Office of Public Sector Information
SCHEDULE 1 continued PART 2 continued
(2) In paragraph 16(4) (the unquoted status requirement) after “Taxes Act 1988” insert “or section 184(3) of ITA 2007”.
(3) In paragraph 55(4) (provision supplementary to paragraph 54) after “Taxes Act 1988” insert “or Part 5 of ITA 2007”.
(4) In paragraph 56(3) (value received by other persons)—
(a) after “Taxes Act 1988”, in the first place where it occurs, insert “or Part 5 of ITA 2007”,
(b) for “section 299 of that Act” substitute “section 299 of the Taxes Act 1988 or section 209 of ITA 2007”,
(c) for “section 300(2)(a) of that Act” substitute “section 300(2)(a) of the Taxes Act 1988 or section 216(2)(a) of ITA 2007”, and
(d) after “section 300 of the Taxes Act 1988” insert “, section 214 of ITA 2007”.
(5) In paragraph 102 (minor definitions etc) after sub-paragraph (8) insert—
“(9) References in this Schedule to Part 5 of ITA 2007 or any provision of that Part are to a Part or provision that applies only in relation to shares issued after 5 April 2007.”
395 In paragraph 41 of Schedule 22 (tonnage tax: the requirement not to enter into tax avoidance arrangements) for sub-paragraph (3) substitute—
“(3) In this paragraph “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.”
396 The Capital Allowances Act 2001 is amended as follows.
397 (1) Amend section 4 (capital expenditure) as follows.
(2) In subsection (4) for “section 348 or 349(1) of ICTA (annual payments)” substitute “Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments or patent royalties) or under section 906 of that Act (certain royalties etc where usual place of abode of owner is abroad)”.
(3) Omit subsection (5).
398 In section 70V(4) (tax avoidance involving international leasing) for “Chapter 1” to the end substitute “section 840ZA of ICTA”.
399 Omit section 70YI(4) (application of section 839 of ICTA).
400 In section 138(2)(b) (limit on amount deferred) for “section 385 or” substitute “section 83 of ITA 2007 or section”.
401 In section 156(1)(a) and (c) (connected persons) for “section 839 of ICTA” substitute “section 575”.
402 In section 220(8)(a) (allocation of expenditure to a chargeable period) omit “, within the meaning of section 840 of ICTA”.
403 In section 232(1)(a) (meaning of connected person) for “section 839 of ICTA” substitute “section 575”.
404 In section 258 (special leasing: income tax) after subsection (3) insert—
“(3A) The allowance or (as the case may be) the proportionate part of the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.”
405 In section 266(5)(a) (election where predecessor and successor are connected persons) for “section 839 of ICTA” substitute “section 575”.
406 In section 355 (buildings for miners etc: carry-back of allowances) after subsection (2) insert—
“(2A) For income tax purposes the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.”
407 In section 437 (research and development allowances) for subsection (2) substitute—
“(2) In this Part “research and development”—
(a) means activities that fall to be treated as research and development in accordance with generally accepted accounting practice, and
(b) includes oil and gas exploration and appraisal.
(3) But—
(a) activities that, as a result of regulations made under section 1006 of ITA 2007, are “research and development” for the purposes of that section are also “research and development” for the purposes of this Part, and
(b) activities that, as a result of any such regulations, are not “research and development” for the purposes of that section are also not “research and development” for the purposes of this Part.”
408 In section 479 (persons having qualifying non-trade expenditure: income tax) after subsection (2) insert—
“(2A) The allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.”
409 At the beginning of Chapter 6 of Part 12 insert—
(1) Any orders or regulations made by the Treasury or the Commissioners for Her Majesty’s Revenue and Customs under this Act must be made by statutory instrument.
(2) Any orders or regulations made by the Treasury or the Commissioners under this Act are subject to annulment in pursuance of a resolution of the House of Commons.
(3) Subsection (2) does not apply to any regulations made under section 70YJ or any order made under section 82(4)(d).”
410 In section 574(1) at the end insert “(but, for the purposes of section 575, this definition applies only where expressly indicated)”.
411 For section 575 (connected persons) substitute—
(1) For the purposes of this Act whether a person is connected with another is determined in accordance with this section unless otherwise indicated.
(2) An individual (“A”) is connected with another individual (“B”) if—
(a) A is B’s spouse or civil partner,
(b) A is a relative of B,
(c) A is the spouse or civil partner of a relative of B,
(d) A is a relative of B’s spouse or civil partner, or
(e) A is the spouse or civil partner of a relative of B’s spouse or civil partner.
(3) A person, in the capacity as trustee of a settlement, is connected with—
(a) any individual who is a settlor in relation to the settlement,
(b) any person connected with such an individual,
(c) any close company whose participators include the trustees of the settlement,
(d) any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement,
(e) any body corporate controlled (within the meaning of section 574) by a company within paragraph or ,
(f) if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and
(g) if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement.
(4) A person who is a partner in a partnership is connected with—
(a) any partner in the partnership,
(b) the spouse or civil partner of any individual who is a partner in the partnership, and
(c) a relative of any individual who is a partner in the partnership.
But this subsection does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements.
(5) A company is connected with another company if—
(a) the same person has control of both companies,
(b) a person (“A”) has control of one company and persons connected with A have control of the other company,
(c) A has control of one company and A together with persons connected with A have control of the other company, or
(d) a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected.
(6) A company is connected with another person (“A”) if—
(a) A has control of the company, or
(b) A together with persons connected with A have control of the company.
(7) In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with—
(a) one another, and
(b) any person acting on the directions of any of them to secure or exercise control of the company.
(1) In section 575 and this section—
“company” includes any body corporate or unincorporated association, but does not include a partnership (and see also subsection (2)),
“control” is to be read in accordance with section 416 of ICTA (except where otherwise indicated),
“principal settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992,
“relative” means brother, sister, ancestor or lineal descendant,
“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act), and
“sub-fund settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992.
(2) For the purposes of section 575—
(a) a unit trust scheme is treated as if it were a company, and
(b) the rights of the unit holders are treated as if they were shares in the company.
(3) For the purposes of section 575 “trustee”, in the case of a settlement in relation to which there would be no trustees apart from this subsection, means any person—
(a) in whom the property comprised in the settlement is for the time being vested, or
(b) in whom the management of that property is for the time being vested.
Section 466(4) of ITA 2007 does not apply for the purposes of this subsection.
(4) If any provision of section 575 provides that a person (“A”) is connected with another person (“B”), it also follows that B is connected with A.”
412 In section 577(1) (other definitions)—
(a) omit the definition of “tax year”, and
(b) omit the definition of “the tax year 2001-02”.
413 (1) Amend Schedule 1 (abbreviations and defined expressions) as follows.
(2) In Part 1 in the appropriate place insert—
| “ITA 2007 | The Income Tax Act 2007.” |
(3) In Part 2—
(a) in the entry for “body of persons”, in the second column, before “section 832(1) of ICTA” insert “section 989 of ITA 2007 and”,
(b) in the entry for “connected persons (general meaning)”, in the second column, for “section 575(1)” substitute “section 575”,
(c) in the entry for “offshore installation”, in the second column, before “section 837C of ICTA” insert “sections 1001 and 1002 of ITA 2007 and”,
(d) in the entry for “overseas property business”, in the second column, at the end insert “(as applied by section 989 of ITA 2007)”,
(e) in the entry for “research and development”, in the second column, for “437(2) and section 837A of ICTA” substitute “437(2) and (3)”,
(f) in the entry for “Schedule A business”, in the second column, before “section 832(1) of ICTA” insert “section 989 of ITA 2007 and”,
(g) in the entry for “tax year”, in the second column, for “section 577(1)” substitute “section 4(2) of ITA 2007 (as applied by section 989 of that Act)”,
(h) in the entry for “UK property business”, in the second column, omit “section 832(1) of ICTA and” and at the end insert “(as applied by section 989 of ITA 2007)”,
(i) in the entry for “United Kingdom”, in the second column, for “section 830 of ICTA and section 41 of ITEPA 2003” substitute “section 1013 of ITA 2007 and section 830(1) of ICTA”, and
(j) in the entry for “within the charge to tax”, in the second column, before “section 832(1) of ICTA” insert “section 1009 of ITA 2007 and”.
414 The Finance Act 2002 is amended as follows.
415 Omit section 98.
416 In section 142 (interpretation) at the end insert “, and “ITA 2007” means the Income Tax Act 2007”.
417 In paragraph 19 of Schedule 12 (tax relief for expenditure on research and development) for sub-paragraph (2) substitute—
“(2) For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.”
418 In paragraph 27 of Schedule 13 (tax relief for expenditure on vaccine research etc) for sub-paragraph (2) substitute—
“(2) For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.”
419 (1) Amend Schedule 16 (community investment tax relief) as follows.
(2) In paragraph 1(1), for “An individual or company” substitute “A company”.
(3) In paragraph 2—
(a) in sub-paragraph (1), for “person” substitute “company” and for “he”, in both places where it occurs, and “him” substitute “it”, and
(b) in sub-paragraph (2), for “person”, in each place where it occurs, substitute “company”.
(4) For paragraphs 4 to 7 substitute—
4 (1) Chapter 2 of Part 7 of ITA 2007 applies for the purposes of this Schedule as it applies for the purposes of that Part.
(2) Chapter 2 of Part 7 of that Act makes provision with respect to—
(a) applications and criteria for accreditation as community development finance institutions (see section 340),
(b) the terms and conditions of accreditation (see section 341),
(c) the period of accreditation (see section 342), and
(d) the delegation of the Secretary of State’s functions under that Chapter (see section 343).
(3) In this Schedule “accreditation period” has the meaning given by section 342(1) of ITA 2007.”
(5) In paragraph 9(5), for “person” substitute “company”.
(6) For paragraph 12(2) substitute—
“(2) The CDFI must not issue tax relief certificates in respect of investments made in the CDFI in an accreditation period if the aggregate value of—
(a) those investments, and
(b) any investments to which sub-paragraph (2A) applies,
will exceed the limit for that period.
(2A) This sub-paragraph applies to investments which—
(a) have been made in the CDFI in the accreditation period, and
(b) in respect of which the CDFI has issued tax relief certificates under section 348 of ITA 2007 (which makes in relation to income tax provision corresponding to that made by this paragraph).
(2B) The limit for an accreditation period is—
(a) £10 million if the CDFI is accredited for the period as a retail community development finance institution (see section 340(8) of ITA 2007 as applied by paragraph 4), and
(b) £20 million in any other case.”
(7) In paragraph 14—
(a) in sub-paragraph (4), for “he” substitute “it” and for “his” substitute “its”, and
(b) in sub-paragraph (6), for “his” substitute “its”.
(8) Omit paragraph 19.
(9) In paragraph 20(1), omit paragraph (a).
(10) In paragraph 21—
(a) in sub-paragraph (2), omit “tax year or”, in each place where it occurs, and
(b) in sub-paragraph (3), for “a tax year or” substitute “an”.
(11) In paragraph 22(1) and (2), for “a tax year or” substitute “an” and for “that year or period” substitute “that period”.
(12) In paragraph 23—
(a) in sub-paragraph (1), for “a tax year or” substitute “an” and, in paragraph (b), omit “tax year or”,
(b) in sub-paragraph (2), for “a tax year or” substitute “an” and for “that year or period” substitute “that period”, and
(c) in sub-paragraph (3), for “a tax year or” substitute “an” and for “that year or period” substitute “that period”.
(13) In paragraph 24—
(a) in sub-paragraph (1), omit “tax year or” in both places where it occurs, and
(b) in sub-paragraph (2)—
(i) omit “tax year or” in both places where it occurs, and
(ii) in paragraph (b), omit “year or” in both places where it occurs.
(14) In paragraph 25(1), omit “is a company and”.
(15) In paragraph 26—
(a) in sub-paragraph (1), omit paragraph (a),
(b) in sub-paragraph (2), omit “income or”, for “a tax year or” substitute “an” and, in paragraph (b)(i), omit “year or”,
(c) in sub-paragraphs (3) and (4), omit “income tax or”, and
(d) in sub-paragraph (5), for “a tax year or” substitute “an” and for “that year or period” substitute “that period”.
(16) In paragraph 27—
(a) omit sub-paragraphs (2) and (3), and
(b) in sub-paragraph (4), omit “Where the investor is a company,”.
(17) In paragraph 28(1), omit “tax year or”.
(18) In paragraph 29—
(a) in sub-paragraph (2), omit “tax year or”,
(b) in sub-paragraph (3), for “a tax year or” substitute “an”,
(c) in sub-paragraph (5), omit “tax year or” and for “that year or period”, in both places where it occurs, substitute “that period”, and
(d) in sub-paragraph (6), for “a tax year or” substitute “an”.
(19) In paragraph 30(1), omit “tax year or”.
(20) In paragraphs 31(5), 32(1)(b), 32(3) and 34(5)(b)(ii) for “he” and “him” substitute “the investor”.
(21) In paragraph 31(8), omit “tax years or”.
(22) In paragraph 32—
(a) in sub-paragraph (1), omit “tax year or”, and
(b) in sub-paragraph (5), omit “tax years or”.
(23) In paragraph 35(1)(d)(ii), omit “if the investor is a company,”.
(24) In paragraph 35(5)(a) for “his” substitute “the investor's”.
(25) In paragraph 36(d)(ii), for “his” substitute “the investor”.
(26) In paragraph 37(6), for “him” substitute “the investor”.
(27) In paragraph 38—
(a) in sub-paragraph (1), for “him” substitute “the investor”.
(b) in sub-paragraph (2), omit “tax year or”,
(c) in sub-paragraph (3), omit “tax years or” and, in both places where it occurs, “tax year or”, and
(d) in sub-paragraph (4), for “he” substitute “the investor”.
(28) Omit paragraphs 40 and 41.
(29) In paragraph 42—
(a) in sub-paragraph (1), omit “tax year or”, and
(b) in sub-paragraph (2), omit paragraph (a) and the “and” immediately after it and, in paragraph (b), “if the investor is a company,”.
(30) In paragraph 43(1), for “Tax Acts” substitute “Corporation Tax Acts”.
(31) In paragraph 45, for “person”, in both places where it occurs, substitute “company”.
(32) In paragraph 46(2), for “person”, in both places where it occurs, substitute “company”.
(33) In paragraph 47—
(a) in sub-paragraph (1), omit “tax years or”,
(b) in sub-paragraphs (3) and (4), omit “of capital gains tax or corporation tax on chargeable gains and”,
(c) omit sub-paragraphs (5) and (6), and
(d) in sub-paragraph (7) for “that Act” substitute “the 1992 Act”.
(34) In paragraph 48(2)—
(a) omit “, and for the purposes of capital gains tax or corporation tax on chargeable gains,” and
(b) for “paragraph 41 he” substitute “section 151BC(1) of the 1992 Act the investor”.
(35) In paragraph 49(2), for “he”, in both places where it occurs, substitute “the investor”.
(36) In paragraph 51(1), omit the definition of “tax year”.
(37) In paragraph 52 before the entry for “associate” insert—
| “Accreditation period | paragraph 4(3)” |
420 (1) Amend Schedule 18 (relief for community amateur sports clubs) as follows.
(2) In paragraph 5—
(a) in sub-paragraph (3)(b) omit the words from “as it applies” to the end, and
(b) after that sub-paragraph insert—
“(4) For the purposes of this paragraph, section 25(10) of the Finance Act 1990 (gift aid) has effect as if a registered club were a charitable company.”
(3) In paragraph 9 for sub-paragraph (1) substitute—
“(1) Chapter 2 of Part 8 of ITA 2007 (gift aid) confers relief from income tax for donors to registered clubs (see section 430 of that Act).”
421 In Schedule 25 (loan relationships), omit paragraph 57.
422 (1) Amend Schedule 26 (derivative contracts) as follows.
(2) In paragraph 24 (derivative contracts for unallowable purposes: supplementary) for sub-paragraph (5) substitute—
“(5) In this paragraph “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.”
(3) Omit paragraph 40.
(4) In paragraph 45I(3) in the definition of “the retail prices index” for “section 833(2) of the Taxes Act 1988” substitute “section 989 of ITA 2007”.
(5) In paragraph 45J(10), in paragraph (b) of the definition of “securities house”, for “section 349(5) and (6) of the Taxes Act 1988” substitute “section 984 of ITA 2007”.
(6) For paragraph 51 substitute—
“51 See section 980 of ITA 2007 (derivative contracts: exception from duties to deduct).”
423 Omit Schedule 33 (venture capital trusts).
424 In paragraph 4 of Part 2 of Schedule 10 (tax) to the Proceeds of Crime Act 2002 for the words from “sections 711” to the end substitute “Chapter 2 of Part 12 of the Income Tax Act 2007, that Part does not apply to the transfer”.
425 The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
426 In section 1 (overview of contents of Act) omit subsection (2).
427 In section 11(3) (calculation of “net taxable earnings”) for “section 380(1) of ICTA” substitute “section 128 of ITA 2007”.
428 In section 24(6)(a) (limit on chargeable overseas earnings where duties of associated employment performed in UK) for “section 840 of ICTA” substitute “section 995 of ITA 2007”.
429 In section 48(2) (scope of Chapter) for “subject to deduction of tax under section 555 of ICTA (payments to non-resident entertainers and sportsmen)” substitute “or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax)”.
430 In section 69(1) (extended meaning of “control”) for “section 840 of ICTA” substitute “section 995 of ITA 2007”.
431 In section 178 (exception for loans where interest qualifies for tax relief)—
(a) in paragraph (a) for the words from “(general” to “MIRAS)” substitute “or section 383 of ITA 2007 (relief for interest payments)”, and
(b) in paragraph (b) for “that section” substitute “section 353 of ICTA”.
432 In section 180(5) (threshold for benefit of loan to be treated as earnings)—
(a) in paragraph (a) for the words from “(general” to “MIRAS)” substitute “or section 383 of ITA 2007 (relief for interest payments)”, and
(b) in paragraph (b) for “that section” substitute “section 353 of ICTA”.
433 In section 230(5)(a) (the approved amount for mileage allowance payments) for “section 840 of ICTA” substitute “section 995 of ITA 2007”.
434 In section 329(6) (deductions from earnings not to exceed earnings) for “section 380 of ICTA” substitute “section 128 of ITA 2007”.
435 In section 347(2) (payments made after leaving an employment) for “from total income” substitute “in calculating net income”.
Income Tax Act 2007