set of relevant conditions" there were substituted "subsection (2)".

(4) It applies as if in subsection (2) for "This is the first set of relevant conditions" there were substituted "These are the conditions".

(5) It applies as if subsection (3) were omitted.

117 (1) This paragraph applies if--

(a) an agreement to sell securities was made before 27 June 2006,

(b) the person from whom the securities are to be repurchased ("A") is not the person to whom the original owner agreed to sell the securities, and

(c) A did not become the person from whom the securities are to be repurchased in consequence of an agreement made on or after 27 June 2006.

(2) Section 602 has effect with the omission of subsections (3) and (4).

118 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003.

(2) Section 605 has effect with the omission--

(a) in subsection (1), of the words "or B", and

(b) of subsection (3).

Price differences under repos

119 Section 607 does not apply if the agreement to sell the securities was entered into before 1 May 1995.

120 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003, for the purpose of determining whether (for the purposes of section 607) there is a repo in respect of the securities.

(2) Section 569 has effect as if for subsection (4) there were substituted--

" (4) Condition C is that the original owner or a person connected with the original owner--

(a) is required to buy back the securities by the agreement or a related agreement, or

(b) is required to buy back the securities under an obligation imposed as a result of the exercise of an option acquired under the agreement or a related agreement. "

121 (1) This paragraph applies if section 607 applies and the agreement to sell the securities was made before 9 April 2003.

(2) That section has effect with the omission of subsections (6) and (7).

122 (1) This paragraph applies if the agreement to sell the securities to the interim holder was made before 9 April 2003.

(2) Section 608(3) has effect as if for "benefits and risks" there were substituted "benefits or risks".

123 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003.

(2) Section 611 applies with these modifications.

(3) It applies as if in subsection (1) after "modifications" there were inserted "in a case where there is a sale and repurchase arrangement in respect of securities".

(4) It applies as if after subsection (1) there were inserted--

" (1A) For the purposes of subsection (1) there is a sale and repurchase arrangement in respect of securities if--

(a) a person ("the original owner") has sold the securities to another person under an agreement,

(b) the securities are UK shares, UK securities or overseas securities, and

(c) the original owner or a person connected with the original owner--

(i) is required to buy back the securities by the agreement or a related agreement, or

(ii) acquires, under the agreement or a related agreement, an option to buy back the securities.

(1B) Section 570 (meaning of "buying back" securities etc) applies in the context of subsection (1A) as it applies in the context of a repo. "

Powers to modify repo provisions

124 (1) This paragraph applies if an agreement to sell securities was made before 9 April 2003, for the purpose of determining whether (for the purposes of section 612) there is a repo in respect of the securities.

(2) This paragraph also applies if an agreement to sell securities was made before 9 April 2003, for the purpose of determining whether (for the purposes of section 613) the case involves redemption arrangements.

(3) Section 569 applies with these modifications.

(4) It applies as if for subsection (2) there were substituted--

" (2) Condition A is that a person ("the original owner") has sold the securities to another person ("the interim owner") under an agreement. "

(5) It applies as if for subsection (4) there were substituted--

" (4) Condition C is that the original owner or a person connected with the original owner--

(a) is required to buy back the securities by the agreement or a related agreement, or

(b) acquires, under the agreement or a related agreement, an option to buy back the securities. "



Part 13 Accrued income profits

Sale and repurchase arrangements

125 (1) Section 655 applies only if--

(a) in the case of overseas securities, the agreement to sell the securities mentioned in section 654(2) is entered into after 5 November 1996, and

(b) in any other case, the agreement to sell the securities so mentioned is entered into after 30 April 1995.

(2) In sub-paragraph (1) "overseas securities" has the same meaning as in Part 11 (see section 567).

126 (1) This paragraph applies if the agreement to sell the securities mentioned in section 654(2) was made before 9 April 2003.

(2) Section 655 has effect with the omission of subsection (2).

(3) For the purpose of determining whether (for the purposes of section 655) there is a sale and repurchase arrangement in respect of the securities, section 654(2) has effect with the omission of paragraph (b).

(4) Sub-paragraph (5) applies--

(a) for the purpose of determining whether (for the purposes of section 656) there is a sale and repurchase arrangement in respect of the securities, and

(b) for the purpose of determining whether (for the purposes of section 657) the case involves redemption arrangements.

(5) Section 654(2) has effect with the substitution for paragraphs (b) and (c) of " or

(b) T or a person connected with T acquires, under the agreement or a related agreement, an option to buy back the securities. "

Successive transfers with unrealised interest in default

127 Section 661 does not apply if the transferor's acquisition was before 28 February 1986.

Unrealised interest received by transferee after transfer within Chapter 2 of Part 12

128 If the transfer of securities within section 681(1)(a) occurred before 19 March 1986, section 681(1) has effect with the omission of paragraph (b).



Part 14 Tax avoidance

<<<< >>>>

Transactions in securities: general

129 (1) Despite anything in this Act, Chapter 1 of Part 17 of ICTA (cancellation of tax advantages from certain transactions in securities) continues to apply so far as required for the purposes of notices under section 703(3) of that Act requiring adjustments to be made affecting tax years before the tax year 2007-08; and a counteraction notice under Chapter 1 of Part 13 (transactions in securities) may not require such an adjustment to be made.

(2) Subject to that, Chapter 1 of Part 13 applies--

(a) whether or not the transaction or transactions, in consequence of which, or of the combined effect of which, the tax advantage has been or will be obtained, occur on or after 6 April 2007, and

(b) whether or not the tax year to which that advantage relates ("the tax advantage year") is a year before the tax year 2007-08,

but see section 698(5) (under which no assessments may be made as a result of a counteraction notice later than 6 years after the tax advantage year).

(3) This paragraph is to be interpreted as if it were part of Chapter 1 of Part 13.

Transactions in securities: meaning of relevant companies for the purposes of sections 689 and 690

130 (1) In its application to a transaction in securities that took place before 29 April 1996 or two or more transactions in securities the first of which took place before that date, section 691(1)(b)(i) (meaning of "relevant company") applies with the substitution for the words "listed in the Official List of" of the words "authorised to be dealt in on".

(2) In its application to a transaction in securities that took place before 1 January 1997 or two or more transactions in securities the first of which took place before that date, section 691(1) applies as if the companies referred to in paragraph (b) included companies none of whose shares or stocks are dealt in on the Unlisted Securities Market regularly or from time to time.

(3) In this paragraph "companies" and "transaction in securities" have the same meaning as in Chapter 1 of Part 13 (see section 713).

Transactions in securities: statement of case by tribunal for opinion of High Court or Court of Session

131 If a tribunal has made a determination under section 705(3) of ICTA (determination on rehearing of appeal against notice under section 703 of ICTA) within 30 days before 6 April 2007, the appellant or an officer of Revenue and Customs may require the tribunal to state and sign a case under section 707(2) of this Act, despite not having declared dissatisfaction with the determination.

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 | P.58 | P.59 | P.60 | P.61 | P.62 | P.63 | P.64 | P.65 | P.66 | P.67 | P.68 | P.69 | P.70

-- Back--

<<<< >>>>

Stat




Search
Popular article
Advert