House of Lords portcullis
House of Lords
Session 2002 - 03
Internet Publications
Other Bills before Parliament

Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    522

 

                           (2)               (enterprise management incentives) have the meaning indicated

by the index.

                           (3)               In this Part of this Schedule, “qualifying shares”—

                      (a)                     means shares acquired by the exercise of a qualifying

option, subject to sub-paragraphs (4) and (5), and

5

                      (b)                     includes shares (“replacement shares”) which—

                             (i)                            are treated under section 127 (equation of original

shares and new holding) as the same asset as a

holding of qualifying shares, and

                             (ii)                           meet the requirements of paragraph 35 of Schedule

10

5 to ITEPA 2003 (type of shares that may be

acquired).

                           (4)               If a disqualifying event occurs in relation to a qualifying option

(whether the original option or a replacement option), shares

acquired by the exercise of that option are qualifying shares only

15

if the option is exercised within 40 days of that event.

                           (5)               References in this Part of this Schedule to “the original option”,

where there has been one or more replacement options, are to the

option that the replacement option (or, if there has been more than

one, the first of them) replaced.

20

Taper relief on disposal of qualifying shares

          15                For the purposes of computing taper relief on a disposal of

qualifying shares, the shares are treated as if they had been

acquired when the original option was granted.

Rights issues in respect of qualifying shares

25

          16                Where—

                      (a)                     an individual holds qualifying shares, and

                      (b)                     there is, by virtue of any such allotment for payment as is

mentioned in section 126(2)(a) (allotment in proportion to

shareholdings), a reorganisation affecting that holding,

30

                            sections 127 to 130 (which relate to reorganisation or reduction of

share capital) shall not apply in relation to that holding.”

Pension Schemes Act 1993 (c. 48)

  222      In section 181(1) of the Pension Schemes Act 1993 (general interpretation), in

the definition of “employee” for “emoluments chargeable to income tax

35

under Schedule E” substitute “general earnings (as defined by section 7 of

the Income Tax (Earnings and Pensions) Act 2003)”.

Pension Schemes (Northern Ireland) Act 1993 (c. 49)

  223      In section 176(1) of the Pension Schemes (Northern Ireland) Act 1993

(general interpretation), in the definition of “employee” for “emoluments

40

chargeable to income tax under Schedule E” substitute “general earnings (as

defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003)”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    523

 

Finance Act 1994 (c. 9)

  224     (1)      In the Finance Act 1994, paragraph 27 of Schedule 24 (provisions relating to

the Railways Act 1993 — employee benefits: transport vouchers) is amended

as follows.

          (2)      In sub-paragraph (3) for “Subsection (6) of section 141 of the Taxes Act 1988”

5

substitute “Section 86 of ITEPA 2003”.

          (3)      In sub-paragraph (3)(c) for “paragraphs (a) to (d) of that subsection”

substitute “section 86(2)(a) to (d) of ITEPA 2003”.

          (4)      In sub-paragraph (12) after the definition of “the former transport voucher

benefits for comparable employees” insert—

10

                                                        ““ITEPA 2003” means the Income Tax (Earnings and

Pensions) Act 2003.”

          (5)      For sub-paragraph (13) substitute—

                           “(13)                             Subject to paragraph 1(1) and sub-paragraph (12)

above, expressions used in this paragraph and in

15

section 86 of ITEPA 2003 have the same meaning in

this paragraph as in that section.

                                                        This does not apply in relation to the reference to a

transport voucher in sub-paragraph (1) above.”

Finance Act 1995 (c. 4)

20

  225      The Finance Act 1995 is amended as follows.

  226     (1)      Amend section 128 (limit on income chargeable on non-residents: income

tax) as follows.

          (2)      For subsection (3)(c) substitute—

                    “(cc)                      it is chargeable to tax under Part 9 of ITEPA 2003 (pension

25

income) because section 577 or 605 of that Act applies to it

(UK social security pensions and retirement annuity

contracts);

                    (cd)                      it arises from a source in the United Kingdom and is

chargeable to tax under Part 9 of ITEPA 2003 because section

30

609, 610 or 611 of that Act applies to it (certain employment-

related annuities);

                    (ce)                      it is a taxable benefit listed in Table A in section 660 of ITEPA

2003, other than income support or jobseeker’s allowance,

chargeable to tax under Part 10 of that Act (social security

35

income);”

          (3)      In subsection (3)(d) for “paragraphs (a) to (c)” substitute “paragraphs (a) to

(ce)”.

          (4)      For subsection (11) substitute—

              “(11)                In this section—

40

                                      “investment transaction” has the same meaning as in section

127 above;

                                      “ITEPA 2003” means the Income Tax (Earnings and Pensions)

Act 2003.”

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    524

 

  227      In section 137(7) (part-time workers: miscellaneous provisions) for

“Subsections (2) to” substitute “Subsection”.

Jobseekers Act 1995 (c. 18)

  228      The Jobseekers Act 1995 is amended as follows.

  229      In section 15(2)(c)(i) (effect on other claimants) for “emoluments in

5

pursuance of section 203 of the Income and Corporation Taxes Act 1988

(PAYE)” substitute “taxable earnings (as defined by section 10 of the Income

Tax (Earnings and Pensions) Act 2003) under PAYE regulations”.

  230      In section 26(3) (the back to work bonus) for the words from “Subject to

section 617” to “not to be taxable)” substitute “Subject to section 677 of the

10

Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to

work bonus not to be taxable)”.

Child Support Act 1995 (c. 34)

  231      For section 10(4) of the Child Support Act 1995 (child maintenance bonus)

substitute—

15

              “(4)                Subsection (3) is subject to section 677 of the Income Tax (Earnings

and Pensions) Act 2003 (which provides for a back to work bonus not

to be taxable).”

Child Support (Northern Ireland) Order 1995 (S.I. 1995/2702 (N.I. 13))

  232      For Article 4(4) of the Child Support (Northern Ireland) Order 1995 (child

20

maintenance bonus) substitute—

              “(4)                Paragraph (3) is subject to section 677 of the Income Tax (Earnings

and Pensions) Act 2003 (which provides for a back to work bonus not

to be taxable).”

Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15))

25

  233      The Jobseekers (Northern Ireland) Order 1995 is amended as follows.

  234      In Article 17(2)(c)(i) (effect on other claimants) for “emoluments in

pursuance of section 203 of the Income and Corporation Taxes Act 1988

(PAYE)” substitute “taxable earnings (as defined by section 10 of the Income

Tax (Earnings and Pensions) Act 2003 under regulations made under section

30

684 of that Act (PAYE regulations)”.

  235      In Article 28(3) (the back to work bonus) for the words from “Subject to

section 617” to “not to be taxable)” substitute “Subject to section 677 of the

Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to

work bonus not to be taxable)”.

35

Teaching and Higher Education Act 1998 (c. 30)

  236      In section 22 of the Teaching and Higher Education Act 1998 (new

arrangements for giving financial support to students)—

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    525

 

              (a)             in subsection (5)(g) for “regulations under section 203 of the Income

and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE

regulations”; and

              (b)             in subsection (6)(a) for “income assessable to income tax under

Schedule E” substitute “PAYE income”.

5

Scotland Act 1998 (c. 46)

  237      In section 79(3) of the Scotland Act 1998 (supplemental powers to modify

enactments) for “section 203 of the Income and Corporation Taxes Act 1988

(PAYE)” substitute “PAYE regulations”.

Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14))

10

  238      In Article 3 of the Education (Student Support) (Northern Ireland) Order

1998 (new arrangements for giving financial support to students)—

              (a)             in paragraph (5)(g) for “section 203 of the Income and Corporation

Taxes Act 1988 (PAYE)” substitute “section 684 of the Income Tax

(Earnings and Pensions) Act 2003 (PAYE regulations)”; and

15

              (b)             in paragraph (6)(a) for “income assessable to income tax under

Schedule E” substitute “PAYE income (as defined in section 683 of

the Income Tax (Earnings and Pensions) Act 2003”.

Tax Credits Act 1999 (c. 10)

  239      The Tax Credits Act 1999 is amended as follows.

20

  240      In section 6(1) (payment of tax credit by employers etc.) for “income

assessable to income tax under Schedule E” substitute “PAYE income”.

  241      In paragraph 10(1) of Schedule 2 (transfer of functions), in paragraph (b) of

the subsection which, in any case where the overpayment was made in

respect of tax credit, is treated as substituted for—

25

              (a)             subsection (8) of section 71 of the Social Security Administration Act

1992 (c. 5); and

              (b)             subsection (8) of section 69 of the Social Security Administration

(Northern Ireland) Act 1992 (c. 8),

           for “section 203(2)(a) of the Income and Corporation Taxes Act 1988 (PAYE)”

30

substitute “PAYE regulations”.

Finance Act 2000 (c. 17)

  242      The Finance Act 2000 is amended as follows.

  243     (1)      Amend section 38 (payroll deduction scheme) as follows.

          (2)      In subsection (1)—

35

              (a)             for “under section 202 of the Taxes Act 1988” substitute “for the

purposes of section 714 of the Income Tax (Earnings and Pensions)

Act 2003”,

              (b)             for “an employer” substitute “a person”,

              (c)             for “employee” substitute “individual”, and

40

              (d)             for “employer”, in the second place where it occurs, substitute

“person”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    526

 

          (3)      In subsection (4) for the definitions of “agent”, “employee” and “employer”

substitute—

               ““agent” means an agent approved for the purposes of section 714 of

the Income Tax (Earnings and Pensions) Act 2003;”.

  244     (1)      Amend Schedule 12 (provision of services through an intermediary) as

5

follows.

          (2)      In paragraph 17—

              (a)             for “deemed Schedule E payment”, in each place, substitute “deemed

employment payment”; and

              (b)             after sub-paragraph (3) insert—

10

                 “(4)                                               In this paragraph and paragraph 18 expressions that are

also used in Chapter 8 of Part 2 of the Income Tax

(Earnings and Pensions) Act 2003 have the same meaning

as in that Chapter.”

          (3)      In paragraph 18—

15

              (a)             in sub-paragraph (1) for “deemed Schedule E payment” substitute

“deemed employment payment”; and

              (b)             in sub-paragraph (3)(a) for “Schedule E” substitute “the employment

income Parts of the Income Tax (Earnings and Pensions) Act 2003”.

  245     (1)      In Schedule 20 (tax relief for expenditure of research and development),

20

amend paragraph 5 as follows.

          (2)      For sub-paragraph (1)(a) substitute—

                      “(a)                                                the earnings paid by the company to directors or

employees of the company;”

          (3)      After sub-paragraph (1) insert—

25

          “(1ZA)                  In sub-paragraph (1)(a) “earnings” means earnings or amounts

treated as earnings which constitute employment income (see

section 7(2)(a) or (b) of the Income Tax (Earnings and Pensions)

Act 2003).”

Capital Allowances Act 2001 (c. 2)

30

  246      The Capital Allowances Act 2001 is amended as follows.

  247     (1)      Amend section 4 (capital expenditure) as follows.

          (2)      For subsection (2)(b) substitute—

                                          “(b) any expenditure or sum that may be allowed as a

deduction under a relevant provision from the taxable

35

earnings from an employment or office held by the person.”

          (3)      After subsection (2) insert—

                              “(2A) In subsection (2)—

                                      “relevant provision” means any of the following—

                           (a)                          section 262;

40

                           (b)                          section 232 of ITEPA 2003 (giving effect to mileage

allowance relief);

                           (c)                          Chapters 2 to 6 of Part 5 of that Act (general

deductions allowed from earnings); and

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    527

 

                           (d)                          sections 613(1), 619 and 639 of ICTA (contributions to

pensions funds etc.), and

                                      “taxable earnings” has the meaning given by section 10 of

ITEPA 2003.”

          (4)      In subsection (3) for “emoluments” substitute “earnings”.

5

  248     (1)      Amend section 20 (employments and offices) as follows.

          (2)      In subsection (2)—

              (a)             for “emoluments” substitute “earnings”; and

              (b)             for “do not fall within Case I or II of Schedule E” substitute “fall

within section 22 or 26 of ITEPA 2003”.

10

          (3)      In subsection (3)—

              (a)             for “those emoluments” substitute “those earnings”; and

              (b)             for “other emoluments” substitute “other taxable earnings (as

defined by section 10 of ITEPA 2003)”.

  249      In section 61(2) (disposal events and disposal values), in entry 2(b) of the

15

Table, for “Schedule E” substitute “ITEPA 2003”.

  250      In section 63(1) (cases in which disposal value is nil) for “Schedule E”

substitute “ITEPA 2003”.

  251      In section 72(3) (disposal values), in entry 2(b) of the Table, for “Schedule E”

substitute “ITEPA 2003”.

20

  252      In section 88(c) (sales at under-value) for “Schedule E” substitute “ITEPA

2003”.

  253      In section 262 (employments and offices)—

              (a)             in paragraph (a) for “an amount to be deducted from the

emoluments of” substitute “a deduction from the taxable earnings

25

from”; and

              (b)             in paragraph (b) for “an emolument” substitute “earnings”.

  254      In section 423(1) (disposal value for sections 421 and 422), in entry 2(b) of the

Table, for “Schedule E” substitute “ITEPA 2003”.

  255      At the end of Part 1 of Schedule 1 (abbreviations) insert—

30

 

“ITEPA 2003

The Income Tax (Earnings and Pensions) Act 2003”.

 

  256      In Part 2 of Schedule 1 (defined expressions used in the Act), in the entry

relating to “United Kingdom”, after “section 830 of ICTA” insert “and section

41 of ITEPA 2003”.

Finance Act 2001 (c. 9)

35

  257      For section 95 of the Finance Act 2001 (exemptions in relation to employee

share ownership plans) substitute—

 

 

 
previous section contents continue
 
House of Lords home page Houses of Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 2003
Revised 17 February 2003