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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 4 — Taxable UK social security benefits: exemptions

    310

 

 661   Taxable social security income

     (1)    This section applies in relation to each of the following taxable benefits listed

in Table A—

                    bereavement allowance,

                    carer’s allowance,

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                    incapacity benefit, and

                    income support.

     (2)    The amount of taxable social security income for a taxable benefit for a tax year

is the full amount of the benefit accruing in the tax year irrespective of when

any amount is actually paid.

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 662   Person liable for tax

The person liable for any tax charged under this Part on a taxable benefit listed

in Table A is the person receiving or entitled to the benefit.

Chapter 4

Taxable UK social security benefits: exemptions

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Incapacity benefit

 663   Long-term incapacity benefit: previous entitlement to invalidity benefit

     (1)    No liability to income tax arises on long-term incapacity benefit if—

           (a)           a person is entitled to the benefit for a day of incapacity for work which

falls in a period of incapacity for work which is treated for the purposes

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of that benefit as having begun before 13th April 1995, and

           (b)           the part of that period which is treated as having fallen before that date

includes a day for which that person was entitled to invalidity benefit.

     (2)    In this section—

                    “invalidity benefit” means invalidity benefit under—

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                  (a)                 Part 2 of SSCBA 1992, or

                  (b)                 Part 2 of SSCB(NI)A 1992;

                    “long-term incapacity benefit” means incapacity benefit payable under—

                  (a)                 section 30A(5), 40 or 41 of SSCBA 1992, or

                  (b)                 section 30A(5), 40 or 41 of SSCB(NI)A 1992.

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 664   Short-term incapacity benefit not payable at the higher rate

     (1)    No liability to income tax arises on short-term incapacity benefit unless it is

payable at the higher rate.

     (2)    In this section—

           (a)           “short-term incapacity benefit” means incapacity benefit payable

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under—

                  (i)                 section 30A(1) of SSCBA 1992, or

                  (ii)                section 30A(1) of SSCB(NI)A 1992;

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 4 — Taxable UK social security benefits: exemptions

    311

 

           (b)           the reference to short-term incapacity benefit payable at the higher rate

is to be construed in accordance with—

                  (i)                 section 30B of SSCBA 1992, or

                  (ii)                section 30B of SSCB(NI)A 1992.

Income support

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 665   Exempt unless payable to member of couple involved in trade dispute

     (1)    No liability to income tax arises on income support unless—

           (a)           the income support is payable to one member of a married or

unmarried couple (“the claimant”), and

           (b)           section 126 of SSCBA 1992 or section 125 of SSCB(NI)A 1992 (trade

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disputes) applies to the claimant but not to the other member of the

couple.

     (2)    In this section “married couple” and “unmarried couple” have the same

meaning as in section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A

1992.

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 666   Child maintenance bonus

No liability to income tax arises on a part of income support which is

attributable to a child maintenance bonus (within the meaning of section 10 of

CSA 1995 or Article 4 of CS(NI)O 1995).

 667   Amounts in excess of taxable maximum

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     (1)    If the amount of income support paid to a person (“the claimant”) for a week

or a part of week exceeds the claimant’s taxable maximum for that period, no

liability to income tax arises on the excess.

     (2)    The claimant’s taxable maximum for a period is determined under section 668.

 668   Taxable maximum

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     (1)    A claimant’s taxable maximum for a week is determined under this subsection

if the applicable amount for the purpose of calculating the income support

consists only of an amount in respect of the relevant couple.

            The taxable maximum is equal to one half of the applicable amount.

     (2)    A claimant’s taxable maximum for a week is determined under this subsection

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if the applicable amount includes amounts that are not in respect of the

relevant couple.

            The taxable maximum is equal to one half of the amount which is included in

the applicable amount in respect of the relevant couple.

     (3)    A claimant’s taxable maximum for a part of a week is determined as follows—

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Step 1

            Assume that the income support is paid to the claimant for the whole of, rather

than part of, the week.

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 4 — Taxable UK social security benefits: exemptions

    312

 

Step 2

            Determine under subsection (1) or (2) what the claimant’s taxable maximum

for that week would be on that assumption.

Step 3

            Determine the claimant’s taxable maximum for the part of the week using this

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formula—equation: times[cross[over[char[N],num[7.00000000,"7"]],char[T]],char[M],char[W]]

            where—

                    N is the number of days in the part of the week for which the claimant is

actually paid the income support, and

                    TMW is the taxable maximum for the whole week determined under step

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2.

 669   Interpretation

     (1)    In sections 667 and 668, except in relation to Northern Ireland—

                    “applicable amount” means the amount prescribed in relation to income

support in regulations made under section 135 of SSCBA 1992;

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                    “married couple” and “unmarried couple” have the same meaning as in

section 137(1) of SSCBA 1992.

     (2)    In sections 667 and 668, in relation to Northern Ireland—

                    “applicable amount” means the amount prescribed in relation to income

support in regulations made under section 131 of SSCB(NI)A 1992;

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                    “married couple” and “unmarried couple” have the same meaning as in

section 133(1) of SSCB(NI)A 1992.

     (3)    In section 668 “relevant couple”, in relation to a claimant, means the married or

unmarried couple of which the claimant is a member.

Jobseeker’s allowance

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 670   Child maintenance bonus

No liability to income tax arises on a part of a jobseeker’s allowance which is

attributable to a child maintenance bonus (within the meaning of section 10 of

CSA 1995 or Article 4 of CS(NI)O 1995).

 671   Amounts in excess of taxable maximum

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     (1)    If the amount of jobseeker’s allowance paid to a person (“the claimant”) for a

week or a part of a week exceeds the claimant’s taxable maximum for that

period, no liability to income tax arises on the excess.

     (2)    The claimant’s taxable maximum for a period is determined under sections 672

to 674.

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 672   Taxable maximum: general

     (1)    A claimant’s taxable maximum for a week is determined—

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 4 — Taxable UK social security benefits: exemptions

    313

 

           (a)           under section 673, if the claimant is paid an income-based jobseeker’s

allowance for that week, or

           (b)           under section 674, if the claimant is paid a contribution-based

jobseeker’s allowance for that week.

     (2)    A claimant’s taxable maximum for a part of a week is determined as follows—

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Step 1

            Assume that the jobseeker’s allowance is paid to the claimant for the whole of,

rather than part of, the week.

Step 2

            Determine under section 673 or 674 what the claimant’s taxable maximum for

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that week would be on that assumption.

Step 3

            Determine the claimant’s taxable maximum for the part of the week using this

formula—equation: times[cross[over[char[N],num[7.00000000,"7"]],char[T]],char[M],char[W]]

            where—

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                    N is the number of days in the part of the week for which the claimant is

actually paid the jobseeker’s allowance, and

                    TMW is the taxable maximum for the whole week determined under step

2.

 673   Taxable maximum: income-based jobseeker’s allowance

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     (1)    A claimant’s taxable maximum for a week is determined under this section if—

           (a)           the claimant is paid an income-based jobseeker’s allowance for that

week, or

           (b)           the claimant is assumed under section 672(2) to be paid an income-

based jobseeker’s allowance for that week.

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     (2)    If the claimant is not a member of a married or unmarried couple, the

claimant’s taxable maximum for the week is equal to the age-related amount

which would be applicable to the claimant if a contribution-based jobseeker’s

allowance were payable to the claimant for that week.

     (3)    If the claimant is a member of a married or unmarried couple, the claimant’s

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taxable maximum for the week is equal to the portion of the applicable amount

which is included in the jobseeker’s allowance in respect of the couple for that

week.

     (4)    But if—

           (a)           the claimant is a member of a married or unmarried couple, and

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           (b)           the other member of that couple is prevented by section 14 of JSA 1995

or Article 16 of JS(NI)O 1995 (trade disputes) from being entitled to a

jobseeker’s allowance,

            the claimant’s taxable maximum for that week is equal to half the portion of the

applicable amount which is included in the jobseeker’s allowance in respect of

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the couple for that week.

 

 

 
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