PART 3 continued CHAPTER 3 continued
(1) For the purposes of sections 51 and 52, the comparable tax liability of an individual is the amount of the individual’s tax left after Step 6 of the calculation in section 23 for the tax year, making that calculation with the modifications set out in subsections (2) and (3).
(2) In making that calculation, do not deduct any tax reduction under—
(a) section 788 of ICTA (double taxation arrangements: relief by agreement), or
(b) section 790(1) of ICTA (relief for foreign tax where there are no double taxation arrangements).
(3) If the individual’s entitlement to a tax reduction under this Chapter is extinguished under section 423(4) (gift aid: restriction of reliefs) to any extent, deduct from the amount calculated in accordance with subsections (1) and (2) the amount by which the tax reduction is reduced.
(4) A notice under section 51 or 52—
(a) must be given on or before the fifth anniversary of the normal self-assessment filing date for the tax year to which it relates,
(b) must be in the form specified by the Commissioners for Her Majesty’s Revenue and Customs, and
(c) cannot be withdrawn.
(5) For the purposes of this section a person is treated as being entitled to a tax reduction under section 788 of ICTA if the person is entitled to credit against income tax under double taxation arrangements.
(1) Subsection (2) applies if an individual—
(a) gets married or enters into a civil partnership in a tax year, and
(b) claims a tax reduction under section 45 or 46 for that tax year.
(2) In calculating the amount of the tax reduction (if any) to which the individual is entitled under that section, the amounts specified in section 45(3) or 46(3) (as applicable) are reduced by one twelfth for each month of the tax year which is a month ending before the date on which—
(a) the marriage took place, or
(b) the civil partnership was formed.
(3) The reference in subsection (2) to the amounts specified in section 45(3) or 46(3) is to those amounts after any reduction under section 45(4) or 46(4).
(4) But if—
(a) the individual has previously been married or in a civil partnership in the same tax year, and
(b) the conditions in section 45(2) or 46(2) are met in relation to the earlier marriage or civil partnership,
subsection (2) applies only if the claim is in respect of the later marriage or civil partnership.
(5) If a claim under section 47, 48 or 49 is for the tax year in which the marriage takes place, or the civil partnership is formed, the references in those sections to the minimum amount are to be read as references to the minimum amount reduced by one twelfth for each month of the tax year which is a month ending before the date on which—
(a) the marriage took place, or
(b) the civil partnership was formed.
(6) In this section, “month” means a period beginning with the sixth day of a calendar month and ending with the fifth day of the next calendar month.
(1) An individual is not entitled to more than one tax reduction under sections 45 to 48 for a tax year (regardless of whether the individual is a party to more than one marriage or civil partnership in the tax year).
(2) For the purposes of sections 45 and 46 an individual is treated as having reached the age of 75 in a tax year if the individual was due to reach the age of 75 in the tax year, but dies in the tax year before reaching that age.
(3) Unless this Chapter provides otherwise, a tax reduction to which an individual is entitled under this Chapter for a tax year, including the tax year in which the individual dies, is given in full.
(1) This section applies in relation to an individual who claims—
(a) an allowance under Chapter 2 (personal allowance and blind person’s allowance) for a tax year, or
(b) a tax reduction under Chapter 3 (tax reductions for married couples and civil partners) for a tax year.
(2) The individual meets the requirements of this section if the individual—
(a) is UK resident for the tax year, or
(b) meets the condition in subsection (3).
(3) An individual meets the condition in this subsection if, at any time in the tax year, the individual—
(a) is resident in the Isle of Man or the Channel Islands,
(b) has previously resided in the United Kingdom and is resident abroad for the sake of the health of—
(i) the individual, or
(ii) a member of the individual’s family who is resident with the individual,
(c) is a person who is or has been employed in the service of the Crown,
(d) is employed in the service of any territory under Her Majesty’s protection,
(e) is employed in the service of a missionary society, or
(f) is a person whose late spouse or late civil partner was employed in the service of the Crown.
(1) This section provides for increases in the amounts specified in—
(a) section 35 (personal allowance for those aged under 65),
(b) section 36(1) (personal allowance for those aged 65 to 74),
(c) section 37(1) (personal allowance for those aged 75 and over),
(d) section 38(1) (blind person’s allowance),
(e) section 43 (tax reductions for married couples and civil partners: the minimum amount),
(f) section 45(3)(a) and (b) (marriages before 5 December 2005),
(g) section 46(3)(a) and (b) (marriages and civil partnerships on or after 5 December 2005), and
(h) sections 36(2), 37(2), 45(4) and 46(4) (adjusted net income limit).
(2) It applies if the retail prices index for the September before the start of a tax year is higher than it was for the previous September.
(3) For the tax year—
(a) the allowances specified in sections 35, 36(1), 37(1), 38(1),
(b) the amounts specified in sections 45(3)(a) and (b) and 46(3)(a) and (b), and
(c) the minimum amount specified in section 43,
are found as follows.
Step 1
Multiply the allowance, amount or (as the case may be) the minimum amount for the previous tax year by the same percentage as the percentage increase in the retail prices index.
Step 2
If the result of Step 1 is a multiple of £10, it is the increase for the tax year.
If the result of Step 1 is not a multiple of £10, round it up to the nearest amount which is a multiple of £10.
That amount is the increase for the tax year.
Step 3
Add the increase for the tax year to the allowance, amount or (as the case may be) the minimum amount for the previous tax year.
The result is the allowance, amount or (as the case may be) the minimum amount for the tax year.
(4) For the tax year, the adjusted net income limits specified in sections 36(2), 37(2), 45(4) and 46(4) are found as follows.
Step 1
Increase the adjusted net income limit for the previous tax year by the same percentage as the percentage increase in the retail prices index.
Step 2
If the result of Step 1 is a multiple of £100, it is the adjusted net income limit for the tax year.
If the result of Step 1 is not a multiple of £100, round it up to the nearest amount which is a multiple of £100.
That amount is the adjusted net income limit for the tax year.
(5) Subsections (1) to (4) do not require a change to be made in the amounts deductible or repayable under PAYE regulations during the period beginning on 6 April and ending on 17 May in the tax year.
(6) Before the start of the tax year the Treasury must make an order replacing the amounts specified in the provisions listed in subsection (1) with the amounts which, as a result of this section, are the allowances, amounts, the minimum amount and the adjusted net income limits for the tax year.
(1) For the purposes of Chapters 2 and 3, an individual’s adjusted net income for a tax year is calculated as follows.
Step 1
Take the amount of the individual’s net income for the tax year.
Step 2
If in the tax year the individual makes, or is treated under section 426 as making, a gift that is a qualifying donation for the purposes of Chapter 2 of Part 8 (gift aid) deduct the grossed up amount of the gift.
Step 3
If the individual is given relief in accordance with section 192 of FA 2004 (relief at source) in respect of any contribution paid in the tax year under a pension scheme, deduct the gross amount of the contribution.
Step 4
Add back any relief under section 457 or 458 (payments to trade unions or police organisations) that was deducted in calculating the individual’s net income for the tax year.
The result is the individual’s adjusted net income for the tax year.
(2) The grossed up amount of a gift is the amount of the gift grossed up by reference to the basic rate for the tax year.
(3) The gross amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004.