Tax Expenditures and Ready Reckoners

TB.2 - Tax allowances and reliefs in force from 2006-07 or 2007-08
Cost not known

Income tax and corporation tax

Exemption of:

  • Trade unions: investment income applied to provident benefits
  • Agricultural societies on profits of shows
  • Officials and agents of overseas governments etc
  • Visiting forces, other than UK citizens
  • Inter-governmental organisations
  • Unremitted income of taxpayers resident but not domiciled in the UK
  • Unremitted income of taxpayers’ resident but not ordinary resident in the UK
  • Certain statutory and public bodies and local authorities
  • Funds held for reducing the National Debt
  • Income of Trustee Savings Banks from investments with the National Debt Commissioners
  • Discount element of certain gilts issues at discount
  • Accrued income of small investors whose nominal value of holding of securities does not exceed £5,000
  • First £8,000 of reimbursed relocation packages provided by employers
  • Subsidised canteen meals provided for an employer’s staff generally
  • Benefit of living accommodation and associated costs proved to certain groups of employees
  • Beneficial loans below £5,000
  • Benefit of entertainment provided for employees by third parties
  • Car parking at or near an employee’s place of work
  • Retraining expenditure
  • Outplacement counselling for redundant employees
  • Certain personal incidental expenses
  • Friendly society tax exempt policies
  • Gains (chargeable as income) on qualifying life insurance policies
  • Income element within immediate needs annuities
  • Annual payments under sickness or unemployment insurance policies
  • Futures and options – exemption for authorised unit trusts and pension schemes
  • Workplace nurseries
  • Unit trusts from full rate of corporation tax (reduced rate applies)
  • Company car accessories for the disabled
  • First employer provided mobile phone
  • 15p luncheon voucher
  • Provision of pension’s advice up to £150 per annum
  • Medical check ups and health screening
  • Cycles and cycle safety equipment
  • Eye tests and special corrective appliances for VDU users
  • Works transport services
  • Support to public bus services
  • Annual parties and functions
  • Sporting or other recreational facilities on employer’s premises
  • Small gifts from third parties
  • Long service awards
  • Suggestion awards
  • Welfare counselling
  • Employment costs relating to disabilities e.g. digital hearing aids
  • Late Night taxis
  • Miner’s coal and allowances in lieu of coal
  • Certain pension and compensation payments to members of Armed Forces
  • Full-time education exemption for employees
  • 10% wear and tear allowance

Allowances and reliefs for:

  • Pre-trading expenditure
  • De-mergers
  • Industrial and Provident Societies
  • Co-operative associations
  • Housing associations
  • Company’s purchase of its own shares
  • Qualifying interest on loans not for the purchase of owner occupied etc property
  • Employment income related expenses
  • Certain income of non-residents received through UK representatives
  • Lump-sum payments from foreign pension schemes
  • Lloyd’s underwriters: special reserve fund arrangement
  • Interest paid by companies on quoted Eurobonds
  • Income tax relief for losses on unquoted shares in trading companies
  • Certain foreign travel expenses
  • Transfers of securities under approved stock lending arrangements
  • Payments to trustees for approved profit sharing schemes
  • Tax free bonus or interest received under a save as you earn contract
  • Payments to relevant scientific research associates
  • Payments for technical education relevant to a taxpayer’s trade
  • Business contributions to Training and Enterprise Councils and Local Enterprise Councils
  • Employee priority allocations in public share offers
  • Payments to Employer Share Ownership Plan Trusts
  • Employer provided work related training
  • Payments for sickness and unemployment insurance policies

Capital gains tax and company gains within corporation tax

Exemption of:

  • Unremitted gains of taxpayers resident but not domiciled in the UK
  • Gains of charities and other certain organisations e.g. museums
  • Gains of registered pension schemes
  • Gains of unit trusts for exempt unit-holders
  • Actual and deemed gains of settlements on death of life tenant
  • Mortgaging or charging of asset
  • Compensation used to replace or restore damaged assets
  • Compensation of damages for wrong or injury in course of trade
  • Gains arising from gambling winnings
  • Life assurance pay-outs
  • Lettings relief
  • Personal Equity Plans and Individual Savings Accounts
  • Gifts to charities
  • Certain heritage works of art
  • Gifts to housing associations
  • Grants for giving up agricultural land
  • Wood/trees on commercial land
  • Visiting forces and agents
  • Foreign consular officers

Gains arising on disposal of:

  • Motor cars
  • Chattels which are wasting assets
  • Other chattels if value is £6,000 or less on disposal
  • Assets by way of gifts to the nation
  • Property settled to reduce national debt
  • Saving certificates and securities issued under the National Loan Act 1968
  • Decoration for valour
  • Interests under a settlement
  • Enterprise Investment Scheme shares
  • Venture Capital Trusts
  • Personal foreign currency and bank accounts for use outside UK
  • Qualifying Corporate Bonds
  • Gilts

Allowances and reliefs for:

  • Indexation allowance & rebasing to March 1982 for companies
  • Double taxation of capital gains realised by individuals or trustees
  • Losses on disposals of assets between spouses or civil partners (relief also continues up to one year after separation)
  • Chattels exceeding £6,000 in value (marginal relief)
  • Disposal by political party associations following boundary changes
  • Halving relief
  • Irrecoverable loans to traders
  • Disposals where IHT is paid on transfer
  • Vulnerable trusts
  • Mineral rights

Rollover/holdover relief for:

  • Gifts of assets
  • Gifts where chargeable to IHT
  • Transfer of businesses to companies
  • Replacements of business assets
  • Small part-disposals of land
  • Small capital distributions in respect of shares
  • Small reorganisations and company reconstructions (paper for paper transaction)
  • Gains on disposals within a group of companies
  • Gains on disposals of assets between spouses or civil partners (relief also continues up to one year after separation)
  • Exit charge on company migration
  • Enterprise Investment Schemes
  • Land acquired by authorities with compulsory purchase powers
  • Remittance of gains impeded by currency restrictions
  • Payment by instalments

Inheritance tax

Exemptions:

  • Lifetime transfers between spouses and civil partners
  • Annual exemption: gifts of £3,000 each year.
  • Small gifts: £250 per donee
  • Normal gifts out of income
  • Gifts in consideration of marriage or civil partnership
  • Lifetime transfers to charities
  • Lifetime transfers to political parties
  • Transfers to employee trusts
  • Gifts for national purposes or for public benefit
  • Gifts to housing associations
  • Historic buildings maintenance funds.

Allowances/reliefs:

  • Falls in value of property before death or after death

Other exclusions:

  • Foreign pensions and foreign armed forces pay
  • Certain savings by persons domiciled in the Channel Islands or the Isle of Man
  • Foreign currency bank accounts
  • Reversionary interests
  • Government securities owned by non-United Kingdom domiciled persons
  • Accumulation and maintenance settlements
  • Trusts for mentally or physically disabled
  • Trade or professional compensation funds
  • Charitable trusts
  • Employee and newspaper trusts
  • Protective trusts
  • Superannuation schemes
  • Lloyd’s premium trusts
  • Settled property passing to settlor, spouse or widow
  • Estate duty surviving spouse settlements
  • Waivers of dividends and remuneration
  • Gifts for the maintenance of the family
  • Cash options under approved annuity schemes
  • Double charges

Stamp duty reserve tax

Exemption of:

  • Purchases by issuing houses in connection with public issues
  • Purchases by recognised intermediaries
  • Purchases under stock borrowing and sale and repurchase arrangements
  • Purchases by charities
  • Purchases of certain bearer instruments

Stamp duty

Exemption of:

  • Transfers of stock on sale to recognised intermediaries
  • Transfers of building society shares
  • Issues or transfers of bearer instruments in foreign currencies
  • Transfers of certain loan stocks
  • Transfers to a Minister of the Crown
  • Transfers under stock borrowing and sale and repurchase arrangements
  • Transfers under schemes of company reconstructions and similar arrangements
  • Transfer of share held in Treasury

Stamp Duty Land Tax

  • Various minor stamp duty land tax exemptions and combinations of reliefs

Value Added Tax

Zero rating of:

  • Bank notes
  • Caravans and houseboats
  • Construction of relevant residential buildings
  • Imports, exports etc
  • International services
  • Protected buildings
  • Talking books for the blind and disabled and wireless sets for the blind
  • Tax-free shops

Exemption of:

  • Fund raising events by charities and other qualifying bodies
  • Investment gold
  • Sport, sports competitions and physical education
  • Supplies of goods where input tax cannot be recovered
  • Subscriptions to trade unions, professional and other public interest bodies
  • Works of art

Air Passenger Duty

  • Young children without a seat
  • Passengers travelling on connecting flights
  • Passengers not carried for reward
  • Military flights
  • Visiting forces, NATO Military Headquarter personnel

Hydrocarbon Oils

  • Aviation Turbine Fuel – a duty rate of zero applies to marked kerosene

Landfill tax

Exemption for:

  • Dredging waste
  • Mining and quarrying waste
  • Waste used to restore landfill sites
  • Waste from visiting overseas forces

Climate change levy

Exemption for supplies of energy:

  • Not for burning or consuming in the UK
  • Used to produce taxable commodities other than electricity (other than self supplies) to various categories of electricity producers including combined heat and power (CHP) schemes
  • From certain CHP schemes
  • Electricity producers that are self-supplies in specific circumstances

Aggregates levy

Exemption/relief for:

  • Clay, soil and other organic matter
  • Coal, lignite, slate and shale
  • Processing waste resulting from the separation of coal, lignite, slate and shale from other aggregate after extraction
  • Spoil, waste and other by-products from any industrial combustion process or metal smelting/refining
  • Drill cuttings from the seabed
  • Spoil from the processing after extraction of industrial minerals
  • Building (‘dimension’) stone
  • Production of lime or cement from limestone
  • Aggregate used in an exempt process after the aggregates levy has been brought to account
  • Aggregate used in a prescribed industrial or agricultural process