(1) No liability to income tax arises in respect of the following payments—
(a) any payment or reward falling within section 57(3) of the Adoption Act 1976 (c. 36) (payments authorised by the court) which is made to a person who has adopted or intends to adopt a child,
(b) payments under section 57(3A)(a) of that Act (payments by adoption agencies of legal or medical expenses of persons seeking to adopt),
(c) payments of allowances under regulations under section 57A of that Act (permitted allowances to persons who have adopted or intend to adopt children),
(d) payments of financial support made in the course of providing adoption support services within the meaning of the Adoption and Children Act 2002 (c. 38) (see section 2(6) and (7) of that Act), ...
(e) payments made under regulations under paragraph 3(1) of Schedule 4 to that Act (transitional and transitory provisions: adoption support services),
(f) payments made under regulations under section 14F of the Children Act 1989 (special guardianship support services) to a person appointed as a child's special guardian,
(g) payments made to a person under section 17 of that Act (provision of services for children in need, their families and others) by reason of that person being a person named in a child arrangements order as a person with whom a child is to live,
(h) payments made to a person, in respect of a child, under paragraph 15 of Schedule 1 to that Act (local authority contribution to child's maintenance to recipients with whom child is living, or is to live, as a result of a child arrangements order), and
(i) payments made in accordance with—
(i) an order under that Schedule (orders for financial relief against parents etc), or
(ii) a maintenance agreement,
for the benefit of a child, to a person appointed as the child's special guardian or a person named in a child arrangements order as a person with whom the child is to live.
(j) payments made to a person under sections 37 to 39 of the Social Services and Well-being (Wales) Act 2014 (meeting care and support needs of children) by reason of that person being named in a child arrangements order as a person with whom a child is to live , and
(k) kinship allowance payments made to a person providing care to a child, under section 1 of the Localism Act 2011, under the scheme known as Kinship Zones.
(2) But a payment is not within subsection (1)(f), (g), (h) , (i) , (j) or (k) if—
(a) it is made to an excluded relative of the child,
(b) it is made to a person appointed as the child's special guardian and an excluded relative is also appointed as the child's special guardian, or
(c) it is made to a person (“P”) named in a child arrangements order as a person with whom the child is to live and an excluded relative who lives in the same household as P is also named in that order as a person with whom the child is to live.
(3) In this section—
“excluded relative”, in relation to a child, means—
a parent of the child, or
a person who is, or has been, the husband or wife or civil partner of a parent of the child;
“maintenance agreement” has the meaning given by paragraph 10(1) of Schedule 1 to the Children Act 1989;
“child arrangements” has the meaning given by section 8 of that Act.
(1) No liability to income tax arises in respect of the following payments—
(a) any payment which is an excepted payment by virtue of paragraph (a) or (c) of subsection (2) of section 73 of the Adoption and Children (Scotland) Act 2007 (asp 4), which is made to a person who has adopted or intends to adopt a child,
(b) payments which are excepted payments by virtue of paragraph (b) of that subsection,
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
(d) payments of allowances in accordance with an adoption allowances scheme under section 71 of that Act,
(e) payments made to a person under section 50 of the Children Act 1975, or section 22 of the Children (Scotland) Act 1995, by reason of that person being a person with whom a child is to live by virtue of a residence order, and
(f) payments of aliment made—
(i) in accordance with an award of aliment under the Family Law (Scotland) Act 1985, or
(ii) under an agreement (within the meaning of section 7(5) of that Act),
for the benefit of a child, to a person in whose favour a residence order with respect to the child is in force.
(2) A payment is not within subsection (1)(e) or (f) if—
(a) it is made to an excluded relative of the child, or
(b) it is made to a person in whose favour a residence order is in force with respect to the child and that order is also in favour of an excluded relative.
(3) In this section—
“excluded relative”, in relation to a child, means—
a parent of the child, or
a person who is, or has been, the husband or wife or civil partner of a parent of the child;
“residence order” has the meaning given by section 11(2)(c) of the Children (Scotland) Act 1995.
(1) No liability to income tax arises in respect of the following payments—
(a) any payment or reward falling within Article 59(2)(b) of the Adoption (Northern Ireland) Order 1987 (S.I. 1987/2203 (N.I. 22)) (payments authorised by the court) which is made to a person who has adopted or intends to adopt a child,
(b) any payment under Article 59(2)(c) of that Order (payments by registered adoption societies) which is made to a person who has adopted or intends to adopt a child, ...
(c) payments of allowances under regulations under Article 59A of that Order (permitted allowances to persons who have adopted or intend to adopt children),
(d) payments made to a person under Article 18 of the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (NI 2)) (general duty of authority to provide personal social services) by reason of that person being a person in whose favour a residence order with respect to a child is in force,
(e) payments made to a person, in respect of a child, under paragraph 17 of Schedule 1 to that Order (local authority contribution to child's maintenance to recipients in whose favour residence order is in force), and
(f) payments made in accordance with—
(i) an order under that Schedule (orders for financial relief against parents etc), or
(ii) a maintenance agreement,
for the benefit of a child, to a person in whose favour a residence order with respect to the child is in force.
(2) But a payment is not within subsection (1)(d), (e) or (f) if—
(a) it is made to an excluded relative of the child, or
(b) it is made to a person in whose favour a residence order is in force with respect to the child and that order is also in favour of an excluded relative.
(3) In this section—
“excluded relative”, in relation to a child, means—
a parent of the child, or
a person who is, or has been, the husband or wife or civil partner of a parent of the child;
“maintenance agreement” has the meaning given by paragraph 12 of Schedule 1 to the Children (Northern Ireland) Order 1995;
“residence order” has the meaning given by Article 8 of that Order.
The Treasury may by order amend section 744, 745 or 746 for the purposes of—
(a) adding a description of payment, or
(b) removing a description of payment if the power to make a payment of that description has been repealed or revoked or has otherwise ceased to be exercisable.
749 Repayment interest, and interest paid under repayment supplements
No liability to income tax arises in respect of interest paid under—
(a) section 824 of ICTA (repayment supplements: individuals and others), ...
(b) section 283 of TCGA 1992 (repayment supplements), or
(c) section 102 of FA 2009 (repayment interest).
(1) No liability to income tax arises in respect of interest on damages for personal injury or death if—
(a) it is included in a sum awarded by a court,
(b) it does not relate to the period between the making and satisfaction of the award, and
(c) in the case of an award by a court in a country outside the United Kingdom, it is exempt from any charge to tax in that place.
(2) No liability to income tax arises in respect of interest if—
(a) it is included in a payment in satisfaction of a cause of action (including a payment into court), and
(b) it would fall within subsection (1) if it were included in a sum awarded by a court in respect of a cause of action.
(3) In subsection (1)—
“damages” in Scotland includes solatium, and
“personal injury” includes disease and impairment of physical or mental condition.
(1) This section applies if—
(a) a scheme is set up to comply with section 682(2)(b) of the Companies Act 2006 (c. 46) (financial assistance for the purposes of an employees' share scheme), and
(b) under the scheme the trustees receive interest from a participant in the scheme.
(2) So far as the scheme requires the trustees to pay to the company an equivalent amount as interest, no liability to income tax arises under Chapter 2 of Part 4 for the trustees in respect of the interest they receive.
(1) No liability to income tax arises in respect of interest if—
(a) it is paid to a person to whom a student loan has been made, and
(b) it relates to an amount repaid to the person after being recovered from the person in respect of the loan.
(2) In this section “student loan” means a loan made under—
section 22 of the Teaching and Higher Education Act 1998 (c. 30),
section 73(f) of the Education (Scotland) Act 1980 (c. 44), or
Article 3 of the Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14)).
(1) No liability to income tax arises in respect of interest paid in compliance with a requirement in a compliance notice or an unpaid contributions notice to pay interest in respect of unpaid relevant contributions.
(2) In this section—
“compliance notice” means a notice under section 35 of the Pensions Act;
“the Pensions Act” means the Pensions Act 2008 or the Pensions (No.2) Act (Northern Ireland) 2008;
“unpaid contributions notice” means a notice under section 37 of the Pensions Act;
“unpaid relevant contributions” has the same meaning as in section 38(2)(a) of the Pensions Act.
(1) The redemption of funding bonds is not treated as the payment of interest on a debt for income tax purposes if their issue was treated under section 380 of this Act or section 413 of CTA 2009 as the payment of interest on the debt.
(2) In this section “funding bonds” includes any bonds, stocks, shares, securities or certificates of indebtedness.
755 Interest on foreign currency securities etc. owned by non-UK residents
(1) This section applies to interest on—
(a) such foreign currency securities issued by a local authority or a statutory corporation as the Treasury direct, and
(b) such foreign currency loans made to a statutory corporation as the Treasury direct.
(2) No liability to income tax arises in respect of interest to which this section applies if—
(a) in the case of interest on a security, its beneficial owner is a non-UK resident, and
(b) in the case of interest on a loan, the person for the time being entitled to repayment or eventual repayment is a non-UK resident.
(3) But interest is not exempt under subsection (2) because a person is a non-UK resident if it is treated as another person's income under—
Chapter 5 of Part 5 (settlements: amounts treated as income of settlor), or
Chapter 2 of Part 13 of ITA 2007 (anti-avoidance provisions: transfer of assets abroad).
(4) In this section—
“company” means a company, as defined in section 1(1) of the Companies Act 2006 (c. 46) ...,
“foreign currency”, in relation to loans and securities, has the meaning given by section 756, and
“statutory corporation” means—
a corporation incorporated by an Act (other than a company), or
any other corporation on which functions connected with carrying on an undertaking are conferred by an Act or by an order made under or confirmed by an Act.
756 Which securities and loans are foreign currency ones for section 755
(1) For the purposes of section 755, a security or loan is a foreign currency one if under its terms the currency to be used for repayment is not sterling.
(2) Subsection (1) is subject to the following qualifications.
(3) A security issued before 6th April 1982 is a foreign currency one if under its terms the currency to be used for repayment is not that of a country specified in Schedule 1 to the Exchange Control Act 1947 (c. 14) at the time of the issue of the security.
(4) A loan made before that date is a foreign currency one if under its terms the currency to be used for repayment is not that of a country specified in that Schedule at the time the loan was made.
(5) If in the case of a security there is an option as to the currency to be used for repayment, the security is only to be treated as a foreign currency one if the option is exercisable only by its holder.
(6) If in the case of a loan there is an option as to the currency to be used for repayment, the loan is only to be treated as a foreign currency one if the option is exercisable only by the person for the time being entitled to repayment or eventual repayment.
756A Interest on certain deposits of victims of National-Socialist persecution
(1) No liability to income tax arises in respect of interest which is paid—
(a) to or in respect of a victim of National-Socialist persecution,
(b) under a qualifying compensation scheme, and
(c) for a qualifying purpose in respect of a qualifying deposit of the victim.
(2) A scheme is a qualifying compensation scheme if—
(a) it is constituted (whether under the law of any part of the United Kingdom or elsewhere) by an instrument in writing, and
(b) the purpose of the scheme, or one of its purposes, is to make payments of interest to or in respect of victims of National-Socialist persecution for qualifying purposes in respect of qualifying deposits.
(3) Interest is paid for a qualifying purpose in respect of a deposit if—
(a) it is paid for meeting a liability in respect of interest on the deposit, or
(b) it is paid for compensating for the effects of inflation on the deposit.
(4) In relation to a victim of National-Socialist persecution, a deposit is a qualifying deposit if it was made—
(a) by, or on behalf of, the victim, and
(b) on or before 5th June 1945.
(5) In this section “deposit” has the same meaning as in Chapter 19 of Part 15 of ITA 2007 (see section 983 of that Act)
(1) No liability to income tax arises under Chapter 8 of Part 5 (income not otherwise charged) in respect of income arising from the commercial occupation of woodlands in the United Kingdom.
(2) For this purpose the occupation of woodlands is commercial if the woodlands are managed—
(a) on a commercial basis, and
(b) with a view to the realisation of profits.
(1) No liability to income tax arises in respect of a payment if it is made—
(a) under an enactment relating to the giving of financial assistance for the provision, maintenance or improvement of housing accommodation or other residential accommodation, and
(b) by way of grant or other contribution towards expenses.
(2) It does not matter whether—
(a) the payment is made to the person who incurs the expenses, or
(b) the expenses have been, or are to be, incurred.
(3) Subsection (1) does not apply so far as the payment is made towards an expense which is deductible in calculating income for any income or corporation tax purpose.
770 Amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment
(1) This section applies if—
(a) shares are awarded to a participant under a Schedule 2 share incentive plan, and
(b) the condition in section 392(3) or (5) is met at the time the shares in question are so awarded (earnings within ITEPA 2003).
This is subject to subsection (4).
(2) No liability to income tax arises for the participant in respect of—
(a) the amount applied by the trustees in acquiring dividend shares on behalf of the participant, or
(b) any amount retained under paragraph 68(2) of Schedule 2 to ITEPA 2003 (amount of cash dividend not reinvested).
(3) Subsection (2) does not affect any liability arising as a result of—
(a) the retained amount later being paid out (see sections 393 and 406), or
(b) the dividend shares ceasing to be subject to the plan (see sections 394 and 407).
(4) This section does not apply if the main purpose or one of the main purposes of the arrangements under which the shares are awarded or acquired is the avoidance of tax or national insurance contributions.
(5) This section forms part of the SIP code (see section 488 of ITEPA 2003: ... share incentive plans).
(6) Accordingly, expressions used in this section and contained in the index in paragraph 100 of Schedule 2 to that Act (... share incentive plans) have the meaning indicated by that index.
(7) In particular—
(a) for the meaning of “dividend shares” see paragraph 62(3)(b) of that Schedule,
(b) for the meaning of “participant” see paragraph 5(4) of that Schedule, and
(c) for the meaning of “the trustees” see paragraphs 2(2) and 71(1) of that Schedule.
771 Relevant foreign income of consular officers and employees
(1) No liability to income tax arises in respect of relevant foreign income of a consular officer or employee in the United Kingdom for a foreign state if—
(a) Her Majesty by Order in Council directs that this section applies to the foreign state for the purpose of giving effect to a reciprocal arrangement with that state, and
(b) the officer or employee meets conditions A to C.
(2) Condition A is that the officer or employee is not—
(a) a British citizen,
(b) a British overseas territories citizen,
(c) a British National (Overseas), or
(d) a British Overseas citizen.
(3) Condition B is that the officer or employee is not engaged in any trade, profession, vocation or employment in the United Kingdom, otherwise than as a consular officer or employee of the state in question.
(4) Condition C is that—
(a) the officer or employee is a permanent employee of that state, or
(b) the officer or employee was non-UK resident for each of the 2 tax years preceding the tax year in which the officer or employee became a consular officer or employee in the United Kingdom of that state.
(5) In this section and section 772—
“consular officer or employee” includes any person employed for the purposes of the official business of a consular officer at—
any consulate,
any consular establishment, or
any other premises used for those purposes, and
“reciprocal arrangement” means a consular convention or other arrangement with a foreign state, making similar provision to that made by this section and sections 302, 646A and 681A of ITEPA 2003 in the case of Her Majesty's consular officers or employees in that state.
772 Further provisions about Orders under section 771
(1) An Order in Council under section 771 may limit the operation of that section in relation to a state in any way appearing to Her Majesty appropriate having regard to the reciprocal arrangement with the state.
(2) An Order under that section may be made so as to have effect from a date earlier than that on which it is made, but not earlier than the reciprocal arrangement in question comes into force.
(3) An Order under that section may contain such transitional provisions as appear to Her Majesty appropriate.
(4) A statutory instrument containing an Order under that section is subject to annulment in pursuance of a resolution of the House of Commons.
773 Income from Inter-American Development Bank securities
(1) No liability to income tax arises for a non-UK resident in respect of income from a security issued by the Inter-American Development Bank if the liability only arises because one or more of circumstances A to C apply.
(2) Circumstance A is that the security is issued in the United Kingdom or in sterling.
(3) Circumstance B is that the income is made payable or paid in the United Kingdom or in sterling.
(4) Circumstance C is that the Bank maintains an office or other place of business in the United Kingdom.
774 Income from securities issued by designated international organisations
(1) No liability to income tax arises for a non-UK resident in respect of income from a security issued by an organisation if—
(a) the organisation has been designated by the Treasury for the purposes of this section, and
(b) the liability only arises because one or more of circumstances A to C apply.
(2) Circumstance A is that the security is issued in the United Kingdom or in sterling.
(3) Circumstance B is that the income is made payable or paid in the United Kingdom or in sterling.
(4) Circumstance C is that the organisation maintains an office or other place of business in the United Kingdom.
(5) The Treasury may by order designate for the purposes of this section—
(a) any of the Communities European Union ,
(b) the European Investment Bank,
(c) any international organisation that meets conditions A and B.
(6) Condition A is that one of its members is the United Kingdom or any of the Communities European Union .
(7) Condition B is that the agreement under which that member became a member provides for the same kind of exemption from tax for income from securities issued by the organisation as this section provides.
(1) This section applies if property is held on trust in accordance with directions which are valid and effective under section 9 of the Superannuation and other Trust Funds (Validation) Act 1927 (c. 41) (validation of trust funds for the reduction of the national debt).
(2) No liability to income tax arises in respect of any of the following—
(a) income arising from the property,
(b) income arising from the accumulation of that income, and
(c) profits of any description otherwise accruing to the property and liable to be accumulated under the trust.
775A Government bonus for savings account or other investment plan
No liability to income tax arises in respect of a payment of, or in respect of, a government bonus under section 1 or 2 of the Savings (Government Contributions) Act 2017.
(1) No liability to income tax arises in respect of income from a scholarship held by an individual in full-time education at a university, college, school or other educational establishment.
(2) This exemption is subject to section 215 of ITEPA 2003 (under which only the scholarship holder is entitled to the exemption if the scholarship is provided by reason of another person's employment).
(2A) No liability to income tax arises in respect of income from a payment made under section 23C(5A) of the Children Act 1989 (duty to make payments to former relevant children who pursue higher education) or under sections 110(6) or 112(2) of the Social Services and Well-being (Wales) Act 2014 (duty to make payments to certain young people who pursue higher education).
(3) In this section “scholarship” includes a bursary, exhibition or other similar educational endowment.
(1) No liability to income tax arises in respect of a payment that is made—
(a) by way of training allowance under the Jobs Growth Wales Plus scheme, and
(b) to a person as a participant in that scheme.
(2) For this purpose the “Jobs Growth Wales Plus scheme” means the scheme under section 14 of the Education Act 2002 known as Jobs Growth Wales Plus.
No liability to income tax arises in respect of anything received by way of incentive under any regulations made in accordance with Schedule 38 to FA 2000 (regulations for providing incentives for electronic communications).