{
  "url": "https://openlegislation.uk/draft-scottish-rates-of-income-tax-consequential-amendments-order-2024/article-2",
  "json_url": "https://openlegislation.uk/draft-scottish-rates-of-income-tax-consequential-amendments-order-2024/article-2.json",
  "legislation": "ukdsi/2024/9780348264302",
  "legislation_title": "The Scottish Rates of Income Tax (Consequential Amendments) Order 2024",
  "legislation_url": "https://openlegislation.uk/draft-scottish-rates-of-income-tax-consequential-amendments-order-2024",
  "path": "article/2",
  "kind": "article",
  "number": "2",
  "heading": "Amendment of the Income Tax (Trading and Other Income) Act 2005",
  "text": "(1) Section 539 of the Income Tax (Trading and Other Income Act) 2005 (relief for deficiencies) is amended as follows.\n(2) In subsection (1)(b), for “of the higher rate, the Scottish higher rate, the Welsh higher rate or the dividend upper rate” substitute “relevant rates”.\n(3) For subsection (5) substitute—\n“(5) The amount of the tax reduction is calculated as follows.\nStep 1\nDetermine the amount of the individual’s income for the tax year that is liable at each relevant rate.\nStep 2\nAttribute the amount or amounts determined at Step 1 to the deficiency, so far as possible.\nStep 3\nCalculate the amount of the individual’s preliminary income tax liability for the tax year (see subsection (6)).\nStep 4\nCalculate the amount of the individual’s preliminary income tax liability for the tax year again, on the assumption that each amount determined under Step 1, so far as attributed to the deficiency at Step 2, is liable at the appropriate lower rate.\nStep 5\nDeduct the amount found at Step 4 from the amount found at Step 3. The result is the amount of the tax reduction.”\n(4) For subsection (7) substitute—\n“(7) In this section—\n(a) “relevant rate” means a rate mentioned in the first column of the Table;\n(b) “the appropriate lower rate”, in relation to an amount of the individual’s income for the tax year that is liable at a relevant rate, means the rate mentioned in the second column of the Table in the same row as that relevant rate.\n(8) Here is the Table referred to in subsection (7)—\nRelevant rate\nThe appropriate lower rate\nthe higher rate\nthe basic rate\nthe default higher rate\nthe default basic rate\nthe savings higher rate\nthe savings basic rate\nthe dividend upper rate\nthe dividend ordinary rate\nthe Scottish higher rate\nthe Scottish basic rate\nthe Scottish advanced rate\nthe Scottish basic rate\nthe Welsh higher rate\nthe Welsh basic rate\n(9) Where—\n(a) it is possible to carry out Step 2 in subsection (5) by attributing amounts in more than one way, and\n(b) the tax reductions, calculated under that subsection by carrying out that Step in those ways, are of different amounts,\nStep 2 is to be carried out in the way that results in the highest tax reduction.”",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "footnote",
      "label": "f1",
      "text": "2005 c. 5. Section 539 was substituted by sections 1027 and 1034 of, and paragraph 539 of Schedule 1 to, the Income Tax Act 2007 (c. 3) and relevantly amended by paragraph 58 of Schedule 1 to the Finance Act 2008 (c. 9), articles 1 and 9 of S.I. 2015/1810 and articles 1 and 10 of S.I. 2019/201."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukdsi/2024/9780348264302/article/2",
    "retrieved_at": "2026-10-30T14:40:37.315881+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}