Office of Public Sector Information
PART 15 continued CHAPTER 18 continued
(1) The Treasury may make regulations providing for the assessment, collection and recovery of income tax where—
(a) a distribution to which subsection (2) or (3) applies is made, and
(b) tax is or may become chargeable in respect of the distribution (whether by virtue of section 121(1) of FA 2006 (distributions: liability to tax) or otherwise).
(2) This subsection applies to a distribution if—
(a) it is made by a company to which Part 4 of FA 2006 applies (Real Estate Investment Trusts), and
(b) it is a distribution of profits or gains (or of both) of C (tax-exempt).
(3) This subsection applies to a distribution if—
(a) it is made by the principal company of a group to which Part 4 of FA 2006 applies, and
(b) it is a distribution of amounts shown in the financial statements of G (property rental business) as—
(i) profits and gains of UK resident members of the group, or
(ii) profits and gains of the property rental business in the United Kingdom of non-UK resident members of the group.
(4) In this section—
“C (tax-exempt)” has the meaning given by section 105(3)(b) of FA 2006,
“G (property rental business)” has the meaning given by paragraph 2 of Schedule 17 to that Act,
“group” and “principal company” have the meanings given by section 134 of that Act, and
“property rental business” has the meaning given by section 104 of that Act (read with paragraph 32(2) of Schedule 17 to that Act).
(5) References in this section to a UK resident company have the same meaning as in Schedule 17 to FA 2006 (see paragraph 3(1) of that Schedule).
(6) In this section “gains” includes chargeable gains.
(1) Regulations under section 973 may, in particular—
(a) require a company to deduct sums representing income tax at the basic rate before payment of distributions,
(b) specify classes of shareholder to whom distributions may be made without deduction of such sums,
(c) make provision about the calculation of the sums to be deducted by a company,
(d) require a company to account for income tax equal to the sums deducted,
(e) apply an enactment (with or without modification) in respect of cases where a sum representing income tax is deducted or treated as deducted from income,
(f) specify the time at which a distribution is to be treated as made by a company,
(g) specify periods in respect of which payments of income tax are to be made,
(h) specify times at which payments of income tax are to be made,
(i) make provision about the making of claims and determinations in respect of over-payment or under-payment (which may include provision for appeals),
(j) include provision requiring the payment of interest in respect of late payments of income tax (which may—
(i) provide for payment without deduction of sums representing income tax,
(ii) allow interest paid as a deduction from profits of the company’s tax-exempt business),
(k) require a company to provide a shareholder with a statement in writing containing specified information,
(l) make provision about the repayment to a shareholder of sums deducted and paid to the Commissioners for Her Majesty’s Revenue and Customs in respect of income tax,
(m) make provision for the payment of interest in respect of repayments under paragraph (l),
(n) require notices to be given by or to a company,
(o) require a company to make returns, and
(p) require a company to make records available to the Commissioners for Her Majesty’s Revenue and Customs for inspection.
(2) A reference in subsection (1) to a distribution in respect of profits of tax-exempt business includes a distribution made after Part 4 of FA 2006 has ceased to apply to a company.
(3) A distribution which is treated as having been made by virtue of section 107(9)(b) of FA 2006 is also to be treated as having been made for the purposes of regulations under section 973.
(4) Regulations under section 973—
(a) may make provision which applies generally or only in specified cases or circumstances,
(b) may make different provision for different cases or circumstances, and
(c) may contain incidental, supplemental, consequential and transitional provision and savings.
(5) In subsections (1) and (2), so far as they apply to cases within section 973(1)(a), “profits” includes gains (including chargeable gains).
(6) In this section “tax-exempt business” has same meaning as in Part 4 of FA 2006 (see section 107(2) of that Act).
(1) Subsection (2) applies if a person makes a payment from which a sum representing income tax must be deducted under any provision of Chapters 2 to 7 or under section 919 or 928.
(2) If the recipient requests it in writing, the person must provide the recipient with a statement showing—
(a) the gross amount of the payment,
(b) the amount of the sum deducted, and
(c) the actual amount paid.
(3) Subsection (4) applies if the trustees of an unauthorised unit trust are treated as making a deemed payment to a unit holder (“U”).
(4) If U requests it in writing, the trustees must provide U with a statement showing—
(a) the gross amount of the payment,
(b) the amount of the deemed deduction from the payment, and
(c) the amount of the payment after the deemed deduction.
(5) A statement under this section must be in writing.
(6) The duty to comply with a request under subsection (2) or (4) is enforceable by the recipient or U (as the case may be).
(7) In this section “deemed deduction”, “deemed payment” and “the gross amount” have the same meanings as in Chapter 13 (see section 941(6)).
(1) This section applies if—
(a) provision is made for the payment of interest, and
(b) the interest is payable without deduction of a sum representing income tax.
(2) It applies—
(a) whenever the provision was made, and
(b) whether it was made orally or in writing.
(3) If the provision is for the payment of interest “less tax” (or uses words to similar effect) it is to be read as if the words “less tax” (or the equivalent words) were not included.
(4) Subsection (5) applies if the provision is (however worded)—
(a) for the payment of interest to which subsection (6) applies, and
(b) for that interest to be paid at such a rate (“the gross rate”) that the amount of interest payable at that rate is, after deduction of a sum representing income tax, equal to the amount of interest payable at a specified rate (“the net rate”).
(5) In that case the provision is to be read as if it were for the payment of interest at the gross rate.
(6) This subsection applies to—
(a) interest on which the recipient is chargeable to income tax, which falls within Chapter 2 of Part 4 of ITTOIA 2005 but which is not relevant foreign income, or
(b) interest on which the recipient is chargeable to corporation tax under Case III of Schedule D.
(1) The provisions of this Part relating to the deduction from payments of sums representing income tax are not affected by the fact that the recipient is a company not chargeable to income tax on the payment.
(2) References in subsection (1) to payments received by a company—
(a) include payments received by another person on behalf of or in trust for the company, but
(b) do not include payments received by the company on behalf of or in trust for another person.
(3) For further provision about payments received by companies, see—
(a) sections 7(2) and 11(3) of ICTA (set-off of income tax deducted at source against liability to corporation tax), and
(b) section 952 (set-off of income tax suffered against income tax payable under Chapter 15).
(1) This Part applies in relation to payments made by public offices and departments of the Crown except as mentioned in subsection (2).
(2) This Part does not apply to payments made by public offices and departments of—
(a) any country mentioned in Schedule 3 to the British Nationality Act 1981 (c. 61) (which contains a list of Commonwealth countries) or the Republic of Ireland, or
(b) any state or province of a country within paragraph (a).
(1) The Treasury may by order designate for the purposes of this section any international organisation of which the United Kingdom is a member.
(2) The duty to deduct under section 874 (duty to deduct from certain payments of yearly interest) does not apply to a payment of interest made by—
(a) an organisation designated under subsection (1), or
(b) a partnership of which an organisation so designated is a member.
(3) None of the duties to deduct under Chapters 6, 7 (deduction from annual payments, patent royalties and other payments connected with intellectual property) and 14 (directions for duty to deduct to apply in tax avoidance cases) apply to a payment made by an organisation designated under subsection (1).
(4) The duties to deduct under sections 919(2) and 922(2) do not apply in a case where the payer of the manufactured interest or (as the case may be) the manufactured overseas dividend is an organisation designated under subsection (1).
(1) Despite the provisions of this Part, a company is not required to deduct a sum representing income tax from a payment made under a derivative contract to which this section applies.
(2) This section applies to a derivative contract if profits and losses arising from it are calculated in accordance with Schedule 26 to FA 2002.
Despite the provisions of this Part there is no duty to deduct a sum representing income tax from a payment of interest within section 755(1) of ITTOIA 2005 (interest on foreign currency securities etc owned by non-UK residents).
If any provision of this Part requires the deduction from a payment of a sum representing income tax at a specified rate, the rate is to be applied to the gross payment, that is to the payment before deduction of a sum representing income tax under this Part.
In this Chapter “deposit” means a sum of money paid on terms which mean that it will be repaid (with or without interest)—
(a) on demand, or
(b) at a time or in circumstances agreed by or on behalf of the person who pays it and the person who receives it.
(1) In this Part “financial instrument” includes—
(a) any money,
(b) any shares or securities,
(c) an option, future or contract for differences if its underlying subject-matter is (or is primarily) one or more financial instruments, and
(d) an instrument the underlying subject-matter of which is (or is primarily) creditworthiness.
(2) For the purposes of subsection (1) if the effect of an instrument depends on an index or factor, the “underlying” subject-matter of the instrument is the matter by reference to which the index or factor is determined.
(1) In this Part “qualifying certificate of deposit” means a certificate of deposit under which—
(a) the amount payable is at least £50,000, exclusive of interest, and
(b) that amount is payable at a specified time within 5 years beginning with the date on which the deposit is made.
(2) If an amount is denominated in a foreign currency, subsection (1)(a) has effect as if it referred to an amount which is at least the equivalent in that currency of £50,000 at the time the deposit is made.
(3) For the meaning of “certificate of deposit”, see section 1019.
(1) In this Part “qualifying uncertificated eligible debt security unit” means an uncertificated eligible debt security unit under which—
(a) the amount payable is at least £50,000, exclusive of interest, and
(b) that amount is payable at a specified time within 5 years beginning with the date on which the deposit is made.
(2) If an amount is denominated in a foreign currency, subsection (1)(a) has effect as if it referred to an amount which is at least the equivalent in that currency of £50,000 at the time the deposit is made.
(3) In this section “uncertificated eligible debt security unit” means an uncertificated unit of an eligible debt security where the issue of the unit corresponds, in accordance with the current terms of issue of the eligible debt security, to the issue of a certificate of deposit.
(4) In subsection (3)—
(a) “eligible debt security”,
(b) “uncertificated” (in relation to a unit), and
(c) “unit”,
have the meanings given by regulation 3(1) of the Uncertificated Securities Regulations 2001 (S.I. 2001/3755).
(5) For the meaning of “certificate of deposit”, see section 1019.
In this Part “quoted Eurobond” means a security, including a share (in particular any permanent interest bearing share as defined in section 117 of TCGA 1992), that—
(a) is issued by a company,
(b) is listed on a recognised stock exchange, and
(c) carries a right to interest.
Income Tax Act 2007