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Amendment of Part 8 of Principal Act (annual payments, charges and interest)
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21. (1) Part 8 of the Principal Act is amended—
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(a) in section 256(1) by substituting the following for the definition of “appropriate tax”:
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“‘appropriate tax’, in relation to a payment of relevant interest, means—
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(a) as respects the year of assessment 2017, a sum representing income tax on the amount of the payment at the rate of 39 per cent,
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(b) as respects the year of assessment 2018, a sum representing income tax on the amount of the payment at the rate of 37 per cent,
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(c) as respects the year of assessment 2019, a sum representing income tax on the amount of the payment at the rate of 35 per cent, and
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(d) as respects the year of assessment 2020 and each subsequent year of assessment, a sum representing income tax on the amount of the payment at the rate of 33 per cent;”,
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and
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(b) in section 267M by substituting the following for subsection (2):
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“(2) (a) Notwithstanding section 15 and subject to paragraph (aa), where the taxable income of an individual includes—
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(i) specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate specified in the definition of ‘appropriate tax’ in section 256(1), or
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(ii) foreign deposit interest, so much of the part of taxable income, equal to that foreign deposit interest, as would otherwise be chargeable to tax at the standard rate, shall instead be chargeable to tax at the rate specified in the definition of ‘appropriate tax’ in section 256(1).
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(aa) Notwithstanding paragraph (a), where any liability of the individual for a year of assessment in respect of the specified interest or foreign deposit interest, as the case may be, has not been discharged on or before the specified return date for the chargeable period (within the meaning of section 959A) for that year, then the part of taxable income, equal to that specified interest or that foreign deposit interest, shall be chargeable to tax at the rate of tax described in the Table to section 15 as the higher rate.”.
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(2) Subsection (1) applies to relevant interest, specified interest or foreign deposit interest, as the case may be, received or paid on or after 1 January 2017.
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