Office of Public Sector Information
PART 8 continued CHAPTER 4 continued
(1) This section sets out the circumstances in which a payment to which section 449 applies, or part of it, is ineligible for relief.
(2) The payment is ineligible for relief if, or so far as, it can lawfully be made only out of—
(a) capital, or
(b) income that is exempt from income tax.
(3) If the payment or any part of it is charged to capital, the payment or that part is ineligible for relief.
(4) If—
(a) the person who makes the payment treats it or any part of it as made out of income that is exempt from income tax, and
(b) the rights or obligations of any person are or may in the future be different from what they would have been if the payment or part had not been so treated,
the payment, or the part concerned, is ineligible for relief.
(5) If the payment or a part of it is not ultimately borne by the person who makes it, the payment or the part concerned is ineligible for relief.
(6) But subsection (5) does not apply to a payment or part of a payment if—
(a) the person who makes the payment is liable to income tax on an amount, and
(b) it is because the person receives that amount or benefits from it in some other way that the payment or the part concerned is not ultimately borne by that person.
(1) This section applies if—
(a) interest payable to a person in respect of securities (“the affected income”) is attributable to a tax year,
(b) because of section 733(1) of ICTA (dividend buying etc: persons entitled to exemptions), some part of the affected income is not exempt from income tax, and
(c) the person makes one or more relievable payments in the tax year which are qualifying annual payments.
(2) Relief under this Chapter for those payments is given only for—
(a) the sum of the gross amounts of the payments, or
(b) if less, the amount of the person’s non-affected income.
(3) The person’s non-affected income is—
(a) the person’s modified net income for the tax year (see section 1025), less
(b) the affected income.
(4) Apply this section before working out the result of section 448(4) or 449(5).
(5) In this section—
“interest” and “securities” are to be read in accordance with section 731(9) of ICTA,
“relievable payment” means a payment to which section 448 or 449 applies, and
“qualifying annual payment” has the same meaning as in Chapter 6 of Part 15 (see section 899).
References in this Chapter to the gross amount of a payment are to the amount of the payment before deduction of the sum representing income tax deductible from it under Chapter 6 of Part 15 (deduction from annual payments and patent royalties).
(1) An individual who makes a claim is entitled to a tax reduction for a tax year in which any qualifying maintenance payments made by the individual fall due.
(2) The amount of the tax reduction is 10% of—
(a) the total amount of qualifying maintenance payments made by the individual which fall due in the tax year, or
(b) if less, the amount specified in section 43 (tax reductions for married couples and civil partners: meaning of “the minimum amount”).
(3) The tax reduction is given effect at Step 6 of the calculation in section 23.
(1) For the purposes of section 453 a payment is a “qualifying maintenance payment” if conditions A to E are met.
(2) Condition A is that the payment is a periodical payment made by—
(a) one of the parties to a marriage or civil partnership (including a marriage or civil partnership which has been dissolved or annulled) to or for the benefit of the other party and for the maintenance of the other party, or
(b) one parent of a child to the child’s other parent for the maintenance of the child by the other parent or by one person to another for the maintenance by the other of a relevant child of theirs.
(3) Condition B is that—
(a) in a case falling within subsection (2)(a), either of the parties to the marriage or civil partnership was born before 6 April 1935, and
(b) in a case falling within subsection (2)(b), either the person who made the payment, or the person to whom it is made, was born before that date.
(4) Condition C is that the payment is made—
(a) under an order made by a court in a member State, or
(b) under a written agreement the law applicable to which is the law of a member State or of a part of a member State.
(5) Condition D is that the payment is due at a time when—
(a) in a case falling within subsection (2)(a)—
(i) the two parties are not a married couple, or civil partners of each other, living together (see section 1011), and
(ii) the party to whom or for whose benefit the payment is made has not entered into a new marriage or a new civil partnership, and
(b) in a case falling within subsection (2)(b), the person making the payment and the person to whom the payment is made are not living together.
(6) Condition E is that relief from tax in respect of the payment is not available to the person making it under any provision of the Income Tax Acts other than section 453.
(7) In subsection (4) the reference to an order made by a court in a member State includes a reference to a maintenance calculation.
(8) “Maintenance calculation” means—
(a) a maintenance calculation made under the Child Support Act 1991 (c. 48), or
(b) a maintenance assessment made under the Child Support (Northern Ireland) Order 1991 (S.I. 1991/2628 (N.I. 23)).
(9) In this section—
“child” means a person under 21 years of age,
“periodical payment” does not include an instalment of a lump sum, and
“relevant child”, in relation to any two persons, means a child who (not being a child who has been boarded out with them by a public authority or voluntary organisation) has been treated by both of them as a child of their family.
(1) Condition A in section 454(2) is treated as met in relation to a payment if—
(a) it is a periodical payment made under a maintenance calculation by any person,
(b) another person is, for the purposes of the Child Support Act 1991 or (as the case may be) the Child Support (Northern Ireland) Order 1991 (S.I. 1991/2628 (N.I. 23)), a parent of the child or children with respect to whom the calculation has effect,
(c) the calculation was not made under section 7 of the Child Support Act 1991 (right of child in Scotland to apply for maintenance calculation), and
(d) any of the conditions mentioned in subsection (2) is met.
(2) The conditions are that—
(a) the payment is made to the Secretary of State in accordance with regulations made under section 29 of the Child Support Act 1991 by virtue of subsection (3)(a)(ii) of that section (collection of child support maintenance: payment to or through Secretary of State),
(b) the payment is retained by the Secretary of State in accordance with regulations made under section 41 of that Act (arrears of child support maintenance),
(c) the payment is made to the Department of Health, Social Services and Public Safety for Northern Ireland in accordance with regulations made under Article 29 of the Child Support (Northern Ireland) Order 1991 (S.I. 1991/2628 (N.I. 23)), by virtue of paragraph (3)(a)(ii) of that Article (collection of child support maintenance: payment to or through Department), or
(d) the payment is retained by the Department of Health, Social Services and Public Safety for Northern Ireland in accordance with regulations made under Article 38 of that Order (arrears of child support maintenance).
(3) “Maintenance calculation” and “periodical payment” have the meanings given in section 454(8) and (9).
(1) Condition A in section 454(2) is treated as met in relation to a payment made by any person if—
(a) it is a periodical payment made to the Secretary of State or to the Department of Health, Social Services and Public Safety for Northern Ireland, and
(b) it is made under a recovery of benefit order.
(2) A “recovery of benefit order” is—
(a) one made under section 106 of the Social Security Administration Act 1992 (c. 5) or section 101 of the Social Security Administration (Northern Ireland) Act 1992 (c. 8) (recovery of expenditure on benefit from person liable for maintenance) in respect of income support claimed by any other person, or
(b) one made by virtue of section 23 of the Jobseekers Act 1995 (c. 18) or Article 25 of the Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15)) (recovery of sums in respect of maintenance), in respect of an income-based jobseeker’s allowance claimed by any other person.
(3) In subsection (2) “income-based jobseeker’s allowance” has the same meaning as in—
(a) the Jobseekers Act 1995, or
(b) for Northern Ireland, the Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15)).
(4) “Periodical payment” has the meaning given in section 454(9).
(1) An individual who makes a payment to a trade union in a tax year is entitled to relief for the tax year if—
(a) part of the payment (the “qualifying amount”) is attributable to the provision of superannuation, life insurance or funeral benefits,
(b) the individual meets the requirements of section 460 (residence etc), and
(c) the individual makes a claim.
(2) The amount of the relief is equal to half the qualifying amount.
(3) But the maximum amount of relief under this section to which an individual is entitled for a tax year is £100.
(4) The relief is given by deducting the amount of the relief in calculating the individual’s net income for the tax year (see Step 2 of the calculation in section 23).
(5) “Trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52).
(1) An individual who makes a payment to a police organisation in a tax year is entitled to relief for the tax year if—
(a) part of the payment (the “qualifying amount”) is attributable to the provision of superannuation, life insurance or funeral benefits,
(b) the sum of the qualifying amounts for all the payments which the individual makes in the tax year is at least £20,
(c) the individual meets the requirements of section 460 (residence etc), and
(d) the individual makes a claim.
(2) The amount of the relief is equal to half the qualifying amount.
(3) But the maximum amount of relief under this section to which an individual is entitled for a tax year is £100.
(4) The relief is given by deducting the amount of the relief in calculating the individual’s net income for the tax year (see Step 2 of the calculation in section 23).
(5) “Police organisation” means an organisation of persons in police service.
(1) An individual who pays a sum, or from whose earnings a sum is deducted, in a tax year is entitled to a tax reduction for the tax year if—
(a) the sum is paid or deducted under an Act or the individual’s terms and conditions of employment,
(b) the sum is for the purpose of—
(i) securing a deferred annuity after the individual’s death for the individual’s surviving spouse or civil partner, or
(ii) making provision after the individual’s death for the individual’s children,
(c) the individual meets the requirements of section 460 (residence etc), and
(d) the individual makes a claim.
(2) The amount of the tax reduction is equal to income tax at the basic rate on the total of all the sums paid or deducted in the tax year.
(3) But the maximum amount of the tax reduction under this section to which an individual is entitled for a tax year is equal to income tax at the basic rate on £100.
(4) A tax reduction under this section is given effect at Step 6 of the calculation in section 23.
(5) There is no entitlement to a tax reduction under this section in respect of a contribution paid by any person under—
(a) Part 1 of the Social Security Contributions and Benefits Act 1992 (c. 4), or
(b) Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7).
(6) This section is also subject to sections 192 to 194 of FA 2004 (relief for pension contributions).
(7) In this section “earnings” has the meaning given by section 62 of ITEPA 2003.
(1) This section applies in relation to an individual who claims—
(a) relief under section 457 or 458 (payments to trade unions and police organisations) for a tax year, or
(b) a tax reduction under section 459 (payments for benefit of family members) 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) A person who makes a claim is entitled to a tax reduction for a tax year in which the person receives a payment of a royalty or other sum if—
(a) the payment is in respect of the use of a patent,
(b) the use of the patent has extended over a period of two years or more, and
(c) the payment is one from which a sum representing income tax is required to be deducted under section 903.
(2) The amount of the tax reduction is the difference between—
(a) the amount of income tax payable by the person in respect of the payment, and
(b) the total amount of income tax which would have been payable by the person in respect of the payment on the assumptions in subsection (3).
(3) Those assumptions are that—
(a) the payment was made in a number of equal instalments at yearly intervals,
(b) the last instalment was paid on the date on which the payment was in fact made, and
(c) the number of instalments was the same as the number of complete years in the period over which the use of the patent extended, but subject to a maximum of 6.
(4) The tax reduction is given effect at Step 6 of the calculation in section 23.
Income Tax Act 2007