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Income Tax (Earnings and Pensions) Act 2003

Section 145: Modification of provisions where car temporarily replaced

555.This section modifies the effect of the two previous sections if a car is temporarily replaced. The section derives from the Income Tax (Replacement Cars) Regulations 1994 (SI 1994 No 778). Those Regulations were made under powers provided by paragraph 8 of Schedule 6 to ICTA. As there is no longer any reason to retain those powers, that paragraph has not been rewritten.

556.Subsections (1) to (3) deal with the conditions to be met for the section to apply. Condition A in subsection (2) relates to the quality of the replacement car as compared with the car it replaces. This Act uses a slightly different form of wording from the source legislation. See Change 25 in Annex 1.

557.Subsection (4) makes the necessary modifications to sections 143 and 144 of this Act when this section applies.

558.Subsection (5) defines “materially better”. The possible introduction of a numerical measure of improvement (a maximum percentage increase above the interim sum, for example) to remove the inherent uncertainty of “materially” was considered but rejected. That approach might produce “hard cases”. It is better to retain the flexibility that a common sense interpretation of “materially” allows.

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