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Income Tax Act 2007 2007 c. 3 An Act to restate, with minor changes, certain enactments relating to income tax; and for connected purposes. [20th March 2007] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Propose a change(1) The following Acts make provision about income tax— (a) ITEPA 2003 (which is about charges to tax on employment income, pension income and social security income and makes provision for the high income child benefit and winter fuel payment charge), (b) ITTOIA 2005 (which is about charges to tax on trading income, property income, savings and investment income and some other miscellaneous income), and (c) this Act (which contains the other main provisions about income tax). (2) There are also provisions about income tax elsewhere: see in particular— (a) Part 2 of TIOPA 2010 (double taxation relief), (b) CAA 2001 (allowances for capital expenditure), and (c) Part 4 of FA 2004 (pension schemes etc). (3) Schedule 1 to the Interpretation Act 1978 (c. 30) defines “the Income Tax Acts” (as all enactments relating to income tax).
Propose a change(1) This Act has 17 Parts. (2) Part 2 contains basic provisions about income tax including— (a) provision about the annual nature of income tax (Chapter 1), (b) the rates at which income tax is charged (Chapter 2), and (c) the calculation of income tax liability (Chapter 3). (3) Part 3 is about taxpayers' personal reliefs including— (a) personal allowances (Chapter 2), (b) blind persons' allowances (Chapter 2), and (c) tax reductions for married couples and civil partners (Chapter 3). (4) Part 4 is about loss relief including relief for— (a) trade losses (Chapters 2 and 3), (b) losses from property businesses (Chapter 4), (c) losses in an employment or office (Chapter 5), (d) losses on disposal of shares (Chapter 6), and (e) losses from miscellaneous transactions (Chapter 7). (5) Part 5 is about relief under the enterprise investment scheme. (5A) Part 5A is about relief under the seed enterprise investment scheme. (5B) Part 5B is about relief for social investments. (6) Part 6 is about— (a) relief for investment in venture capital trusts, and (b) other matters relating to venture capital trusts. (7) Part 7 is about community investment tax relief. (8) Part 8 is about a variety of reliefs including relief for— (a) interest payments (Chapter 1), (b) gifts to charity including gift aid (Chapters 2 and 3), (c) annual payments ... (Chapter 4), and (d) maintenance payments (Chapter 5). (9) Part 9 contains special rules about settlements and trustees including— (a) general provision about settlements and trustees (Chapter 2), (b) special income tax rates for trusts (Chapters 3, 4 and 5), (c) rules about trustees' expenses (Chapters 4 and 8), (d) rules about trustees' discretionary payments (Chapter 7), (e) ... and (f) rules about heritage maintenance settlements (Chapter 10). (9A) Part 9A is about the treatment of certain transactions in UK land. (10) Part 10 contains special rules about charitable trusts etc. (10A) Part 10A is about alternative finance arrangements. (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11ZA) Part 11ZA is about manufactured payments. (11A) Part 11A is about leasing arrangements involving finance leases or loans. (12) Part 12 is about accrued income profits. (12A) Part 12A is about sale and lease-back etc. (13) Part 13 is about tax avoidance in relation to— (a) transactions in securities (Chapter 1), (b) transfers of assets abroad (Chapter 2), (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) sales of occupation income (Chapter 4), ... (e) trade losses (Chapter 5) ... (f) transfers of income streams (Chapter 5A). (g) finance arrangements (Chapter 5B), (h) loan or credit transactions (Chapter 5C), (ha) disposals of assets through partnerships (Chapter 5D), (hb) disguised investment management fees (Chapter 5E), (hc) income-based carried interest (Chapter 5F), (i) leases of plant and machinery (Chapter 6), and (j) tax relief for interest (Chapter 7). (14) Part 14 deals with some miscellaneous rules about income tax liability, including— (za) an alternative basis for charge (the remittance basis) for certain income and gains of certain individuals (Chapter A1), (a) limits on liability to income tax for non-UK residents (Chapter 1), (aa) exemption for persons not domiciled in United Kingdom (Chapter 1A), (b) special rules about residence and domicile (Chapters 2 and 2A), ... (ba) rules about UK representatives of non-UK residents (Chapters 2B and 2C), (c) rules about jointly held property (Chapter 3), and (d) imposition of the charge to income tax on the receipts of certain types of company being wound up (Chapter 3A). (15) Part 15 is about the deduction of income tax at source. (16) Part 16 contains definitions which apply for the purposes of the Income Tax Acts and other general provisions which apply for the purposes of those Acts. (17) Part 17— (a) contains provisions to be used in interpreting this Act, (b) introduces Schedule 1 (minor and consequential amendments), (c) introduces Schedule 2 (transitional provisions and savings), (d) introduces Schedule 3 (repeals and revocations, including of spent enactments), (e) introduces Schedule 4 (index of defined expressions that apply for the purposes of this Act), (f) confers powers on the Treasury to make orders, and (g) makes provision about the coming into force of this Act.
Propose a change(1) Income tax is charged under— (a) Part 2 of ITEPA 2003 (employment income), (b) Part 9 of ITEPA 2003 (pension income), (c) Part 10 of ITEPA 2003 (social security income), (d) Part 2 of ITTOIA 2005 (trading income), (e) Part 3 of ITTOIA 2005 (property income), (f) Part 4 of ITTOIA 2005 (savings and investment income), and (g) Part 5 of ITTOIA 2005 (miscellaneous income). (2) Income tax is also charged under other provisions, including— (a) Chapter 5 of Part 4 of FA 2004 (registered pension schemes: tax charges), (b) section 7 of F(No.2)A 2005 (social security pension lump sums), (c) Part 10 of this Act (special rules about charitable trusts etc), (d) Chapter 2 of Part 12 of this Act (accrued income profits), ... (e) Part 13 of this Act (tax avoidance), and (f) Chapter 3A of Part 14 of this Act (banks etc in compulsory liquidation).
Propose a change(1) Income tax is charged for a year only if an Act so provides. (2) A year for which income tax is charged is called a “tax year”. (3) A tax year begins on 6 April and ends on the following 5 April. (4) “The tax year 2007-08” means the tax year beginning on 6 April 2007 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way). (5) Every assessment to income tax must be made for a tax year. (6) Subsection (5) is subject to Chapter 15 of Part 15 (by virtue of which an assessment may relate to a return period).
Propose a changeSection 3 of CTA 2009 disapplies the provisions of the Income Tax Acts relating to the charge to income tax in relation to income of a company (not accruing to it in a fiduciary or representative capacity) if— (a) the company is UK resident, or (b) the company is non-UK resident and it is chargeable to corporation tax in respect of the income, or would be so chargeable but for an exemption.
Propose a change(1) The main rates at which income tax is charged are— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) the basic rate, ... (c) the higher rate , and (d) the additional rate. (2) The ... basic rate , higher rate and additional rate for a tax year are the rates determined as such by Parliament for the tax year. (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) For other rates at which income tax is charged see— (za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (zb) section 6B (the Welsh rates), (zc) section 6C (default basic, higher and additional rates), (zd) section 6D (property basic, higher and additional rates), (a) section 7 (starting rate for savings and savings nil rate), (aa) section 7A (savings basic, higher and additional rates), (b) section 8 (dividend nil rate, dividend ordinary rate , dividend upper rate and dividend additional rate), and (c) section 9 (trust rate , property trust rate, savings trust rate and dividend trust rate). (4) See also section 80C of the Scotland Act 1998 which makes provision for the purposes of section 11A (income charged at Scottish rates)
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Propose a change(1) The Welsh basic rate, the Welsh higher rate and the Welsh additional rate for a tax year are calculated as follows. Step 1 Take the basic rate, higher rate or additional rate. Step 2 Deduct 10 percentage points. Step 3 Add the Welsh rate (if any) set by the National Assembly for Wales for that year for the purpose of calculating the Welsh basic rate, the Welsh higher rate or the Welsh additional rate (as the case may be). (1A) The Welsh property basic rate, the Welsh property higher rate and the Welsh property additional rate for a tax year are calculated as follows. Step 1 Take the property basic rate, property higher rate or property additional rate. Step 2 Deduct 10 percentage points. Step 3 Add the Welsh rate (if any) set by Senedd Cymru for that year for the purpose of calculating the Welsh property basic rate, the Welsh property higher rate or the Welsh property additional rate (as the case may be). (2) For provision about the setting of the Welsh rates, see Chapter 2 of Part 4A of the Government of Wales Act 2006.
Propose a changeThe default basic rate, default higher rate and default additional rate for a tax year are the rates determined as such by Parliament for the tax year.
Propose a changeThe property basic rate, the property higher rate and the property additional rate for a tax year are the rates determined as such by Parliament for the tax year.
Propose a change(1) The starting rate for savings is 0%. (2) The savings nil rate is 0%
Propose a changeThe savings basic rate, savings higher rate and savings additional rate for a tax year are the rates determined as such by Parliament for the tax year.
Propose a change(A1) The dividend nil rate is 0%. (1) The dividend ordinary rate is 10.75%. (2) The dividend upper rate is 35.75%. (3) The dividend additional rate is 39.35%.
Propose a change(1) The trust rate is 45%. (1A) The property trust rate is 47%. (1B) The savings trust rate is 47%. (2) The dividend trust rate is 39.35%.
Propose a changeThe general effect of sections 10 to 15 is outlined in the following table— Type of taxpayer | Rates payable on savings income | Rates payable on property income | Rates payable on most dividend income | Rates payable on other income UK resident individual who is neither a Scottish taxpayer nor a Welsh taxpayer | Savings rates | Property rates | Dividend rates | Main rates Scottish taxpayer | Savings rates | Scottish rates | Dividend rates | Scottish rates Welsh taxpayer | Savings rates | Welsh property rates | Dividend rates | Main rates while section 11B is not in force; Welsh rates if that section is in force Non-UK resident individual | Savings rates | Property rates | Dividend rates | Default rates Non-individual, except that some trustees in some circumstances are subject instead to the trust rate or the dividend trust rate | Savings basic rate | Property basic rate | Dividend ordinary rate | Default basic rate Note: the table does not address the effect of some exceptions referred to in sections 10 to 15.
Propose a change(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Income tax on an individual's income up to the basic rate limit is charged at the basic rate .... (3) Income tax is charged at the higher rate on an individual's income above the basic rate limit and up to the higher rate limit. (3A) Income tax is charged at the additional rate on an individual's income above the higher rate limit. (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) This section is subject to— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . section 11A (income charged at Scottish rates), section 11B (income charged at the Welsh basic, higher and additional rates), section 11C (income charged at the default basic, higher and additional rates: non-UK resident individuals), section 11CA (income charged at the property basic, higher and additional rates: individuals), section 11CB (income charged at the Welsh property basic, higher and additional rates: individuals), section 11D (savings income charged at the savings basic, higher and additional rates: individuals), section 12 (savings income charged at the starting rate for savings), section 12A (savings income charged at the savings nil rate), section 13 (income charged at the dividend ordinary and dividend upper rates: individuals), and any other provisions of the Income Tax Acts which provide for income of an individual to be charged at different rates of income tax in some circumstances. (5) The basic rate limit is £37,700. (5A) The higher rate limit for a tax year is equal to— (a) twice the amount specified in subsection (1) of section 35 (personal allowance) for the tax year, plus (b) the amount specified in subsection (2) of that section (amount at which personal allowance starts to be withdrawn). (5B) Before the start of the tax year the Treasury must make an order specifying the amount which is, as a result of subsection (5A), the higher rate limit for the tax year. (6) The basic rate limit and higher rate limit are increased in some circumstances: see— (a) section 414(2) (gift aid relief), and (b) section 192(4) of FA 2004 (relief for pension contributions). (7) See section 21 for indexation of the basic rate limit.
Propose a change(1) Income tax is charged at the default basic rate on the income of persons other than individuals. (2) This section is subject to— ... section 11CC (income charged at the property basic rate: non-individuals), section 11DA (income charged at the savings basic rate: non-individuals), section 14 (income charged at the dividend ordinary rate: other persons), Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at the property trust rate, the savings trust rate or the dividend trust rate or at the trust rate), and any other provisions of the Income Tax Acts which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.
Propose a change(1A) Income tax is charged at Scottish rates on the non-savings income of a Scottish taxpayer. (4) For the purposes of this section, “non-savings income” means income which is not savings income. (5) This section is subject to— section 13 (income charged at the dividend ordinary, upper and additional rates: individuals), and any provisions of the Income Tax Acts (apart from section 10) which provide for income of an individual to be charged at different rates of income tax in some circumstances. (6) Section 16 has effect for determining which part of a Scottish taxpayer’s income consists of savings income.
Propose a change(1) Income tax is charged at the Welsh basic rate on the income of a Welsh taxpayer which— (a) is neither property income nor savings income, and (b) would otherwise be charged at the basic rate. (2) Income tax is charged at the Welsh higher rate on the income of a Welsh taxpayer which— (a) is neither property income nor savings income, and (b) would otherwise be charged at the higher rate. (3) Income tax is charged at the Welsh additional rate on the income of a Welsh taxpayer which— (a) is neither property income nor savings income, and (b) would otherwise be charged at the additional rate. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) This section is subject to— section 13 (income charged at the dividend ordinary, upper and additional rates: individuals), and any provisions of the Income Tax Acts (apart from section 10) which provide for income of an individual to be charged at different rates of income tax in some circumstances. (6) Sections 16 and 16A have effect for determining the extent to which the income of a Welsh taxpayer which is neither property income nor savings income would otherwise be charged at the basic, higher or additional rate.
Propose a change(1) Income tax on a non-UK resident individual’s income up to the basic rate limit is charged at the default basic rate. (2) Income tax is charged at the default higher rate on a non-UK resident individual’s income above the basic rate limit and up to the higher rate limit. (3) Income tax is charged at the default additional rate on a non-UK resident individual’s income above the higher rate limit. (4) Subsections (1) to (3) are subject to— section 11CA (income charged at the property basic, higher and additional rates: individuals), section 11D (savings income charged at the savings basic, higher and additional rates), section 12 (savings income charged at the starting rate for savings), section 12A (savings income charged at the savings nil rate), section 13 (income charged at the dividend ordinary, upper and additional rates: individuals), and any other provisions of the Income Tax Acts (apart from section 10) which provide for income to be charged at different rates of income tax in some circumstances.
Propose a change(1) Income tax is charged at the property basic rate on an individual’s income which— (a) is property income, and (b) would otherwise be charged at the basic rate or the default basic rate. (2) Income tax is charged at the property higher rate on an individual’s income which— (a) is property income, and (b) would otherwise be charged at the higher rate or the default higher rate. (3) Income tax is charged at the property additional rate on an individual’s income which— (a) is property income, and (b) would otherwise be charged at the additional rate or the default additional rate. (4) Subsections (1) to (3) are subject to— section 11A (income charged at Scottish rates), section 11CB (income charged at the Welsh property basic, higher and additional rates: individuals), any other provisions of the Income Tax Acts which provide for income to be charged at different rates of income tax in some circumstances. (5) Sections 16 and 16A have effect for determining the extent to which an individual’s property income would otherwise be charged at the basic, higher or additional rate or the default basic, default higher or default additional rate.
Propose a change(1) Income tax is charged at the Welsh property basic rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh basic rate. (2) Income tax is charged at the Welsh property higher rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh higher rate. (3) Income tax is charged at the Welsh property additional rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh additional rate. (4) This section is subject to any provisions of the Income Tax Acts which provide for income to be charged at different rates of income tax in some circumstances. (5) Sections 16 and 16A have effect for determining the extent to which the property income of a Welsh taxpayer would otherwise be charged at the Welsh basic, higher or additional rate.
Propose a change(1) Income tax is charged at the property basic rate on the income of persons other than individuals which— (a) is property income, (b) would otherwise be charged at the default basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) This is subject to— Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at special trust rates), and any other provisions of the Income Tax Acts (apart from section 11) which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.
Propose a change(1) Income tax is charged at the savings basic rate on an individual’s income which— (a) is saving income, and (b) would otherwise be charged at the basic rate or the default basic rate. (2) Income tax is charged at the savings higher rate on an individual’s income which— (a) is savings income, and (b) would otherwise be charged at the higher rate or the default higher rate. (3) Income tax is charged at the savings additional rate on an individual’s income which— (a) is savings income, and (b) would otherwise be charged at the additional rate or the default additional rate. (4) Subsections (1) to (3)— (a) have effect after sections 12 and 12A have been applied (so that any reference in subsections (1) to (3) to income which would otherwise be charged at a particular rate does not include income charged at the starting rate for savings or at the savings nil rate), and (b) are subject to any other provisions of the Income Tax Acts (apart from sections 10 and 11C) which provide for income to be charged at different rates of income tax in some circumstances. (5) Section 16 has effect for determining the extent to which an individual’s savings income above the starting rate limit for savings would otherwise be charged at the basic, higher or additional rate or the default basic, default higher or default additional rate. (6) In relation to an individual who is a Scottish taxpayer, references in this section to income which would otherwise be charged at a particular rate are to be read as references to income that would, if the individual were not a Scottish taxpayer (but were UK resident), be charged at that rate (and subsection (5) is to be read accordingly).
Propose a change(1) Income tax is charged at the savings basic rate on the income of persons other than individuals which— (a) is savings income, (b) would otherwise be charged at the default basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) This is subject to— Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at special trust rates), and any other provisions of the Income Tax Acts (apart from section 11) which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.
Propose a change(1) Income tax is charged at the starting rate for savings ... on so much of an individual's income up to the starting rate limit for savings as— (a) is savings income, and (b) would otherwise be charged at the basic rate or the default basic rate. (2) This is subject to any provisions of the Income Tax Acts (apart from section 10) which provide for income of an individual to be charged at different rates of income tax in some circumstances. (3) The starting rate limit for savings is £5,000. (4) See section 21 for indexation of the starting rate limit for savings. (5) Section 16 has effect for determining the extent to which a person's income up to the starting rate limit for savings consists of savings income.
Propose a change(1) This section applies in relation to an individual if— (a) the amount of the individual's Step 3 income is greater than £L, where £L is the amount of the starting rate limit for savings, and (b) when the individual's Step 3 income is split into two parts— (i) one (“the individual's income up to the starting rate for savings”) consisting of the lowest £L of the individual's Step 3 income, and (ii) the other (“the individual's income above the starting rate limit for savings”) consisting of the rest of the individual's Step 3 income, some or all of the individual's income above the starting rate limit for savings consists of savings income (whether or not some or all of the individual's income up to the starting rate limit for savings consists of savings income). (2) In this section— £A is the amount of the individual's savings allowance (see section 12B), “the excess” is so much of the individual's income above the starting rate limit for savings as consists of savings income, and £X is the amount of the excess. (3) If £X is less than or equal to £A, income tax is charged at the savings nil rate (rather than the basic, higher or additional rate or the default basic, default higher or default additional rate) on the excess. (4) If £X is more than £A, income tax is charged at the savings nil rate (rather than the basic, higher or additional rate or the default basic, default higher or default additional rate) on the lowest £A of the excess. (5) Subsections (3) and (4) are subject to any provisions of the Income Tax Acts (apart from sections 10 and 11C) which provide for income to be charged at different rates of income tax in some circumstances. (6) Section 16 has effect for determining the extent to which the individual's income above the starting rate limit for savings consists of savings income. (7) For the purposes of this section, an individual's “Step 3 income” is the individual's net income less allowances deducted at Step 3 of the calculation in section 23.
Propose a change(1) Subsections (2) to (4) determine the amount of an individual's savings allowance for a tax year. (2) If any of the individual's income for the year is additional-rate income, the individual's savings allowance for the year is nil. (3) If— (a) any of the individual's income for the year is higher-rate income, and (b) none of the individual's income for the year is additional-rate income, the individual's savings allowance for the year is £500. (4) If none of the individual's income for the year is higher-rate income, the individual's savings allowance for the year is £1,000. (5) The Treasury may by regulations substitute a different amount for the amount for the time being specified in subsection (2), (3) or (4); and regulations under this subsection that have effect for a tax year may be made at any time before the end of that tax year. (6) If regulations under subsection (5) reduce any amount, the regulations may not be made unless a draft of the instrument containing them (whether alone or together with regulations under subsection (5) which increase any amount) has been laid before, and approved by a resolution of, the House of Commons. (7) Section 1014(4) (negative procedure) does not apply to regulations under subsection (5) which increase any amount if— (a) the instrument containing them also contains regulations under subsection (5) which reduce any amount, and (b) a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons. (8) For the purposes of this section— (a) each of the following is “additional-rate income”— (i) income on which income tax is charged at the additional rate , property additional rate , default additional rate or dividend additional rate, (ii) income on which income tax would be charged at the additional rate , or default additional rate, but for section 12A (income charged at savings nil rate), (iii) income on which income tax would be charged at the dividend additional rate but for section 13A (income charged at dividend nil rate), and (iv) income of an individual who is a Scottish taxpayer or Welsh taxpayer which would, if the individual were not a Scottish taxpayer or Welsh taxpayer (as the case may be), be income on which income tax is charged at the additional rate , property additional rate or default additional rate, and (b) each of the following is “higher-rate income”— (i) income on which income tax is charged at the higher rate , property higher rate , default higher rate or dividend upper rate, (ii) income on which income tax would be charged at the higher rate , or default higher rate, but for section 12A (income charged at savings nil rate), (iii) income on which income tax would be charged at the dividend upper rate but for section 13A (income charged at dividend nil rate), and (iv) income of an individual who is a Scottish taxpayer or Welsh taxpayer which would, if the individual were not a Scottish taxpayer or Welsh taxpayer (as the case may be), be income on which income tax is charged at the higher rate , property higher rate or default higher rate.
Propose a change(1) Income tax is charged at the dividend ordinary rate on an individual's income which— (a) is dividend income, (b) would otherwise be charged at the ... basic rate, ... or the Welsh basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) Income tax is charged at the dividend upper rate on an individual's income which— (a) is dividend income, ... (b) would otherwise be charged at the higher rate, ... or the Welsh higher rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005. (2A) Income tax is charged at the dividend additional rate on an individual's income which— (a) is dividend income, (b) would otherwise be charged at the additional rate, ... or the Welsh additional rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005. (3) Subsections (1) to (2A) are subject to any provisions of the Income Tax Acts (apart from section 10 or 11A or 11B) which provide for income to be charged at different rates of income tax in some circumstances. (4) Section 16 has effect for determining the extent to which an individual's dividend income would otherwise be charged at the ... basic , higher or additional rate ... or the Welsh basic, higher or additional rate. (5) In relation to an individual who is a Scottish taxpayer, references in this section to income that would otherwise be charged at a particular rate are to be read as references to income that would, if the individual were not a Scottish taxpayer, be charged at that rate (and subsection (4) is to be read accordingly).
Propose a change(1) Subsection (2) applies if, ignoring this section, at least some of an individual's income would be charged to income tax at the dividend ordinary rate, the dividend upper rate or the dividend additional rate. (2) Income tax is charged at the dividend nil rate (rather than the dividend ordinary rate, dividend upper rate or dividend additional rate) on one or more amounts of the individual's income as follows— Step 1 Identify the amount (“D”) of the individual's income which would, ignoring this section, be charged at the dividend ordinary rate.Rule 1A: If D is more than £500, the first £500 of D is charged at the dividend nil rate (rather than the dividend ordinary rate), and is the only amount charged at the dividend nil rate.Rule 1B: If D is equal to £500, D is charged at the dividend nil rate (rather than the dividend ordinary rate), and is the only amount charged at the dividend nil rate.Rule 1C: If D is less than £500 but more than nil, D is charged at the dividend nil rate (rather than the dividend ordinary rate). Step 2 If D is less than £500, identify the amount (“U”) of the individual's income which would, ignoring this section, be charged at the dividend upper rate.Rule 2A: If the total of D and U is more than £500— the first £M of U is charged at the dividend nil rate (rather than the dividend upper rate), where £M is the difference between £500 and D, and the amounts charged under this Rule and Rule 1C are the only amounts charged at the dividend nil rate. Rule 2B: If the total of D and U is equal to £500, U is charged at the dividend nil rate (rather than the dividend upper rate), and the amounts charged under this Rule and Rule 1C are the only amounts charged at the dividend nil rate.Rule 2C: If the total of D and U is less than £500 but more than nil, U is charged at the dividend nil rate (rather than the dividend upper rate). Step 3 If the total of D and U is less than £500, identify the amount (“A”) of the individual's income which would, ignoring this section, be charged at the dividend additional rate.Rule 3A: If the total of D, U and A is more than £500, the first £X of A is charged at the dividend nil rate (rather than the dividend additional rate), where £X is the difference between— £500, and the total of D and U, and the amounts charged under this Rule, and Rules 1C and 2C, are the amounts charged at the dividend nil rate.Rule 3B: If the total of D, U and A is less than or equal to £500, A is charged at the dividend nil rate (rather than the dividend additional rate), and the amounts charged under this Rule, and Rules 1C and 2C, are the amounts charged at the dividend nil rate.
Propose a change(1) Income tax is charged at the dividend ordinary rate on the income of persons other than individuals which— (a) is dividend income, (b) would otherwise be charged at the default basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) This is subject to— Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at the dividend trust rate or at the trust rate), ... and any other provisions of the Income Tax Acts (apart from section 11) which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.
Propose a changeFor the circumstances in which income tax is charged at the trust rate , the property trust rate, the savings trust rate and the dividend trust rate, see Chapters 3 to 5 of Part 9.
Propose a change(1) This section has effect for determining — (za) which part of a Scottish taxpayer's income consists of savings income, (zb) the rate at which income tax would be charged on the income of a Welsh taxpayer which is neither property income nor savings income apart from section 11B but taking into account the effect of section 16A, (a) the extent to which a person's income up to the starting rate limit for savings consists of savings income, (aa) the extent to which a person's income above the starting rate limit for savings consists of savings income, and (ab) the rate at which income tax would be charged on a person’s savings income above the starting rate limit for savings apart from sections 11D and 12A, (b) the rate at which income tax would be charged on a person's dividend income apart from section 13. (2) It also has effect for all other income tax purposes except for the purposes of— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief). (3) If a person has savings income but no dividend income, the savings income is treated as the highest part of the person's total income. (4) If a person has dividend income but no savings income, the dividend income is treated as the highest part of the person's total income. (5) If a person has both savings income and dividend income— (a) the savings income and dividend income are together treated as the highest part of the person's total income, and (b) the dividend income is treated as the higher part of that part of the person's total income. (6) See section 1012 for the relationship between— (a) the rules in this section, and (b) other rules requiring particular income to be treated as the highest part of a person's total income. (7) References in this section to dividend income do not include dividend income which is relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis).
Propose a change(1) This section has effect for determining— (a) which part of a Scottish taxpayer’s income consists of property income, (b) the rate at which income tax would be charged on a person’s property income apart from section 11CA, and (c) the rate at which income tax would be charged on the property income of a Welsh taxpayer apart from section 11CB. (2) It also has effect for all other income tax purposes except for the purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief). (3) If a person has property income but no dividend income or savings income, the property income is treated as the highest part of the person’s total income. (4) If a person— (a) has property income, and (b) dividend income or savings income (or both dividend income and savings income), the property income is treated as the part of the person’s total income immediately before the savings income or, if the person does not have savings income, immediately before the dividend income.
Propose a change(1) This section applies if income tax at a rate greater than the starting rate for savings has been paid on income on which income tax is chargeable at the starting rate for savings. (1A) This section also applies if income tax at a rate greater than the savings nil rate has been paid on income on which income tax is chargeable at the savings nil rate. (2) If a claim is made, any necessary repayment of tax must be made.
Propose a change(1) This section applies for the purposes of the Income Tax Acts. (2) “Property income” is income which is— (a) chargeable under Chapter 3 of Part 3 of ITTOIA 2005 (the profits of a UK property business or an overseas property business), (b) chargeable under Chapter 7 of that Part (amounts treated as adjustment income under section 330), (c) chargeable under Chapter 8 of that Part (rent receivable in connection with a UK section 12(4) concern), (d) chargeable under Chapter 9 of that Part (rent receivable for UK electric-line wayleaves), and (e) chargeable under Chapter 10 of that Part (post-cessation receipts arising from a UK property business).
Propose a change(1) This section applies for the purposes of the Income Tax Acts. (2) “Savings income” is income— (a) which is within subsection (3) or (4), and (b) which is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (3) Income is within this subsection if it is— (a) income chargeable under Chapter 2 of Part 4 of ITTOIA 2005 (interest), (b) income chargeable under Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments), other than income from annuities specified in section 718(2) of that Act (annuities purchased from certain life assurance premium payments or under wills etc), (c) income chargeable under Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities), or (d) income chargeable under Chapter 2 of Part 12 of this Act (accrued income profits). (4) Income is within this subsection if— (a) it is chargeable under Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc), and (b) an individual is, or personal representatives or trustees are, liable for income tax on it (under section 465 , 466 or 467 of that Act).
Propose a change(1) This section applies for the purposes of the Income Tax Acts. (2) “Dividend income” is income which is— (a) chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc from UK resident companies), (b) chargeable under Chapter 4 of that Part (dividends from non-UK resident companies), (c) chargeable under Chapter 5 of that Part (stock dividends from UK resident companies), (d) chargeable under Chapter 6 of that Part (release of loan to participator in close company), or (e) a relevant foreign distribution chargeable under Chapter 8 of Part 5 of ITTOIA 2005 (income not otherwise charged). (3) In subsection (2) “relevant foreign distribution” means a distribution of a non-UK resident company which— (a) is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but (b) would be chargeable under Chapter 3 of that Part if the company were UK resident.
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