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<b>Tax News:</b> Income Tax re-write draws to a close. By Nichola Ross Martin

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2nd Mar 2006
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The Tax Law Rewrite project entered its final phase this week, with the publication of the draft of the fourth Bill.

The aim of the re-write project is to modernise UK direct tax law so that it is clearer and easier to use, without changing its general effect.

In a written statement to Parliament the Financial Secretary to the Treasury, John Healey, said the new Bill, the Income Tax Bill, will in practice complete the rewrite of income tax.

This bill covers the basic provisions about the charge to income tax, income tax rates, the calculation of income tax liability, and personal reliefs; various specific reliefs, including relief for losses, the enterprise investment scheme, venture capital trusts, community investment tax relief, interest paid, gift aid and gifts of assets to charities; specific rules about trusts, deduction of tax at source, manufactured payments and repos, tax avoidance; and
general income tax definitions.

Rewritten legislation produced by the Project to date are:
The Income Tax (Trading and Other Income) Act 2005 which came into force on 6 April 2005
The Income Tax (PAYE) Regulations 2003 which came into force on 6 April 2004
The Income Tax (Earnings and Pensions) Act 2003 came into force on 6 April 2003 and
The Capital Allowances Act 2001 which came into force in April 2001.

Next on the agenda are the Corporation tax and Taxes Management re-writes.

The Income Tax Bill (Bill 4) is now in its final period of consultation, which ends on 31 May 2006.
HMRC have published the following links:

Draft Bill without origins;
Draft Bill with origins show;
target="_blank">Draft Explanatory Notes (Commentary);
Draft Explanatory Notes (Annexes and Appendices);
Tables of origins and destinations.

Comments or questions should be sent to Basil Rajamanie

Nichola Ross Martin

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