Income Tax (Trading and Other Income) Act 2005

198 (1) Amend section 505 (charities: general) as follows.

(2) In subsection (1)—

(a) in paragraph (a) after “Schedules A and D” insert “, or under Parts 2 and 3 of ITTOIA 2005,”,

(b) in paragraph (c)(ii) after “Schedule D” insert “or under Chapter 2, 7, 8 or 10 of Part 4 of ITTOIA 2005 (interest, purchased life annuity payments, profits from deeply discounted securities and distributions from unauthorised unit trusts), section 579 of that Act so far as it relates to annual payments (royalties etc. from intellectual property), Chapter 4 of Part 5 of that Act so far as it relates to annual payments (certain telecommunication rights: non-trading income) or Chapter 7 of Part 5 of that Act (annual payments not otherwise charged)”,

(c) in paragraph (c)(iia) omit “IV or”,

(d) after paragraph (c)(iia) insert—

“(iiaa) from tax under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies) or from tax under Chapter 8 of Part 5 of that Act (income not otherwise charged) so far as it applies to relevant foreign distributions,”,

(e) in paragraph (c)(iib) from “income” to “and” at the end of sub-paragraph (iib) substitute “such dividends as would, in the case of income tax, be chargeable to tax under Chapter 4 of Part 4 of ITTOIA 2005 or such distributions (other than dividends) as would, in the case of income tax, be chargeable to tax under Chapter 8 of Part 5 of that Act so far as it would apply to what would be a relevant foreign distribution,”,

(f) in paragraph (c)(iii) for “Schedule F” substitute “Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.)”,

(g) in paragraph (d) after “Schedule D” insert “or Chapter 2 of Part 4 of ITTOIA 2005 (interest)”,

(h) in paragraph (e) after “Schedule D” insert “or Part 2 of ITTOIA 2005 (trading income)”, and

(i) in paragraph (f) after “Schedule D” insert “or Part 2 or 5 of ITTOIA 2005 (trading and miscellaneous income)”.

(3) After subsection (1) insert—

“(1AA) In subsection (1)(c)(iiaa) and (iib) “relevant foreign distribution” means any distribution of a company not resident in the United Kingdom 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 of that Act if the company were resident in the United Kingdom.”

(4) In subsection (2) after “chargeable to”, in the second place where it occurs, insert “income tax under Chapter 7 of Part 5 of ITTOIA 2005 (annual payments not otherwise charged) so far as it does not apply to relevant foreign income and shall be chargeable to corporation”.