^X1PART I THE CHARGE TO TAX

Income tax

1 The charge to income tax.

^F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F21A Application of lower rate to income from savings and distributions.

^F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F2]

[^F41B Rates of tax applicable to [^F5distribution^F5] income etc.

^F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F4]

2 Fractions of a pound, and yearly assessments.

^F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Certain income charged at basic rate.

^F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Construction of references in Income Tax Acts to deduction of tax.

^F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Date for payment.

^F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporation tax

6 The charge to corporation tax and exclusion of income tax and capital gains tax.

(1)^F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F13(4A)^F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F13]

^F15(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Treatment of certain payments and repayment of income tax.

^F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 General scheme of corporation tax.

^F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F188A Resolutions to reduce corporation tax.

^F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F18]

9 Computation of income: application of income tax principles._cross-notes

(1)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F21(2A)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2C)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F21]

(3)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F22Where . . . any enactment applies both to income tax and to corporation tax—

(a)it shall not be affected in its operation by the fact that they are distinct taxes but, so far as is consistent with the Corporation Tax Acts, shall apply in relation to income tax and corporation tax as if they were one tax, so that, in particular, a matter which in a case involving two individuals is relevant for both of them in relation to income tax shall in a like case involving an individual and a company be relevant for him in relation to that tax and for it in relation to corporation tax; and

(b)for that purpose references in any such enactment to a relief from or charge to income tax, or to a specified provision of the Income Tax Acts shall, in the absence of or subject to any express adaptation, be construed as being or including a reference to any corresponding relief from or charge to corporation tax, or to any corresponding provision of the Corporation Tax Acts.

(6)^F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10 Time for payment of tax.

^F24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Companies not resident in United Kingdom.

[^F25(1)^F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A)^F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F25]

(3)^F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F2811AADetermination of profits attributable to permanent establishment

^F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F28]

12 Basis of, and periods for, assessment.

(1)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F31(5A)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F31]

[^F32(5B)^F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F32]

(6)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F34(7ZA)^F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F34]

[^F35(7A)^F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F35]

[^F37(7B)^F38. . .

• ^F38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• ^F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F37]

[[^F40,F41(7C)^F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F41,F40]]

(8)Where it appears to the inspector that the beginning or end of any accounting period of a company is uncertain, he may make an assessment on the company for such period, not exceeding 12 months, as appears to him appropriate, and that period shall be treated for all purposes as an accounting period of the company unless either—

(a)the inspector on further facts coming to his knowledge sees fit to revise it; or

(b)on an appeal against the assessment in respect of some other matter the company shows the true accounting periods;

and if on an appeal against an assessment made by virtue of this subsection the company shows the true accounting periods, the assessment appealed against shall, as regards the period to which it relates, have effect as an assessment or assessments for the true accounting periods, and there may be made such other assessments for any such periods or any of them as might have been made at the time when the assessment appealed against was made.

[^F42(9)^F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F42]

Small companies’ rate

13 Small companies’ relief.

^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F4513ZA Interpretation of section 13(7)

^F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F45]

[^F4713AA Corporation tax starting rate.

^F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F47]

[^F4913ABThe non-corporate distribution rate

^F50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F49]

[^F5113A Close investment-holding companies.

^F52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F51]

Advance corporation tax

14 Advance corporation tax and qualifying distributions.

^F53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The six Schedules

15 Schedule A.

^F54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F5516 Schedule B.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F5617 Schedule C.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 Schedule D.

^F57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 Schedule E.

^F58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20 Schedule F.

^F59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II[^F60PROVISIONS RELATING TO THE SCHEDULE A CHARGE^F60]

General

[^F6121 Persons chargeable and basis of assessment.

^F62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F61]

[^F6321A Computation of amount chargeable.

^F64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21B Application of other rules applicable to Case I of Schedule D.

^F65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F63]

[^F6621C The Schedule A charge and mutual business.

^F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F66]

22 Assessments.

^F68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23 Collection from lessees and agents.

^F69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24 Construction of Part II.

^F70. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deductions and other allowances

25 Deductions from rent: general rules.

^F71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26 Deductions from rent: land managed as one estate.

^F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 Deductions from rent: maintenance funds for historic buildings.

^F73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28 Deductions from receipts other than rent.

^F74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29 Sporting rights.

^F75. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 Expenditure on making sea walls.

^F76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 Provisions supplementary to sections 25 to 30.

^F77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F7831ZADeduction for expenditure on energy-saving items

^F79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31ZBRestrictions on relief

^F80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31ZCRegulations

^F81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F78]

[^F8231ADeductions for expenditure by landlords on energy-saving items

^F83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31BProvisions supplementary to section 31A

^F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F82]

32 Capital allowances for machinery and plant used in estate management.

^F85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 Agricultural land: allowance for excess expenditure on maintenance.

^F86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F87 Connected persons

^F8833A Rents or receipts payable by a connected person.

^F89. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F9033B Rents or receipts relating to land in respect of which a connected person makes payments to a third party.

^F91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F87]

Premiums, leases at undervalue etc

34[^F92Treatment of premiums, etc. as rent.^F92]

^F93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35[^F94Charge^F94] on assignment of lease granted at an undervalue.

^F95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36[^F96Charge^F96] on sale of land with right to reconveyance.

^F97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37 Premiums paid etc: deductions from premiums and rent received.

^F98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F9937ASection 37(4) and reductions in receipts under ITTOIA 2005

^F100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F99]

38 Rules for ascertaining duration of leases.

^F101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39 Saving for pre-1963 leases, and special relief for individuals.

^F102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F103 Supplementary provisions^F103]

40 Tax treatment of receipts and outgoings on sale of land.

^F104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 Relief for rent etc. not paid.

^F105. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42^F106 Appeals against determinations under . . . [^F107Chapter 4 of Part 3 of ITTOIA 2005^F107] .

^F108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F10942A Non-residents and their representatives.

^F110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F109]

43 Non-residents.

^F111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F112 Rent factoring

43A Finance agreement: interpretation.

^F113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43B Transfer of rent.

^F114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43C Transfer of rent: exceptions, &c.

^F115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43D Interposed lease.

^F116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43E Interposed lease: exceptions, &c.

^F117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43F Insurance business.

^F118. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43G Interpretation.

^F119. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F112]

PART III[^F120GOVERNMENT SECURITIES^F120]

General

44 Income tax: mode of charge.

^F121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45 Interpretation of Part III.

^F122. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government securities: exemptions from tax

46 Savings certificates and tax reserve certificates.

^F123. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47 United Kingdom government securities held by non-residents.

^F124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 Securities of foreign states.

^F125. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49 Stock and dividends in name of Treasury etc.

[^F126(1)No tax shall be chargeable in respect of the stock or dividends—

(a)transferred, in pursuance of any Act of Parliament, to accounts in the books of the Bank of England in the name of the Treasury or the National Debt Commissioners, or

(b)transferred, in pursuance of any Act of Parliament, to the Treasury or the National Debt Commissioners and in respect of which the Treasury or those Commissioners are entered as holder in the registers kept by the Registrar of Government Stock,

but the Bank of England and the Registrar of Government Stock shall each transmit to the Board an account of the total amount thereof in those books or registers as the case may be.^F126]

(2)No tax shall be chargeable in respect of the stock or dividends belonging to the Crown, in whatever name they may stand in the books of the Bank of England [^F127or in the registers kept by the Registrar of Government Stock^F127] .

[^F128(3)In this section “dividends” means any interest, public annuities, dividends or shares of annuities.^F128]

[^F129(4)In this section “Registrar of Government Stock” means the person or persons appointed in accordance with regulations under section 47(1)(b) of the Finance Act 1942(see regulation 3 of the Government Stock Regulations 2004).^F129]

Government securities: interest payable without deduction of tax

50United Kingdom securities: Treasury directions for payment without deduction of tax.

^F130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51 Treasury directions as respects Northern Ireland securities.

^F131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F13251AA Commencement of direction under section 50 or 51.

^F133. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F132]

[^F13451A Gilt-edged securities held under authorised arrangements.

^F135. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F134]

[^F13651B Periodic accounting for tax on interest on gilt-edged securities.

^F137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F136]

52 Taxation of interest on converted government securities and interest which becomes subject to deduction.

^F138. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART IV PROVISIONS RELATING TO THE SCHEDULE D CHARGE

CHAPTER I SUPPLEMENTARY CHARGING PROVISIONS

53 Farming and other commercial occupation of land (except woodlands).

^F139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F14054 Woodlands managed on a commercial basis.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55 Mines, quarries and other concerns.

^F141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56 Transactions in deposits with and without certificates or in debts._cross-notes

(1)^M1,M2Subsection (2) below applies to the following rights—

(a)the right to receive the amount, with or without interest, stated in a certificate of deposit;

(b)the right to receive an amount payable with interest—

(i)in a transaction in which no certificate of deposit or security is issued, and

(ii)which is payable by a bank or similar institution or a person regularly engaging in similar transactions;

and the right to receive that interest.

(2)^M3Profits or gains arising to a [^F142company^F142] from the disposal of a right to which this subsection applies or, except so far as it is a right to receive interest, from the exercise of any such right (whether by the person to whom the certificate was issued or by some other person, or, as the case may be, by the person who acquired the right in the transaction referred to in subsection (1) above or by some person acquiring it directly or indirectly from that person), shall, if not falling to be taken into account as a trading receipt, be treated as [^F143an amount to which the charge to corporation tax on income applies^F143] .

(3)^M4Subsection (2) above [^F144and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do^F144] not apply in the case of the disposal or exercise of a right to receive an amount stated in a certificate of deposit or interest on such an amount—

(a)if the [^F145company^F145] disposing of the right acquired it before 7th March 1973;

(b)to any profits or gains arising to a fund or scheme in the case of which provision is made by section [^F146613(4) or 614(2) or (3) or section 186 of the Finance Act 2004^F146] for exempting the whole or part of its income from income tax;

(c)^F147. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F148(3A)^F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B)^F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C)^F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3D)^F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F148]

(4)^F150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F151(4A)This section and section 56A shall not apply for the purposes of corporation tax except in relation to rights in existence before 1st April 1996.

(4B)For the purposes of corporation tax, where any profits or gains arising from the disposal or exercise of a right in existence before 1st April 1996 are, or (if there were any) would be, chargeable under this section, nothing in [^F152Part 5 of CTA 2009^F152] (loan relationships) shall require any amount relating to that disposal, or to the exercise of that right, to be brought into account for the purposes of [^F152that Part^F152].^F151]

(5)^M5 In this section—

• “certificate of deposit” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable; and

• “security” has the same meaning as in section [^F153132 of the 1992 Act^F153] .

[^F15456A Disposal or exercise of rights in pursuance of deposits.

(1)This section applies where there is an arrangement under which—

(a)there is a right to receive an amount (with or without interest)

in pursuance of a deposit of money,

(b)when the right comes into existence there is no certificate of deposit in respect of the right, and

(c)the person for the time being entitled to the right is entitled to call for the issue of a certificate of deposit in respect of the right.

(2)In such a case—

(a)the right shall be treated as not falling within section 56(1)(b), and

(b)if there is a disposal or exercise of the right before such time (if any) as a certificate of deposit is issued in respect of it, section 56(2) shall apply to it by virtue of this paragraph.

(3)In the application of section 56 by virtue of this section—

(a)subsection (2) shall have effect as if the words from “(whether” to “person)” read “(whether by the person originally entitled to the right or by some other person)”, and

(b)subsection (3) shall have effect as if the words “stated in a certificate of deposit” read “under an arrangement”.

(4)In this section “certificate of deposit” has the meaning given by section 56(5).^F154]

57 Deep discount securities.

^F155. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58 Foreign pensions.

^F156. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59 Persons chargeable.

(1)^F157. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F157. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER II INCOME TAX: BASIS OF ASSESSMENT ETC.

Cases I and II

60 Assessment on current year basis.

^F159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61 Basis of assessment at commencement.

^F160. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62 Change of basis period.

^F161. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F16262A Conditions for such a change.

^F163. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F162]

63 Basis of assessment on discontinuance.

^F164. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F16563A Overlap profits and overlap losses.

^F166. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F165]

Cases III, IV and V

64 Case III assessments.

^F167. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65 Cases IV and V assessments: general.

^F168. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F16965A Case V income from land outside UK: income tax.

^F170. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F169]

66 Special rules for fresh income.

^F171. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67 Special rules where source of income disposed of or yield ceases.

^F172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68 Special rules where property etc. situated in Republic of Ireland.

^F173. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F17468AShare incentive plans: application of section 68B

^F175. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68BShare incentive plans: cash dividends and dividend shares

^F176. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68CShare incentive plans: interpretation

^F177. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F174]

Case VI

69 Case VI assessments.

^F178. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER III CORPORATION TAX: BASIS OF ASSESSMENT ETC

70 Basis of assessment etc.

^F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F18070A Case V income from land outside UK: corporation tax.

^F181. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F180]

CHAPTER IV PROVISIONS SUPPLEMENTARY TO CHAPTERS II AND III

71 Computation of income tax where no profits in year of assessment.

^F182. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72 Apportionments etc. for purposes of Cases I, II and VI.

^F183. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73 Single assessments for purposes of Cases III, IV and V.

^F184. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER V COMPUTATIONAL PROVISIONS

Deductions

74 General rules as to deductions not allowable.

^F185. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75Expenses of management: companies with investment business

^F186. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F18775AAccounting period to which expenses of management are referable

^F188. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F187]

[^F18975BAmounts reversing expenses of management deducted: charge to tax

^F190. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F189]

76Expenses of insurance companies

^F191. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F192Payments for restrictive undertakings

76ZAPayments for restrictive undertakings

^F193. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F192]

[^F194Seconded employees

76ZBEmployees seconded to charities and educational establishments

^F195. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F194]

[^F196Counselling and retraining expenses

76ZCCounselling and other outplacement services

^F197. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F19876ZDRetraining courses

^F199. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F198]

[^F20076ZERetraining courses: recovery of tax

^F201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F200,F196]]

[^F202Redundancy payments etc

76ZFRedundancy payments and approved contractual payments

^F203. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F20476ZGPayments in respect of employment wholly in employer's business

^F205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F204]

[^F20676ZHPayments in respect of employment in more than one capacity

^F207. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F206]

[^F20876ZIAdditional payments

^F209. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F208]

[^F21076ZJPayments by the Government

^F211. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F210,F202]]

[^F212Contributions to local enterprise organisations or urban regeneration companies

76ZKContributions to local enterprise organisations or urban regeneration companies

^F213. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F212]

[^F214Unpaid remuneration

76ZLUnpaid remuneration

^F215. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F21676ZMUnpaid remuneration: supplementary

^F217. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F216,F214]]

[^F218Car or motor cycle hire^F218]

[^F21976ZNCar or motor cycle hire

^F220. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F219]

[^F22176ZOHiring cars (but not motor cycles) with low CO₂ emissions before 1 April 2013

^F222. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F221]

^F22376A Levies and repayments under the Financial Services and Markets Act 2000.

^F224. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F22576B Levies and repayments under the Financial Services and Markets Act 2000: investment companies.

^F226. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77 Incidental costs of obtaining loan finance.

^F227. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78 Discounted bills of exchange.

^F228. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79 Contributions to local enterprise agencies.

^F229. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F23079A Contributions to training and enterprise councils and local enterprise companies.

^F231. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F23279BContributions to urban regeneration companies

^F233. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80 Expenses connected with foreign trades etc.

^F234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81 Travel between trades etc.

^F235. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82 Interest paid to non-residents.

^F236. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F23782A Expenditure on research and development.

^F238. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F23982B Payments to research associations, universities etc.

^F240. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83 Patent fees etc. and expenses.

^F241. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F24283A Gifts in kind to charities etc.

^F243. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84 Gifts to educational establishments.

^F244. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F24584A Costs of establishing share option or profit sharing schemes: relief.

^F246. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F245]

85 Payments to trustees of approved profit sharing schemes.

^F247. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F24885A Costs of establishing employee share ownership trusts: relief.

^F249. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F25085BApproved share incentive plans

^F251. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

86 Employees seconded to charities and educational establishments.

^F252. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F25386A Charitable donations: contributions to agent’s expenses.

^F254. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87 Taxable premiums etc.

^F255. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F25687ASection 87(2) and (3) and reductions in receipts under ITTOIA 2005

^F257. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88 Payments to Export Credit Guarantee Department.

^F258. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F25988A Debts of overseas governments etc.

^F260. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F26188B Section 88A debts: restriction on deductions under section 74(j).

^F262. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F26388C Section 88A debts: restriction on other deductions.

^F264. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F26588DRestriction of deductions in respect of certain debts

^F266. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89Debts proving to be irrecoverable after discontinuance etc

^F267. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90 Additional payments to redundant employees.

^F268. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91 Cemeteries.

^F269. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F27091A Waste disposal: restoration payments.

^F271. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F27291B Waste disposal: preparation expenditure.

^F273. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F27491BA Waste disposal: entitlement of successor to allowances.

^F275. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F27691C Mineral exploration and access.

^F277. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treatment of regional development and other grants and debts released etc.

92 Regional development grants.

^F278. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93 Other grants under Industrial Development Act 1982 etc.

^F279. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94 Debts deducted and subsequently released.

^F280. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95[^F281Taxation of dealers in respect of distributions etc.^F281]

^F282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F28395ZATaxation of UK distributions received by insurance companies

(1)If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly [[^F284,F285section 130(2)^F285] of CTA 2009^F284] does not apply in relation to those distributions).

(2)A company (“company A”) receives a “relevant distribution” if—

(a)it receives a distribution made by a company ^F286. . . (“company B”),

(b)the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution,

(c)a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and

(d)either—

(i)the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or

(ii)the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days.

(3)In this section “relevant insurance business” means any kind of insurance business other than [^F287business in relation to which section 111 of the Finance Act 2012 applies^F287].

(4)Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i).

(5)Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding.^F283]

Special provisions

[^F28895A Creative artists: relief for fluctuating profits

^F289. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F288]

96 Farming and market gardening: relief for fluctuating profits.

^F290. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97 Treatment of farm animals etc.

^F291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F29298 Tied premises: receipts and expenses treated as those of trade.

^F293. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F292]

99 Dealers in land.

^F294. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER VI^F295 DISCONTINUANCE . . .

Valuation of trading stock etc.

100 Valuation of trading stock at discontinuance of trade.

^F296. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101 Valuation of work in progress at discontinuance of profession or vocation.

^F297. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102 Provisions supplementary to sections 100 and 101.

^F298. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Case VI charges on receipts

103 Receipts after discontinuance: earnings basis charge and related charge affecting conventional basis.

^F299. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104^F300 Conventional basis: general charge on receipts after discontinuance . . . .

^F301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105 Allowable deductions.

^F302. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106 Application of charges where rights to payments transferred.

^F303. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reliefs

107 Treatment of receipts as earned income.

^F304. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108 Election for carry-back.

^F305. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109 Charge under section 104: relief for individuals born before 6th April 1917.

^F306. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F307 Relief for post-cessation expenditure

109A Relief for post-cessation expenditure.

^F308. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F307]

Supplemental

110 Interpretation etc.

^F309. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[[^F310,F311 Change of residence^F311]

110A Change of residence.

^F312. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F310]

CHAPTER VII PARTNERSHIPS AND SUCCESSIONS

General

[^F313111 Treatment of partnerships.

(1)^F314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13)^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F313]

112 Partnerships controlled abroad.

^F316. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113 Effect, for income tax, of change in ownership of trade, profession or vocation.

^F317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Partnerships involving companies

114 Special rules for computing profits and losses.

^F318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115 Provisions supplementary to section 114.

^F319. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116 Arrangements for transferring relief.

^F320. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited partners

117 Restriction on relief: individuals.

^F321. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118 Restriction on relief: companies.

^F322. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F323Limited liability partnerships

118ZA Treatment of limited liability partnerships.

^F324. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZBRestriction on relief: companies

^F325. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZC Member’s contribution to trade.

^F326. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZD Carry forward of unrelieved losses.

^F327. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F323]

[^F328Non-active general partners and non-active members of limited liability partnerships

118ZERestriction on relief for non-active partners

^F329. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZFMeaning of “the aggregate amount”

^F330. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZG“The individual’s contribution to the trade”

^F331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZH“A significant amount of time”

^F332. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZICarry forward of unrelieved losses of non-active partners

^F333. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18ZJCommencement: the first restricted year

^F334. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZKTransitional provision for years after the first restricted year

^F335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F328]

[^F336Partnerships exploiting films

118ZLPartnerships exploiting films

^F337. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZMPartnerships exploiting films: supplementary

^F338. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F336]

[^F339Partners: meaning of “contribution to the trade”

118ZNPartners: meaning of “contribution to the trade”

^F340. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118ZOMeaning of “relevant loss” in section 118ZN

^F341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F339]

[[^F342,F343Chapter VIIA Paying and collecting agents^F343]

118A Definitions.

^F344. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118B Paying agents.

^F345. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118C Collecting agents.

^F346. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118D Chargeable payments and chargeable receipts.

^F347. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118E Deduction of tax from chargeable payments and chargeable receipts.

^F348. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118F Accounting for tax on chargeable payments and chargeable receipts.

^F349. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118G Relevant securities of eligible persons.

^F350. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118H Relevant securities of eligible persons: administration.

^F351. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118I Deduction of tax at reduced rate.

^F352. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118J Prevention of double accounting.

^F353. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118K Regulations.

^F354. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F342]

CHAPTER VIII MISCELLANEOUS AND SUPPLEMENTAL

119 Rent etc. payable in connection with mines, quarries and similar concerns.

^F355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120 Rent etc. payable in respect of electric line wayleaves.

^F356. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121 Management expenses of owner of mineral rights.

^F357. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122 Relief in respect of mineral royalties.

^F358. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123 Foreign dividends.

^F359. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124 Interest on quoted Eurobonds.

^F360. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125[^F361Annual payments for dividends or non-taxable consideration^F361]

^F362. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126 Treasury securities issued at a discount.

^F363. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126A Charge to tax on appropriation of securities and bonds.

^F364. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127 Enterprise allowance.

^F365. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F366127A Futures and options: transactions with guaranteed returns.

^F367. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F366]

128 Commodity and financial futures etc.: losses and gains.

(1)^F368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F369(2)^F370. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F369]

(3)^F370. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129 Stock lending.

^F371. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F372129A Stock lending: interest on cash collateral.

^F373. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F372]

[^F374129B Stock lending fees.

(1)The income which, as income deriving from investments of a description specified in any of the relevant provisions, is eligible for relief from tax by virtue of that provision shall be taken to include any relevant stock lending fee.

(2)For the purposes of this section the relevant provisions are [^F375sections 613(4) and 614(3) and section 186 of the Finance Act 2004^F375].

(3)In this section “relevant stock lending fee”, in relation to investments of any description, means any amount, in the nature of a fee, which is payable in connection with [^F376any^F376]stock lending arrangement relating to investments which, but for any transfer under the arrangement, would be investments of that description.

[^F377(4)In this section “stock lending arrangement” has the same meaning as in section 263B of the 1992 Act.^F377,F374]]

130[^F378Meaning of “investment company” in Part 4^F378]

^M6In this Part of this Act [^F379—

• ^F380. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F379]

• ^M7“investment company”, means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, but includes any savings bank or other bank for savings except any which, for the purposes of the Trustee Savings Bank Act 1985, is a successor or a further successor to a trustee savings bank.

PART V PROVISIONS RELATING TO THE SCHEDULE E CHARGE

CHAPTER I SUPPLEMENTARY CHARGING PROVISIONS OF GENERAL APPLICATION

Miscellaneous provisions

131 Chargeable emoluments.

^F381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

132 Place of performance, and meaning of emoluments received in the U.K.

^F382. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133 Voluntary pensions.

^F383. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

134 Workers supplied by agencies.

^F384. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shareholdings, loans etc.

135 Gains by directors and employees from share options.

^F385. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

136 Provisions supplementary to section 135.

^F386. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137 Payment of tax under section 135 by instalments.

^F387. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138 Share acquisitions by directors and employees.

^F388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F389139 Provisions supplementary to section 138.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140 Further interpretation of sections 135 to 139.

^F390. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F391140A Conditional acquisition of shares.

^F392. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140B Consideration for shares conditionally acquired.

^F393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140C Cases where interest to be treated as only conditional.

^F394. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F391]

[^F395140D Convertible shares.

^F396. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140E Consideration for convertible shares.

^F397. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140F Supplemental provision with respect to convertible shares.

^F398. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F395]

[^F399140G Information for the purposes of sections 140A to 140F.

^F400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F399]

[^F401140H Construction of sections 140A to 140G.

^F402. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F401]

Vouchers etc.

141 Non-cash vouchers.

^F403. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

142 Credit-tokens.

^F404. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

143 Cash vouchers taxable under P.A.Y.E.

^F405. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144 Supplementary provisions.

^F406. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F407144A Payments etc. received free of tax.

^F408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F407]

Living accommodation

145 Living accommodation provided for employee.

^F409. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

146 Additional charge in respect of certain living accommodation.

^F410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F411146A Priority of rules applying to living accommodation.

^F412. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F411]

147 Occupation of Chevening House.

^F413. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payments on retirement, sick pay etc.

148 Payments and other benefits in connection with termination of employment, etc.

^F414. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

149 Sick pay.

^F415. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150 Job release scheme allowances, maternity pay and statutory sick pay.

^F416. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

151 Income support etc.

^F417. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F418151A Jobseeker’s allowance.

^F419. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F418]

152[^F420Notification of taxable amount of certain benefits^F420] .

^F421. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER II[^F422EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS^F422]

Expenses

153 Payments in respect of expenses.

^F423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefits in kind

154 General charging provision.

^F424. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

155 Exceptions from the general charge.

^F425. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F426155ZA Accommodation, supplies or services used in performing duties of employment.

^F427. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F426]

[^F428155ZB Power to provide for exemption of minor benefits.

^F429. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F428]

[^F430155AA Mobile telephones.

^F431. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F430]

[^F432155A Care for children.

^F433. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F432]

156 Cash equivalent of benefits charged under section 154.

^F434. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F435156A Limited exemption for computer equipment.

^F436. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F435]

157 Cars available for private use.

^F437. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F438157A Cars available for private use: cash alternative, etc.

^F439. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F438]

158 Car fuel.

^F440. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

159 Pooled cars.

^F441. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F442159AA Vans available for private use.

^F443. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F442]

^F444159AB Pooled vans.

^F445. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F446159AC Heavier commercial vehicles available for private use.

^F447. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F446]

[^F448159A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F449. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F448]

160 Beneficial loan arrangements.

^F450. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161 Exceptions from section 160.

^F451. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F452161A Treatment of qualifying loans.

^F453. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F452]

[^F454161B Beneficial loans: loans on ordinary commercial terms.

^F455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F454]

162 Employee shareholdings.

^F456. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

163 Expenses connected with living accommodation.

^F457. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164 Director’s tax paid by employer.

^F458. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165 Scholarships.

^F459. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General supplementary provisions

166 Notice of nil liability under this Chapter.

^F460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

167 Employment to which this Chapter applies.

^F461. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168 Other interpretative provisions.

^F462. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F463168A Price of a car as regards a year.

^F464. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F463]

[^F465168AA Equipment to enable disabled person to use car.

^F466. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F465]

[^F467168AB Equipment etc. to enable car to run on road fuel gas.

^F468. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F467]

^F469168B Price of a car: accessories not included in list price.

^F470. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F471168C Price of a car: accessories available after car first made available.

^F472. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F473168D Price of a car: capital contributions.

^F474. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F475168E Price of a car: replacement accessories.

^F476. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F477168F Price of a car: classic cars.

^F478. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F479168G Price of a car: cap for expensive car.

^F480. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER III PROFIT-RELATED PAY

Preliminary

169 Interpretation.

^F481. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

170 Taxation of profit-related pay.

^F482. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The relief

171 Relief from tax.

^F483. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172 Exceptions from tax.

^F484. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration

173 Persons who may apply for registration.

^F485. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

174 Excluded employments.

^F486. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175 Applications for registration.

^F487. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176 Registration.

^F488. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

177 Change of scheme employer.

^F489. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F490177A Death of scheme employer.

^F491. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F490]

177B Alteration of scheme’s terms.

^F492. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

178 Cancellation of registration.

^F493. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Administration

179 Recovery of tax from scheme employer.

^F494. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

180 Annual returns etc.

^F495. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181 Other information.

^F496. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182 Appeals.

^F497. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

183 Partnerships.

^F498. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

184 Independent accountants.

^F499. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER IV OTHER EXEMPTIONS AND RELIEFS

Share option and profit sharing schemes

185 Approved share option schemes.

^F500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

186 Approved profit sharing schemes._cross-notes

(1)^M8The provisions of this section apply where, after 5th April 1979 [^F501and before 1st January 2003^F501] , the trustees of an approved profit sharing scheme appropriate shares—

(a)which have previously been acquired by the trustees, and

(b)as to which the conditions in Part II of Schedule 9 are fulfilled,

to an individual who participates in the scheme (“the participant”).

(2)^M9Notwithstanding that, by virtue of such an appropriation of shares as is mentioned in subsection (1) above, the beneficial interest in the shares passes to the participant to whom they are appropriated—

(a)the value of the shares at the time of the appropriation shall be treated as not being income of his chargeable to tax under Schedule E; and

(b)he shall not be chargeable to income tax under that Schedule by virtue of [^F502section 78 or 79 of the Finance Act 1988 in respect of the shares^F502] or by virtue of section 162 in any case where the shares are appropriated to him at an undervalue within the meaning of that section.

(3)^M10,F503Subject to the provisions of this section and paragraph 4 of Schedule 10, if, in respect of or by reference to any of a participant’s shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money’s worth (“a capital receipt”), . . . the appropriate percentage (determined as at the time the trustees become or the participant becomes so entitled) of so much of the amount or value of the receipt as exceeds the appropriate allowance for that year, as determined under subsection (12) below [^F504 counts as employment income of the participant for the year of assessment in which the entitlement arises^F504] .

(4)^M11,F505If the trustees dispose of any of a participant’s shares at any time before the release date or, if it is earlier, the date of the participant’s death, then, subject to subsections (6) and (7) below, . . . the appropriate percentage of the locked-in value of the shares at the time of the disposal [^F506 counts as employment income of the participant for the year of assessment in which the disposal takes place^F506] .

(5)^M12Subject to paragraphs 5 and 6(6) of Schedule 10, the locked-in value of a participant’s shares at any time is—

(a)if prior to that time he has become [^F507 entitled to a capital receipt (within the meaning of subsection (3) above) which is referable to those shares and—

(i)an amount calculated by reference to that capital receipt counts as his employment income by virtue of subsection (3) above, or

(ii)if the entitlement to the capital receipt arose before 6th April 2003, he was chargeable to income tax by virtue of that subsection (as it had effect before that date) in respect of that capital receipt,^F507]

the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and

(b)in any other case, their initial market value.

(6)Subject to subsection (7) below, if, on a disposal of shares falling within subsection (4) above, the proceeds of the disposal are less than the locked-in value of the shares at the time of the disposal, subsection (4) above shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal.

(7)If, at any time prior to the disposal of any of a participant’s shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (8) below, subsections (4) and (6) above shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant’s shares held by the trustees at that time.

(8)^M13For the purposes of subsection (7) above—

(a)no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and

(b)in relation to a particular disposal the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals;

and any reference in subsection (7) or paragraph (a) above to the rights arising under a rights issue is a reference to rights conferred in respect of a participant’s shares, being rights to be allotted, on payment, other shares or securities or rights of any description in the same company.

(9)^M14If at any time the participant’s beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of the relevant provisions as having been disposed of at that time by the trustees for (subject to subsection (10) below) the like consideration as was obtained for the disposal of the beneficial interest; and for the purposes of this subsection there is no disposal of the participant’s beneficial interest if and at the time when—

(a)in England and Wales or Northern Ireland, that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of law, or

(b)in Scotland, that interest becomes vested in a judicial factor, in a trustee on the participant’s sequestrated estate or in a trustee for the benefit of the participant’s creditors.

(10)If—

(a)a disposal of shares falling within subsection (4) above is a transfer to which paragraph 2(2)(c) of Schedule 9 applies, or

[^F508(b)any other disposal falling within that subsection is not at arm’s length,^F508]

(c)a disposal of shares falling within [^F509that subsection^F509] is one which is treated as taking place by virtue of subsection (9) above and takes place within the period of retention,

then for the purposes of the relevant provisions the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal.

(11)^M15Where the trustees of an approved scheme acquire any shares as to which the requirements of Part II of Schedule 9 are fulfilled and, within the period of 18 months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme, section 686 shall not apply to income consisting of dividends on those shares received by the trustees; and, for the purpose of determining whether any shares are appropriated within that period, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time.

(12)^M16For the purposes of subsection (3) above, “the appropriate allowance”, in relation to any year of assessment, means a sum which, subject to a maximum of [^F510£60^F510] , is the product of multiplying £20 by 1 plus the number of years which fall within the period of [^F511three years^F511] immediately preceding the year in question and in which shares were appropriated to the participant under the scheme; and if in any year (and before the release date) the trustees become or the participant becomes entitled, in respect of or by reference to any of his shares, to more than one capital receipt, the receipts shall be set against the appropriate allowance for that year in the order in which they are received.

(13)Schedule 10 shall have effect with respect to profit sharing schemes.

187 Interpretation of sections 185 and 186 and Schedules 9 and 10._cross-notes

(1)^M17[^F512In sections 185 and 186, this section and Schedules 9 and 10 “the relevant provisions” means those sections (including this section) and Schedules.^F512]

(2)[^F512For the purposes of the relevant provisions, except where the context otherwise requires—

• “appropriate percentage” shall be construed in accordance with paragraph 3 of Schedule 10;

• “approved”, in relation to a scheme, means approved under Schedule 9;

• “associated company” has the same meaning as in section 416, except that, for the purposes of paragraph 23 of Schedule 9, subsection (1) of that section shall have effect with the omission of the words “ or at any time within one year previously ”;

• “bonus date” has the meaning given by paragraph 17 of Schedule 9;

• “capital receipt” means money or money’s worth to which the trustees of or a participant in a profit sharing scheme become or becomes entitled as mentioned in section 186(3), but subject to paragraph 4 of Schedule 10;

• “certified contractual savings scheme” has the meaning given by section 326;

• “control” has the same meaning as in section 840;

• “grantor”, in relation to any scheme, means the company which has established the scheme;

• “group scheme” and, in relation to such a scheme, “participating company” have the meanings given by paragraph 1(3) and (4) of Schedule 9;

• “initial market value”, in relation to shares in a profit sharing scheme, has the meaning given by paragraph 30(4) of Schedule 9;

• “locked-in value”, in relation to any shares, shall be construed in accordance with section 186(5);

• “market value” has the same meaning as in Part VIII of the [^F5131992 Act^F513];

• “new holding” has the meaning given by section [^F513126(1)(b) of the 1992 Act^F513];

• “participant”, in relation to a profit sharing scheme, means an individual to whom the trustees of the scheme have appropriated shares;

• “participant’s shares”, in relation to a participant in a profit sharing scheme, means, subject to paragraph 5(4) of Schedule 10, shares which have been appropriated to the participant by the trustees;

• ^F514. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “period of retention” has the meaning given by paragraph 2 of Schedule 10;

• “release date”, in relation to any of the shares of a participant in a profit sharing scheme, means the [^F515third^F515] anniversary of the date on which they were appropriated to him;

• “relevant amount”, in relation to a participant in a profit sharing scheme, means an amount which is [^F516not less than £3,000 and not more than £8,000^F516] but which, subject to that, is 10 per cent. of his salary (determined under subsection (5) below) for the year of assessment in question or the preceding year of assessment, whichever is the greater;

• “relevant requirements” has the meaning given by paragraph 1 of Schedule 9;

• “savings-related share option scheme” has the meaning given by paragraph 1 of Schedule 9;

• “scheme” means a savings-related share option scheme, a share option scheme which is not a savings-related share option scheme or a profit sharing scheme, as the context may require;

• “shares” includes stock;

• ^F517“specified age”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;

• “the trustees”, in relation to an approved profit sharing scheme or the shares of a participant in such a scheme, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 30 of Schedule 9; and

• “just instrument”, in relation to an approved profit sharing scheme, means the instrument referred to in paragraph 30(1)(c) of Schedule 9.^F512]

(3)^M18[^F512For the purposes of the application of the relevant provisions in relation to any share option scheme or profit sharing scheme, a person has a material interest [^F518in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—

(a)is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the ordinary share capital of the company, or

(b)where the company is a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 25 per cent., or in the case of a share option scheme which is not a savings-related share option scheme more than 10 per cent., of the assets which would then be available for distribution among the participators.^F518]

• In this subsection “associate” has the meaning given by section 417(3) and (4) [^F518and “participator” has the meaning given by section 417(1)^F518].^F512]

(4)^M19[^F512Subsection (3) above shall have effect subject to the provisions of Part VI of Schedule 9.^F512]

(5)^M20For the purposes of subsection (2) above, a participant’s salary for a year of assessment means such of the emoluments of the office or employment by virtue of which he is entitled to participate in a profit sharing scheme as are liable to be paid in that year under deduction of tax pursuant to section 203 after deducting therefrom amounts included by virtue of Chapter II of this Part.

(6)^M21[^F512Section 839 shall apply for the purposes of the relevant provisions.^F512]

(7)^M22[^F512For the purposes of the relevant provisions a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than three-quarters of the other company’s ordinary share capital and each of which beneficially owns not less than one-twentieth of that capital.^F512]

(8)^M23Where the disposal referred to in section 186(4) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of the relevant provisions—

(a)^F519the initial market value and the locked-in value of each of those shares, . . .

(b)^F519. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)^M24Any of the relevant provisions with respect to—

(a)the order in which any of a participant’s shares are to be treated as disposed of for the purposes of those provisions, or

(b)the shares in relation to which an event is to be treated as occurring for any such purpose,

shall have effect in relation to a profit sharing scheme notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.

(10)^M25In the relevant provisions “workers’ cooperative” means a [^F520registered society^F520][^F521, as defined in [^F522section 1119 of CTA 2010^F522,F521]] , which is a cooperative society and the rules of which include provisions which secure—

(a)that the only persons who may be members of it are those who are employed by, or by a subsidiary of, the society and those who are the trustees of its profit sharing scheme; and

(b)that, subject to any provision about qualifications for membership which is from time to time made by the members of the society by reference to age, length of service or other factors of any description, all such persons may be members of the society;

^M26and in this subsection “cooperative society” has the same meaning as in [^F523section 2 of the Co-operative and Community Benefit Societies Act 2014^F523] or, as the case may be, [^F524section 1 of^F524]the Industrial and Provident Societies Act (Northern Ireland) 1969.

[^F525 Contributions in respect of share option gains

187A Relief for contributions in respect of share option gains.

^F526. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F525]

Retirement benefits etc.

188 Exemptions from section 148.

^F527. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

189 Lump sum benefits on retirement.

^F528. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

190Payments to MPs and others.

^F529. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

191 Job release scheme allowances not to be treated as income.

^F530. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F531 Removal expenses and benefits

^F532191A Removal expenses and benefits.

^F533. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F534191B Removal benefits: beneficial loan arrangements.

^F535. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F531]

Foreign emoluments and earnings, pensions and certain travel facilities

192 Relief from tax for foreign emoluments.

^F536. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F537192A Foreign earnings deduction for seafarers.

^F538. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F537]

193 Foreign earnings and travel expenses.

^F539. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194 Other foreign travel expenses.

^F540. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195 Travel expenses of employees not domiciled in the United Kingdom.

^F541. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

196 Foreign pensions.

^F542. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197 Leave travel facilities for the armed forces.

^F543. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F544197A Car parking facilities

^F545. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F544]

[^F546197AA Works bus services.

^F547. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197AB Support for public transport road services.

^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F546]

[^F549197AC Provision of cycle or cyclist’s safety equipment.

^F550. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F549]

[^F551 Mileage allowances

197AD Mileage allowance payments

^F552. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197AE Passenger payments

^F553. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197AF Mileage allowance relief

^F554. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197AG Giving effect to mileage allowance relief

^F555. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197AH Interpretation of sections 197AD to 197AG

^F556. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F551]

^F557 Mileage allowances

197B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F558. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F559. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F560. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F561. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F562. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F563 Sporting and recreational facilities

197G Sporting and recreational facilities.

^F564. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F563]

Other expenses, subscriptions etc.

198 Relief for necessary expenses.

^F565. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F566198A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F567. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F566]

199 Expenses necessarily incurred and defrayed from official emoluments.

^F568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200 Expenses of Members of Parliament.

^F569. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F570200ZA Expenses of members of Scottish Parliament, National Assembly for Wales or Northern Ireland Assembly.

^F571. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F570]

[^F572200AA Incidental benefits for holders of certain offices etc.

^F573. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F572]

[^F574200A Incidental overnight expenses.

^F575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F574]

[^F576200B Work-related training provided by employers.

^F577. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200C Expenditure excluded from section 200B.

^F578. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200D Other work-related training.

^F579. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F576]

[^F580200E Education and training funded by employers.

^F581. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200F Section 200E: exclusion of expenditure not directly related to training.

^F582. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200G Section 200E: exclusion of expenditure if contributions not generally available to staff.

^F583. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200H Section 200E: exclusion of expenditure otherwise relieved.

^F584. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200J Education or training funded by third parties.

^F585. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F580]

201 Fees and subscriptions to professional bodies, learned societies etc.

^F586. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F587201AA Employee liabilities and indemnity insurance.

^F588. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F587]

[^F589201A Expense of entertainers.

^F590. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F589]

202 Donations to charity: payroll deduction scheme.

^F591. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER V ASSESSMENT, COLLECTION, RECOVERY AND APPEALS

[^F592202A Assessment on receipts basis.

^F593. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F592]

202B Receipts basis: meaning of receipt.

^F594. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203 Pay as you earn.

^F595. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F596203A P.A.Y.E.: meaning of payment.

^F597. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F596]

[^F598203B PAYE: payment by intermediary.

^F599. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F598]

[^F600203C PAYE: employee of non-UK employer.

^F601. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203D PAYE: employee non-resident, etc.

^F602. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203E PAYE: mobile UK workforce.

^F603. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F600]

[^F604203F PAYE: tradeable assets.

^F605. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F604]

[^F606203FA PAYE: enhancing the value of an asset.

^F607. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F606]

[^F608203FB PAYE: gains from share options etc.

^F609. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F608]

[^F610203G PAYE: non-cash vouchers.

^F611. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F610]

[^F612203H PAYE: credit-tokens.

^F613. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F612]

[^F614203I PAYE: cash vouchers.

^F615. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F614]

[^F616203J S.203B to s.203I: accounting for tax.

^F617. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203K Trading arrangements.

^F618. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203L S.203B to s.203K: interpretation, etc.

^F619. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F616]

204 P.A.Y.E repayments.

^F620. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

205 Assessments unnecessary in certain circumstances.

^F621. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206 Additional provision for certain assessments.

^F622. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F623206A PAYE settlement agreements.

^F624. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F623]

207 Disputes as to domicile or ordinary residence.

^F625. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART VI COMPANY DISTRIBUTIONS, TAX CREDITS ETC

CHAPTER I TAXATION OF COMPANY DISTRIBUTIONS_cross-notes

[^F626207A Application of lower rate to company distributions.

^F627. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F626]

208 U.K. company distributions not generally chargeable to corporation tax.

^F628. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F629CHAPTER II MATTERS WHICH ARE DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS^F629]

209 Meaning of “distribution”.

^F630. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F631209A Section 209(3AA): link to shares of company or associated company

^F632. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209B Section 209(3AA): hedging arrangements

^F633. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F631]

210 Bonus issue following repayment of share capital.

^F634. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

211 Matters to be treated or not to be treated as repayments of share capital.

^F635. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F636CHAPTER III MATTERS WHICH ARE NOT DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS^F636]

Payments of interest

212 Interest etc. paid in respect of certain securities.

^F637. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Demergers

213 Exempt distributions.

^F638. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F639213AExempt distributions: division of business

^F640. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F639]

214 Chargeable payments connected with exempt distributions.

^F641. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

215 Advance clearance by Board of distributions and payments.

^F642. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

216 Returns.

^F643. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

217 Information.

^F644. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218 Interpretation of sections 213 to 217.

^F645. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchase of own shares

219 Purchase by unquoted trading company of own shares.

^F646. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

220 Conditions as to residence and period of ownership.

^F647. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

221 Reduction of vendor’s interest as shareholder.

^F648. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

222 Conditions applicable where purchasing company is member of group.

^F649. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

223 Other conditions.

^F650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

224 Relaxation of conditions in certain cases.

^F651. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225 Advance clearance of payments by Board.

^F652. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226 Returns and information.

^F653. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227 Associated persons.

^F654. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228 Connected persons.

^F655. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229 Other interpretative provisions.

^F656. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock dividends

230 Stock dividends: distributions.

^F657. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F658Industrial and provident society dividends etc

230ADividend or bonus granted by industrial and provident society

^F659. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F658]

CHAPTER IV TAX CREDITS

231 Tax credits for certain recipients of qualifying distributions.

^F660. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F661231A Restrictions on the use of tax credits by pension funds.

^F662. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F661]

[^F663231AA No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement.

^F664. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F663]

[^F665231AB No tax credit for original owner under repurchase agreement in respect of certain manufactured dividends.

^F666. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F665]

[^F667231B Consequences of certain arrangements to pass on the value of a tax credit.

^F668. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F667]

232 Tax credits for non-U.K. residents.

^F669. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

233 Taxation of certain recipients of distributions and in respect of non-qualifying distributions.

^F670. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234 Information relating to distributions.

^F671. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F672234A Information relating to distributions: further provisions.

^F673. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F672]

^F674235 Distributions of exempt funds etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F675236 Provisions supplementary to section 235.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F676237 Disallowance of reliefs in respect of bonus issues.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER V ADVANCE CORPORATION TAX AND FRANKED INVESTMENT INCOME

238 Interpretation of terms and collection of ACT.

^F677. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

239 Set-off of ACT against liability to corporation tax.

^F678. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240 Set-off of company’s surplus ACT against subsidiary’s liability to corporation tax.

^F679. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241 Calculation of ACT where company receives franked investment income.

^F680. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242 Set-off of losses etc. against surplus of franked investment income.

^F681. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

243 Set-off of loss brought forward, or terminal loss.

^F682. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

244 Further provisions relating to claims under section 242 or 243.

^F683. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245 Calculation etc. of ACT on change of ownership of company.

^F684. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F685245A Restriction on application of section 240 in certain circumstances.

^F686. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F685]

245B Restriction on set-off where asset transferred after change in ownership of company.

^F687. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246 Charge of ACT at previous rate until new rate fixed, and changes of rate.

^F688. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F690[^F689Chapter VA Foreign Income Dividends

Election by company paying dividend

246A Election by company paying dividend.

^F691. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246B Procedure for making election.

^F692. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recipient of foreign income dividend

246C No tax credit for recipient.

^F693. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246D Individuals etc.

^F694. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Companies: payments and receipts

246E Foreign income dividend not franked payment.

^F695. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246F Calculation of ACT where company receives foreign income dividend.

^F696. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246G Information relating to foreign income dividends.

^F697. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246H Power of inspector to require information.

^F698. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign source profit and distributable foreign profit

246I Foreign source profit and distributable foreign profit.

^F699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Matching of dividend with distributable foreign profit

246J Matching of dividend with distributable foreign profit.

^F700. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246K Matching: subsidiaries.

^F701. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246L Requirement as to subsidiaries.

^F702. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246M Matching: further provisions.

^F703. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repayment or set-off of advance corporation tax

246N ACT to be repaid or set off against corporation tax liability.

^F704. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246P Notional foreign source advance corporation tax.

^F705. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246Q Repayment or set-off: supplementary.

^F706. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246R Supplementary claims.

^F707. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International headquarters companies

246S International headquarters companies.

^F708. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246T Liability to pay ACT displaced.

^F709. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246U Settlement of liability by IHC as to ACT.

^F710. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246V Settlement of liability by non-IHC as to ACT.

^F711. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246W Payments and repayments where further matching takes place.

^F712. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adjustments

246X Adjustments where profits or foreign tax altered.

^F713. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Application of this Chapter

246Y Application of this Chapter.

^F714. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F689]

[^F715CHAPTER VI MISCELLANEOUS AND SUPPLEMENTAL^F715]

Group income

247 Dividends etc. paid by one member of a group to another.

^F716. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248 Provisions supplementary to section 247.

^F717. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock dividends

249 Stock dividends treated as income.

^F718. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250 Returns.

^F719. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251 Interpretation of sections 249 and 250.

^F720. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F721Approved share incentive plans

251AApplication of sections 251B and 251C

^F722. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251BTreatment of cash dividend retained and then later paid out

^F723. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251CCharge on dividend shares ceasing to be subject to plan

^F724. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

251DInterpretation of sections 251A to 251C

^F725. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F721]

Supplemental

252 Rectification of excessive set-off etc. of ACT or tax credit.

^F726. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

253 Power to modify or replace section 234(5) to (9) and Schedule 13.

^F727. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

254 Interpretation of Part VI.

^F728. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255“Gross rate” and “gross amount” of distributions to include ACT.

^F729. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS

CHAPTER I PERSONAL RELIEFS

The reliefs

256 General.

^F730. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F731256AMeaning of “adjusted net income”

^F732. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256BMeaning of “the minimum amount”

^F733. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F731]

257 Personal allowance.

^F734. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F735257AA Children’s tax credit.

^F736. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F735]

257A Married couple’s allowance [^F737(pre-5th December 2005 marriages)^F737] .

^F738. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F739257ABMarried couple's allowance (post-5th December 2005 marriages and civil partnerships etc.)

^F740. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F739]

[^F741257BA Elections as to transfer of relief under section 257A [^F742or 257AB^F742].

^F743. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F741]

^F745257BB Transfer of relief under section 257A where relief exceeds income [^F744 or 257AB.^F744]

^F746. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F747257B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

257C Indexation of amounts in [^F751sections 256B, 257^F751][^F752, 257A and 257AB^F752] .

^F753. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

257D Transitional relief: husband with excess allowances.

^F754. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

257E Transitional relief: the elderly.

^F755. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

257F Transitional relief: separated couples.

^F756. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F757258 Widower’s or widow’s housekeeper.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

259 Additional relief in respect of children.

^F758. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260 Apportionment of relief under section 259.

^F759. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261 Claims under section 259 for year of marriage.

^F760. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F761261A Additional relief in respect of children for year of separation.

^F762. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F761]

262 Widow’s bereavement allowance.

^F763. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F764263 Dependent relatives.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F765264 Claimant depending on services of a son or daughter.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265 Blind person’s allowance.

^F766. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

266 Life assurance premiums._cross-notes

(1)^M27,F769Subject to the provisions of this section, [^F767section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004,^F767] an [^F768eligible individual^F768] who pays any such premium as is specified in subsection (2) below . . . shall (without making any claim) be entitled to relief under this section.

[^F770(1A)For the purposes of subsection (1) above an individual is an eligible individual if the individual—

(a)is resident in the United Kingdom, or

(b)meets the conditions in section 56(3) of ITA 2007.^F770]

(2)^M28The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—

(a)the payments are made to —

[^F771(i)a person who has permission under [^F772Part 4A^F772] of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or

(ii)a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;^F771]

(iv)in the case of a deferred annuity, the National Debt Commissioners; and

(b)the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse [^F773or civil partner^F773] ; and

(c)the insurance or contract was made by him or his spouse [^F773or civil partner^F773] .

(3)^F774Subject to subsections . . . (10) and (11) below, no relief under this section shall be given—

(a)^M29except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;

(b)^M30in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;

(c)^M31,F775in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 . . . ;

(d)^M32in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.

(4)^M33Subject to [^F776subsection^F776] (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.

(5)Subject to the provisions of Schedule 14—

(a)an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to [^F77712.5 per cent^F777] of the payment; and

(b)the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.

(6)^F778. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6A)^F778. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)^F779. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)^M34,F781Where the individual is not resident in the United Kingdom [^F780(but is entitled to relief by virtue of subsection (1A)(b))^F780] , subsection (4) above shall not apply but . . . the like relief shall be given to him under paragraph 6 of Schedule 14.

(9)^M35Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the [^F782spouse^F782][^F783or civil partner^F783] of such a member as if the individual were so resident.

(10)^M36Subsection (3)(b) above shall not apply—

(a)to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or

(b)to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.

(11)^M38Subsection (3)(a) and (d) above shall not affect premiums payable—

(a)under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the [^F784spouse, [^F785civil partner,^F785] widow, widower [^F786, surviving civil partner^F786] or children or other dependants of any such employee or person,^F784] or

(b)under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.

(12)Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.

[^F787(13)In ^F788. . . Schedule 14, “friendly society” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).^F787]

[^F789(14)In subsection (2)(a)—

• “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and

• “member of the society” has the same meaning as in Lloyd’s Act 1982 ^M39.^F789]

[^F790266ALife assurance premiums paid by employer

(1)This section applies if—

(a)pursuant to [^F791an employer-financed^F791] retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and

(b)the payment is made under such an insurance or contract as is mentioned in section 266.

This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.

(2)Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—

(a)the payment had been made by him, and

(b)the insurance or contract under which the payment is made had been made with him.

[^F792(3)For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.

(4)If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.

(5)The amount treated as paid for or in respect of each employee is—

(6)This section does not apply if—

(a)in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or

(b)the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.

(7)Those conditions are—

(a)that the employment is with a foreign employer, and

(b)that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.

(8)In subsection (6)(a) “earnings charged on remittance” means earnings which are taxable earnings under—

(a)section 22 of ITEPA 2003 (chargeable overseas earnings for year when [^F793remittance basis applies and employee outside section 26^F793]), or

(b)section 26 of that Act (foreign earnings for year when [^F794remittance basis applies and employee meets section 26A requirement^F794]).

[^F795(8A)Section 835BA of ITA 2007 (deemed domicile) applies for the purposes of subsection (6)(b).^F795]

(9)In this section—

• “employer-financed retirement benefits scheme”, and

• “relevant benefits”,

• have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).^F792,F790]]

267 Qualifying policies.

Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.

268 Early conversion or surrender of life policies.

^F796. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

269 Surrender etc. of policies after four years.

^F797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

270 Provisions supplementary to sections 268 and 269.

^F798. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

271 Deemed surrender in cases of certain loans.

^F799. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

272 Collection of sums payable under sections 268 and 269.

^F800. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

273 Payments securing annuities.

^F801. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274 Limits on relief under [^F802section 266^F802].

(1)^M40,F803The aggregate of the premiums . . . in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.

(2)^M41,F805The aggregate of the relief given under [^F804section 266^F804] in respect of premiums . . . payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at [^F80612.5%^F806] on £100.

(3)^F807. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^M42War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.

Supplemental

^F810275 Meaning of “relative”.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

276 Effect on relief of charges on income.

^F811. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

277 Partners.

^F812. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

278 Non-residents.

^F813. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER II TAXATION OF INCOME OF SPOUSES [^F814 AND CIVIL PARTNERS^F814]

General rules

^F815279 Aggregation of wife’s income with husband’s.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F816280 Transfer of reliefs.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F817281 Tax repayments to wives.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

282 Construction of references to [^F818spouses or civil partners^F818] living together.

^F819. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F820282A Jointly held property.

^F821. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F820]

282B Jointly held property: declarations.

^F822. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Separate assessments

^F823283 Option for separate assessment.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F824284 Effect of separate assessment on personal reliefs.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F825285 Collection from wife of tax assessed on husband but attributable to her income.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F826286 Right of husband to disclaim liability for tax on deceased wife’s income.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Separate taxation

^F827287 Separate taxation of wife’s earnings.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F828288 Elections under section 287.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F829CHAPTER IIIENTERPRISE INVESTMENT SCHEME^F829]

289 Eligibility for relief.

^F830. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F831289A Form of relief.

^F832. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F831]

[^F833289B Attribution of relief to shares.

^F834. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F833]

290 Minimum and maximum subscriptions.

^F835. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F837[^F836290A Restriction of relief where amounts raised exceed permitted maximum.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F836]

291 Individuals qualifying for relief.

^F838. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F839291A Connected persons: directors.

^F840. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F839]

[^F841291B Connected persons: persons interested in capital etc. of company.

^F842. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F841]

292 Parallel trades.

^F843. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

293 Qualifying companies.

^F844. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

294 Companies with interests in land.

^F845. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

295 Valuation of interests in land for purposes of section 294(1)(b).

^F846. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

296 Section 294 disapplied where amounts raised total £50,000 or less.

^F847. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

297 Qualifying trades.

^F848. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

298 Provisions supplementary to sections 293 and 297.

^F849. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

299 Disposal of shares.

^F850. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F851299A Loan linked investments.

^F852. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F851]

[^F853299B Pre-arranged exits.

^F854. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F853]

300 Value received from company.

^F855. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F856300A Receipt of replacement value

^F857. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F856]

301 Provisions supplementary to section 300.

^F858. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F859301A Receipts of insignificant value: supplementary provision

^F860. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F859]

302 Replacement capital.

^F861. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

303 Value received by persons other than claimants.

^F862. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F863303AA Insignificant repayments disregarded for purposes of s.303(1)

^F864. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F863]

[^F865303A Restriction on withdrawal of relief under section 303.

^F866. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F865]

304[^F867Spouses and civil partners.^F867]

^F868. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F869304A Acquisition of share capital by new company.

^F870. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F869]

305 Reorganisation of share capital.

^F871. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F872305A Relief for loss on disposal of shares.

^F873. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F872]

306 Claims.

^F874. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

307 Withdrawal of relief.

^F875. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

308 Application to subsidiaries.

^F876. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309 Further provisions as to subsidiaries.

^F877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310 Information.

^F878. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

311 Nominees, bare trustees and approved investment funds.

^F879. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312 Interpretation of Chapter III.

^F880. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER IV SPECIAL PROVISIONS

313 Taxation of consideration for certain restrictive undertakings.

^F881. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

314 Divers and diving supervisors.

^F882. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

315 Wounds and disability pensions.

^F883. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316 Allowances, bounties and gratuities.

^F884. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

317 Victoria Cross and other awards.

^F885. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

318 Other pensions in respect of death due to war service etc.

^F886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

319 Crown servants: foreign service allowance.

^F887. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

320 Commonwealth Agents-General and official agents etc.

^F888. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

321 Consuls and other official agents.

^F889. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322 Consular officers and employees.

^F890. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

323 Visiting forces.

^F891. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

324 Designated international organisations.

^F892. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

325 Interest on deposits with National Savings Bank.

^F893. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

326 Interest etc. under contractual savings schemes.

^F894. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F895326A Tax-exempt special savings accounts.

^F896. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F895]

[^F897326B Loss of exemption for special savings accounts.

^F898. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F897]

[^F899326BB Follow-up TESSAs.

^F900. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F899]

[^F901326C Tax-exempt special savings accounts: supplementary.

^F902. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F901]

[^F903326D Tax-exempt special savings accounts: tax representatives.

^F904. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F903]

327 Disabled person’s vehicle maintenance grant.

^F905. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F906327APayments to adopters

^F907. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F906]

^F908328 Funds in court.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

329 Interest on damages for personal injuries.

^F909. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F910329AA Personal injury damages in the form of periodical payments.

^F911. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

329AB Compensation for personal injury under statutory or other schemes.

^F912. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F910]

^F914[^F913329A Annuities purchased for certain persons.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F915329B Annuities assigned in favour of certain persons.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F913]

^F917[^F916329C Annuities: criminal injuries.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F916]

330 Compensation for National-Socialist persecution.

^F918. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

331 Scholarship income.

^F919. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F920331A Student loans: certain interest to be disregarded.

^F921. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F920]

332 Expenditure and houses of ministers of religion.

(1)^F922. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F922. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F923. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F924(3A)^F925. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B)^F925. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F924]

(4)^F925. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F926332A Venture capital trusts: relief.