Income Tax (Trading and Other Income) Act 2005

Chapter 1 Introduction

365 Overview of Part 4

(1) This Part imposes charges to income tax under—

(a) Chapter 2 (interest),

(b) Chapter 3 (dividends etc. from UK resident companies etc.),

(c) Chapter 4 (dividends from non-UK resident companies),

(d) Chapter 5 (stock dividends from UK resident companies),

(e) Chapter 6 (release of loan to participator in close company),

(f) Chapter 7 (purchased life annuity payments),

(g) Chapter 8 (profits from deeply discounted securities),

(h) Chapter 9 (gains from contracts for life insurance etc.),

(i) Chapter 10 (distributions from unauthorised unit trusts),

(j) Chapter 11 (transactions in deposits),

(k) Chapter 12 (disposals of futures and options involving guaranteed returns), and

(l) Chapter 13 (sales of foreign dividend coupons).

(2) Part 6 deals with exemptions from the charges under this Part.

(3) See, in particular, any exemptions mentioned in the particular Chapters.

(4) The charges under this Part apply to non-UK residents as well as UK residents but this is subject to section 368(2) (charges on non-UK residents only on UK source income).

(5) This section needs to be read with the relevant priority rules (see sections 2 and 366).

366 Provisions which must be given priority over Part 4

(1) Any income, so far as it falls within—

(a) any Chapter of this Part, and

(b) Chapter 2 of Part 2 (receipts of a trade, profession or vocation),

is dealt with under Part 2.

(2) Any income, so far as it falls within—

(a) any Chapter of this Part, and

(b) Chapter 3 of Part 3 so far as the Chapter relates to a UK property business,

is dealt with under Part 3.

(3) Any income, so far as it falls within—

(a) any Chapter of this Part other than Chapter 3 or 6, and

(b) Part 2, 9 or 10 of ITEPA 2003 (employment income, pension income or social security income),

is dealt with under the relevant Part of ITEPA 2003.

(4) Nothing in this section prevents amounts both—

(a) being counted as income for the purposes of Chapter 9 of this Part (gains from contracts for life insurance etc.), and

(b) being taken into account in calculating income, or counting as income, for the purposes of other Parts of this Act,

but see section 527 (reduction for sums taken into account otherwise than under Chapter 9).

367 Priority between Chapters within Part 4

(1) Any income, so far as it falls within Chapter 2 (interest) and Chapter 8 (profits from deeply discounted securities), is dealt with under Chapter 8.

(2) Any income, so far as it falls within Chapter 3 (dividends etc. from UK resident companies etc.) and another Chapter, is dealt with under Chapter 3 (but this is subject to subsection (3)).

(3) Any income, so far as it falls within—

(a) Chapter 2 (interest) as a result of section 372 (building society dividends) or 379 (industrial and provident society payments), and

(b) Chapter 3,

is dealt with under Chapter 2.

368 Territorial scope of Part 4 charges

(1) Income arising to a UK resident is chargeable to tax under this Part whether or not it is from a source in the United Kingdom.

(2) Income arising to a non-UK resident is chargeable to tax under this Part only if it is from a source in the United Kingdom.

(3) References in this section to income which is from a source in the United Kingdom include, in the case of any income which does not have a source, references to income which has a comparable connection to the United Kingdom.

(4) This section is subject to any express or implied provision to the contrary in this Part (or elsewhere in the Income Tax Acts).