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Income Tax Act 2003


Published: 2015-04-06

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Income Tax Act 2003

c i e
AT 11 of 2003

INCOME TAX ACT 2003

Income Tax Act 2003 Index


c AT 11 of 2003 Page 3

c i e
INCOME TAX ACT 2003

Index Section Page

PART 1 – PERSONAL ALLOWANCE CREDIT 5

Purpose 5

1 Introduction ..................................................................................................................... 5
Qualification for credit 5

2 Qualification for credit: individuals ............................................................................. 5
3 Qualification for credit: joint assessment of married couples and civil
partners ............................................................................................................................ 6
4 Qualification for credit: supplementary ...................................................................... 7
Calculation of credit 7

5 Credit: individuals .......................................................................................................... 7
6 Credit: married couples and civil partners ................................................................. 7
7 Calculation of credit where obligation to submit return suspended ...................... 8
8 Revision of credit ............................................................................................................ 8
Claim and payment 9

9 Form of claim ................................................................................................................... 9
10 Credit notices ................................................................................................................... 9
11 Payment of credit .......................................................................................................... 10
General 10

12 Nature of credit ............................................................................................................. 10
13 Set-off .............................................................................................................................. 10
14 Regulations .................................................................................................................... 10
15 Interpretation ................................................................................................................. 11
16 Commencement ............................................................................................................ 12
PART 2 12

17 [Repealed] ...................................................................................................................... 12
18 [Repealed] ...................................................................................................................... 12
Index Income Tax Act 2003


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PART 3 – INFORMATION: INTERNATIONAL OBLIGATIONS 12

19 to 22 [Repealed] ............................................................................................................ 12
PART 4 – MISCELLANEOUS AMENDMENTS AND GENERAL 12

Amendments 12

23 [Repealed] ...................................................................................................................... 12
24 to 28 [Repealed] ............................................................................................................ 12
General 12

29 Interpretation ................................................................................................................ 12
30 Financial provision ....................................................................................................... 12
31 Short title, construction and commencement ........................................................... 12
ENDNOTES 15

TABLE OF LEGISLATION HISTORY 15
TABLE OF RENUMBERED PROVISIONS 15
TABLE OF ENDNOTE REFERENCES 15

Income Tax Act 2003 Section 1


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c i e
INCOME TAX ACT 2003

Received Royal Assent: 22 October 2003
Passed: 22 October 2003
Commenced: See endnotes
AN ACT
to introduce Personal Allowance Credit; to provide for confidential
information and the supply and use of that information; to provide for the
implementation of international information exchange agreements; to make
certain amendments to the Income Tax Acts; and for connected purposes.
PART 1 – PERSONAL ALLOWANCE CREDIT

Purpose
1 Introduction

(1) The purpose of this Part is to provide for annual payments (to be known
as “Personal Allowance Credit
”) to be made through the income tax
system to certain residents with low incomes (in this Part those payments
are referred to as “credit
”).
(2) Credit is under the care and management of the Treasury.
(3) Credit will be granted only if a claim is made for it in the correct manner.
Qualification for credit
2 Qualification for credit: individuals

(1) Subject to subsection (2), a claim for credit may be made by an individual
who —
(a) was resident in the Island for the whole year of assessment in
respect of which the payment is made; and
(b) was —
(i) aged at least 65 at the commencement of that year of
assessment;
Section 3 Income Tax Act 2003


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(ii) entitled to Blind Person’s Allowance in accordance with
section 35A of the Income Tax Act 1970 (allowance for
blind persons) during that year of assessment; or
(iii) entitled to Disabled Person’s Allowance in accordance with
section 35B of the Income Tax Act 1970 (allowance for
disabled persons) during that year of assessment.1

(2) A claim for credit may not be made in respect of a year of assessment if
the individual —
(a) was in full time education at any time during the year of
assessment;
(b) was serving an immediate sentence of custody for the whole of
the year of assessment; or
(c) was the spouse of an individual whose income tax liability for the
year of assessment was capped.
(3) Subsection (1) does not apply in respect of an individual who is qualified
under section 3 to make a claim for credit.
(4) In subsection (2)(c), “capped” means subject to an election approved by
the Assessor under section 2ZA of the Income Tax Act 1970.2

(5) [Repealed]3

(6) Subsection (2)(c) does not operate where a joint treatment election made
under section 65C of the 1970 Act is in force in respect of the individual
and the spouse.4

3 Qualification for credit: joint assessment of married couples and civil

partners
5

If the income of a married couple or civil partners is jointly assessed under
section 65A of the Income Tax Act 1970 (in this Act referred to as the “1970 Act
”)
(joint assessment of spouses or civil partners), a claim for credit may be made if
either of the parties to the marriage or civil partnership —
(a) was resident in the Island for the whole of the year of assessment
in respect of which the claim is made; and
(b) was —
(i) aged at least 65 at the commencement of that year of
assessment;
(ii) entitled to Blind Person’s Allowance in accordance with
section 35A of the Income Tax Act 1970 (allowance for
blind persons) during that year of assessment; or
(iii) entitled to Disabled Person’s Allowance in accordance with
section 35B of the Income Tax Act 1970 (allowance for
disabled persons) during that year of assessment;
Income Tax Act 2003 Section 4


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(c) was not in full time education at any time during the year of
assessment; and
(d) was not serving an immediate sentence of custody for the whole
of the year of assessment.6

4 Qualification for credit: supplementary

(1) In the case of an individual who —
(a) dies in any year of assessment, and
(b) was resident in the Island for the whole of the period from 6 April
in that year to the date on which he died,
he will be treated as complying with either section 2(1)(a) or 3(a) as the
case requires.
(2) Regulations made under section 14 may provide for the transitional
treatment of —
(a) persons who marry or form a civil partnership and (in either case)
commence to live together;7

(b) married couples or civil partners who separate,8

and section 65E(1) and (2) (meaning of “living together” and tax
treatment of non-resident spouses or civil partners) of the 1970 Act
applies for the purposes of this subsection.9

Calculation of credit
5 Credit: individuals

(1) If the gross income of any individual in any year of assessment is £9,500
(“the low income point”) or less, the credit in respect of that individual is
£400.10

(2) [Repealed]11

6 Credit: married couples and civil partners
12

(1) This section applies in respect of married couples or civil partners who
qualify under section 3.13

(2) If the joint gross income of a married couple or two persons who have
formed a civil partnership in any year of assessment is £19,000 (“the low
income point”) or less, the credit in respect of that couple is £800.14

(3) However, in the circumstances specified in subsection (4), the credit in
respect of a married couple or two persons who have formed a civil
partnership is half the sum specified in subsection (2).15
16

Section 7 Income Tax Act 2003


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(4) The circumstances are that one party to the marriage or civil partnership
does not satisfy the conditions in paragraphs (a) to (d) of section 3
(qualification for credit: joint assessment of married couples and civil
partners).17

(5) No credit is payable to the married couple or civil partners in respect of
the year of assessment if neither spouse or partner satisfies the conditions
in paragraphs (a) to (d) of section 3.18
19

7 Calculation of credit where obligation to submit return suspended

(1) This section applies in respect of cases in which the Assessor has
confirmed in writing that he does not require a return of income under
section 62 of the 1970 Act for the relevant year of assessment on the
ground that the Assessor is satisfied that the income of the individual or
married couple or civil partners is likely to be less than the low income
point under section 5 or 6 as the case requires.20

(2) In a case to which this section applies, the credit is —
(a) £400 in respect of an individual;21

(b) £800 in respect of a married couple or civil partners subject to
section 6(3).22

(3) Section 1(3) does not apply in respect of a case to which this section
applies.
8 Revision of credit

(1) If for any reason, the Assessor is satisfied that the amount of credit
specified in a credit notice is wrong or that the person concerned is not
qualified to receive credit, the Assessor may issue a revised credit notice
or give written notice that the person concerned is not qualified to
receive a credit.
(2) If the Assessor gives notice under subsection (1), then either —
(a) the Assessor may recover any overpayment in the same manner
as an assessment for income tax and section 98A of the 1970 Act
shall apply accordingly; or
(b) the Treasury shall, as soon as practicable after the issue of the
revised credit notice, pay any additional amount falling due
under the revised notice,
as the case requires.
Income Tax Act 2003 Section 9


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Claim and payment
9 Form of claim

(1) The claim for credit shall be in a form approved under section 95A of the
1970 Act and shall be delivered to the Assessor before the end of the year
following the year of assessment to which the credit applies or such
longer period as the Assessor may in writing permit.
(2) A claim for credit shall include such information as is required by the
form.
(3) If at any time any question arises under this Part in respect of any matter
relating to qualification for, or payment of, credit —
(a) the Assessor may require the claimant to furnish such further
information and documents as the Assessor may require to
determine that question; and
(b) the Assessor may consult the Social Security Division of the
Treasury.23

(4) A disclosure by the Social Security Division of the Treasury for the
purposes of subsection (3) shall not be treated as a breach of any
restriction upon the disclosure of information imposed by statute or
otherwise.24

10 Credit notices

(1) Where the Assessor is satisfied that a person is entitled to the payment of
credit, the Assessor shall cause a notice confirming that fact and showing
the amount of credit to be delivered to the person concerned.
(2) Where the Assessor is satisfied that a person is not entitled to the
payment of credit, the Assessor shall cause a notice confirming that fact
to be delivered to the person concerned if —
(a) a claim was made for credit; or
(b) if no claim was made, at the request of the person concerned.
(3) A notice by the Assessor under subsections (1) or (2) shall be delivered
within 12 months of a claim being made.
(4) The provisions of the Income Tax Acts in respect of contested
assessments shall apply in respect of credit notices under this section.
(5) In any case to which section 7 applies, the Assessor shall cause a credit
notice to be sent to the claimant before the end of the year following the
year of assessment to which the credit applies.
Section 11 Income Tax Act 2003


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11 Payment of credit

(1) The Treasury shall make arrangements for the payment of credit as soon
as practicable after the credit notice is sent in accordance with section 10.
(2) Subject to the following provisions of this section, where credit is paid by
the Treasury after the end of 12 months following that year of assessment
to which the credit applies, the repayment shall be increased under this
section by an amount (a “supplement”) equal to interest on the amount
of the credit at the prescribed rate for the period (if any) between the
relevant time and the end of the tax month in which the order for the
supplement is issued.
(3) For the purposes of subsection (2), the relevant time is the end of the 12
months mentioned in that subsection.
(4) A supplement paid to any person under this section shall not be income
of that person for any tax purposes.
(5) In this section —
“prescribed rate” means the rate of interest that applies from time to time for
the purposes of section 107A(1) of the 1970 Act (repayment supplement);
“tax month” means the period beginning with the 6th day of any calendar
month and ending with the 5th day of the following calendar month.
General
12 Nature of credit

Credit or the right to credit is not to be taken into account in calculating the
income or assets of any person for the purposes of income tax or any other
purpose under any statutory provision whether passed before or after this
section.
13 Set-off

Where the Treasury is liable to pay or repay any amount to any person under
this Part, that amount may be set off against any amount due to the Treasury in
respect of income tax (including interest on overdue tax under section 111A of
the 1970 Act) or Class 4 contributions under the Social Security Act 1975 (an Act
of Parliament) as that Act has effect in the Island.
14 Regulations

(1) The Treasury may make all such regulations as are necessary to carry
into effect this Part.
(2) Without prejudice to the generality of subsection (1), regulations may
include provision —
Income Tax Act 2003 Section 15


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(a) for the qualification for credit of persons who die during a year of
assessment;
(b) amending the amounts specified in sections 5, 6 and 7;25

(c) amending the marginal rate reduction factors specified in
sections 5 and 6;
(d) for varying the payment of credit to persons who marry or cease
to live together;
(e) amending the definition of “gross income” in section 15.
(2A) Regulations under this Part shall have effect in respect of the year of
assessment specified in them (which may include the year of assessment
in which the regulations were made and any subsequent year).26

(3) Regulations under this Part shall be laid before Tynwald as soon as
practicable after they are made, and if Tynwald at the sitting at which the
regulations are laid or at the next following sitting resolves that they
shall be annulled, they shall cease to have effect.
15 Interpretation

In this Part —
“credit
” has the meaning given in section 1(1);
“gross income
” means the whole of the income of the individual from all
sources from both within and outside the Island and, without prejudice
to the generality of that definition, —
(a) includes —
(i) all income (whether or not it is not treated as income for
the purposes of the Income Tax Acts and whether or not it
is subject to income tax under the Income Tax Acts);
(ii) benefits in kind and all other benefits (excluding those
referred to in sub-paragraph (iii) or (iv)) that are treated as
income for the purposes of the Income Tax Acts with the
exception of benefits in respect of which income tax is not
payable;
(iii) all payment of benefit chargeable to income tax under
section 48 of the Income Tax Act 1970;27

(iv) all payments of benefit similar to those referred to in sub-
paragraph (iii) that are paid under the law of another
country or territory;
(b) no exemption, relief or allowance (including capital allowances)
which is allowable for the purpose of calculating income for the
purposes of the Income Tax Acts shall be taken into account;
(c) no deduction other than under section 31B of the 1970 Act (money
expended in performance of duties) shall be taken into account;28

Section 16 Income Tax Act 2003


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“resident
” means resident in the Island for the purposes of the Income Tax Acts.
16 Commencement

This Part shall have effect in respect of the year of assessment commencing on 6
April 2003 in respect of persons qualifying for credit in the year of assessment
commencing on 6 April 2002.
PART 2
29

17 [Repealed]
30

18 [Repealed]
31

PART 3 – INFORMATION: INTERNATIONAL OBLIGATIONS

19 to 22 [Repealed]
32

PART 4 – MISCELLANEOUS AMENDMENTS AND GENERAL

Amendments
23 [Repealed]
33

24 to 28 [Repealed]
34

General
29 Interpretation

In this Act, “1970 Act
” means the Income Tax Act 1970.
30 Financial provision

There shall be paid out of monies provided by Tynwald any expenses of the
Treasury that are attributable to this Act.
31 Short title, construction and commencement

(1) This Act may be cited as the Income Tax Act 2003 and shall be construed
as one with the 1970 Act.
Income Tax Act 2003 Section 31


c AT 11 of 2003 Page 13

(2) Except where otherwise provided in this Act, the provisions of this Act
shall come into operation on such day as the Treasury may by order
prescribe and different days may be so prescribed for different purposes
and for different provisions.35

(3) An order under subsection (2) may contain such transitional provisions
as the Treasury may consider necessary in connection with any provision
brought into force by the order.
Income Tax Act 2003 Endnotes


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ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Subs (1) substituted by SD2015/0013 and confirmed by Income Tax Act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 2
Subs (4) substituted by SD2015/0013 and confirmed by Income Tax Act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 3
Subs (5) repealed by SD2015/0013 and confirmed by Income Tax Act 2015 s 4, effective
in respect of the income tax year ending 5 April 2015 and all subsequent years. 4
S 2 substituted by SD22/10 and confirmed by Income Tax Act 2011 s4, effective
6/4/2010. 5
S 3 heading amended by Civil Partnership Act 2011 Sch 14. 6
S 3 amended by Income Tax (Amendment) Act 2006 Sch effective i.r.o. year of
assessment commencing on 6/4/2006 and subsequent years, by Civil Partnership Act
2011 Sch 14 and by SD2015/0013 and confirmed by Income Tax Act 2015 s 4, effective in
respect of the income tax year ending 5 April 2015 and all subsequent years. 7
Para (a) amended by Civil Partnership Act 2011 Sch 14. 8
Para (b) amended by Civil Partnership Act 2011 Sch 14. 9
Subs (2) amended by Income Tax (Amendment) Act 2006 Sch effective i.r.o. year of
assessment commencing on 6/4/2006 and subsequent years and by Civil Partnership
Act 2011 Sch 14. 10
Subs (1) amended by SD51/12 and confirmed by Income tax Act 2013 s 2, with effect
in respect of the income tax year ending 5/4/2012 and all subsequent years and by SD
2015/0012, effective in respect of payments made on or after 6 April 2015 for the income
tax year commencing 6 April 2014 and subsequent years. 11
Subs (2) repealed by Income Tax Act 2009 s 13 effective in respect of the income tax
year commencing on 6/4/2009 and subsequent years.
Endnotes Income Tax Act 2003


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12
S 6 heading amended by Civil Partnership Act 2011 Sch 14. 13
Subs (1) amended by Civil Partnership Act 2011 Sch 14. 14
Subs (2) amended by SD51/12 and confirmed by Income tax Act 2013 s 2, with effect
in respect of the income tax year ending 5/4/2012 and all subsequent years and by SD
2015/0012, effective in respect of payments made on or after 6 April 2015 for the income
tax year commencing 6 April 2014 and subsequent years. 15
Subs (3) added by SD22/10 and confirmed by Income Tax Act 2011 s 4, effective
6/4/2010. [Original subs (3) repealed by Income Tax Act 2009 s 14 effective in respect of
the income tax year commencing on 6/4/2009 and subsequent years.] 16
Subs (3) amended by Civil Partnership Act 2011 Sch 14. 17
Subs (4) substituted by SD2015/0013 and confirmed by Income Tax act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 18
Subs (5) added by SD22/10 and confirmed by Income Tax Act 2011 s4, effective
6/4/2010 and substituted by SD2015/0013 and confirmed by Income Tax Act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 19
S 6 amended by Civil Partnership Act 2011 Sch 14. 20
Subs (1) amended by Civil Partnership Act 2011 Sch 14. 21
Para (a) amended by SD51/12 and confirmed by Income tax Act 2013 s 2, with effect
in respect of the income tax year ending 5/4/2012 and all subsequent years and by
Tynwald resolution dated 17/02/2015, effective income tax year commencing
06/04/2015 and subsequent years. 22
Para (b) amended by SD51/12 and confirmed by Income tax Act 2013 s 2, with effect
in respect of the income tax year ending 5/4/2012 and all subsequent years, by Tynwald
resolution dated 17/02/2015, effective income tax year commencing 06/04/2015 and
subsequent years and by SD2015/0013 and confirmed by Income Tax Act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 23
Para (b) amended by SD155/10 Sch 6, by SD2014/08 and by SD2015/0013 and
confirmed by Income Tax Act 2015 s 4, effective in respect of the income tax year
ending 5 April 2015 and all subsequent years. 24
Subs (4) amended in accordance with amendment of subs (3)(b) (above) by SD155/10
Sch 6, by SD2014/08 and by SD2015/0013 and confirmed by Income Tax Act 2015 s 4,
effective in respect of the income tax year ending 5 April 2015 and all subsequent years. 25
Para (b) amended by SD51/12 and confirmed by Income tax Act 2013 s 2, 26
Subs (2A) inserted by SD51/12 and confirmed by Income tax Act 2013 s 2. 27
Subpara (iii) substituted by SD47/06. 28
Para (c) substituted by SD23/10. 29
Part 2 repealed by Income Tax Act 2013 s 3. 30
S 17 repealed by Income Tax Act 2013 s 3. 31
S 18 repealed by Income Tax Act 2013 s 3. 32
Ss 19 to 22 repealed by SD315/13. 33
S 23 repealed by Income Tax (Amendment) Act 2006 s 7. 34
SS 24 to 28 repealed by Income Tax Act 2013 s 13. 35
ADO (ss 17 to 22 and 26 to 28) 1/3/2005 (SD116/05).