Part 1Amendments of ITA 2007
1ITA 2007 is amended as follows.
2(1)Section 6 (rates of income tax) is amended as follows.
(2)In subsection (2), for “and higher rate” substitute “, higher rate and additional rate”.
(3)In the heading, for “and higher rate” substitute “, higher rate and additional rate”.
3(1)Section 8 (dividend ordinary rate and dividend upper rate) is amended as follows.
(2)Insert at the end—
“(3)The dividend additional rate is 42.5%.”
(3)In the heading, for “and dividend upper rate” substitute “, dividend upper rate and dividend additional rate”.
4(1)Section 10 (income charged at basic and higher rates: individuals) is amended as follows.
(2)In subsection (3), insert at the end “and up to the higher rate limit.”
(3)After that subsection insert—
“(3A)Income tax is charged at the additional rate on an individual’s income above the higher rate limit.”
(4)After subsection (5) insert—
“(5A)The higher rate limit is £150,000.”
(5)In subsection (6), for “is” substitute “and higher rate limit are”.
(6)In the heading, for “and higher” substitute “, higher and additional”.
5(1)Section 13 (income charged at dividend ordinary and dividend upper rates: individuals) is amended as follows.
(2)After subsection (2) insert—
“(2A)Income tax is charged at the dividend additional rate on an individual’s income which—
(a)is dividend income,
(b)would otherwise be charged at the additional rate, and
(c)is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005.”
(3)In subsection (3), for “and (2)” substitute “to (2A)”.
(4)In subsection (4), for “or higher” substitute “, higher or additional”.
(5)In the heading, for “and dividend upper” substitute “, dividend upper and dividend additional”.
6In section 414(2)(b) (relief for gifts to charity), after “limit” insert “and the higher rate limit”.
7In section 515(a) (rate of tax in respect of heritage maintenance settlements), for “higher rate” substitute “additional rate”.
8(1)Section 989 (definitions) is amended as follows.
(2)After the definition of “Act” insert—
““additional rate” means the rate of income tax determined in pursuance of section 6(2),”.
(3)After the definition of “distribution” insert—
““dividend additional rate” means the rate of income tax specified in section 8(3),”.
(4)After the definition of “higher rate” insert—
““higher rate limit” has the meaning given by section 10,”.
9(1)Schedule 4 (index of defined expressions) is amended as follows.
(2)After the entry relating to “Act” insert—
| “additional rate | section 6(2) (as applied by section 989).” |
(3)In the entry relating to “basic rate limit”, for “20(2)” substitute “10”.
(4)After the entry relating to “dividends (in Chapter 1 of Part 13)” insert—
| “dividend additional rate | section 8(3) (as applied by section 989).” |
(5)After the entry relating to “higher rate” insert—
| “higher rate limit | section 10 (as applied by section 989).” |