Amendments to the Finance (No.2) Act 20059
1
Section 7 of the Finance (No.2) Act 200512 (charge to income tax on social security pension lump sum) is amended as follows.
2
In subsection (5)—
a
after the words “a charge under this section” insert “for a person who is not a Scottish tax payer in the applicable year of assessment”,
b
in paragraph (c) omit “or, if P is a Scottish taxpayer, the Scottish basic rate”,
c
in paragraph (d) omit “or, if P is a Scottish taxpayer, the Scottish higher rate”, and
d
in paragraph (e) omit “or, if P is a Scottish taxpayer, the Scottish additional rate”.
3
After subsection (5) insert—
5A
Where P is a Scottish taxpayer in the applicable year of assessment, a charge under this section is a charge in respect of the amount of the lump sum at the following rate—
a
if P’s Step 3 income for the applicable year of assessment is nil, 0%;
b
if P’s Step 3 income for that year of assessment is greater than nil but does not exceed the Scottish basic rate limit for that year, the Scottish basic rate for that year;
c
if P’s Step 3 income for that year of assessment exceeds the Scottish basic rate limit for that year, the highest Scottish rate for that tax year that is applicable to P.