39 Meaning of “relevant minor”
For the purposes of this Chapter a person is a “relevant minor” if— (a) he has not yet attained the age of 18, and (b) at least one of his parents has died.
Propose a changeLaw
Finance Act 2005
United Kingdom · statute
Ask the law about thisMore laws of United KingdomFor machines: Markdown
In force since 2025-03-21, as the publisher states.
Copy read on 2026-11-08. The page it was read from
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.
sha256 2f631079b00794777d7bff7b0c31b099ad55a2ad1be512be88e25521443f0330
Contents: 109 provisions
- Title and introductory text
- 1 Rates of tobacco products duty
- 2 Rate of duty on beer
- 3 Rates of duty on wine and made-wine
- 4 Consolidation of current rates of hydrocarbon oil duties etc.
- 5 Rates of hydrocarbon oil duties etc. from 1st September 2005
- 6 Rates of gaming duty
- 7 Rates
- 8 Charge and rates for 2005-06
- 9 Personal allowances for those aged 65 or more
- 10 Charge and main rate for financial year 2006
- 11 Small companies' rate and fraction for financial year 2005
- 12 Corporation tax starting rate and fraction for financial year 2005
- 13 Non-corporate distribution rate for financial year 2005
- 14 Special trust rates not to apply to first slice of trust income
- 15 Childcare vouchers: exempt amount
- 16 Extension of exemptions for childcare, workplace parking, cycles etc
- 17 Transfer of previously loaned computer or cycle etc
- 18 Extension of outplacement services etc exemption: part-time employees
- 19 Armed forces pensions and compensation schemes
- 20 Research institution spin-out companies
- 21 Research institution spin-out companies: pre-2nd December 2004 cases
- 22 Capital gains
- 23 Introduction
- 24 Entitlement to make claim for special tax treatment
- 25 Qualifying trusts income: special income tax treatment
- 26 Amount of relief
- 27 Trustees' liability: TQTI
- 28 Vulnerable person's liability: VQTI
- 28A Disapplication of section 629 of ITTOIA 2005
- 29 Part years
- 30 Qualifying trusts gains: special capital gains tax treatment
- 31 UK resident vulnerable persons: amount of relief
- 32 Non-UK resident vulnerable persons: amount of relief
- 33 Vulnerable person's liability: VQTG
- 34 Disabled persons
- 35 Relevant minors
- 36 Parts of assets
- 37 Vulnerable person election
- 38 Meaning of “disabled person”
- 39 Meaning of “relevant minor”
- 40 Power to make enquiries
- 41 Interpretation etc.
- 42 Application in relation to Scotland
- 43 Penalties under TMA 1970
- 44 Consequential amendments
- 45 Commencement
- 48 Arrangements within section 47: foreign currency and non-residents
- 48A Alternative finance arrangements: alternative finance investment bond: introduction
- 48B Alternative finance arrangements: alternative finance investment bond: effects
- 58 Relief for production and acquisition expenditure on limited-budget films
- 59 Restrictions on relief for production and acquisition expenditure
- 60 Deferred income agreements which exist when relief claimed
- 61 Meaning of “deferred income agreement in respect of a film”
- 62 Deferred income agreements entered into after relief claimed
- 63 Sections 60 to 62: supplementary
- 64 Transitional provision for years of assessment before the year 2005-06
- 65 Corresponding provision in ITTOIA 2005
- 66 When a chargeable event occurs
- 67 Consequences of a chargeable event: exit event X or Y
- 68 Exit event Z: a relevant disposal at an undervalue
- 69 Consequences of a chargeable event: exit event Z
- 70 Valuation of the “rights to guaranteed income” and “disposed rights”
- 71 Meaning of “company” and related terms
- 72 Removal of restrictions on interest relief
- 73 Meaning of “contribution to the trade”
- 74 Recovery of excess relief given under section 380 or 381 of ICTA
- 75 Computing the chargeable amount
- 76 Meaning of “relevant loss”
- 77 Transitional provision for years of assessment before the year 2005-06
- 78 Consequential amendments
- 79 Meaning of “capital contribution to the trade”
- 80 Accounting practice and related matters
- 81 Computation of profits: change of accounting basis
- 82 Change of accounting practice: deferment of transitional adjustments
- 83 Application of accounting standards to securitisation companies
- 84 Taxation of securitisation companies
- 85 Dividends by reference to which a deduction is allowed: no underlying tax
- 86 Limits on credit: income tax and corporation tax: trading profits
- 87 Schemes and arrangements designed to increase relief
- 88 Self-assessment amendments
- 89 ADP dividends and double taxation relief
- 90 Foreign taxation of group as single entity: exclusion of ADP CFCs
- 91 Tax avoidance involving annual payments and double taxation relief
- 92 Capital allowances: renovation of business premises in disadvantaged areas
- 93 Tonnage tax
- 94 Alternative property finance
- 95 Raising of thresholds
- 96 Removal of disadvantaged areas relief for non-residential property
- 97 Demutualisation of insurance companies
- 98 Rates and rate bands for the next three years
- 99 Rate of landfill tax
- 100 Lorry road-user charge
- 101 Pension schemes etc.
- 102 Pension Protection Fund etc.
- 103 Civil partnerships etc
- 104 Repeals
- 105 Interpretation
- 106 Short title
- SCHEDULE 1 Non-UK resident vulnerable persons: interpretation
- SCHEDULE 1A Meaning of “disabled person”
- SCHEDULE 2 Alternative finance arrangements: further provisions
- SCHEDULE 4 Accounting practice and related matters
- SCHEDULE 6 Capital allowances: renovation of business premises in disadvantaged areas
- SCHEDULE 7 Tonnage tax
- SCHEDULE 8 Stamp duty land tax: alternative property finance
- SCHEDULE 9 Stamp duty land tax and stamp duty: removal of disadvantaged areas relief for non-residential property
- SCHEDULE 10 Pension schemes etc.
- SCHEDULE 11 Repeals
Proposed changes to this act
No one has proposed a change to this act yet.
109 provisions
40 Power to make enquiries
(1) Where a vulnerable person election has been made the Inland Revenue may by notice require the trustees or the vulnerable person by whom the election was made to furnish them with such particulars as they may reasonably require for the purposes of determining— (a) whether the requirements mentioned in subsection (1)(a) and (b) of section 37 were met at the time the election was made, and (b) whether an event mentioned in subsection (5) of that section has occurred since the effective date. (2) The notice must specify the time within which the information must be furnished (not being less than 60 days). (3) If the Board of Inland Revenue determine— (a) that either or both of the requirements mentioned in subsection (1)(a) and (b) of section 37 were not met at the time the election was made, or (b) that an event mentioned in subsection (5) of that section has occurred since the effective date of the election, they may give notice to the trustees and the person in relation to whom the vulnerable person election was made that the election never had effect or ceased to have effect from a date specified in the notice. (4) A person aggrieved by a determination of the Board of Inland Revenue under subsection (3) may by notice appeal .... (5) The notice of appeal must be given to the Board of Inland Revenue within 30 days after the notice of the determination was given under subsection (3). (6) All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to a determination under subsection (3) (despite any limitation on the time within which any adjustment may be made). (7) In subsection (6) “tax” means income tax or capital gains tax.
Propose a change41 Interpretation etc.
(1) In this Chapter— “the Board of Inland Revenue” means the Commissioners of Inland Revenue (as to which, see in particular the Inland Revenue Regulation Act 1890 (c. 21)), “the Inland Revenue” means any officer of the Board of Inland Revenue, “non-UK resident” means not resident in the United Kingdom in accordance with the statutory residence test in Part 1 of Schedule 45 to FA 2013, “notice” means notice in writing, and ... “UK resident” means resident in the United Kingdom in accordance with the statutory residence test in Part 1 of Schedule 45 to FA 2013. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Sections 30 to 32 and Schedule 1 are to be construed as one with TCGA 1992. (4) To the extent that any provision of this Chapter would not, apart from this subsection, form part of Income Tax Acts, the provisions of the Income Tax Acts are to apply for the purposes of any references in the provision relating to income arising (or treated as arising) to a person or to the income tax liability of a person.
Propose a change42 Application in relation to Scotland
(1) This Chapter applies in relation to Scotland with the following modifications. (2) In section 23(5), for “trusts on which property is held for the benefit of a vulnerable person are qualifying trusts” substitute “ property held in trust for the benefit of a vulnerable person is held in qualifying trust ”. (3) In section 31(3)(a), for “on the qualifying trusts” substitute “ in qualifying trust (in the same trust as the settled property disposed of) ”. (4) In section 34— (a) in subsection (1), for “those trusts are qualifying trusts if they” substitute “ the property is held in qualifying trust if the trust purposes ”, and (b) in subsection (4), for “on trusts” substitute “ in a trust ”. (5) In section 35— (a) in subsection (1), for “those trusts are qualifying trusts if they are” substitute “ the property is held in qualifying trust if the trust is ”, (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) in subsection (2), before “which” insert “ the purposes of ”. (6) In section 36, for “the trusts on which it is held are qualifying trusts” substitute “ it is held in qualifying trust ”. (7) In section 37— (a) in subsection (1), for paragraph (b) substitute— (b) property held in the trust in relation to which the election is made is held in qualifying trust. , (b) in subsection (3)(b), for “the trusts in relation to which the election is made are qualifying trusts” substitute “ property held in the trust in relation to which the election is made is held in qualifying trust ”, and (c) in subsection (5), for paragraph (b) substitute— (b) property held in the trust in relation to which the election is made ceases to be held in qualifying trust, . (8) Sections 34(3) and 35(4) do not apply to Scotland (9) Unless otherwise modified by this section, any reference to anything being held on trusts is to be construed as a reference to it being held in trust. (10) Unless otherwise modified or disapplied by this section, any reference to trusts is to be construed as a reference to a trust or the trust (as appropriate).
Propose a change43 Penalties under TMA 1970
(1) Section 98 of TMA 1970 (special returns, etc) is amended as follows. (2) In the first column of the table insert at the appropriate place— “ section 40(1) of the Finance Act 2005 ”. (3) In the second column of the table insert at the appropriate place— “ section 37(3) of the Finance Act 2005; ”, and “ section 37(6) of the Finance Act 2005; ”. (4) For the purposes of that section, any information, statements or declarations given or made jointly by the trustees of a settlement and a vulnerable person are to be treated as given or made by the trustees.
Propose a change44 Consequential amendments
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Propose a change45 Commencement
This Chapter has effect for the tax year beginning on 6th April 2004 and subsequent tax years.
Propose a change48 Arrangements within section 47: foreign currency and non-residents
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Propose a change48A Alternative finance arrangements: alternative finance investment bond: introduction
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Propose a change48B Alternative finance arrangements: alternative finance investment bond: effects
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Propose a change58 Relief for production and acquisition expenditure on limited-budget films
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Propose a change59 Restrictions on relief for production and acquisition expenditure
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Propose a change60 Deferred income agreements which exist when relief claimed
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Propose a change61 Meaning of “deferred income agreement in respect of a film”
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Propose a change62 Deferred income agreements entered into after relief claimed
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Propose a change63 Sections 60 to 62: supplementary
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Propose a change64 Transitional provision for years of assessment before the year 2005-06
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Propose a change65 Corresponding provision in ITTOIA 2005
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Propose a change66 When a chargeable event occurs
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Propose a change67 Consequences of a chargeable event: exit event X or Y
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Propose a change68 Exit event Z: a relevant disposal at an undervalue
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Propose a change69 Consequences of a chargeable event: exit event Z
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Propose a change70 Valuation of the “rights to guaranteed income” and “disposed rights”
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Propose a change71 Meaning of “company” and related terms
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Propose a change72 Removal of restrictions on interest relief
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Propose a change73 Meaning of “contribution to the trade”
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Propose a change74 Recovery of excess relief given under section 380 or 381 of ICTA
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Propose a change75 Computing the chargeable amount
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Propose a change76 Meaning of “relevant loss”
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Propose a change77 Transitional provision for years of assessment before the year 2005-06
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Propose a change78 Consequential amendments
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Propose a change79 Meaning of “capital contribution to the trade”
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Propose a change80 Accounting practice and related matters
(1) Schedule 4 (accounting practice and related matters) has effect. (2) In that Schedule— Part 1 makes provision about bad debts and related matters; Part 2 makes other provision connected with accounting practice. (3) Part 1 of the Schedule, so far as it amends provisions that have effect both for income tax and corporation tax, has effect for the purposes of corporation tax only. (4) Except as otherwise provided, the provisions of the Schedule have effect for periods of account beginning on or after 1st January 2005.
Propose a change81 Computation of profits: change of accounting basis
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Propose a change82 Change of accounting practice: deferment of transitional adjustments
(1) This section applies where— (a) a company enters into a transaction on or after 14th December 2004, otherwise than in the ordinary course of its business, (b) as a result of the transaction it incurs a loss in respect of a loan relationship or derivative contract in respect of which, apart from this section, a debit would fall to be brought into account for tax purposes in a period of account beginning before 1st January 2005, (c) the sole or main purpose of the company in entering into the transaction at the time it did was to enable it to bring a debit into account for tax purposes in such a period, and (d) if the company had continued to hold the asset or liability representing the loan relationship or derivative contract, as it was held immediately before the transaction referred to in paragraph (a), in its first period of account beginning on or after 1st January 2005, a debit would have arisen in respect of the loan relationship or derivative contract in that period that was a prescribed debit for the purposes of regulation 3 of the Loan Relationship and Derivative Contracts (Change of Accounting Practice) Regulations 2004 (S.I. 2004/3271) (debits not to be brought into account until the company's first period beginning on or after 1st January 2006). (2) Where this section applies no such debit as is mentioned in subsection (1)(b) shall be brought into account in the period of account mentioned there, but a debit of the same amount shall instead be brought into account as if it were a prescribed debit for the purposes of the regulation referred to in subsection (1)(d) (even though the loss giving rise to the debit was incurred before 1st January 2005). (3) In determining the sole or main purpose of a company for the purposes of subsection (1)(c) regard shall be had to anything done by a connected company that would be relevant for the purposes of that determination if done by the company in question. For this purpose companies are connected if they are connected persons within the meaning of section 839 of ICTA. (4) For the purposes of subsection (1)(d) it shall be assumed that the loan relationship or derivative contract has the same value at the beginning of the company's first period of account beginning on or after 1st January 2005 as it had at the time of the transaction referred to in subsection (1)(a). (5) This section does not apply where the transaction is entered into in pursuance of legally binding arrangements entered into before 14th December 2004. (6) In this section, references to a company entering into a transaction include a reference to the company, or the directors of the company, taking a decision about a loan relationship or derivative contract that affects its treatment for accounting purposes (other than a decision to prepare some or all of the company's accounts in accordance with international accounting standards).
Propose a change83 Application of accounting standards to securitisation companies
(1) For the purposes of the Corporation Tax Acts as they apply to a securitisation company in relation to a period of account— (a) beginning on or after 1st January 2005, and (b) (subject to subsection (7A)(a)) ending before 1st January 2008, generally accepted accounting practice shall be taken to be UK generally accepted accounting practice as it applied for a period of account ending on 31st December 2004. (2) For the purposes of this section a “securitisation company” means a company that is— (a) a note-issuing company, (b) an asset-holding company, (c) an intermediate borrowing company, (d) a warehouse company, or (e) a commercial paper funded company, as defined below. (3) A “note-issuing company” means a company in relation to which the following conditions are met— (a) it is party as debtor to a capital market investment, (b) the securities that represent the capital market investment are issued wholly or mainly to independent persons, (c) the capital market investment is part of a capital market arrangement, . . . (d) the total value of the capital market investments made under that capital market arrangement is at least £50 million , and (e) if it has any business apart from the activity mentioned in paragraph (a) (and any incidental activities) it consists in one or both of the following— (i) acquiring, holding and managing assets forming the whole or part of the security for the capital market arrangement; (ii) acting as guarantor in respect of loan relationships, derivative contracts, finance leases or other liabilities of other companies where the whole, or substantially the whole, of the company's rights in respect of the guarantee (including any right of subrogation) form the whole or part of the security for the capital market arrangement. (4) An “asset-holding company” means a company— (a) whose business (apart from any incidental activities) consists in acquiring, holding and managing assets forming the whole or part of the security for a capital market arrangement entered into by a note-issuing company, and (b) whose liabilities representing debtor relationships are owed wholly or mainly to a note-issuing company or intermediate borrowing company. (5) An “intermediate borrowing company” means a company— (a) whose only business is to enter into and be a party to creditor relationships with an asset-holding company (or another intermediate borrowing company), and (b) whose liabilities representing debtor relationships are owed wholly, or substantially wholly, to a note-issuing company (or another intermediate borrowing company). (6) A “warehouse company” means a company whose business consists wholly of acquiring and holding financial assets for the purpose— (a) of transferring them to a company (whether or not yet in existence) that at the time of the transfer is, or as a result of the transfer will become, an asset-holding or note-issuing company, or (b) of itself becoming an asset-holding or note-issuing company. (7) A “commercial paper funded company” means— (a) a company that was an asset-holding company but whose obligations under debtor relationships to a note-issuing company or intermediate borrowing company— (i) have been transferred to, or (ii) have been replaced by obligations under debtor relationships to, one or more companies carrying on a business of banking, or (b) a company that was an intermediate borrowing company but whose obligations under debtor relationships to a note-issuing company— (i) have been transferred to, or (ii) have been replaced by obligations under debtor relationships to, one or more companies carrying on a business of banking. (7A) The Treasury may by regulations— (a) make provision for subsection (1) to apply in relation to periods of account ending on or after 1st January 2008 but before a date specified by the regulations, and (b) make provision modifying any provision of, or made under, the Corporation Tax Acts in relation to the first period of account of securitisation companies in the case of which subsection (1) does not apply (whether by virtue of that subsection itself or regulations under paragraph (a)). (7B) Regulations under subsection (7A)(a) may, in particular— (a) specify a date only in relation to specified descriptions of company, (b) specify different dates in relation to different descriptions of company, and (c) include provision for a company to elect that the regulations are to apply to it or provision for a company to elect that they are not to apply to it. (8) In this section— “asset” includes any option, future or contract for differences as defined for the purposes of Part 7 of CTA 2009 (derivative contracts) (see sections 580, 581 and 582 of that Act); “capital market investment” and “capital market arrangement” have the same meaning as in section 72B(1) of the Insolvency Act 1986 (c. 45) (see paragraphs 1, 2 and 3 of Schedule 2A to that Act); “company” includes a partnership; “financial asset” has the meaning it has for accounting purposes; and “independent persons” means persons who are not connected with the company. (9) Section 839 of ICTA (connected persons) applies for the purposes of the definition above of “independent persons”, except that in applying the definition of “control” in that section a person is not to be treated as a participator in a company by reason only that he is a loan creditor of the company.
Propose a change84 Taxation of securitisation companies
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Propose a change85 Dividends by reference to which a deduction is allowed: no underlying tax
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Propose a change86 Limits on credit: income tax and corporation tax: trading profits
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) In section 803 of ICTA (underlying tax reflecting interest on loans)— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) subsections (4) to (9) shall cease to have effect. (3) Subsections (1) and (2) shall have effect— (a) for the purposes of corporation tax, in relation to a credit for foreign tax which relates to— (i) a payment of foreign tax on or after 16th March 2005, or (ii) income received on or after that date in respect of which foreign tax has been deducted at source, and (b) for the purposes of income tax, in relation to a credit for foreign tax which relates to— (i) a payment of foreign tax on or after 6th April 2005, or (ii) income received on or after that date in respect of which foreign tax has been deducted at source. (4) In subsection (3) a reference to tax deducted at source is a reference to tax deducted or treated as deducted from income, or treated as paid in respect of income. (5) In respect of dividends paid before 1st January 2006, the effect of section 798 or 798A of ICTA in respect of credit for foreign tax shall be disregarded to the extent that it would otherwise reduce the allowable credit to less than 50% of the foreign tax; but this subsection shall not apply to tax paid as part of a scheme or arrangement designed or entered into for the purposes of causing this subsection to apply.
Propose a change87 Schemes and arrangements designed to increase relief
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Propose a change