Office of Public Sector Information

Finance Act 2005 (c. 7)

593 The Finance Act 2005 is amended as follows.

594 In section 26 (amount of relief for trustees of property held on trust for vulnerable persons) at the beginning insert “(1)” and at the end insert—

“(2) The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007.”

595 (1) Amend section 27 (tax liability of trustees of property held on trust for vulnerable persons) as follows.

(2) In subsection (2)—

(a) in paragraph (b) for the words from “any expenses” to the end substitute “allowable expenses”, and

(b) for “management” substitute “allowable”.

(3) After that subsection insert—

“(2A) References in subsection (2) to allowable expenses are to expenses which can be set against the total income in accordance with Chapter 4 of Part 9 of ITA 2007.”

596 In section 41(1) (interpretation of Chapter 4 of Part 2) in the definition of “tax year” omit paragraph (a) and the “and” immediately after it.

597 (1) Amend section 47A (alternative finance arrangements: diminishing share ownership) as follows.

(2) In subsection (3)—

(a) in paragraph (b) omit “within the meaning of section 840 of ICTA”, and

(b) in paragraph (c) omit “, in each case within the meaning of section 840 of ICTA”.

(3) After that subsection insert—

“(3A) For the purposes of subsection (3) whether a person is controlled by another person is determined in accordance with section 840 of ICTA.”

598 In section 51(2) (treatment of alternative finance arrangements)—

(a) for “368 of ICTA” substitute “367 of ICTA and Chapter 1 of Part 8 of ITA 2007 (interest payments)”, and

(b) after “366” insert “of ICTA and section 412 of ITA 2007”.

599 (1) Amend section 52 (alternative finance arrangements: provision not at arm’s length) as follows.

(2) In subsection (4)(b) for “against total income or, as the case may be,” substitute “in calculating net income or, as the case may be, against”.

(3) In subsection (5)(b) for “against total income or, as the case may be,” substitute “in calculating net income or, as the case may be, against”.

600 Omit sections 74 to 78 (partners: recovery of excess relief).

601 In section 105 (interpretation) after the definition of “IHTA 1984” insert—

““ITA 2007” means the Income Tax Act 2007;”.

602 (1) Amend Schedule 2 (alternative finance arrangements: further provisions) as follows.

(2) Omit paragraphs 3, 5 and 6.

(3) After paragraph 10 insert—

“Income Tax Act 2007

11 Chapter 2 of Part 15 of ITA 2007 (deduction of income tax at source: deduction by deposit-takers and building societies) (and Chapter 19 of that Part so far as it has effect for the purposes of Chapter 2) have effect as if—

(a) relevant arrangements were a deposit,

(b) for the purposes of section 866(2)(a) of that Act, relevant arrangements were a deposit consisting of a loan, and

(c) alternative finance return or profit share return payable under relevant arrangements were interest.

12 Chapters 3 to 5 of Part 15 of ITA 2007 (and Chapter 19 of that Part so far as it has effect for the purposes of those Chapters) have effect in relation to alternative finance return or profit share return as they have effect in relation to interest.

13 In Chapter 12 of Part 15 of ITA 2007 (funding bonds) references to interest include references to alternative finance return or profit share return.”

Finance (No. 2) Act 2005 (c. 22)

603 The Finance (No. 2) Act 2005 is amended as follows.

604 (1) Amend section 7 (charge to income tax on social security pension lump sum) as follows.

(2) In subsection (5) for “total income” in each place substitute “Step 3 income”.

(3) At the end insert—

“(9) For the purposes of this section P’s “Step 3 income” means P’s net income less allowances deducted at Step 3 of the calculation in section 23 of ITA 2007 (calculation of income tax liability).”

605 In section 18(3)(b)(i) (authorised investment funds etc: section 17(3): specific powers) for “506(1) of ICTA” substitute “989 of ITA 2007”.

606 In section 71 (interpretation) after the definition of “ICTA” insert—

““ITA 2007” means the Income Tax Act 2007;”.

Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1))

607 The Pensions (Northern Ireland) Order 2005 is amended as follows.

608 In Schedule 3 (restricted information held by the Regulator: certain permitted disclosures to facilitate exercise of functions), in the entry relating to the Commissioners of Inland Revenue or their officers, in the second column—

(a) omit the “or” immediately after paragraph (f), and

(b) after paragraph (g) insert “, or

(h) the Income Tax Act 2007 (so far as relating to functions previously exercised under the Income and Corporation Taxes Act 1988).”

609 In Schedule 7 (restricted information held by the Board: certain permitted disclosures to facilitate exercise of functions), in the entry relating to the Commissioners of Inland Revenue or their officers, in the second column—

(a) omit the “or” immediately after paragraph (e), and

(b) after paragraph (f) insert “, or

(g) the Income Tax Act 2007 (so far as relating to functions previously exercised under the Income and Corporation Taxes Act 1988).”

Finance Act 2006 (c. 25)

610 The Finance Act 2006 is amended as follows.

611 In section 34 (meaning of certain expressions for the purposes of Chapter 3 of Part 3) for subsection (4) substitute—

“(4) For the purposes of subsection (3) whether a person is connected with another person is determined in accordance with section 839 of ICTA (connected persons).”

612 In section 65(3) (London Organising Committee) for “Section 349(1) of ICTA (annual payments: deductions of tax)” substitute “The duties to deduct under Chapters 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source)”.

613 In section 67 (International Olympic Committee)—

(a) in subsection (1)(c), for “section 349(1) and (2) of ICTA (annual payments: deductions of tax)” substitute “the duties to deduct under Chapters 3, 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source)”, and

(b) in subsection (2)(c), for “section 349(1) and (2) of ICTA” substitute “the duties to deduct under Chapters 3, 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source)”.

614 In section 68(1)(d) (competitors and staff) for “section 349(1) of ICTA (annual payments: deductions of tax)” substitute “the duties to deduct under Chapters 6, 7, 10 and 14 of Part 15 of ITA 2007 (deduction of income tax at source)”.

615 Omit section 75 (tax avoidance: interest relief and film partnerships).

616 In section 103(1)(b) (Real Estate Investment Trusts) for “, 121 and 122” substitute “and 121 and regulations made under section 973 of ITA 2007”.

617 In section 107 (conditions for tax-exempt business)—

(a) in subsection (7)(a) omit “(within the meaning given by section 839 of ICTA)”, and

(b) after subsection (7) insert—

“(7A) For the purposes of subsection (7)(a) whether a person is connected with another person is determined in accordance with section 839 of ICTA (connected persons).”

618 In section 117(4) (cancellation of tax advantage) for “section 709” substitute “section 840ZA”.

619 In section 121(2)(c) (distributions: liability to tax) for “chargeable to tax by virtue of section 42A of ICTA (non-resident landlords)” substitute “non-resident landlord income for the purposes of regulations under section 971 of ITA 2007 (income tax due in respect of income of non-resident landlords)”.

620 Omit section 122 (distributions: deduction of tax).

621 (1) Amend section 139 (manufactured dividends) as follows.

(2) In subsection (1) after “manufactured dividend” insert “for the purposes of the Corporation Tax Acts”.

(3) In subsection (2)—

(a) in the new paragraph 2(2) of Schedule 23A to ICTA for “(2A) to (2C)” substitute “(2A) and (2B)”,

(b) in the new paragraph 2(2A) of that Schedule insert “Corporation” before “Tax Acts”,

(c) in the new paragraph 2(2B) of that Schedule omit paragraph (d),

(d) omit the new sub-paragraphs (2C) to (2E) of paragraph 2 of that Schedule.

(4) Omit subsections (3) and (4).

622 In section 179 (interpretation) after the definition of “IHTA 1984” insert—

““ITA 2007” means the Income Tax Act 2007;”.

623 In Schedule 5 (film tax relief: further provisions) in paragraph 9(4)(b) for “555 of ICTA (foreign entertainers)” substitute “966 of ITA 2007 (visiting performers)”.

624 In paragraph 27(1) of Schedule 8 (long funding leases of plant and machinery) for “section 840 of ICTA” in both places where it occurs substitute “section 574 of CAA 2001”.

625 In Schedule 13 (settlements) omit paragraph 37.

626 (1) Amend Schedule 17 (Group Real Estate Investment Trusts: modifications) as follows.

(2) Omit paragraph 19.

(3) Omit paragraph 30(b) and the “and” immediately before it.

(4) Omit paragraph 32(8)(c).

Part 3 Amendment having effect in relation to shares issued after 5 April 2007

Income and Corporation Taxes Act 1988 (c. 1)

627 Omit Chapter 3 of Part 7 of the Income and Corporation Taxes Act 1988 (Enterprise Investment Scheme), except section 305A.