Income Tax Act 2007

Chapter 6 Miscellaneous other reliefs

Payments for life insurance etc

457 Payments to trade unions

(1) An individual who makes a payment to a trade union in a tax year is entitled to relief for the tax year if—

(a) part of the payment (the “qualifying amount”) is attributable to the provision of superannuation, life insurance or funeral benefits,

(b) the individual meets the requirements of section 460 (residence etc), and

(c) the individual makes a claim.

(2) The amount of the relief is equal to half the qualifying amount.

(3) But the maximum amount of relief under this section to which an individual is entitled for a tax year is £100.

(4) The relief is given by deducting the amount of the relief in calculating the individual’s net income for the tax year (see Step 2 of the calculation in section 23).

(5) “Trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52).

458 Payments to police organisations

(1) An individual who makes a payment to a police organisation in a tax year is entitled to relief for the tax year if—

(a) part of the payment (the “qualifying amount”) is attributable to the provision of superannuation, life insurance or funeral benefits,

(b) the sum of the qualifying amounts for all the payments which the individual makes in the tax year is at least £20,

(c) the individual meets the requirements of section 460 (residence etc), and

(d) the individual makes a claim.

(2) The amount of the relief is equal to half the qualifying amount.

(3) But the maximum amount of relief under this section to which an individual is entitled for a tax year is £100.

(4) The relief is given by deducting the amount of the relief in calculating the individual’s net income for the tax year (see Step 2 of the calculation in section 23).

(5) “Police organisation” means an organisation of persons in police service.

459 Payments for benefit of family members

(1) An individual who pays a sum, or from whose earnings a sum is deducted, in a tax year is entitled to a tax reduction for the tax year if—

(a) the sum is paid or deducted under an Act or the individual’s terms and conditions of employment,

(b) the sum is for the purpose of—

(i) securing a deferred annuity after the individual’s death for the individual’s surviving spouse or civil partner, or

(ii) making provision after the individual’s death for the individual’s children,

(c) the individual meets the requirements of section 460 (residence etc), and

(d) the individual makes a claim.

(2) The amount of the tax reduction is equal to income tax at the basic rate on the total of all the sums paid or deducted in the tax year.

(3) But the maximum amount of the tax reduction under this section to which an individual is entitled for a tax year is equal to income tax at the basic rate on £100.

(4) A tax reduction under this section is given effect at Step 6 of the calculation in section 23.

(5) There is no entitlement to a tax reduction under this section in respect of a contribution paid by any person under—

(a) Part 1 of the Social Security Contributions and Benefits Act 1992 (c. 4), or

(b) Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7).

(6) This section is also subject to sections 192 to 194 of FA 2004 (relief for pension contributions).

(7) In this section “earnings” has the meaning given by section 62 of ITEPA 2003.

460 Residence etc of claimants

(1) This section applies in relation to an individual who claims—

(a) relief under section 457 or 458 (payments to trade unions and police organisations) for a tax year, or

(b) a tax reduction under section 459 (payments for benefit of family members) for a tax year.

(2) The individual meets the requirements of this section if the individual—

(a) is UK resident for the tax year, or

(b) meets the condition in subsection (3).

(3) An individual meets the condition in this subsection if, at any time in the tax year, the individual—

(a) is resident in the Isle of Man or the Channel Islands,

(b) has previously resided in the United Kingdom and is resident abroad for the sake of the health of—

(i) the individual, or

(ii) a member of the individual’s family who is resident with the individual,

(c) is a person who is or has been employed in the service of the Crown,

(d) is employed in the service of any territory under Her Majesty’s protection,

(e) is employed in the service of a missionary society, or

(f) is a person whose late spouse or late civil partner was employed in the service of the Crown.

Patent royalty receipts

461 Spreading of patent royalty receipts

(1) A person who makes a claim is entitled to a tax reduction for a tax year in which the person receives a payment of a royalty or other sum if—

(a) the payment is in respect of the use of a patent,

(b) the use of the patent has extended over a period of two years or more, and

(c) the payment is one from which a sum representing income tax is required to be deducted under section 903.

(2) The amount of the tax reduction is the difference between—

(a) the amount of income tax payable by the person in respect of the payment, and

(b) the total amount of income tax which would have been payable by the person in respect of the payment on the assumptions in subsection (3).

(3) Those assumptions are that—

(a) the payment was made in a number of equal instalments at yearly intervals,

(b) the last instalment was paid on the date on which the payment was in fact made, and

(c) the number of instalments was the same as the number of complete years in the period over which the use of the patent extended, but subject to a maximum of 6.

(4) The tax reduction is given effect at Step 6 of the calculation in section 23.