Income Tax (Trading and Other Income) Act 2005 section 2

Overview of priority rules

Section 2 provides an overview of the rules within the Act that determine which income tax charge takes priority when a particular amount of income could potentially be taxed under more than one provision.

• Where income could fall within two or more charges under different chapters or parts of the Act, or under both this Act and the Income Tax (Earnings and Pensions) Act 2003, priority rules determine which charge applies
• The Act contains specific priority rules located at the start of each main part, including sections 4, 261, 262, 366, 367, 575 and 576, covering trading income, property income, savings and investment income, and miscellaneous income respectively
• These priority rules must be read alongside other rules of law, whether contained in this Act or elsewhere, including case law, which may affect the scope of particular provisions or their order of priority
• Examples of other relevant rules include section 171(2) of the Finance Act 1993 concerning Lloyd's underwriters' profits, and sections 16A, 16B and 16C of this Act dealing with voluntary office-holders' compensation, payments to company directors, and professionals' incidental employment income