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Income and Corporation Taxes Act 1988

1988 CHAPTER 1

ARRANGEMENT OF SECTIONS

Go to Preamble

  1. Part I

    The Charge to Tax

    1. Income tax

      1. 1. The charge to income tax.

      2. 2. Fractions of a pound, and yearly assessments.

      3. 3. Certain income charged at basic rate.

      4. 4. Construction of references in Income Tax Acts to deduction of tax.

      5. 5. Date for payment.

    2. Corporation tax

      1. 6. The charge to corporation tax and exclusion of income tax and capital gains tax.

      2. 7. Treatment of certain payments and repayment of income tax.

      3. 8. General scheme of corporation tax.

      4. 9. Computation of income: application of income tax principles.

      5. 10. Time for payment of tax.

      6. 11. Companies not resident in United Kingdom.

      7. 12. Basis of, and periods for, assessment.

    3. Small companies' rate

      1. 13. Small companies' relief.

    4. Advance corporation tax

      1. 14. Advance corporation tax and qualifying distributions.

    5. The six Schedules

      1. 15. Schedule A.

      2. 16. Schedule B.

      3. 17. Schedule C.

      4. 18. Schedule D.

      5. 19. Schedule E.

      6. 20. Schedule F.

  2. Part II

    Provisions Relating to the Schedule A Charge and the Associated Schedule D Charges

    1. General

      1. 21. Persons chargeable.

      2. 22. Assessments.

      3. 23. Collection from lessees and agents.

      4. 24. Construction of Part II.

    2. Deductions and other allowances

      1. 25. Deductions from rent: general rules.

      2. 26. Deductions from rent: land managed as one estate.

      3. 27. Deductions from rent: maintenance funds for historic buildings.

      4. 28. Deductions from receipts other than rent.

      5. 29. Sporting rights.

      6. 30. Expenditure on making sea walls.

      7. 31. Provisions supplementary to sections 25 to 30.

      8. 32. Capital allowances for machinery and plant used in estate management.

      9. 33. Agricultural land: allowance for excess expenditure on maintenance.

    3. Premiums, leases at undervalue etc

      1. 34. Treatment of premiums etc. as rent or Schedule D profits.

      2. 35. Schedule D charge on assignment of lease granted at an undervalue.

      3. 36. Schedule D charge on sale of land with right to reconveyance.

      4. 37. Premiums paid etc: deductions from premiums and rent received.

      5. 38. Rules for ascertaining duration of leases.

      6. 39. Saving for pre-1963 leases, and special relief for individuals.

    4. Supplemental: Schedules A and D

      1. 40. Tax treatment of receipts and outgoings on sale of land.

      2. 41. Relief for rent etc. not paid.

      3. 42. Appeals against determinations under sections 34 to 36.

      4. 43. Non-residents.

  3. Part III

    Provisions Relating to the Schedule C Charge and General Provisions about Government Securities

    1. General

      1. 44. Income tax: mode of charge.

      2. 45. Interpretation of Part III.

    2. Government securities: exemptions from tax

      1. 46. Savings certificates and tax reserve certificates.

      2. 47. United Kingdom government securities held by non-residents.

      3. 48. Securities of foreign states.

      4. 49. Stock and dividends in name of Treasury etc.

    3. Government securities: interest payable without deduction of tax

      1. 50. United Kingdom securities: Treasury directions for payment without deduction of tax.

      2. 51. Treasury directions as respects Northern Ireland securities.

      3. 52. Taxation of interest on converted government securities and interest which becomes subject to deduction.

  4. Part IV

    Provisions Relating to the Schedule D Charge

    1. Chapter I

      Supplementary Charging Provisions

      1. 53. Farming and other commercial occupation of land (except woodlands).

      2. 54. Woodlands managed on a commercial basis.

      3. 55. Mines, quarries and other concerns.

      4. 56. Transactions in deposits with and without certificates or in debts.

      5. 57. Deep discount securities.

      6. 58. Foreign pensions.

      7. 59. Persons chargeable.

    2. Chapter II

      Income Tax: Basis of Assessment etc.

      1. Cases I and II

        1. 60. Assessment on preceding year basis.

        2. 61. Special basis at commencement of trade, profession or vocation.

        3. 62. Special basis for early years following commencement.

        4. 63. Special basis on discontinuance.

      2. Cases III, IV and V

        1. 64. Case III assessments: general.

        2. 65. Cases IV and V assessments: general.

        3. 66. Special rules for fresh income.

        4. 67. Special rules where source of income disposed of or yield ceases.

        5. 68. Special rules where property etc. situated in Republic of Ireland.

      3. Case VI

        1. 69. Assessment on current year basis unless otherwise directed.

    3. Chapter III

      Corporation Tax: Basis of Assessment etc.

      1. 70. Basis of assessment etc.

    4. Chapter IV

      Provisions Supplementary to Chapters II and III

      1. 71. Computation of income tax where no profits in year of assessment.

      2. 72. Apportionments etc. for purposes of Cases I, II and VI.

      3. 73. Single assessments for purposes of Cases III, IV and V.

    5. Chapter V

      Computational Provisions

      1. Deductions

        1. 74. General rules as to deductions not allowable.

        2. 75. Expenses of management: investment companies.

        3. 76. Expenses of management: insurance companies.

        4. 77. Incidental costs of obtaining loan finance.

        5. 78. Discounted bills of exchange.

        6. 79. Contributions to local enterprise agencies.

        7. 80. Expenses connected with foreign trades etc.

        8. 81. Travel between trades etc.

        9. 82. Interest paid to non-residents.

        10. 83. Patent fees etc. and expenses.

        11. 84. Payments for technical education.

        12. 85. Payments to trustees of approved profit sharing schemes.

        13. 86. Employees seconded to charities and educational establishments.

        14. 87. Taxable premiums etc.

        15. 88. Payments to Export Credit Guarantee Department.

        16. 89. Debts proving irrecoverable after event treated as discontinuance.

        17. 90. Additional payments to redundant employees.

        18. 91. Cemeteries.

      2. Treatment of regional development and other grants and debts released etc.

        1. 92. Regional development grants.

        2. 93. Other grants under Industrial Development Act 1982 etc.

        3. 94. Debts deducted and subsequently released.

        4. 95. Taxation of dealer’s receipts on purchase by company of own shares.

      3. Special provisions

        1. 96. Farming and market gardening: relief for fluctuating profits.

        2. 97. Treatment of farm animals etc.

        3. 98. Tied premises.

        4. 99. Dealers in land.

    6. Chapter VI

      Discontinuance, and Change of Basis of Computation

      1. Valuation of trading stock etc.

        1. 100. Valuation of trading stock at discontinuance of trade.

        2. 101. Valuation of work in progress at discontinuance of profession or vocation.

        3. 102. Provisions supplementary to sections 100 and 101.

      2. Case VI charges on receipts

        1. 103. Receipts after discontinuance: earnings basis charge and related charge affecting conventional basis.

        2. 104. Conventional basis: general charge on receipts after discontinuance or change of basis.

        3. 105. Allowable deductions.

        4. 106. Application of charges where rights to payments transferred.

      3. Reliefs

        1. 107. Treatment of receipts as earned income.

        2. 108. Election for carry-back.

        3. 109. Charge under section 104: relief for individuals born before 6th April 1917.

      4. Supplemental

        1. 110. Interpretation etc.

    7. Chapter VII

      Partnerships and Successions

      1. General

        1. 111. Partnership assessments to income tax.

        2. 112. Partnerships controlled abroad.

        3. 113. Effect, for income tax, of change in ownership of trade, profession or vocation.

      2. Partnerships involving companies

        1. 114. Special rules for computing profits and losses.

        2. 115. Provisions supplementary to section 114.

        3. 116. Arrangements for transferring relief.

      3. Limited partners

        1. 117. Restriction on relief: individuals.

        2. 118. Restriction on relief: companies.

    8. Chapter VIII

      Miscellaneous and Supplemental

      1. 119. Rent etc. payable in connection with mines, quarries and similar concerns.

      2. 120. Rent etc. payable in respect of electric line wayleaves.

      3. 121. Management expenses of owner of mineral rights.

      4. 122. Relief in respect of mineral royalties.

      5. 123. Foreign dividends.

      6. 124. Interest on quoted Eurobonds.

      7. 125. Annual payments for non-taxable consideration.

      8. 126. Treasury securities issued at a discount.

      9. 127. Enterprise allowance.

      10. 128. Commodity and financial futures etc.: losses and gains.

      11. 129. Stock lending.

      12. 130. Meaning of “investment company” for the purposes of Part IV.

  5. Part V

    Provisions Relating to The Schedule E Charge

    1. Chapter I

      Supplementary Charging Provisions of General Application

      1. Miscellaneous provisions

        1. 131. Chargeable emoluments.

        2. 132. Place of performance, and meaning of emoluments received in the U.K.

        3. 133. Voluntary pensions.

        4. 134. Workers supplied by agencies.

      2. Shareholdings, loans etc.

        1. 135. Gains by directors and employees from share options.

        2. 136. Provisions supplementary to section 135.

        3. 137. Payment of tax under section 135 by instalments.

        4. 138. Share acquisitions by directors and employees.

        5. 139. Provisions supplementary to section 138.

        6. 140. Further interpretation of sections 135 to 139.

      3. Vouchers etc.

        1. 141. Non-cash vouchers.

        2. 142. Credit-tokens.

        3. 143. Cash vouchers taxable under P.A.Y.E.

        4. 144. Supplementary provisions.

      4. Living accommodation

        1. 145. Living accommodation provided for employee.

        2. 146. Additional charge in respect of certain living accommodation.

        3. 147. Occupation of Chevening House.

      5. Payments on retirement, sick pay etc.

        1. 148. Payments on retirement or removal from office or employment.

        2. 149. Sick pay.

        3. 150. Job release scheme allowances, maternity pay and statutory sick pay.

        4. 151. Income support etc.

        5. 152. Notification of amount taxable under section 151.

    2. Chapter II

      Supplementary Charging Provisions Applicable to Directors and Higher-Paid Employees and Office Holders

      1. Expenses

        1. 153. Payments in respect of expenses.

      2. Benefits in kind

        1. 154. General charging provision.

        2. 155. Exceptions from the general charge.

        3. 156. Cash equivalents of benefits charged under section 154.

        4. 157. Cars available for private use.

        5. 158. Car fuel.

        6. 159. Pooled cars.

        7. 160. Beneficial loan arrangements.

        8. 161. Exceptions from section 160.

        9. 162. Employee shareholdings.

        10. 163. Expenses connected with living accommodation.

        11. 164. Director’s tax paid by employer.

        12. 165. Scholarships.

      3. General supplementary provisions

        1. 166. Notice of nil liability under this Chapter.

        2. 167. Meaning of “director’s or higher-paid employment”.

        3. 168. Other interpretative provisions.

    3. Chapter III

      Profit-Related Pay

      1. Preliminary

        1. 169. Interpretation.

        2. 170. Taxation of profit-related pay.

      2. The relief

        1. 171. Relief from tax.

        2. 172. Exceptions from tax.

      3. Registration

        1. 173. Persons who may apply for registration.

        2. 174. Excluded employments.

        3. 175. Applications for registration.

        4. 176. Registration.

        5. 177. Change of scheme employer.

        6. 178. Cancellation of registration.

      4. Administration

        1. 179. Recovery of tax from scheme employer.

        2. 180. Annual returns etc.

        3. 181. Other information.

        4. 182. Appeals.

      5. Supplementary

        1. 183. Partnerships.

        2. 184. Independent accountants.

    4. Chapter IV

      Other Exemptions and Reliefs

      1. Share option and profit sharing schemes

        1. 185. Approved share option schemes.

        2. 186. Approved profit sharing schemes.

        3. 187. Interpretation of sections 185 and 186 and Schedules 9 and 10.

      2. Retirement benefits etc.

        1. 188. Exemptions from section 148.

        2. 189. Lump sum benefits on retirement.

        3. 190. Payments to Members of Parliament, Representatives to the European Parliament and others.

        4. 191. Job release scheme allowances not to be treated as income.

      3. Foreign emoluments and earnings, pensions and certain travel facilities

        1. 192. Relief from tax for foreign emoluments.

        2. 193. Foreign earnings and travel expenses.

        3. 194. Other foreign travel expenses.

        4. 195. Travel expenses of employees not domiciled in the United Kingdom.

        5. 196. Foreign pensions.

        6. 197. Leave travel facilities for the armed forces.

      4. Other expenses, subscriptions etc.

        1. 198. Relief for necessary expenses.

        2. 199. Expenses necessarily incurred and defrayed from official emoluments.

        3. 200. Expenses of Members of Parliament.

        4. 201. Fees and subscriptions to professional bodies, learned societies etc.

        5. 202. Donations to charity: payroll deduction scheme.

    5. Chapter V

      Assessment, Collection, Recovery and Appeals

      1. 203. Pay as you earn.

      2. 204. P.A.Y.E repayments.

      3. 205. Assessments unnecessary in certain circumstances.

      4. 206. Additional provision for certain assessments.

      5. 207. Disputes as to domicile or ordinary residence.

  6. Part VI

    Company Distributions, Tax Credits etc

    1. Chapter I

      Taxation of Company Distributions

      1. 208. U.K. company distributions not generally chargeable to corporation tax.

    2. Chapter II

      Matters which are Distributions for the Purposes of the Corporation Tax Acts

      1. 209. Meaning of “distribution”.

      2. 210. Bonus issue following repayment of share capital.

      3. 211. Matters to be treated or not to be treated as repayments of share capital.

    3. Chapter III

      Matters which are not Distributions for the Purposes of the Corporation Tax Acts

      1. Payments of interest

        1. 212. Interest etc. paid in respect of certain securities.

      2. Demergers

        1. 213. Exempt distributions.

        2. 214. Chargeable payments connected with exempt distributions.

        3. 215. Advance clearance by Board of distributions and payments.

        4. 216. Returns.

        5. 217. Information.

        6. 218. Interpretation of sections 213 to 217.

      3. Purchase of own shares

        1. 219. Purchase by unquoted trading company of own shares.

        2. 220. Conditions as to residence and period of ownership.

        3. 221. Reduction of vendor’s interest as shareholder.

        4. 222. Conditions applicable where purchasing company is member of group.

        5. 223. Other conditions.

        6. 224. Relaxation of conditions in certain cases.

        7. 225. Advance clearance of payments by Board.

        8. 226. Returns and information.

        9. 227. Associated persons.

        10. 228. Connected persons.

        11. 229. Other interpretative provisions.

      4. Stock dividends

        1. 230. Stock dividends: distributions.

    4. Chapter IV

      Tax Credits

      1. 231. Tax credits for certain recipients of qualifying distributions.

      2. 232. Tax credits for non-U.K. residents.

      3. 233. Taxation of certain recipients of distributions and in respect of non-qualifying distributions.

      4. 234. Information relating to distributions.

      5. 235. Distributions of exempt funds etc.

      6. 236. Provisions supplementary to section 235.

      7. 237. Disallowance of reliefs in respect of bonus issues.

    5. Chapter V

      Advance Corporation Tax and Franked Investment Income

      1. 238. Interpretation of terms and collection of ACT.

      2. 239. Set-off of ACT against liability to corporation tax.

      3. 240. Set-off of company’s surplus ACT against subsidiary’s liability to corporation tax.

      4. 241. Calculation of ACT where company receives franked investment income.

      5. 242. Set-off of losses etc. against surplus of franked investment income.

      6. 243. Set-off of loss brought forward, or terminal loss.

      7. 244. Further provisions relating to claims under section 242 or 243.

      8. 245. Calculation etc. of ACT on change of ownership of company.

      9. 246. Charge of ACT at previous rate until new rate fixed, and changes of rate.

    6. Chapter VI

      Miscellaneous and Supplemental

      1. Group income

        1. 247. Dividends etc. paid by one member of a group to another.

        2. 248. Provisions supplementary to section 247.

      2. Stock dividends

        1. 249. Stock dividends treated as income.

        2. 250. Returns.

        3. 251. Interpretation of sections 249 and 250.

      3. Supplemental

        1. 252. Rectification of excessive set-off etc. of ACT or tax credit.

        2. 253. Power to modify or replace section 234(5) to (9) and Schedule 13.

        3. 254. Interpretation of Part VI.

        4. 255. “Gross rate” and “gross amount” of distributions to include ACT.

  7. Part VII

    General Provisions Relating to Taxation of Income of Individuals

    1. Chapter I

      Personal Reliefs

      1. The reliefs

        1. 256. General.

        2. 257. Personal relief.

        3. 258. Widower’s or widow’s housekeeper.

        4. 259. Additional relief in respect of children.

        5. 260. Apportionment of relief under section 259.

        6. 261. Claims under sections 258 and 259 for year of marriage.

        7. 262. Widows' bereavement allowance.

        8. 263. Dependent relatives.

        9. 264. Claimant depending on services of a son or daughter.

        10. 265. Relief for blind persons.