Income Tax (Trading and Other Income) Act 2005

148 (1) Amend section 349 (payments not out of profits or gains brought into charge to income tax, and annual interest) as follows.

(2) In subsection (1A), after paragraph (a), insert—

“(aa) which—

(i) is charged with tax under Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments), Chapter 10 of that Part (distributions from unauthorised unit trusts), section 579 of that Act (royalties etc. from intellectual property), Chapter 4 of Part 5 of that Act (certain telecommunication rights: non-trading income) or Chapter 7 of Part 5 of that Act (annual payments not otherwise charged), and

(ii) is not relevant foreign income,”.

(3) In subsection (2) for “chargeable to” substitute “which falls within Chapter 2 of Part 4 of ITTOIA 2005 (interest) (excluding anything specially exempted from income tax and discounts treated as interest by section 381 of that Act) or which is chargeable to corporation”.

(4) In subsection (3) before paragraph (a) insert—

“(za) to interest chargeable to income tax as relevant foreign income; or”.

(5) In subsection (4)—

(a) insert the following definitions in the appropriate places—

““certificate of deposit” means a document falling within the definition of that expression in section 56(5) above or section 552(2) of ITTOIA 2005;”,

““uncertificated eligible debt security units” has the same meaning as in section 552(2) of ITTOIA 2005;”,

(b) in the definition of “qualifying certificate of deposit”—

(i) omit “, as defined in section 56(5),”, and

(ii) after “under which” insert “, or uncertificated eligible debt security units under which”, and

(c) in the definition of “qualifying deposit right”—

(i) at the end of paragraph (a) insert “above or is an uncertificated right, as defined in section 552(2) of ITTOIA 2005”, and

(ii) in paragraph (b) omit “, as defined in section 56(5),” and after “issued” insert “, and no uncertificated eligible debt security units have been issued,”.

(6) For subsection (7) substitute—

“(7) This section is subject to section 101 of the Finance Act 2004 (payment of royalties without deduction at source).”