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Finance Act 2012

Section 222: Removal of Special Provision for Incapacitated Persons and Minors


1.Section 222 removes the current definition of “incapacitated person” from the Taxes Management Act 1970. This section also removes linked provisions in the Taxes Management Act (and other similar legislation) that confer certain rights and obligations on the person that represents an incapacitated person.  The general legal framework for appointing people to assist those who lack capacity will continue to operate in relation to tax.

Details of the Section

2.Subsections (1) and (2) remove provisions of the Taxes Management Act 1970 and the Finance Act 2003 which relate to income tax and stamp duty land tax and confer different rights and obligations on the representatives of incapacitated persons (including minors), and on parents and guardians of minors generally.

3.Subsection (4)(a) removes the definitions of an “incapacitated person” and an “infant” from the Taxes Management Act 1970.

4.Subsections 4(b) to (e) make further consequential amendments to other legislation.

5.Subsections (5) and (6) make provision as to when the changes have effect.

Background Note

6.In 2010 the Exchequer Secretary to the Treasury gave a commitment to consult, with an intention to update the current definition for tax purposes of an incapacitated person. A consultation document was published on 24 May 2011, and a summary of responses has now been published.

7.The approach taken here removes both the terminology, which is seen as offensive, of the current definition and the linked provisions. As a result of the changes there will no longer be a tax-specific legal framework for incapacitated persons. The general legal framework for appointing people to assist those who lack capacity will continue to operate in relation to tax.

8.The provisions that this section removes from the Taxes Management Act 1970 are applied for different purposes, and with modifications, by three statutory instruments: the Stamp Duty Reserve Tax Regulations 1986 (S.I. 1986/1711); the Child Trust Fund Regulations 2004 (SI 2004/1450); the Education (Student Loans) (Repayment) Regulations 2009 (SI 2009/470). It is intended that secondary legislation will be made to remove from those instruments the provisions that are linked to the sections of the Taxes Management Act that are removed by this section.

9.The Registered Pension Schemes (Discharge of Liabilities under Sections 267 and 268 of the Finance Act 2004) Regulations 2005 (S.I. 2005/3452), makes provision in regulation 4 for applications made on behalf of incapacitated persons. The intention is to revoke    regulation 4 by statutory instrument.

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