(SECTIONS 365 TO 886)

TABLE OF CONTENTS

Part 4: Savings and investment income     2

Chapter 1: Introduction     2

Section 365: Overview of Part 4     2

Section 366: Provisions which must be given priority over Part 4     2

Section 367:Priority between Chapters within Part 4     4

Section 368: Territorial scope of Part 4 charges     4

Chapter 2: Interest     5

Section 369: Charge to tax on interest     6

Section 370: Income charged     8

Section 371: Person liable     9

Section 372: Building society dividends     9

Section 373: Open-ended investment company interest distributions     9

Section 374: Date when interest payments under section 373 made     10

Section 375: Interpretation of sections 373 and 374     10

Section 376: Authorised unit trust interest distributions     10

Section 377: Date when interest payments under section 376 made     10

Section 378: Interpretation of sections 376 and 377     11

Section 379: Industrial and provident society payments     11

Section 380: Funding bonds     11

Section 381: Discounts     11

Introduction     12

Section 382: Contents of Chapter     12

Section 387: Date when dividends paid under section 386     15

Section 388: Interpretation of sections 386 and 387     15

Section 390: Date when dividends paid under section 389     16

Section 391: Interpretation of sections 389 and 390     16

Section 396: Interpretation of sections 392 to 395     18

Section 398: Increase in amount or value of dividends where tax credit available     19

Section 399: Qualifying distributions received by persons not entitled to tax credits     19

Section 401: Relief: qualifying distribution after linked non-qualifying distribution     20

Chapter 4: Dividends from non-UK resident companies     21

Section 402: Charge to tax on dividends from non-UK resident companies     21

Section 403: Income charged     22

Section 404: Person liable     22

Section 405: SIP shares: introduction     22

Section 406: Later charge where cash dividends retained in SIPs are paid over     22

Section 407: Dividend payment when dividend shares cease to be subject to SIP     22

Section 408: Reduction in tax due in cases within 407     23

Chapter 5: Stock dividends from UK resident companies     23

Section 409: Charge to tax on stock dividend income     23

Section 410: When stock dividend income arises     24

Section 411: Income charged     24

Section 412: Cash equivalent of share capital     24

Section 413: Person liable     24

Section 414: Income tax treated as paid     25

Chapter 6: Release of loan to participator in close company     26

Section 415: Charge to tax under Chapter 6     26

Section 416: Income charged     26

Section 417: Person liable     26

Section 418: Relief where borrowers liable as settlors     27

Section 419: Loans and advances to persons who die     28

Section 420: Loans and advances to trustees of trusts that have ended     28

Section 421: Income tax treated as paid     28

Section 435: Securities issued in separate tranches: basic rule     34

Section 444: Meaning of "strip" in Chapter 8     37

Section 447: Restriction of profits on strips by reference to original acquisition cost     38

Section 448: Restriction of losses on strips by reference to original acquisition cost     38

Section 449: Strips of government securities: manipulation of acquisition, sale or redemption payments     39

Section 450: Market value of strips etc.     39

Section 451: Market value of strips etc. quoted in foreign stock exchange lists     39

Section 465: Person liable: individuals     44

Section 466: Person liable: personal representatives     45

Section 467: Person liable: UK resident trustees     45

Section 475: Special rules: personal portfolio bonds     48

Section 482: Excepted group life policies: conditions about persons intended to benefit     50

Section 484: When chargeable events occur     50

Section 486: Exclusion of maturity of capital redemption policies in certain circumstances     51

Section 489: Conditions applicable to alterations of life insurance policy terms     52

Section 490: Last payment under guaranteed income bonds etc. treated as total surrender     52

Calculating gains: general     52

Section 493: The value of a policy or contract     53

Part surrenders and assignments: periodic calculations and excess events     54

Section 498: Requirement for periodic calculations in part surrender or assignment cases     55

Transaction-related calculations and part surrender or assignment events     59

Section 510: Requirement for transaction-related calculations in certain part surrender and assignment cases     59

Section 512: Available premium left for relevant transaction     60

Section 513: Special rules for part surrenders and assignments in final insurance year     61

Section 523: The total amount of personal portfolio bond excesses     63

Section 524: The total amount of part surrender gains     64

Section 527: Reduction for sums taken into account otherwise than under Chapter 9     64

Section 532: Relief for policies and contracts with European Economic Area insurers     67

Section 533: Meaning of "comparable EEA tax charge"     67

Section 539: Relief for deficiencies     69

Section 540: When deficiencies arise: events following calculation events     70

Section 544: Application of Chapter to policies and contracts in which companies interested     71

Section 546: Table of provisions subject to special rules for older policies and contracts     71

Chapter 10: Distributions from unauthorised unit trusts     71

Section 547: Charge to tax under Chapter 10     71

Section 548: Income charged     72

Section 549: Person liable     72

Section 550: Income tax treated as paid     72

Chapter 13: Sales of foreign dividend coupons     80

Section 570: Charge to tax under Chapter 13     80

Section 571: Meaning of "foreign holdings" etc     81

Section 572: Income charged     81

Section 573: Person liable     81

Part 5: Miscellaneous income     81

Part 5: Chapter 1: Introduction     82

Section 574: Overview of Part 5     82

Section 575: Provisions which must be given priority over Part 5     82

Section 576: Priority between Chapters within Part 5     82

Section 577: Territorial scope of Part 5 charges     83

Chapter 3: Films and sound recordings: non-trade businesses     93

Section 609: Charge to tax on films and sound recordings businesses     94

Section 610: Income charged     94

Section 611: Person liable     94

Section 612: Calculation of income     94

Section 613: Application of trading income rules to non-trade businesses     95

Section 614: Charge to tax on certain telecommunication rights of a non-trader     95

Section 615: Income charged     95

Section 616: Person liable     95

Section 617: Deductions in calculating certain income charged     96

Section 618: Payments received after deduction of tax     96

Section 620: Meaning of "settlement" and "settlor"     97

Section 625: Settlor's retained interest     98

Section 626: Exception for outright gifts between spouses     99

Section 630: Exceptions for gifts to charities     100

Section 632: Offshore income gains     101

Section 634: Meaning of "capital sum" and "sums paid to settlor"     101

Section 635: Amount of available income     102

Section 636: Calculation of undistributed income     102

Section 637: Qualifications to section 636     102

Section 638: Capital sums paid by way of loan or repayment of loan     103

Section 639: Loans to participators in close companies     103

Section 640: Grossing-up of deemed income     103

Section 642: Exception for certain loans or repayments of loans     104

Section 645: Property or income originating from settlor     105

Chapter 7: Annual payments not otherwise charged     120

Section 683: Charge to tax on annual payments not otherwise charged     121

Section 684: Income charged     122

Section 685: Person liable     122

Section 686: Payments received after deduction of tax     122

Section 688: Income charged     124

Section 689: Person liable     125

Part 6: Exempt income     125

Chapter 1: Introduction     125

Section 690: Overview of Part 6     125

Chapter 2: National savings income     125

Section 691: National Savings Bank ordinary account interest     126

Section 692: Income from savings certificates     126

Section 693: Income from Ulster Savings Certificates     127

Chapter 3: Income from individual investment plans     128

Section 694: Income from individual investment plans     128

Section 695: Investment plans     128

Section 696: Plan managers     128

Section 697: Special requirements for certain foreign managers     128

Section 698: Requirements for discharge of foreign institution's duties     128

Section 699: Non-entitlement to exemption     129

Section 700: Information     129

Section 701: General and supplementary powers     129

Section 703: Meaning of "certified SAYE savings arrangement"     130

Chapter 5: Venture capital trust dividends     131

Section 709: Venture capital trust dividends     132

Section 710: Treatment of shares where annual acquisition limit     132

exceeded     132

Section 711: Identification of shares after disposals     132

Section 712: Identification of shares after reorganisations etc.     133

Chapter 6: Income from FOTRA securities     134

Section 713: Introduction: securities free of tax to residents abroad ("FOTRA securities")     134

Section 714: Exemption of profits from FOTRA securities     135

Section 715: Interest from FOTRA securities held on trust     135

Section 716: Restriction on deductions etc. relating to FOTRA securities     135

Section 720: Exempt proportion: term dependent solely on duration of life     138

Section 725: Annual payments under immediate needs annuities     140

Section 726: Meaning of "care provider"     140

Section 732: Compensation awards     143

Section 733: Persons entitled to exemptions for personal injury payments etc.     143

Section 734: Payments from trusts for injured persons     143

Section 748: Payments by persons liable to pool betting duty     145

Section 757: Interest and royalty payments: introduction     148

Section 758: Exemption for certain interest and royalty payments     149

Section 759: The person making the payment     149

Section 760: The person beneficially entitled to the payment     149

Section 761: Meaning of "25% associates"     150

Section 762: Interest payments: exemption notices     150

Section 763: Special relationships     150

Section 764: Application of ICTA provisions about special relationships     150

Section 765: Anti-avoidance     150

Section 766: Interest and royalty payments: interpretation     150

Section 767: Power to amend references to the Directive by Order     150

Section 777: VAT repayment supplements     153

Section 778: Incentives to use electronic communications     153

Section 780: Disabled person's vehicle maintenance grant     153

Section 781: Payments under New Deal 50plus     153

Section 782: Payments under employment zone programme     153

Chapter 10: General     153

Section 783: General disregard of exempt income for income tax purposes     153

Section 820: Periods of account not ending on 5th April     163

Section 828: Overlap profit     165

Part 8: Foreign income: special rules     165

Chapter 1: Introduction     167

Section 829: Overview of Part 8     167

Section 830: Meaning of "relevant foreign income"     167

Chapter 2: Relevant foreign income charged on remittance basis     169

Section 831: Claims for relevant foreign income to be charged on the remittance basis     169

Section 832: Relevant foreign income charged on the remittance basis     170

Section 833: Income treated as remitted: repayment of UK-linked debts     170

Section 834: Arrangements treated as repayment of UK-linked debts     170

Section 835: Relief for delayed remittances     171

Section 836: Relief for delayed remittances: backdated pensions     171

Section 837: Claims for relief on delayed remittances     171

Chapter 3: Relevant foreign income charged on arising basis: deductions and reliefs     172

Section 838: Expenses attributable to collection or payment of relevant foreign income     172

Section 839: Annual payments payable out of relevant foreign income     172

Section 840: Relief for backdated pensions charged on the arising basis     172

Chapter 4: Unremittable income     173

Section 841: Unremittable income: introduction     173

Section 842: Claim for relief for unremittable income     173

Section 843: Withdrawal of relief     174

Section 844: Income charged on withdrawal of relief after source ceases     174

Section 845: Valuing unremittable income     174

Part 9: Partnerships     175

Section 846: Overview of Part 9     175

Section 847: General provisions     175

Section 848: Assessment of partnerships     175

Section 849: Calculation of firm's profits or losses     175

Section 850: Allocation of firm's profits or losses between partners     176

Section 851: Calculations etc. where firm has other income or losses     176

Section 852: Carrying on by partner of notional trade     177

Section 853: Basis periods for partners' notional trades     177

Section 854: Carrying on by partner of notional business     178

Section 855: Basis periods for partners' notional businesses     179

Section 856: Overlap profits from partners' notional businesses     179

Section 857: Partners to whom the remittance basis may apply     179

Section 858: Resident partners and double taxation agreements     180

Section 859: Special provisions about farming and property income     181

Section 860: Adjustment income     181

Section 861: Sale of patent rights: effect of partnership changes     182

Section 862: Sale of patent rights: effect of later cessation of trade     183

Section 863: Limited liability partnerships     183

Part 10: General provisions     184

Chapter 1: Introduction     184

Section 864: Overview of Part 10     184

Chapter 2: General calculation rules etc.     184

Section 865: Unpaid remuneration: non-trades and non-property businesses     184

Section 866: Employee benefit contributions: non-trades and non-property businesses     184

Section 867: Business entertainment and gifts: non-trades and non-property businesses     185

Section 868: Social security contributions: non-trades etc.     185

Section 869: Penalties, interest and VAT surcharges: non-trades etc.     186

Section 870: Crime-related payments: non-trades and non-property businesses     186

Section 871: Apportionment etc. of miscellaneous profits to tax year     186

Section 872: Losses calculated on same basis as miscellaneous income     187

Chapter 3: Supplementary and general provisions     187

Section 873: Orders and regulations made by Treasury or Board     187

Section 874: Activities in UK sector of continental shelf     187

Section 875: Meaning of "caravan"     187

Section 876: Meaning of "farming" and related expressions     187

Section 877: Meaning of grossing up     189

Section 878: Other definitions     189

Section 879: Interpretation: Scotland     190

Section 880: Interpretation: Northern Ireland     190

Section 881: Disapplication of corporation tax: section 9 of ICTA     191

Section 882: Consequential amendments     191

Section 883: Commencement and transitional provisions etc.     191

Section 884: Repeals and revocations     191

Section 885: Abbreviations and general index in Schedule 4     191