SCHEDULES

SCHEDULE 1Consequential amendments

Part 1Income and Corporation Taxes Act 1988

277

1

Amend section 686 (accumulation and discretionary trusts: special rates of tax) as follows.

2

In subsection (1) for “Schedule F” substitute “ dividend ”.

3

In subsection (1AA)(a)—

a

for “Schedule F”, in the first place where it occurs, substitute “ distribution ”, and

b

for “Schedule F”, in the second place where it occurs, substitute “ dividend ”.

4

In subsection (1A) for “Schedule F” substitute “ dividend ”.

5

In subsection (2AA) for “Schedule F” substitute “ dividend ”.

6

In subsection (5A) for ““Schedule F type” substitute “ “distribution type ” and for paragraphs (a) to (g) substitute—

a

income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);

b

income chargeable under Chapter 4 of that Part (dividends from non-UK resident companies);

c

income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies);

d

income chargeable under Chapter 6 of that Part (release of loan to participator in close company);

e

a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged); or

f

any amount which, by virtue of section 686A of this Act, is treated for the purposes of the Tax Acts as if it were income to which this section applies.

7

After that subsection insert—

5B

In subsection (5A) “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 if the company were resident in the United Kingdom.

8

In subsection (6) for “Part XVI” substitute “ Chapter 6 of Part 5 of ITTOIA 2005 ”.