Office of Public Sector Information
Section 883
1 The repeal of provisions and their enactment in a rewritten form by this Act does not affect the continuity of the law.
2 Paragraph 1 does not apply to any change made by this Act in the effect of the law.
3 Any subordinate legislation or other thing which—
(a) has been made or done, or has effect as if made or done, under or for the purposes of a superseded enactment so far as it applied for relevant tax purposes, and
(b) is in force or effective immediately before the commencement of the corresponding rewritten provision,
has effect after that commencement as if made or done under or for the purposes of the rewritten provision.
4 (1) Any reference (express or implied) in this Act, another enactment or an instrument or document to a rewritten provision is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding superseded enactment had effect for relevant tax purposes, a reference to the superseded enactment so far as applying for those relevant tax purposes.
(2) In particular, any reference (express or implied) in this Act, another enactment or an instrument or document to—
(a) the profits of a UK property business,
(b) relevant foreign income, or
(c) similar concepts created by this Act,
is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding concept in a superseded enactment had effect for income tax purposes, a reference to that concept so far as applying for income tax purposes.
(3) Any reference (express or implied) in this Act, another enactment or an instrument or document to—
(a) things done under or for the purposes of a rewritten provision, or
(b) things falling to be done under or for the purposes of a rewritten provision,
is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding superseded enactment had effect for relevant tax purposes, a reference to things done or falling to be done under or for the purposes of the superseded enactment so far as applying for those relevant tax purposes.
5 (1) Any reference (express or implied) in any enactment, instrument or document to a superseded enactment in its application for relevant tax purposes is to be read, so far as is required for those relevant tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten provision has effect, a reference to the rewritten provision.
(2) In particular, any reference (express or implied) in any enactment, instrument or document to Schedule A, D or F or the Cases of Schedule D in their application for income tax purposes is to be read, so far as is required for income tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten concept has effect, a reference to the rewritten concept.
(3) Any reference (express or implied) in any enactment, instrument or document to—
(a) things done under or for the purposes of a superseded enactment in its application for relevant tax purposes, or
(b) things falling to be done under or for the purposes of a superseded enactment in its application for relevant tax purposes,
is to be read, so far as is required for those relevant tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten provision has effect, a reference to things done or falling to be done under or for the purposes of the rewritten provision.
6 (1) Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act 1978 (c. 30) (but are without prejudice to any other provision of that Act).
(2) Paragraphs 4 and 5 apply only so far as the context permits.
7 (1) The repeal by this Act of a transitional or saving provision relating to the coming into force of a provision rewritten in this Act does not affect the operation of the transitional or saving provision, so far as it is not specifically rewritten in this Act but remains capable of having effect in relation to the corresponding provision of this Act.
(2) The repeal by this Act of an enactment previously repealed subject to savings does not affect the continued operation of those savings.
(3) The repeal by this Act of a saving on the previous repeal of an enactment does not affect the operation of the saving so far as it is not specifically rewritten in this Act but remains capable of having effect.
8 (1) Sub-paragraph (2) applies if—
(a) as a result of this Act, an enactment which applies to both income tax and corporation tax (“the original enactment”) has become an enactment which applies to income tax and an enactment which applies to corporation tax (“the successor enactments”),
(b) immediately before 6th April 2005, section 9(5) of ICTA (taxes treated as one in certain circumstances) had effect in relation to the original enactment, and
(c) no express provision is made by this Act to preserve this effect.
(2) The successor enactments are not to be affected in their operation by the fact that income tax and corporation tax are distinct taxes but they are to apply in relation to income tax and corporation tax as if they were one tax so far as is—
(a) consistent with the Corporation Tax Acts, and
(b) required to preserve the effect of section 9(5) of ICTA,
and the successor enactments are to be read accordingly.
9 (1) References in this Act to any person are to be read, in the case of a person acting in partnership with other persons of whom at least one is a company chargeable to corporation tax, as references to all the partners so far as is required for the purposes of preserving the continuity of the law.
(2) References to a company or other person in any provision amended in its application for corporation tax purposes by this Act are to be read, in the case of a company acting in partnership with other persons of whom at least one is not a company, as references to all the partners so far as is required for the purposes of preserving the continuity of the law.
10 (1) In this Part—
“enactment” includes an enactment comprised in subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30)),
“relevant tax purposes” means, in relation to a superseded enactment, tax purposes for which the enactment has been rewritten by this Act, and
“superseded enactment” means an earlier enactment which has been rewritten by this Act for certain tax purposes (whether it applied only for those purposes or for those and other tax purposes).
(2) References in this Part to the repeal of a provision include references to its revocation and to its express or implied disapplication for income tax purposes of this Act.
(3) References in this Part to tax purposes are not limited to income tax purposes.
11 (1) This paragraph applies if, in the case of any person—
(a) a thing is done or an event occurs before 6th April 2005, and
(b) because of a change in the law made by this Act, the tax consequences of that thing or event for the relevant period are different from what they would otherwise have been.
(2) If that person so elects, this Act applies with such modifications as may be necessary to secure that the tax consequences for the relevant period are the same as they would have been if the change in the law had not been made.
(3) In sub-paragraphs (1) and (2) “the relevant period” means—
(a) for income tax purposes, any period of account beginning before and ending on or after 6th April 2005, and
(b) for corporation tax purposes, any accounting period beginning before and ending on or after 6th April 2005.
(4) If this paragraph applies in the case of two or more persons in relation to the same thing or event, an election made under this paragraph by any one of those persons is of no effect unless a corresponding election is made by the other or each of the others.
(5) An election under this paragraph must be made—
(a) for income tax purposes, on or before the first anniversary of the normal self-assessment filing date for the tax year in which the period of account ends, and
(b) for corporation tax purposes, no later than two years after the end of the accounting period.
12 (1) This paragraph applies for the purposes of section 36.
(2) In relation to a period of account ending before 27th November 2002, an amount charged in the accounts in respect of employees' remuneration includes an amount which is held by an intermediary with a view to its becoming employees' remuneration.
(3) In relation to a period of account ending on or after 27th November 2002, an amount charged in the accounts in respect of employees' remuneration includes an amount—
(a) in respect of employee benefit contributions (within the meaning of sections 38 to 44) made before that date, and
(b) which is held by an intermediary,
with a view to its becoming employees' remuneration.
13 Sections 38 to 44 do not apply to deductions that would otherwise be allowed—
(a) for a period ending before 27th November 2002, or
(b) in respect of employee benefit contributions made before that date.
14 (1) In relation to any time before the coming into force of ITEPA 2003—
(a) section 40(7) applies as if, in the definition of “employment income tax charge”, for “tax under ITEPA 2003” there were substituted “income tax under Schedule E”,
(b) section 41(1) applies as if for “treated as received” to the end there were substituted “treated as received for the purposes of section 202A(1)(a) of ICTA (applying the rules in section 202B(1) to (6) of that Act (receipts basis of assessment for Schedule E)).”, and
(c) section 41(3) applies as if for “tax under ITEPA 2003” there were substituted “income tax under Schedule E”.
(2) The express provision made by this paragraph does not affect the construction of other provisions of this Act as a result of the operation of paragraph 5 of this Schedule on paragraph 4 of Schedule 7 to ITEPA 2003 (references in enactment to rewritten provisions include corresponding repealed provisions) or on any similar provision (for example paragraph 4 of Schedule 3 to CAA 2001).
15 (1) Subject to sub-paragraph (7), sections 38 to 44 apply before 6th April 2006 with the following amendments.
(2) In section 38(4)—
(a) for paragraphs (b) and (c) and the word “or” at the end of paragraph (c) substitute—
“(b) contributions under a retirement benefits scheme within the meaning of Chapter 1 of Part 14 of ICTA (see section 611 of that Act),
(c) contributions under a personal pension scheme approved under Chapter 4 of that Part (see section 630 of that Act), or”, and
(b) omit “For the purposes of paragraph (c)” to the end.
(3) In section 39—
(a) in subsection (1)(b) omit “, or in respect of, present or former”, and
(b) in subsection (2) omit “present or former”.
(4) In section 40—
(a) in subsection (1) for “, C or D” substitute “or C”, and
(b) omit subsection (5).
(5) In section 41(1) omit paragraph (b) and the word “and” before it.
(6) In section 44(1) omit the definition of “employer-financed retirement benefits scheme”.
(7) The power of the Treasury to make an order under section 281 or 283 of FA 2004 has effect as if Schedule 35 to that Act contained an amendment substituting sections 38 to 44 of this Act for those sections as amended by sub-paragraphs (2) to (6) above.
16 In relation to expenditure incurred under a contract entered into before 11th March 1992, section 48(1) and (2) apply with the substitution of “£8,000” for “£12,000”.
17 Section 50 does not apply to expenditure which is incurred—
(a) before 17th April 2002, or
(b) on the hiring of a car mentioned in that section which is first registered before that date.
18 Section 55(1)(b) does not apply to expenditure which was incurred before 1st April 2002.
19 (1) This paragraph relates to the operation of sections 60 to 67 where, in respect of a lease—
(a) there is a receipt of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) as a result of section 34 or 35 of ICTA (treatment of premiums etc. as rent and assignments for profit of lease granted at an undervalue) for a tax year before the tax year 2005-06 or an accounting period ending before 6th April 2005, or
(b) there would be such a receipt, but for the operation of section 37(2) or (3) of ICTA (reductions in certain receipts under section 34 or 35 of ICTA).
In this paragraph and paragraph 20 such a receipt is referred to as a “pre-commencement receipt”.
(2) For the purposes of sections 60 to 67—
(a) the lease is treated as a taxed lease, and
(b) the pre-commencement receipt is treated as a taxed receipt.
(3) For the purposes of those sections, the “receipt period” of a taxed receipt which is a pre-commencement receipt is—
(a) in the case of a pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and
(b) in the case of a pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.
(4) For the purposes of sections 60 to 67 the “unreduced amount” of a taxed receipt which is a pre-commencement receipt is the amount of the pre-commencement receipt as a result of section 34 or 35 of ICTA, before the operation of section 37(2) or (3) of ICTA.
(5) Sub-paragraph (6) applies to a taxed receipt which is a pre-commencement receipt arising as a result of section 34(2) of ICTA (obligation on tenant to carry out work under lease).
(6) If the obligation to carry out work included the carrying out of work which gave or will give rise to expenditure for which an allowance has been, or may be, made under the enactments relating to capital allowances, the unreduced amount of the taxed receipt is calculated as if the obligation had not included the carrying out of that work.
20 (1) This paragraph provides for the application of section 61 as a result of section 63 if—
(a) a lease is a taxed lease as a result of paragraph 19,
(b) another lease is granted out of the taxed lease,
(c) in calculating the amount of a pre-commencement receipt in respect of the other lease, there is a reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and
(d) as a result of paragraph 19 the amount chargeable on the superior interest is the taxed receipt for the purposes of section 61.
(2) Sections 61 to 65 apply as follows—
(a) the pre-commencement receipt is treated as if it were a lease premium receipt for the purposes of sections 64 and 65,
(b) references in those sections to the reduction under section 288 by reference to the taxed receipt are, in relation to the pre-commencement receipt, to the reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest, and
(c) for the purposes of those sections the receipt period of the pre-commencement receipt is—
(i) in the case of a pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and
(ii) in the case of a pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.
(3) References to a reduction under section 37(2) or (3) of ICTA in a pre-commencement receipt by reference to the amount chargeable on the superior interest are to the difference between—
(a) the amount of the pre-commencement receipt before the operation of section 37(2) or (3) of ICTA, and
(b) the amount of the receipt after the operation of that subsection,
so far as attributable to the amount chargeable on the superior interest for the purposes of section 37 of ICTA.
21 (1) This paragraph applies if—
(a) the period of account of a trade begins before 1st April 2003 and ends on or after 6th April 2005, and
(b) in that period of account the person carrying on the trade made the services of a person employed for the purposes of the trade available to a self-governing school within the meaning of the Self-Governing Schools etc. (Scotland) Act 1989 (c. 39) on a basis that was stated and intended to be temporary.
(2) For the purposes of section 70 an “educational establishment”, in Scotland, includes such a school (despite the fact that, following the abolition of such schools on 1st April 2003, section 86(5)(d) of ICTA is not re-written in this Act).
(3) This paragraph applies to professions and vocations as it applies to trades.
22 (1) This paragraph applies if, without the modifications to section 588 of ICTA (training courses for employees) made by this Act—
(a) section 588(5) of ICTA would operate in relation to an employee by virtue of paragraph (a) of that provision and paragraph 37 of Schedule 7 to ITEPA 2003 (savings in relation to tax years before 2003-04),
(b) section 588(5) of ICTA would operate in relation to an employer by virtue of paragraph (b) of that provision and paragraph 37 of Schedule 7 to ITEPA 2003, or
(c) section 588(6) and (7) of ICTA would operate in relation to an employer by virtue of paragraph 37 of Schedule 7 to ITEPA 2003.
(2) Those modifications do not apply in relation to—
(a) the operation of section 588(5) of ICTA in relation to the employee as mentioned in sub-paragraph (1)(a),
(b) the operation of section 588(5) of ICTA in relation to the employer as mentioned in sub-paragraph (1)(b), and
(c) the operation of section 588(6) and (7) of ICTA in relation to the employer as mentioned in sub-paragraph (1)(c).
23 (1) This paragraph applies if—
(a) at any time during the period beginning with 6th April 2003 and ending with 5th April 2005, a person (“the employer”) incurred expenditure in paying or reimbursing retraining course expenses within the meaning of section 311 of ITEPA 2003,
(b) the employer’s liability to income tax for any tax year has been determined (before or after the passing of this Act, and by assessment or otherwise) on the assumption that, by virtue only of section 588(3) of ICTA, the employer is entitled to a deduction on account of the expenditure, and
(c) before 6th April 2005, no assessment has been made under section 29(1) of TMA 1970 by virtue of section 588(5) of ICTA of an amount due in consequence of the failure by the person in respect of whom the expenditure was incurred to meet a condition of the kind mentioned in section 312(1)(b)(i) or (ii) of ITEPA 2003.
(2) Section 75 (retraining courses: recovery of tax) applies in relation to the employer as if the condition in subsection (1) were met.
(3) In the application of that section to the employer, references to “the employee” are to the person in respect of whom the expenditure was incurred by the employer.
24 Section 82 does not apply to any contribution which was made to an urban regeneration company before 1st April 2003.
25 To the extent that any function of the Scottish Ministers under section 79 of ICTA was, before 6th April 2005, also exercisable by the Secretary of State for the purposes specified in section 2(2) of the European Communities Act 1972 (c. 68) that function as rewritten in—
(a) section 83(2) (meaning of “local enterprise agency”),
(b) section 84 (approval of local enterprise agencies), or
(c) section 85 (supplementary provisions with respect to approvals),
continues to be also exercisable by the Secretary of State for those purposes.
26 (1) This paragraph applies if—
(a) fees have been incurred, but not paid, for the purposes of a trade in connection with any of the matters mentioned in section 89 or 90,
(b) the fees were incurred in a period of account no part of which falls in the basis period for the tax year 2005-06 or a subsequent tax year, and
(c) the fees have not been taken into account in calculating the profits of the trade of any tax year.
(2) A deduction is allowed for the fees in calculating the profits of the period of account in which they are paid.
27 (1) This paragraph applies if—
(a) a sum is payable, but not paid, by the person carrying on a trade to the Export Credits Guarantee Department under an agreement mentioned in section 91(1)(a) or with a view to entering into such an agreement,
(b) the sum was incurred in a period of account no part of which falls in the basis period for the tax year 2005-06 or a subsequent tax year, and
(c) the sum has not been taken into account in calculating the profits of the trade of any tax year.
(2) A deduction is allowed for the sum in calculating the profits of the period of account in which it is paid.
(3) This paragraph applies to professions and vocations as it applies to trades.
28 (1) Sections 101 and 102 do not apply to a reverse premium—
(a) which was received before 9th March 1999, or
(b) to which the recipient was entitled immediately before that date.
(2) In determining whether a reverse premium was one to which the recipient was entitled immediately before 9th March 1999, no account is to be taken of any arrangements made on or after that date.
29 (1) Section 106 does not apply if—
(a) a person carrying on a trade recovers a sum mentioned in that section, and
(b) the sum has been taken into account in calculating the profits of the trade of a tax year before the tax year 2005-06.
(2) This paragraph applies to professions and vocations as it applies to trades.
30 To the extent that the power of the National Assembly for Wales to make regulations under section 84(5) of ICTA was, before 6th April 2005, also exercisable by the Secretary of State for the purpose of—
(a) implementing any Community obligation of the United Kingdom,
(b) enabling any such obligation to be implemented,
(c) enabling any rights enjoyed or to be enjoyed by the United Kingdom under or by virtue of the Community Treaties to be exercised, or
(d) dealing with matters arising out of or related to any such obligation or rights or the operation of section 2(1) of the European Communities Act 1972 (c. 68),
that power as rewritten in section 110 continues to be also exercisable by the Secretary of State for those purposes.
31 (1) This paragraph applies to—
(a) production expenditure in respect of the original master version of a film which (within the meaning of Chapter 9 of Part 2) was completed before 21st March 2000,
(b) production expenditure in respect of the original master version of a film which (within the meaning of that Chapter) is completed on or after that date, if the first day of principal photography was before that date (but see sub-paragraph (4)), and
(c) acquisition expenditure in respect of the original master version of a film which was incurred before 6th April 2000.
(2) For this purpose acquisition expenditure in respect of the original master version of a film includes the acquisition of any description of rights in the original master version of a film (whether or not held or acquired with it).
(3) In relation to expenditure to which this paragraph applies—
(a) section 130(4) applies with the omission of “that are held or acquired with it”,
(b) section 131(5) applies with the insertion at the end of “or, if the expenditure is acquisition expenditure and the acquisition takes place after that time, at the time of the acquisition”, and
(c) section 134(1) applies with the insertion after “acquisition expenditure,” of “and the expenditure would otherwise constitute capital expenditure on the provision of plant or machinery for the purposes of Part 2 of CAA 2001,”.
(4) This paragraph does not apply to expenditure falling within sub-paragraph (1)(b) if the person incurring the expenditure so elects.
(5) Any such election is irrevocable.
32 (1) Sections 134 and 135 do not apply in relation to expenditure incurred by a person carrying on a trade which consists of or includes the exploitation of original master versions of films if—
(a) the expenditure is incurred on the production or acquisition of an original master version of a film completed before 10th March 1992 (within the meaning of Chapter 9 of Part 2),
(b) the original master version is a certified master version,
(c) its value is expected to be realised over a period of not less than two years, and
(d) the film is genuinely intended for theatrical release.
(2) Sub-paragraph (1)(d) does not apply if—
(a) the original master version of the film was certified before 17th April 2002 by the Secretary of State under Schedule 1 to the Films Act 1985 (c. 21) as a qualifying film, tape or disc, or
(b) an application for such certification was received by the Secretary of State before that date.
33 Section 137 does not apply in relation to expenditure which was incurred before 10th March 1992.
34 Section 138 does not apply in relation to production or acquisition expenditure in respect of the original master version of a film which was completed before 10th March 1992.
35 (1) Any requirement in Chapter 9 of Part 2 for a film to be genuinely intended for theatrical release does not apply to a film completed (within the meaning of that Chapter)—
(a) on or after 17th April 2002 if—
(i) an application for certification was received by the Secretary of State before that date, or
(ii) the film is a qualifying drama (see sub-paragraph (2)),
(b) before 1st January 2002 if—
(i) the film was certified by the Secretary of State before 17th April 2002, or
(ii) an application for certification was received by the Secretary of State before 17th April 2002, or
(c) at any time in the period beginning with 1st January 2002 and ending with 16th April 2002.
References in this sub-paragraph to certification are to certification of the original master version of the film under Schedule 1 to the Films Act 1985 (c. 21) as a qualifying film, tape or disc.
(2) A film is a qualifying drama if—
(a) it is a drama with an average production expenditure per hour of running time of the completed film greater than £500,000,
(b) it was commissioned on or before 17th April 2002, and
(c) the first day of principal photography was on or before 30th June 2002.
(3) For the purposes of sub-paragraph (2) “drama” does not include—
(a) anything in the nature of—
(i) an advertisement or promotional film,
(ii) a discussion programme, news or current affairs programme, quiz show, panel show, variety show or similar entertainment, or
(iii) a training film, or
(b) a film of a live event or of a theatrical or artistic performance given otherwise than for the purpose of being filmed,
but it includes a documentary involving the dramatic reconstruction of events if the dramatic content forms 50% or more of the running time.
(4) For the purposes of sub-paragraph (2) the production expenditure on a film means the total production expenditure in respect of the original master version of the film (as defined by section 141).
36 Sections 139 and 140 do not apply if—
(a) the expenditure was incurred before 2nd July 1997 (as determined by section 142), or
(b) the film was completed before that date (within the meaning of Chapter 9 of Part 2).
37 Sections 139(4) and 141(3) do not apply to any film which was completed before 17th April 2002.
38 The requirement in section 140 for the acquisition to be a relevant acquisition does not apply in relation to expenditure which was incurred before 30th June 2002 (as determined by section 142).
Income Tax (Trading and Other Income) Act 2005