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Income Tax (Earnings and Pensions) Bill


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

    528

 

       “95            Exemptions in relation to approved share incentive plans

              (1)             This section forms part of the SIP code (see section 488 of the Income

Tax (Earnings and Pensions) Act 2003 (approved share incentive

plans)).

              (2)             Accordingly, expressions used in this section and contained in the

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index at the end of Schedule 2 to that Act (approved share incentive

plans) have the meaning indicated by that index.

              (3)             Where, under an approved share incentive plan, partnership shares

or dividend shares are transferred by the trustees to an employee—

                    (a)                   no ad valorem stamp duty is chargeable on any instrument

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by which the transfer is made, and

                    (b)                   no stamp duty reserve tax is chargeable on any agreement by

the trustees to make the transfer.

              (4)             But subsection (3) does not apply to—

                    (a)                   any instrument executed (within the meaning of the Stamp

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Act 1891) before 6th April 2003, or

                    (b)                   any agreement to transfer shares made before that date.”

  258     (1)      In Schedule 22 (remediation of contaminated land), amend paragraph 5 as

follows.

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

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

employees of the company;”

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

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

treated as earnings which constitute employment income (see

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

Act 2003).”

Social Security Contributions (Share Options) Act 2001 (c. 20)

  259      The Social Security Contributions (Share Options) Act 2001 is amended as

follows.

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  260      In section 2(3)(b) (effect of notice under section 1) for “section 135(3)(a) of the

Income and Corporation Taxes Act 1988” substitute “section 479 of the

Income Tax (Earnings and Pensions) Act 2003”.

  261     (1)      Amend section 3 (special provision for roll-overs) as follows.

          (2)      In subsection (4)(a) for “section 136(1) of the Income and Corporation Taxes

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Act 1988” substitute “section 485(1) to (4) of the Income Tax (Earnings and

Pensions) Act 2003”.

          (3)      In subsection (4)(b)(i) for “section 135(3)(a)” substitute “section 479”.

          (4)      For subsection (6) substitute—

                              “(6) Subject to subsection (7), in relation to the replacement right or

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any subsequent right, section 485(1) to (3) of the Income Tax

(Earnings and Pensions) Act 2003 (application of Chapter 5 of Part 7

where share option exchanged for another) shall be deemed to have

 

 

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

    529

 

              effect (or, as the case may be, to have had effect) for the purposes of

the determination mentioned in subsection (5) of this section—

                    (a)                   as if that section had effect (or, as the case may be, had had

effect) in relation to that right to the extent only that it is a

right to acquire additional shares; and

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                    (b)                   as if the value of the consideration for the grant of the original

right had been nil.”

          (5)      In subsection (7)(b) for “section 135 of the Income and Corporation Taxes Act

1988” substitute “Chapter 5 of Part 7 of the Income Tax (Earnings and

Pensions) Act 2003”.

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          (6)      In subsection (11)(a) for “section 135(3)(a) of the Income and Corporation

Taxes Act 1988” substitute “section 479 of the Income Tax (Earnings and

Pensions) Act 2003”.

  262      In section 5(2)(c) (interpretation)—

              (a)             for “subsection (8) of section 135 of the Income and Corporation

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Taxes Act 1988 (c. 1)” substitute “section 483(1) of the Income Tax

(Earnings and Pensions) Act 2003”; and

              (b)             for “that section” substitute “Chapter 5 of Part 7 of that Act”.

State Pension Credit Act 2002 (c. 16)

  263     (1)      Section 17(1) of the State Pension Credit Act 2002 (other interpretation

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provisions) is amended as follows.

          (2)      In paragraph (b) of the definition of “foreign war disablement pension” for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

(c. 1)” substitute “section 641 of the Income Tax (Earnings and Pensions) Act

2003”.

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          (3)      In paragraph (b) of the definition of “foreign war widow’s or widower’s

pension” for “section 315(2)(e) of the Income and Corporation Taxes Act

1988” substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and

Pensions) Act 2003”.

          (4)      In paragraph (b) of the definition of “war disablement pension”, for

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“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

(c. 1)” substitute “any of paragraphs (a) to (f) of section 641(1) of the Income

Tax (Earnings and Pensions) Act 2003”.

          (5)      In paragraph (b) of the definition of “war widow’s or widower’s pension”

for “section 315(2)(e) of the Income and Corporation Taxes Act 1988”

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substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions)

Act 2003”.

Tax Credits Act 2002 (c. 21)

  264      The Tax Credits Act 2002 is amended as follows.

  265     (1)      Amend section 25 (payments of working tax credit by employers) as follows.

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          (2)      In subsection (1) for “Schedule E payments” substitute “payments of, or on

account of, PAYE income”.

          (3)      In subsection (5) for “Schedule E payment” substitute “payment of, or on

account of, PAYE income”.

          (4)      Omit subsection (6).

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

    530

 

  266      In section 29(5) (recovery of overpayments) for “regulations under section

203(2)(a) of the Income and Corporation Taxes Act 1988 (c. 1) (PAYE)”

substitute “PAYE regulations”.

State Pension Credit Act (Northern Ireland) 2002 (c. 14 (N.I.))

  267     (1)      Section 17(1) of the State Pension Credit Act (Northern Ireland) 2002 (other

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interpretation provisions) is amended as follows.

          (2)      In paragraph (b) of the definition of “foreign war disablement pension” for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

(c. 1)” substitute “section 641 of the Income Tax (Earnings and Pensions) Act

2003”.

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          (3)      In paragraph (b) of the definition of “foreign war widow’s or widower’s

pension” for “section 315(2)(e) of the Income and Corporation Taxes Act

1988” substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and

Pensions) Act 2003”.

          (4)      In paragraph (b) of the definition of “war disablement pension”, for

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“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

(c. 1)” substitute “any of paragraphs (a) to (f) of section 641(1) of the Income

Tax (Earnings and Pensions) Act 2003”.

          (5)      In paragraph (b) of the definition of “war widow’s or widower’s pension”

for “section 315(2)(e) of the Income and Corporation Taxes Act 1988”

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substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions)

Act 2003”.

Certain corresponding Northern Ireland provision

  268     (1)      This paragraph applies if provision is made for Northern Ireland which

corresponds to section 171ZJ of the Social Security Contributions and

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Benefits Act 1992 (c. 4) (Part 12ZA — statutory paternity pay:

supplementary) (which was inserted by section 2 of the Employment Act

2002 (c. 22)).

          (2)      In the Northern Ireland provision any reference to emoluments chargeable

to income tax under Schedule E is to be construed as a reference to general

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earnings (as defined by section 7 of this Act).

  269     (1)      This paragraph applies if provision is made for Northern Ireland which

corresponds to section 171ZS of the Social Security Contributions and

Benefits Act 1992 (Part 12ZA — statutory adoption pay: supplementary)

(which was inserted by section 4 of the Employment Act 2002).

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          (2)      In the Northern Ireland provision any reference to emoluments chargeable

to income tax under Schedule E is to be construed as a reference to general

earnings (as defined by section 7 of this Act).

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 2 — Employment income: charge to tax

    531

 

Schedule 7

Section 723

 

Transitionals and savings

Part 1

Continuity of the law

  1        The repeal of provisions and their enactment in a rewritten form in this Act

5

does not affect the continuity of the law.

  2        Paragraph 1 does not apply to any change in the law made by this Act.

  3        Any subordinate legislation or other thing which—

              (a)             has been made or done, or has effect as if made or done, under or for

the purposes of a repealed provision, and

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              (b)             is in force or effective immediately before the commencement of the

corresponding rewritten provision,

           has effect after that commencement as if made or done under or for the

purposes of the rewritten provision.

  4        Any reference (express or implied) in any enactment, instrument or

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document to—

              (a)             a rewritten provision, or

              (b)             things done or falling to be done under or for the purposes of a

rewritten provision,

           is to be read as including, in relation to times, circumstances or purposes in

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relation to which any corresponding repealed provision had effect, a

reference to the repealed provision or (as the case may be) things done or

falling to be done under or for the purposes of the repealed provision.

  5        Any reference (express or implied) in any enactment, instrument or

document to—

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              (a)             a repealed provision, or

              (b)             things done or falling to be done under or for the purposes of a

repealed provision,

           is to be read as including, in relation to times, circumstances or purposes in

relation to which any corresponding rewritten provision has effect, a

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reference to the rewritten provision or (as the case may be) things done or

falling to be done under or for the purposes of the rewritten provision.

  6        Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act

1978 (c. 30) (but are without prejudice to any other provision of that Act).

  7        Paragraphs 4 and 5 apply only in so far as the context permits.

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Part 2

Employment income: charge to tax

Taxable earnings

  8       (1)      The charging provisions of Chapters 4 and 5 of Part 2—

              (a)             apply for the purpose of determining taxable earnings from an

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employment in the tax year 2003-04 or any later tax year, and

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 2 — Employment income: charge to tax

    532

 

              (b)             accordingly apply where (for the purposes of those Chapters)

general earnings are received, or remitted to the United Kingdom, in

that or any later tax year.

          (2)      But they apply to general earnings for a tax year before the tax year 2003-04,

as well as to those for that or any later year.

5

                   This is subject to sub-paragraph (3).

          (3)      If—

              (a)             any general earnings within subsection (1) of section 22 (chargeable

overseas earnings) or 26 (foreign earnings of resident employee) are

for a tax year before 1989-90,

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              (b)             the earnings are remitted to the United Kingdom in the tax year 2003-

04 or any later tax year (“the remittance year”), and

              (c)             either—

                    (i)                   the employee is not resident in the United Kingdom in the

remittance year, or

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                    (ii)                  the employment is not held in the remittance year,

                   subsection (2) of section 22 or 26 does not apply to the earnings.

          (4)      Section 30 (treatment of earnings for year in which employment not held)

does not apply where any of the tax years mentioned in subsection (2) or (3)

of that section is a tax year before the tax year 1989-90.

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Relief for delayed remittances

  9       (1)      This paragraph applies where one or more of the earlier tax years referred to

in section 35(3)(b) (treatment of delayed remittances as taxable earnings in

earlier tax years) is a tax year before the tax year 2003-04.

          (2)      References (whether express or implied) in sections 35 and 36 to earnings

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constituting or being treated as taxable earnings from the employment

under section 22(2) or 26(2) in such an earlier tax year are to be construed for

the purposes of the charging of income tax under Case III of Schedule E in

that year as references to earnings constituting or being treated as

emoluments of the employment falling within that Case and received in the

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United Kingdom in that year.

          (3)      For the purposes of this paragraph the reference in sub-paragraph (2) to the

receipt of income in the United Kingdom is to be construed in accordance

with section 132(5) of ICTA (meaning of emoluments received in the United

Kingdom).

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  10       Section 36(2) (the definition of “blocked earnings”) applies in relation to

emoluments of the employment received in a country or territory outside

the United Kingdom in a tax year before the tax year 2003-04 with the

substitution of—

              (a)             “Emoluments” for “General earnings”, and

40

              (b)             the following paragraph for paragraph (c)—

                             “(c)                               would have constituted emoluments of the

employment on which income tax would have

been charged under Case III of Schedule E in that

year if they had been so transferred.”.

45

  11      (1)      This paragraph applies where a claimant—

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 2 — Employment income: charge to tax

    533

 

              (a)             makes an election under section 36 for the purposes of a claim for

relief under section 35, and

              (b)             has made a previous claim for relief under section 585 of ICTA (relief

from tax on delayed remittances) in respect of delayed remittances

from the same employment.

5

          (2)      Section 36(6) (limit on amount of remittances allocated to a previous tax

year) applies as if, in the definition of “PC”, the reference to the amount of

remittances treated as taxable earnings from the employment in the tax year

in question as a result of a previous claim by the claimant under section 35

includes a reference to the amount of remittances treated as income from the

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employment received in the United Kingdom in that year as a result of a

previous claim by the claimant under section 585 of ICTA.

          (3)      For the purposes of this paragraph the reference in sub-paragraph (2) to the

receipt of income in the United Kingdom is to be construed in accordance

with section 132(5) of ICTA (meaning of emoluments received in the United

15

Kingdom).

Disputes as to domicile or ordinary residence

  12      (1)      Nothing in sections 42 and 43 (disputes as to domicile or ordinary residence)

has effect where the dispute relates to the amount of income charged to tax

for the tax year 2002-03 or any earlier tax year.

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          (2)      Nothing in those sections—

              (a)             as applied by section 645(4C) of ICTA (earnings from pensionable

employment) or section 76(6E) of FA 1989 (non-approved retirement

benefits schemes) has effect where the dispute relates to the amount

of income charged to tax for the tax year 2002-03 or any earlier tax

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year, or

              (b)             as applied by section 9(2) of TCGA 1992 (residence, including

temporary residence) has effect where the dispute relates to the

amount of capital gains tax charged for the tax year 2002-03 or any

earlier tax year.

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          (3)      Accordingly, section 207 of ICTA (disputes as to domicile or ordinary

residence) continues to apply to the disputes mentioned in sub-paragraphs

(1) and (2) whether they arise before or after 6th April 2003.

Application of provisions to agency workers

  13       In relation to times before 6th April 2003, Chapter 7 of Part 2 applies with the

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following modifications—

              (a)             references to “employment income of the worker” are to be read as

references to “income of the worker chargeable to tax under

Schedule E”,

              (b)             references to “earnings” are to be read as references to

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“emoluments”, and

              (c)             references to “this Chapter” are to be read as references to “section

134 of ICTA”.

  14       Section 44(2) does not apply in relation to—

              (a)             payments made before 6th April 1998 other than payments made in

45

respect of services provided on or after that date, or

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 3 — Employment income: earnings and benefits etc. treated as earnings

    534

 

              (b)             payments made on or after that date in respect of services provided

before that date,

           if in providing the services the worker is or would be a sub-contractor within

the meaning of section 560 of ICTA (sub-contractors in the construction

industry).

5

Part 3

Employment income: earnings and benefits etc. treated as earnings

Taxable benefits: dispensations relating to benefits within provisions not applicable to lower-

paid employments

  15      (1)      An existing notification—

10

              (a)             is not affected by any of the repeals made by this Act, but

              (b)             continues in force as if it were a dispensation given under section 65

(dispensations relating to benefits within provisions not applicable

to lower-paid employment),

                   and accordingly, where an existing notification is revoked under that section

15

for any period before 6th April 2003, subsection (8) or (9) of that section

extends to tax years before the tax year 2003-04.

          (2)      In this paragraph an “existing notification”—

              (a)             means a notification which, immediately before 6th April 2003, was

in force under section 166(1) of ICTA (notice of nil liability in respect

20

of payments, benefits or facilities); and

              (b)             includes a notification whose validity was preserved by subsection

(4) of that section (notifications given under section 199 of FA 1970);

                   but a notification within paragraph (b) only continues to have effect under

this paragraph in respect of any liability to tax arising by virtue of Chapter 3

25

(expenses) or 10 (residual liability to charge) of Part 3.

  16      (1)      This paragraph applies if—

              (a)             mileage allowance payments are made to an employee in respect of

the use of a vehicle that is not a company vehicle, or

              (b)             mileage allowance relief is available in respect of the use by an

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employee of a vehicle.

          (2)      Any notification under section 166(1) of ICTA (notice of nil liability in

respect of payments, benefits or facilities) which—

              (a)             was in force immediately before 6th April 2002, and

              (b)             has effect as a dispensation under section 65 (dispensations relating

35

to benefits within provisions not applicable to lower-paid

employment),

                   does not apply in relation to payments made, or benefits or facilities

provided, in respect of expenses incurred in connection with the use of the

vehicle by the employee for business travel.

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          (3)      In this paragraph “business travel”, “company vehicle” and “mileage

allowance payment” have the same meanings as in Chapter 2 of Part 4.

 

 

 
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