SCHEDULES

SCHEDULE 1Abolition of starting and savings rates and creation of starting rate for savings

Part 1Amendments of ITA 2007

11

1

Section 21 (indexation of starting and basic rate limits) is amended as follows.

2

Omit subsection (2).

3

After subsection (3) insert—

3A

The starting rate limit for savings for the tax year is the amount found as follows.

Step 1

Increase the starting rate limit for savings for the previous tax year by the same percentage as the percentage increase in the retail prices index.

Step 2

If the result of Step 1 is a multiple of £10, it is the starting rate limit for savings for the tax year.

If the result of Step 1 is not a multiple of £10, round it up to the nearest amount which is a multiple of £10.

That amount is the starting rate limit for savings for the tax year.

4

In subsection (4), for “(2) and (3)” substitute “ (3) and (3A) ”.

5

In subsection (5)—

a

for “section 20” substitute “ sections 10 and 12 ”,

b

for “(2) and (3)” substitute “ (3) and (3A) ”, and

c

for “starting rate limit and the basic rate limit” substitute “ basic rate limit and starting rate limit for savings ”.

6

Accordingly, in the heading, for “starting rate limit and the basic rate limit” substitute “ basic rate limit and starting rate limit for savings ”.