The Income Tax (Schedule 22 to the Finance Act 1995) (Prescribed Amounts) Regulations 1997

Statutory Instruments

1997 No. 1158

INCOME TAX

The Income Tax (Schedule 22 to the Finance Act 1995) (Prescribed Amounts) Regulations 1997

Made

3rd April 1997

Laid before the House of Commons

4th April 1997

Coming into force

25th April 1997

The Commissioners of Inland Revenue, in exercise of the powers conferred on them by paragraphs 1(3), 2(4)(b), 3(3), 5(4)(b), 6(3), 7(3), 9(3)(a) and 10(3) of Schedule 22 to the Finance Act 1995(1), hereby make the following Regulations:

Citation and commencement

1.  These Regulations may be cited as the Income Tax (Schedule 22 to the Finance Act 1995) (Prescribed Amounts) Regulations 1997 and shall come into force on 25th April 1997.

Interpretation

2.—(1) In these Regulations “appropriate period” means—

(a) where paragraph 1(3) applies, “the transitional period” within the meaning given by paragraph 1(4);

(b) where paragraph 3(3) applies so as to modify paragraph 1(3), “the transitional overlap period” within the meaning given by paragraph 3(4);

(c) where paragraph 6(3) applies so as to modify paragraph 1(3), the years of assessment 1995–96 and 1996–97;

(d) where paragraph 7(3) applies so as to modify paragraph 1(3), “the transitional overlap period” within the meaning given by paragraph 7(4).

(2) References in these Regulations to a paragraph are to that paragraph of Schedule 22 to the Finance Act 1995.

Amounts prescribed under paragraph 1(3)—persons other than partners

3.  As respects a trade, profession or vocation carried on by any person (other than in partnership)—

(a) the amount prescribed for the purposes of paragraph 1(3)(a) and of that provision as applied by paragraphs 3(3), 6(3) and 7(3) is £10,000;

(b) the amount prescribed for the purposes of paragraphs 1(3)(c) and of that provision as applied by paragraphs 3(3), 6(3) and 7(3) is £50,000.

Amount prescribed under paragraph 1(3)(a)—persons in partnership

4.  As respects a trade, profession or vocation carried on by persons in partnership, the amount prescribed for the purposes of paragraph 1(3)(a) and of that provision as applied by paragraphs 3(3), 6(3) and 7(3))—

(a) where the maximum number of partners comprising the partnership in the appropriate period does not exceed 20, is the amount determined by the formula—

 £ 7,500 × A

where

• A is the maximum number of partners comprising the partnership in the appropriate period;

(b) where the maximum number of partners comprising the partnership in the appropriate period exceeds 20, is the amount determined by the formula—

where

• B is the number by which the maximum number of partners comprising the partnership in the appropriate period exceeds 20.

Amount prescribed under paragraph 1(3)(c)—persons in partnership

5.  As respects a trade, profession or vocation carried on by persons in partnership, the amount prescribed for the purposes of paragraph 1(3)(c) and of that provision as applied by paragraphs 3(3), 6(3) and 7(3) is the amount determined by the formula—

 £ 50,000 × C

where

• C is the maximum number of partners comprising the partnership in the appropriate period.

Amount prescribed under paragraph 2(4)(b)

6.  The amount prescribed for the purposes of paragraph 2(4)(b) is £15,000.

Amount prescribed under paragraph 5(4)(b)

7.  The amount prescribed for the purposes of paragraph 5(4)(b) is £7,500.

Amount prescribed under paragraph 9(3)(a)

8.  The amount prescribed for the purposes of paragraph 9(3)(a) and of that provision as applied by paragraph 10(3) is £7,500.

C W Corlett

G H Bush

Two of the Commissioners of Inland Revenue

3rd April 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations prescribe amounts under various provisions of Schedule 22 to the Finance Act 1995 (c. 4) (“Schedule 22”) other than paragraphs 1(3)(b) and 9(3)(b) of that Schedule. Schedule 22 contains rules designed to prevent the exploitation of the transitional relief provisions for self assessment in Schedule 20 to the Finance Act 1994 (c. 9).

Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.

Regulation 3 prescribes amounts for the purposes of paragraph 1(3) and related paragraphs of Schedule 22 (increase of profits or gains of the appropriate transitional period) as respects a trade, profession or vocation carried on by any person other than a partner.

Regulations 4 and 5 prescribe amounts for the purposes of paragraph 1(3) and related paragraphs of Schedule 22 as respects a trade, profession or vocation carried on by persons in partnership.

Regulations 6 and 7 prescribe amounts for the purposes of paragraphs 2(4)(b) and 5(4)(b) of Schedule 22 (partnership refinancing in the appropriate transitional period).

Regulation 8 prescribes an amount for the purposes of paragraphs 9(3)(a) and 10(3) of Schedule 22 (limits applying to income chargeable under Case III, IV or V of Schedule D arising in the years of assessment 1995–96 and 1996–97).

(1)

1995 c. 4.